DUSSELDORF, GERMANY — Change is afoot at the various plastics machinery operations owned by Mannesmann AG. The company on Nov. 17 announced plans to bundle its previously separate manufacturers of plastics machinery.
Mannesmann is creating a new business unit, Mannesmann Plastic Machinery, to gather all its plastics holdings under one command.
Mannesmann's plastics machinery business includes five of the biggest names in injection molding presses, but to date its activities have been split between two chief units and their subsidiaries: Mannesmann Demag AG and Krauss-Maffei AG.
Mannesmann Demag's operations include Van Dorn Demag of Strongsville, Ohio, and Mannesmann Demag Kunststofftechnik of Schwaig, Germany. Krauss-Maffei include Krauss-Maffei Kunststofftechnik of Munich, Germany; Netstal-Maschinen AG of Nafels, Switzerland; Hermann Berstorff Maschinenbau GmbH of Hanover, Germany; and Billion SA of Bellignat, France.
``Mannesmann is taking the plastics businesses out of the Krauss-Maffei group and the plastics businesses out of the Mannesmann Demag group and putting them into one plastics group,'' Jerry Pryor, president of Van Dorn Demag, said in a Nov. 18 telephone interview.
Five separate operating business units will comprise the new group: Billion, Netstal, Van Dorn Demag, Demag Ergotech (which is changing its name from Demag Kunstofftechnik) and Krauss (changing its name from Krauss Maffei Kunstofftechnik).
Compounding extruder maker Berstorff will join the group later, Krauss-Maffei spokesman Guido Radig said in a Nov. 20 interview.
``The parent company will be able to evaluate and focus on the [plastics] business,'' Pryor said, noting the various non-plastics-related businesses of Krauss-Maffei and Mannesmann will separate from their plastics units.
The new combined activities will employ about 5,400 and achieve 1997 sales of DM2.1 billion ($1.21 billion).
Mannesmann AG and Krauss-Maffei had been separate publicly traded firms, but Mannesmann began buying shares of Krauss-Maffei in 1989, and became 100 percent owner in 1996.
While still competing against each other in some markets, Mannesmann's newly combined companies benefit from ``leveraged purchasing capabilities, economies of scale and strategic product development,'' Pryor said.
Pryor and Radig agreed the new Mannesmann group would resemble a plastics machinery version of General Motors Corp. GM's Buick, Chevrolet and Cadillac share a common ownership while competing for buyers on some models and targeting different types of consumers on other lines.
``Each one of the business units will maintain its autonomy,'' Pryor said, adding the Mannesmann group will provide ``strategic direction.''
Netstal, as the ``Cadillac'' of the new group, will continue to concentrate on its high-tech, high-speed machines, Radig said, with the other businesses focusing on their own niches.
Billion, for example, is not a global company, but ``is very well-known in France,'' Radig said. ``They are our French connection.''
At NPE in June, Cletus von Pichler, the top executive at Krauss-Maffei AG, pledged that his firm would remain autonomous under Mannesmann's ownership.
Under the new structure, Krauss-Maffei will hold 90 percent of the new group, with Mannesmann Demag holding 10 percent.
Even though both Krauss-Maffei and Mannesmann Demag are owned by the same parent, the ownership structure has an impact on the board membership as well as the choice of headquarters location, Radig said. The new group will be run out of Krauss-Maffei's home base of Munich.
And while the Krauss-Maffei Kunststofftechnik name will be shortened to Krauss under the new arrangement, its machines likely will still be branded Krauss-Maffei, Radig said.