Bertelsmann Balms Bothered Bosses

19 August 2002

Senior executives of RTL Group and Gruner + Jahr – the TV and magazine publishing units of German media conglomerate Bertelsmann – were called to meetings at three locations in Luxembourg, Cologne and Hamburg last week.

The sighs of relief were almost audible as the sweaty-palmed gatherings were reassured by new ceo Günther Thielen that their units would not be drastically slimmed to reduce group indebtedness. He also restated his intention to accord them greater autonomy.

Said one attendee at the meetings: “It is no secret the units were unhappy about centralisation, so Thielen made a very good impression.”

Thielen, who replaced empire-building centrist Thomas Middelhoff last month after a boardroom coup [WAMN: 29-Jul-02], has been charged by the group’s controlling Mohn family with the execution of a decentralization programme, making his predecessor’s dream of an IPO by 2005 seem increasingly unlikely.

The nervous tics have now transferred from the operating units to Bertelsmann headquarters in Gütersloh, a small provincial town in north-west Germany. Says one insider: “It would not be crazy to assume that if the central management lowers its profile, it will not need as big a corporate centre.”

The issue of central costs is expected to be discussed at a Bertelsmann board meeting next week, where Thielen may well cite RTL, which last year lopped thirty jobs from its back-office headcount of 110 without apparent loss of efficiency.

Data sourced from: Financial Times; additional content by WARC staff