Economy & Politics

Yesterday’s WesternHow Hoechst AG was smashed

Juergen Dormann CEO Hoechst AG at the press conference on March 12, 1998 in front of the Jahrhunderthalle in Frankfurt-Hoechst
Former Hoechst CEO Jürgen Dormann in a photo from 1998dpa

When Jürgen Dormann quit his last big job a few years ago, he found a hard sentence for his guild: “CEOs are dangerous animals.” You have to monitor the CEOs carefully, otherwise they do what they want. The outgoing superintendent of the Swiss industrial group Sulzer knew what he was talking about. After all, he was such a dangerous animal himself.

That was about 20 years ago, and Dormann’s territory was one of the largest in the German economy: Hoechst AG in Frankfurt, then one of the most powerful chemical groups in the world. When he became CEO in 1994, Hoechst had more than 160,000 employees and annual sales of more than 40 billion marks. The range was huge: dyes, waxes, plastics, synthetic fibers and foils, pharmaceuticals, chemicals and much more. However: sales stagnated, some divisions wrote deep red numbers, accidents scratched the image.

Dormann scolded that he had to change this “encrusted, introverted shop”. It is about whether you stand up to the tough competition or whether you turn on the “Advent lights” straight away. Probably not even he suspected that this heralded the decline of the company and not the rise.

Failed merger attempts

He had no qualms about the renovation. His radical recipe: Hoechst was to become a life science company. Dormann saw no future in paints and plastics. Instead, he focused entirely on pharmaceuticals and crop protection. At least the shareholders thanked him, the share price rose sharply. At first Dormann tried to merge Hoechst with the US company Monsanto – unsuccessfully. A merger with Bayer also failed because the managers could not agree on filling the top positions. Then Dormann started the sale. It was the chemical division’s turn, and in 1999 he forged the new pharmaceutical giant Aventis from Hoechst’s remaining pharmaceutical business with French competitor Rhône-Poulenc.

A Franco-German company was to be created. But nothing came of the “equal partnership”. In 2004, Sanofi Aventis took over. Dormann had to be on the board. His time as a predator was over. But to this day, Dormann is still the first German manager to concentrate solely on increasing shareholder value – even if the company went under.

main character

Jürgen Dormann was born in Heidelberg in 1940. After studying economics, he went to Hoechst AG in 1963 as a trainee. In 1994 he was appointed chairman of the board. He wanted to transform the Hoechst general store into an international life science company. For this, he sold large parts of the group all over the world. Dormann received the title “Germany’s most radical manager”.

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