CHICAGO — German machinery maker Krauss-Maffei AG will benefit from its complete ownership by Mannesmann AG, said the top Krauss-Maffei executive, Cletus von Pichler — who pledged that his firm will remain autonomous.
Plastics Machinery Technology, by far Krauss-Maffei's largest division, racked up $760 million in 1996 sales, or about half the company's total of $1.5 billion. Krauss-Maffei's plastics holdings are: Krauss-Maffei Kunststofftechnik GmbH, which makes injection molding machines, extruders and reaction injection molding equipment; Swiss injection press maker Netstal-Maschinen AG; Hermann Berstorff Maschinenbau GmbH, a German ex- truder maker; and Billion SA, a French injection press supplier.
Interviewed June 20 at NPE 1997 in Chicago, von Pichler addressed industry speculation about Krauss-Maffei's future under Mannesmann — a German conglomerate generating more than $15 billion in annual sales, which also has its own substantial holdings in plastics machinery. In 1989, Mannesmann began buying shares of Krauss-Maffei of Munich, and steadily increased its stake to reach 100 percent ownership in 1996.
``I will make it very simple: Mannesmann's policy is to let its separate entities be managed autonomously,'' he said. ``They have to go for their products and their markets, so freedom is very much existent. The benefit of being part of Mannesmann is to be part of a worldwide global organization and an extremely financially sound company.''
Management turnover at Krauss- Maffei has fueled the speculation. Rolf Lidl left his job as president in August 1996. Lidl is now chairman of the managing board of Werner & Pfleiderer GmbH, a German compounding extruder firm.
A few months later, when Burkhard WollschlÃ¤ger stepped down after 11 years as chairman of Krauss-Maffei's managing board, he blamed disagreements with Mannesmann leaders about Krauss-Maffei's future. He also said full Mannesmann ownership would reduce his ability to manage the company.
Von Pichler was named the new managing board chairman of Krauss-Maffei. A 23-year Mannesmann veteran, von Pichler has held a number of top management posts. He served on the managing board of Mannesmann Demag AG, where he was involved in the decision to purchase Van Dorn Plastic Machinery Co. in 1993.
The position of chairman of the managing board is similar to chief executive officer at a U.S. firm.
Von Pichler said not to read too much into WollschlÃ¤ger's decision to leave, which amounted to differences in management philosophy.
Both Krauss-Maffei and Mannesmann AG are publicly traded in Germany. But about half of Mannesmann's stock is controlled by institutional investors, including pension plans for large corporations. U.S. institutional investors own about one-third.
``So we are very much driven by the value that U.S. institutional investors put on a company,'' von Pichler said. Mannesmann's shares outperform the German stock market average, he said.
What is von Pichler's management philosophy?
``When you're a European company, first of all, you have to be absolutely present in Europe. You have to cover the European market. Second, you absolutely have to cover the U.S. market. Someone who does not understand the U.S. market, and is not absolutely present in the U.S. should not tackle any other market.''
Von Pichler praised the U.S. unit, Krauss-Maffei Corp. in Florence, Ky.
``I think Krauss-Maffei has an excellent approach in the U.S. Our people do a good job. This can be done only when you give these people sufficient management freedom,'' he said.
Krauss-Maffei officials in the United States will keep pushing the C range of machines, aimed at custom injection molders. The U.S. unit's goal is to sell 200 C machines a year, said Michael Santa, executive vice president.
``This year that number remains a possibility, but it will require a strong second half. We've seen a continual increase in sales over the past three years,'' he said.
Under Mannesmann, von Pichler said, some things will change. For example, Krauss-Maffei will consolidate some of its divisions into larger units. But he said those moves will not affect plastics, as the largest of six divisions. Other, smaller divisions make train locomotives, tanks and weapons systems, surface-treatment equipment, processing engineering systems and automation technology.
The 1996 annual report was the last one for Krauss-Maffei. Sales increased 4 percent at the Plastics Machinery Technology division, to $760 million. Von Pichler said the division made money in 1996, although exact profit numbers are not released.
Here are some highlights from the plastics division:
Sales at Krauss-Maffei Kunststofftechnik of Munich increased by 11 percent, to $394 million. Growth was split across all product groups, injection, extrusion and reaction injection molding machines. German orders for injection presses picked up after several slow years. Demand for pipe and profile extruders was strong in North and South America and Asia, but weak in Europe. Sheet lines sold well in Europe and Asia. Big injection press orders for 1996 included Courtesy Corp. of Buffalo Grove, Ill., which bought 18 Krauss-Maffei presses; European automotive molder Sommer-Allibert Group, which spent $15 million for 19 machines; Black & Decker, which bought 11 presses for its factory in Spennymoor, England; and an 11-machine order from Israeli molder Keter-Plastic Inc.
Netstal of NÃ¤fels, Switzerland, reported sales of $180.4 million. Sales declined by 7 percent, mainly because Netstal sold its U.S. compact disc jewel box molding business, Optima Precision Inc. The firm's U.S. unit is Netstal-Machinery Inc. of Fort Devens, Mass.
Berstorff of Hanover, Germany, reported that sales of its extruders and calendering equipment increased 3 percent, to $137.6 million, on strong orders from tire makers.
Billion of Bellignat, France, said 1996 sales were flat, at $51.4 million.