What happened: Two years after being acquired by Chinese consumer electronics giant Midea, German robot manufacturer Kuka reported poor results for 2018.
Its sales revenues decreased 6.8% to €3.2 billion (around $3.6 billion) compared to the prior year, while after-tax profits plummeted 81.2% year-on-year to €16.6 million.
The company is has a cost reduction plan in the works with the goal of saving €300 million by 2021, including laying off 350 full-time employees in Augsburg, Germany within the year.
Why it’s important: A major industrial robots manufacturer and global automation solutions provider, Augsburg-based Kuka was 95% acquired by Midea in 2017.
At the time, the home appliances maker sought to sell Kuka robotics in the Chinese market, while implementing them in its own production bases amid the state-led industrial policy “Made in China 2025.” However, uptake for Kuka equipment in Chinese factories including Midea’s was disappointing because of cost and slow delivery times.
Kuka’s troubles also highlight China’s slowing economy over the past year despite the market’s long-term attractiveness, German media cited Kuka employees as saying.