Werner Wenning
1946–

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Chairman and chief executive officer, Bayer AG

Nationality: German.

Born: October 21, 1946, in Leverkusen-Opladen, Germany.

Family: Married Ursula; children: two.

Career: Bayer AG, 1966–1996, various positions; 1996-1997, head of Corporate Planning and Controlling; 1997-2001, chairman of board of management committee for finance; 2001–, chairman of board and CEO.

Address: Bayer AG, 51368 Leverkusen, Germany, +49-(0)5214/30-1; http://www.bayer.com.

■ Werner Wenning grew up in the shadow of the Bayer Company in Leverkusen-Opladen, Germany—the town that the company started over a century ago—and began to work there as a young man. He entered a Bayer training program in 1966 and never looked back. Wenning worked his way up through the ranks in a variety of locations around the globe and eventually became the company's CFO in 1997. In 2002 Wenning took over as CEO of Bayer at a critical point in the company's history, when profits were dwindling and the company was under worldwide scrutiny because of litigation. He made improvements from the time he became CEO—some were deemed radical for a company once considered staid—and won the respect of his colleagues for his open and honest approach. Martin J. Evans, an analyst at Credit Lyonnais Securities in London, told BusinessWeek , "His direct management style is really refreshing" (May 6, 2002).

BEGINNING AT BAYER

Werner Wenning was born on October 21, 1946, in Lever-kusen-Opladen, Germany. The town outside Cologne was started over a century ago by the Bayer Company, a researchbased chemical and pharmaceutical firm. The company financed

Werner Wenning. AP/Wide World Photos.
Werner Wenning.
AP/Wide World Photos
.

many community activities, including social clubs, a mandolin orchestra, a ballroom dancing club, and the professional Bayer Leverkusen soccer team. Wenning went to the local high school and then attended a Hochschule , or higher professional school, but skipped college, preferring instead to join the Bayer Company as a commercial trainee in April 1966. At that time the Bayer Company had four major divisions: HealthCare, CropScience, Polymers, and Chemicals.

Wenning trained in Bayer's finance and accounting department for a year, followed by an additional year in the company's Corporate Auditing Department. He did so well that he was given the opportunity in 1970 to manage finance and ac counting for Bayer International, a new company that had recently been formed in Lima, Peru. He remained in Peru until 1975. After Wenning returned to Germany, he rejoined the Corporate Auditing Department, where he stayed for another three years before he returned to Lima in 1978—this time as the managing director and administrative head of Bayer's Peruvian branch.

In 1983 Wenning moved back to Leverkusen to direct the staff of the HealthCare Sector. He later moved to the Plastics Business Group to head Bayer's thermoplastics marketing within Germany. After Wenning had proved his competence in this area, he acquired the additional responsibility of the plastics group's international marketing in 1987. Wenning then moved to Barcelona in 1992 as Managing Director of Bayer Hispania International; while living there he also took over the position of Senior Bayer Representative for Spain. During Wenning's stay in Spain, he developed an interest in the country and its culture that he continued to pursue after he returned to Germany. In 1996 he moved back to Leverkusen, this time to head the Corporate Planning and Controlling Department.

Wenning's hard work was again rewarded on February 1, 1997, when he was appointed to the Board of Management of Bayer AG. He became CFO, chairman of the board's committee for finance, and a member of the board's committees for corporate coordination and human resources. At the same time he was also appointed the representative of Bayer's Central and South American, African, and Middle Eastern markets. As Bayer's chief financial officer, Wenning introduced the principle of value management, a way to increase corporate value by getting the most out of the money the company spends. Value management had already gained a reputation as an innovative and practical business strategy, but it was just beginning to take root at Bayer when problems arose for the company.

A DIFFICULT TIME

After 36 years of hard and dedicated work, Wenning got the break of his life in 2001 when Bayer announced that he would become the company's chief executive officer and chairman of its board of management. Wenning took over in April 2002 from Manfred Schneider, who had held the position for the 10 years between 1992 and 2002. Wenning took charge of Bayer during one of the most difficult periods in the company's 140-year history, but the board expressed great confidence in him from the start. The chairman of the supervisory board, Hermann Josef Strenger, said, "I firmly believe that Werner Wenning is the right man for the job. His decisiveness and perseverance are convincing arguments in his favor."

Bayer had lost large sums of money in the last few years of Schneider's tenure in addition to confronting serious legal problems related to one of its drugs, Baycol. Unlike some observers, Wenning saw Bayer's financial difficulties as mostly growth-related. New drugs take a long time from their research and development phase through testing and regulatory approval before they are ready to market. Bayer had some drugs at the clinical trial stage in 2002, but they were not yet ready for government approval and marketing. Wenning also acknowledged that the company had been slow to change in the past and therefore slow to respond to the public's needs—a problem that he wanted to correct. He told BusinessWeek , "In the future, we have to act more quickly" (May 6, 2002). Such candor and responsiveness to public opinion was new to the old company; many analysts were pleased with Wenning's approach. According to The Economist , "Part of [the CEO's] job is public relations, not one of Bayer's strongest suits. Mr. Wenning is widely considered to be more approachable and cooperative than the daunting Mr. Schneider. He is one of the few top executives who actually enjoys talking to analysts, and looks forward to his role as Bayer's public face" (April 27, 2002).

