Bosch Consolidates JV Ownership

LAS VEGAS – Robert Bosch remains the world’s largest supplier of automotive components, but the company continues its mission to expand into other sectors, particularly home appliances, power tools and electronics to enable the connected home.

This week, Bosch announces it is taking control of a 50-50 joint venture it has operated with Siemens since 1967 to produce dishwashers, dryers, refrigerators and other home appliances.

Mike Mansuetti, president of Bosch in North America, says the JV has been successful for many years and that the decision was made last year to acquire Siemens’ stake as part of the growth strategy.

The JV, which employs 50,000 people worldwide and generates about €10 billion ($11.9 billion) in annual revenues, was based in Munich and had a separate board of directors. The consolidation assigns all the employees to Bosch, bringing global headcount to about 330,000, Mansuetti says.

“This deal really makes sense for us when we talk about all this connectivity, connected living and the connected space,” he tells WardsAuto after the Bosch press conference here at the Consumer Electronics Show. “These appliances become a big part of daily life, so it’s really a good platform for us to continue expanding.”

Throughout 2014, automotive components made up between 60% and 65% of Bosch’s global revenues. The acquisition of the Siemens JV will bring the company closer to a 50-50 split between automotive and non-automotive business, he says.

In North America, the JV has plants producing appliances in New Bern, NC, and Cookeville, TN. The operation will retain the Bosch Siemens Home Appliances name, as well as the Thermador and Gaggenau brand names.

Bosch Taking Over ZF Lenksysteme JV

Bosch also is taking control of ZF Lenksysteme, another 50-50 JV with fellow German supplier ZF to engineer and produce automotive steering systems. In 2013, the JV posted $4.9 billion (€4.1 billion) in sales and employed 13,000 people in eight countries.

ZF is in the process of acquiring a key Bosch rival in the brake and chassis business, TRW, which already is one of the world’s largest steering suppliers.

To mitigate antitrust issues, ZF has agreed to give up its stake in the JV and Bosch will own it all, including a steering-system plant in Florence, KY, and an engineering facility in Plymouth, MI, near Bosch’s North American headquarters. Based near Stuttgart, the steering business also has a presence in China.

Mansuetti says he expects the JV will be dissolved this year.

“We will consolidate that business into the Bosch group,” he says. “What that means for Bosch in North America is we will take over the steering portion.” The operations will play a key role as Bosch continues development of technologies for self-driving cars.

At CES, Bosch is emphasizing its strength in sensors and software competence – key components in the push to make hand-held devices even smarter and able to control lights, heating and other systems within the home, says Werner Struth, chairman of Robert Bosch LLC in North America.

He cites Nielsen Survey research showing that in 2013, a majority of mobile-phone users in the U.S. (65%) owned a smart device.

A vital enabler for connectivity are micro-electronic-mechanical sensors. Bosch claims global leadership in producing MEMS, which factor into innovations such as a photovoltaic system for creating electrical and thermal energy.

Bosch also announces another international JV with ABB and Cisco to develop and operate an open software platform for smart homes. The companies plan to establish an alliance that will be open to all manufacturers, developers and suppliers.

“Connected smart living is transforming our lives,” Struth says. “From homes to mobility, we are adding more comfort and convenience. And, if handled correctly, we are engineering in more safety and greater security.”

Asked about his level of confidence that Bosch is well prepared for a new breed of brazen corporate hackers, Struth discusses a dual architecture for vehicles – one for mission-critical systems such as powertrain, braking and steering, and another for infotainment.

He also says Bosch has acquired a stake in a company dedicated to security for connectivity and data.

“We are quite confident that we have set up the right provisions in order to make sure you can’t hack the car from the outside,” Struth says. “Of course, this is a never-ending story. These systems need to be updated continuously.”

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