Gunter Thielen
1942–

Chairman and chief executive officer, Bertelsmann AG

Nationality: German.

Born: August 4, 1942, in Quiershied, Germany.

Education: Technical University of Aachen, mechanical engineering and economics; PhD.

Family: Married (wife's name unknown).

Career: BASF, 1970–1976, various management positions; Wintershall Refinery, 1976–1980, technical director; Maul-Belser (division of Bertelsmann), 1980–1985, chief executive officer; Arvato, 1985–2001, chief executive officer and member of Bertelsmann AG's executive board; Bertelsmann's Verwaltungsgesellschaft (BVG), 1999–2001, member; Bertelsmann Foundation and BVG, 2001–2002, chairman; Bertelsmann AG, 2002–, chairman and chief executive officer.

Address: Carl-Bertelsmann-Strasse 270, D-33311 Gütersloh, Germany; http://www.bertelsmann.com.

■ Gunter Thielen was chairman and CEO of Bertelsmann AG, a privately held company located in Gütersloh, Germany. Belying its small-town base of operations, Bertelsmann AG is one of the world's largest media corporations, consisting of more than four hundred companies with interests in publishing, broadcasting, music, printing, and many other endeavors. Thielen first came to Bertelsmann in 1980 as CEO of Maul-Belser, the leading rotogravure printing company in Europe. His abilities to streamline companies and focus on profits helped him in his position as CEO of Arvato—a printing and industrial services company. Thielen's core values could be summarized as decentralization, entrepreneurship, and consensus leadership. It was his ability to lead his divisions to profit and success that motivated the supervisory board members of Bertelsmann to lure him out of his impending retirement to become CEO.

EARLY SUCCESS IN LEADERSHIP

Thielen always had a goal to lead a company. Studying mechanical engineering and economics at the Technical University of Aachen led him first to management at BASF, a leading chemical company. Before that job, though, Thielen had shown his skill at turning companies around, although on a small scale. For a short time he worked at his wife's family's sausage factory, Holl Feine Fleische and Wurstwarem. In his short tenure there he took the small, struggling company to an enterprise with annual sales of more than EUR 100 million.

As CEO of Arvato for 17 years, Thielen focused on profits, helping to grow the division. When he took the helm of Arvato, the division's printing and industrial services were not in great demand. By the time he left in 2002, the company had gone from operating results of approximately EUR 61 million to EUR 217 million. Its staff had grown from nine thousand employees to 30,000, and demand had increased to provide services for clients worldwide.

REDIRECTING COMPANY POLICY

In 2002 Thielen stepped down as CEO of Arvato and was preparing to take the leading role in the Bertelsmann Foundation, Bertelsmann's philanthropic arm, which focuses on education, health care, and international relations, among many other concerns. Hours before his retirement, he was called upon to replace Thomas Middlehoff, who had resigned under pressure from Bertelsmann's board of directors, which included members of the Mohn family, who were the primary owners of Bertelsmann stock. Middlehoff had engaged in buyouts, purchases, and investments that had driven Bertelsmann's debt to more than $2.8 billion.

Thielen's long and close association with the Mohn family led to his succession. His profile on the Bertelsmann Web site noted, "He is known as a pragmatist with a circumspect and down-to-earth approach…. Streamlined structures, quick decisions and direct communications are the ingredients he cites for his recipe for success." The Mohn family held these qualities in high regard. With Thielen at the helm, they knew that their corporation would be run according to their standards.

Thielen's first move was to announce that Bertelsmann was getting out of the Internet business, on which Middlehoff had focused heavily. Two prominent investments—Bol.com, an online retailer, and Napster.com, a music delivery company—were sold immediately. In 2003 Thielen sold off Bertelsmann's stake in BarnesandNoble.com. He also sold the Bertelsmann Springer division, which published scientific and academic books.

With a focus on streamlining and increasing profits, Thielen was lauded for the numbers he generated. Selling BarnesandNoble.com and the Springer division added EUR 761 million to Bertelsmann's bottom line in the third quarter of 2003. At the same time, Thielen had to face other numbers that were declining. Sales fell from EUR 4.2 billion to EUR 3.9 billion, and revenues went from EUR 13 billion to EUR 11.7 billion. Eventually the numbers began to turn around. Under Thielen's command, by 2004 Bertelsmann had seen a 20 percent rise in profits to EUR 1.12 billion.

HARD LINE ON PROFITS

While in some quarters Thielen was being praised, in others his hard-line stance on the numbers created controversy and questions. Turnover of high-ranking executives was reaching alarming numbers. Three executives were fired in January 2004 for failing to meet goals set by Thielen. Three others were fired for not being as fiscally conservative as Thielen thought they should be. According to Thomas L. McLane of the Directorship Search Group, an executive search firm, the sense of instability created by these firings could lead to problems for the company's public image. He explained to Jack Ewing of BusinessWeek, "Whenever there's an exorbitant amount of turnover, questions have to arise about what's going on at the very top" (February 9, 2004).

Although Thielen had a reputation for slashing unproductive divisions, he also sought to acquire new markets and companies. When asked about mergers, Thielen told James Robinson of the Observer, "It's very hard to bring two big companies together with different corporate cultures. That's why I think it's much easier to acquire smaller companies and integrate them very fast into your organisation" (April 11, 2004). Despite this belief, Thielen announced in 2003 Bertelsmann's plans to form a merger with the music division of the industry giant Sony Corporation, bringing it under the umbrella of Bertelsmann's music division, BMG. If approved by the European Union, the merger would make Sony-BMG the music industry leader.

Thielen's tenure as CEO of Bertelsmann's was originally supposed to last only two years. In 2004 the supervisory board unanimously approved Thielen's contract until 2007.

See also entries on BASF Aktiengesellschaft and Bertelsmann A.G. in International Directory of Company Histories.

sources for further information

Benoit, Bertrand, "Media Chief Determined to Keep It in the Family," Financial Times (London), March 24, 2003, p. 30.

Bertesmann—media worldwide, http://www.bertelsmann.com/bag/management/bio.cfm?id=1139, (July 15, 2004).

Ewing, Jack, "Reckoning at Bertelsmann," BusinessWeek, February 9, 2004, p. 44.

Hall, Allan, "Bertelsmann, under New CEO, to Return to Its Traditional Roots," Sunday Business (London), September 8, 2002.

Lottman, Herbert, "Thielen Takes on Turnaround," Bookseller, April 16, 2004, p. 11.

Robinson, James, "This Is Germany Calling," Observer (London), April 11, 2004, p. 6.

Spahr, Wolfgang, and Matthew Benz, "Bertelsmann Chief Aims to Rein in Debt," Billboard, August 10, 2002.

—Eve M. B. Hermann