(Aug. 30, 2004) — Need a recharge from today's harsh business world and its emphasis on short-term results? Visit the picturesque hamlets of Schwertberg, Austria, and Lossburg, Germany. I had the pleasure during a trip to preview some K 2004 machinery news in late May.
Two small towns, two makers of injection molding machines where family ownership goes back several generations: Engel Holding GmbH in Schwertberg and Arburg GmbH & Co. in Lossburg.
Leaders of Engel and Arburg use old-fashioned long-term thinking. The towns are clean and refreshing in the best European tradition. Neatly kept homes. Narrow streets. Fresh bread every day.
What strikes you is that Engel and Arburg really are the big deals in their respective towns. Engel employs 1,300 in Schwertberg, population 6,300. Lossburg is a rustic Black Forest hideaway of 6,000 people, and 1,600 of them work at Arburg.
The Schwarz family that owns Engel and the Hehls, owners of Arburg, have become internationally known in the world of plastics machinery. Back home, they are true pillars of their modest hometowns.
Brothers Karl and Eugen Hehl were awarded the Order of the Cross for the Federal Republic of Germany, and the same award for the state, for building the business and for their community activism. Their father, Arthur Hehl, founded Arburg in 1923 to make surgical instruments. After World War II, the Hehls changed gears to make camera flash devices, but when corrosion plagued the metal plug connectors, Karl got the idea to encapsulate the plugs in plastic. There weren't many small injection presses in the 1950s, so Arburg built its own. In 1957 the firm shifted completely into plastics machinery.
Today the third generation is at the helm: Michael and Juliane Hehl, the son and daughter of Eugen.
All of the injection presses that come out of Arburg's mammoth plant are built to order. “We are only producing sold machines,” said spokesman Christoph Schumacher.
Stability is a good word to describe the owners of both companies. “There is really a difference in the philosophy,” said Peter Neumann, chairman of the managing board of Engel Holding. “We have long-term investment and we do huge investments — and when you visit Arburg you will see the same — in production facilities and new developments.”
As the Page 1 story in this issue details, Engel has rebuilt after the massive flood of 2002. Move or close the Schwertberg headquarters plant? It was never an option.
Roots run deep. Ludwig Engel founded his namesake company in 1945, as a tiny repair shop. The company turned out its first hand-operated injection press, to run Bakelite, three years later. Leadership passed to his son-in-law, Georg Schwarz. Last year Schwarz passed the baton to his son-in-law, Neumann, who is married to Schwarz's daughter Helga.
Families, of course, have their own pressures. “Maybe they put even more pressure than shareholders on you,” Neumann said. “But it's a long-term strategy and they understand the business because they're involved in the business.”