SCHWAIG, GERMANY — What does the creation of Mannesmann Plastics Machinery AG, a behemoth with $1.3 billion in annual sales, mean for the six companies it owns — continued autonomy or a top-down management that dictates each company's strategy?
At pre-K'98 news conferences, major German machinery makers Krauss-Maffei Kunststofftechnik GmbH and Demag Ergotech GmbH touted their technical prowess as the Dusseldorf, Germany, show nears. But trade press reporters asked as many questions about MPM, the world's biggest plastic machinery builder, as they did about innovations planned for the Oct. 22-29 K show.
In November, Mannesmann AG, one of Germany's biggest industrial conglomerates, announced plans to group its plastics equipment companies under a single unit. Previously, the companies had been run separately.
The new unit formed Jan. 1, and includes: German injection press builders Krauss-Maffei and Demag Ergotech; Van Dorn Demag Corp. of Strongsville, Ohio; Swiss injection press maker Netstal-Maschinen AG; and French press builder Billion SA. The group also includes one extruder manufacturer, Hermann Berstorff Maschinenbau GmbH. Krauss-Maffei also makes extruders and polyurethane processing systems.
Wolfgang von Schroter, Demag Ergotech's executive managing director, and Wilhelm Schroder, chairman of Krauss-Maffei's managing board, each said the reorganization is good for their firms.
They agreed that the individual companies that comprise MPM need to remain separate and compete against each other — even as MPM sets up teams to study how to coordinate purchasing common components, buying capital equipment such as metalworking mills, and other issues.
MPM is creating those teams now, officials said.
Schroder acknowledged the process will not be easy. ``This is a principle that requires a lot of discipline on the part of our bosses,'' he said during Krauss-Maffei's June 16 news conference in Munich. The credibility of each company is at stake, said Schroder, who predicted: ``We will succeed to accomplish this differentiation.''
Schroder said there will be no joint projects and that MPM units will not trade price lists. MPM members will buy some parts together. ``But that's only for basic components,'' he said. ``The machines themselves will remain under separate development.''
In Schwaig the following day, von Schroter echoed many of the same themes.
``We see [MPM] positively, of course,'' he said. ``Ours is a policy of multiple brands competing with each other. Competition is desired.''
Von Schroter kicked off Ergotech's news briefing by addressing the issue, which he said was reported inaccurately in a Frankfurt, Germany, newspaper recently. He called MPM ``an interesting experiment in what is often a conservative industry.''
He said Demag Ergotech will continue its strategic alliance with Van Dorn Demag. Each company markets the other's injection molding machines in its home market. Demag Ergotech also manufactures small-tonnage machines at a facility in Wiehe, Germany.
Questions about the autonomy of plastics machinery builders owned by Mannesmann AG began in 1989, when Mannesmann started buying shares of Krauss-Maffei. Krauss-Maffei itself bought several companies, including Billion and Netstal.
Mannesmann bought Van Dorn in 1993 and, after steadily increasing its stake in Krauss-Maffei, reached 100 percent ownership in 1996.