The first task that Wenning took up after he became CEO was to raise the profits of Bayer's pharmaceuticals business. In 2001 Bayer had taken a heavy loss when its best-selling drug, a cholesterol-lowering medication sold as Lipobay in Europe and Baycol in the United States, had to be withdrawn from the market because it had been linked to over a hundred deaths. The number of lawsuits filed against Bayer in America eventually rose to over eight thousand—an intimidating and potentially damaging number. By 2002, however, Wenning received some good news when Bayer was cleared of liability in a case tried in an American court. According to Chemistry and Industry magazine, "A US jury cleared Bayer of liability in a $550m lawsuit filed by 82-year-old Hollis Haltom, who alleged his muscle-wasting disease was caused by Baycol" (April 7, 2003). As of 2004, however, the company was uncertain about the total amount of its liability payments elsewhere in the world.

Wenning's second task involved the possibility of forming an alliance with another pharmaceutical company for research and marketing. Many of the other major companies (such as DuPont, Hoechst, and ICI) that had once had a four-pillared approach to the marketplace—pharmaceuticals, crop science, chemicals, and polymers—had divided their companies. Wenning did not favor this course of action. He preferred to form a partnership with another drug company but could not attract a potential partner. Bayer did, however, purchase the Aventis CropScience company in 2002, which was credited with raising Bayer's sales in the agricultural science sector.

A RADICAL DECISION

In 2003 Wenning finally made the difficult decision to split the Bayer Company in half—grouping the chemical unit together with part of the polymers unit to form a new company separate from the pharmaceutical division. This partition was expected to allow Bayer itself to focus on health care, agrochemicals, and material sciences while the new chemical company would be freer to respond quickly to world needs. Wenning said about the split, "With our stronger focus, we will in future be able to dedicate the financial and management resources of the Bayer Group exclusively to the development and expansion of the three subgroups…. Bayer is an inventor company and we aim to continue concentrating on these abilities." When asked whether the restructuring would lead eventually to more spin-offs, Wenning emphatically told the press no.

The new company was to be named Lanxess and led by Alex Claus Heitmann, a member of the executive committee of Bayer Polymers and head of the Asia Pacific region. The Chemical Market Reporter quoted Wenning as saying that Lanxess would "have a rating and valuation which will enable it to finance itself independently. We will not invest any more in classical chemistry" (November 17, 2003). Bayer intended to market the new company as a competitive firm that would add value to any company. Lanxess was scheduled to be listed on the stock market by early 2005.

At the time of the decision to form Lanxess, Bayer had some new drugs in the pipeline, including Cipro XR, an antibiotic used to treat anthrax, and Kinzalmono, a medication for treating hypertension. After the announcement about Lanxess appeared, Bayer's stock price in Frankfurt went up 10 percent in just two days—an indication that consumers had regained confidence in the company. Also in the works was a challenger to Viagra—another drug for erectile dysfunction called Levitra, which was expected to bring in over $900 million in annual sales. Wenning reported that Levitra had made a good start after its release, gaining 14 percent of new prescriptions by October 2003. Even with this good news, however, 2003 was not a stellar year for the Bayer Company, which continued to lose money. After record losses in 2003, Wenning announced that the company expected a turnaround in 2004. He stated that he saw "signs of a gradual economic recovery, driven mainly by the United States and Asia."

In addition to Wenning's duties at Bayer, he served on the supervisory boards of the Gerling Konzern Versicherungsbeteiligungs-AG and Henkel as well as acting as vice president of the German Industry Association (VCI) in Frankfurt. Wenning was also an avid sports fan, participating when time permitted—he enjoyed jogging, playing soccer, and watching the Bayer Levenkusen soccer team.

See also entry on Bayer A.G. in International Directory of Company Histories .

sources for further information

"Bayer AG Names Wenning Chairman," Rubber World , October 2001, p. 74.

"Bayer Faces 3,500 Lawsuits over Drug Recall," Independent (London, England), October 22, 2002.

"Bayer Still Not in the Clear," Chemistry & Industry , April 7, 2003, p. 7.

Capell, Kerry, "Bayer's Big Headache; Can Its New Chairman, Werner Wenning, Provide a Cure?" BusinessWeek , May 6, 2002, p. 30.

Firn, David, and Bettina Wassener, "Bayer's Slow Move toward Separating Its Businesses: The Company Will Create a Unit Called MaterialScience," Financial Times , November 10, 2003, p. 27.

Harnischfeger, Uta, "Lipobay Problems Put Bayer 'In Limbo,'" Financial Times , March 14, 2003, p. 26.

Harnischfeger, Uta, and Klaus Max Smolla, "Bayer Risks Local Ire While Fighting Fires," Financial Times , October 18, 2002, p. 31.

"In Brief: Bayer Loses Pounds 1bn," Guardian (London, England) , March 19, 2004.

"Making Up for Lost Time; Face Value," Economist (US), April 27, 2002.

Milmo, Sean, "Bayer Breakup Rekindles Investor Confidence in the Company," Chemical Market Reporter , November 17, 2003, pp. 6, 36.

"Viagra Challenger To Be in U.S. Soon," Cincinnati Post (Cincinnati, OH), June 24, 2002.

Wassener, Bettina, "Bayer Sticks with Stated Restructuring Chemicals/Pharmaceuticals," Financial Times , November 12, 2003, p. 33.

"Wenning Is New Bayer CEO," European Rubber Journal , December 2001, p. 16.

"Werner Wenning Continues Systematic Realignment: Bayer Plans Stock Market Flotation for Chemicals Activities and Strategic Refocus of Health Care Business," Canadian Corporate News , November 11, 2003.

"Werner Wenning Will Be New Bayer CEO," PR Newswire, September 13, 2001.

Withers, Malcolm, "Lawsuits May Hit Earnings at Bayer," Evening Standard (London, England), March 13, 2003.

—Catherine Victoria Donaldson



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