Varta: All hail the turn-around king! CEO Ostermann on restoring the German battery giant to its former glory

One year ago, Michael Ostermann became chief executive of a battery company in a whole heap of trouble. Here, he tells Shona Sibary what’s first on his agenda of change…

(First published in May 2025)

I am sitting with the man who has been tasked with the not insurmountable challenge of turning around troubled German battery giant, Varta, after its much-publicized financial woes in recent years. And what I’m expecting, if I’m honest, is a stressed executive with five minutes to spare. What I get is someone who wants to talk about motorbikes. And not the electric kind.

“I’m a petrol head,” states Ostermann. “I sometimes commute to work on my Harley Davidson.” He grins. “I think every man my age should have at least seven.”

It’s a surprising comment from someone who, almost a year ago to the day, was appointed as the new CEO and board chairman for a company known for its lithium battery production.

But then Michael Ostermann seems keen to throw a curved ball.

“You know Varta is also the world market leader for batteries for hearing aids, right?” he says. “The problem is nobody realises. We don’t talk about it. We are doing such a lot of innovation and so much good work, but we are forgetting to tell the world.”

His frustration is understandable. Because what the world does know is that last year, after a series of financial challenges, Varta was forced into pre-insolvency restructuring proceedings, resulting into the company’s liabilities having “a haircut” from €485 million down to €230 million. At the same time, it received €60 million in new senior loans and a total of €60 million in fresh capital from major Austrian shareholder Michael Tojner and Porsche, who formally each hold 50% of the shares.

As part of the restructuring, the shares of the previous Varta shareholders became worthless and the share capital was reduced to zero, removing Varta from the stock exchange.

“It’s been a challenging year,” Ostermann says with a wry smile. “As you can imagine, we’ve been having seven-day-a-week negotiations with lenders. The very first priority for me was to get the financial situation stabilized.

“We have become a little bit too fat in recent years. We had way too many overheads, and we are now doing some operational restructuring by making the organization and our processes slimmer to be able to make faster decisions, because this has sometimes been too slow.

“Also, the overhead structure was much too heavy. And we are using our part of the fresh money to pace the restructuring. So, that first initial step was made by the end of March where we more or less laid off 10% of our overheads, and we are now working on the second and the third waves.

“But these waves won’t be the same magnitude as the first one — not 10% again — but there will still be some adjustments.”

Ostermann has a track record in steering firms through financial storms. He was in a similar position when brought in to implement a restructuring at Exide Technologies 15 years ago. Under his leadership there, heading the company’s Europe and Asia division, successful strategies for lithium-ion batteries and energy storage systems were deployed in both sectors. One can’t help wondering if he is feeling an overwhelming sense of déjà vu?

“Obviously, when I joined Varta it didn’t happen by accident,” he says. “I was aware of the situation. I knew Mr Toyna from my time at Exide and when he approached me sometime in the autumn of 2023, it was about helping Varta as a consultant.

“With my experience and knowledge in both the battery and automotive industries, this was an area where they needed advice. That was the objective of the first talks. But then he changed course and asked me directly if I would be interested in taking the role of CEO.”

“I’m not arrogant and my door is always open. I treat everybody the same, regardless of their position, income, or social status. I like to think I always see the human and not the job or the bank account”

Having been out of corporate life for a few years, and, at this point, working for himself as a consultant, was a potential leap back into the boardroom something he relished?

“It took me seconds to decide it was the right move,” he says. “But obviously I have a boss at home, my wife. And the Varta office is 500km away from where I live. The same distance, ironically, as Exide, when I lived in Paris during the week. So, it needed to be discussed with her.

“My 10 years at Exide was probably, until today, one of the best experiences of my professional life. I really loved this time; it was very interesting. But I was always a little bit jealous, even then, looking over the fence at Varta, at their brand awareness.

“I found it a pity that such a well-known industrial icon in the battery industry was suffering. Therefore, when I was made the offer, it was really clear to me what I wanted to do.”

Does he think there is perhaps something in his management style that makes him the obvious choice for helping stricken battery firms?

“I think I’ve always been a very accessible, approachable guy,” he replies. “When I first left school, I did an apprenticeship for a year as a locksmith and then I went back to university to study mechanical engineering. But that time before still connects me to the people. I’m a very grounded person.

“And there’s no silver bullet. You have to be open minded and listen to your people. You have to be a fast decision-maker because in a crisis, it’s important to make fast decisions. You also have to be clear and transparent in your communication.”

Focus on the top line

“At the same time, if you’re doing a restructuring, you should not only focus on cost but on the top line. Because when you’re growing your top line at the same time as lowering your costs, you’re doubling the effect of the savings. So, I’m always taking this dual approach with an eye on catching the costs. You have to do both.”

So in what direction does he want to take Varta?

“A big one is the energy storage segment,” he says. “We are focusing on residential and industrial storage and there are some significant growth opportunities, but regularization is urgently required.”

Ostermann pauses. He isn’t keen to get drawn into a political debate but acknowledges that a strong blueprint for the company is its home-grown manufacturing capability. This he believes has become ever more crucial with the demand for energy storage.

“When you think about hybrid warfare and all this stuff today, energy infrastructure is critical,” he says. “If you have, let’s say, a foreign inverter, it can be remotely controlled and switched off. Data is transferred into unsafe data harbors. For me, I would say that the US and China are equal in not being safe data harbors. And this is an important point.

“Varta had a strategy right from the beginning, two or three years ago, when our energy storage product was in the earlier phases, where we knew that the data from our customers, which is collected by the inverter, needed to remain in Europe and not go to the US or China.

“And that is being played out today. Just look at these recent blackouts in Spain and Portugal, and let’s see what the root cause was, if they ever find out, and if ever tell us. It potentially proves that using inverters from foreign countries can result in Beijing or somewhere pressing a button and creating a blank out there. And that’s terrifying.

“We have big dealers out there approaching us and saying: ‘Let’s promote this as a German-made bundle because home security has become a top priority.’ People are becoming more and more concerned. If we really are following the path of de-carbonisation then electrochemical storage will become the backbone of our power supply. And we should all – as individuals, as a country and as the EU – have a common interest in gaining control over this. We have to play it right.”

“I found it a pity that such a well-known industrial icon in the battery industry was suffering. Therefore, when I was made the offer, it was really clear to me what I wanted to do”

It’s a huge task for a man approaching 60, with no retirement seemingly in sight. Does this bother him?

“Success is a big driver for me,” he admits. “If I recognize that I am doing something and changing something for the good, then I find that a high level of motivation.

“What I’m experiencing, possibly for the first time in my career at Varta, is that workers on the shop floor are giving me frequent and positive feedback. They are approaching me, even as I’m walking by, and coming over to shake my hand. That spurs me to carry on.

“Also, I’ve got four children. They’re all in their 20s and while they’ve left home, they haven’t left my payroll yet.” He laughs. “Retirement could be a long way off!”

This will be music to Porsche’s ears, who must surely be relying on Ostermann’s extensive automotive experience in carving out a joint venture with Varta.

“They have a high interest in securing the supply of our V4Smart lithium ion power cell, which has an outstanding performance,” he says.

“You can’t find something similar in the battery industry and it’s already being used in the Porsche 911 GTS model. And they want to develop this technology further. So, the main motivator for this joint venture for them, is to help stabilize Varta and not have an unsteady minority chair.”

Harley or Ducati?

As our interview draws to a close, Ostermann glances at his watch. He has a dinner appointment tonight and is probably wondering what will get him there quicker? His Harley, his Ducati, or one of the several sports cars he reserves for enjoying at the weekends?

“I’ll tell you what it won’t be,” he jokes. “And that’s the motorbike I have for racing. The problem with that bike is two hours of driving and I get three days of pain in my back, my neck, everywhere. I should be fitter.”

I dare to suggest he takes one of Varta’s company electric cars, but he isn’t a fan.

“I don’t want to be too political or polemic,” he says, “but I still have a very big question mark about EVs. When you have one car with one combustion engine, they have an average lifetime of 20 plus years. In some cases, 30 years.

“With EVs this would be two electric cars with at least three battery specs. And from a CO2 standpoint, is this a big advantage for the environment? I have doubts and I’ve never really seen a comprehensive study about it. If you’re going to take a holistic approach, there’s the sourcing and transport of the materials, the manufacturing process of the battery, the recycling processes and then the limited lifetime.

“In Germany, for example, after 30 years, you get an age on your registration plate for a historical car and that has some advantages for you. You know you’re paying less tax. With EVs, I can promise you, you will never, ever, see one single battery electrical car with an age on the number plate in Germany, because none of these cars will reach an age of 30 years.”

It’s possibly quite a contrary view from a CEO who couldn’t be prouder of Varta being one of Germany’s biggest lithium-ion battery producers. But one thing’s for sure about Michael Ostermann. He’s nothing if not optimistic.

“I still believe that mankind will discover that it makes a lot more sense to work together, to find the middle way. And not always seek to get advantages on one side to the expense of others,” he says.

“I once read something someone had written about being very concerned about his future because he thought young people were lazy. He wrote that they don’t want to work, and they don’t want to listen. And do you know who that was? It was Aristotle.

“He wrote that two and a half thousand years ago, raising the same concerns our grandparents raised in 1968 when we had Woodstock, and the same concerns we still have today.

“But I have hope in our intelligence as humans to overcome the challenges we are all facing right now.”

Wise words from a CEO who, in just 12 months, can be applauded for steering Varta sensibly down a bumpy road, with both hands firmly on the steering wheel.

Maybe now he can put his foot down and feel the wind in his hair.