Demag Plastics Group is abandoning its ``platform strategy'' - in which it builds parts at DPG plants around the world for final assembly at the one closest to the customer - in favor of focusing each factory on what it does best.
One result is that DPG's U.S. assembly plant, in Strongsville, will become the global center for making large, two-platen Titan presses. DPG will ship Titans assembled in Strongsville to customers around the world.
Pepyn Dinandt, chief executive officer of parent Mannesmann Plastics Machinery GmbH, outlined the strategy during a July 1 interview at the Strongsville plant.
Dinandt also said MPM is not on the selling block, despite news reports in February that said New York buyout firm Kohlberg Kravis Roberts & Co. was ready to sell the machinery conglomerate. MPM is the world's largest plastics equipment maker, with $1.5 billion in 2004 sales from five brands.
While noting that any company owned by a private equity fund always can be sold, potentially, Dinandt said nothing is happening right now.
``We're not for sale,'' he said.
The Titan, introduced at K 2004, replaces the Strongsville-built Caliber and the Maxx, which DPG assembled in Schwaig, Germany.
The K show marked the full unification of Demag Plastics Group, which was formed by the 2002 merger of sister MPM injection press makers Demag Ergotech in Germany and Van Dorn Demag in Strongsville. The company also has plants in China and India.
Helmar Franz and Bill Carteaux, then-co-executive managing directors, articulated the platform strategy to assemble the large-tonnage Titan machines at each location for quicker delivery to customers.
Then a management shakeup hit. Carteaux left in March to become president of the Society of the Plastics Industry Inc. in Washington. Soon after, DPG abruptly announced that Franz and DPG's chief financial officer, Gerhard Becker, were leaving.
Dinandt praised the former leaders for integrating Demag Plastics Group as a single company - a move he said was encouraged by top MPM management - but he suggested that Franz disagreed with plans for DPG's future direction.
``From the point of view of direction, sometimes there are different opinions,'' he said.
DPG still does not have a replacement for Franz as executive managing director.
``We have some very interesting candidates for the DPG position in Germany that we hope to close within the next, let's say, one or two months,'' Dinandt said.
DPG has named a chief operating officer in Germany, Herbert HÃ¶gemann.
After the top spot is filled in Germany, the company will hire a top executive for the North American position. Brian Bishop is the interim president and chief executive officer.
Bishop said centering Titan production is good news for the Strongsville plant. For the first time, the factory is assembling a large-tonnage press that will be shipped to a customer in Germany, he said.
``We obviously do very well here as a large-tonnage manufacturing facility,'' Bishop said. ``Each plant has its strengths.''
Demag Plastics Group claims to have a 30 percent share of the U.S. market for machines with clamping forces of 1,000 tons and larger.
Dinandt said strategies change. ``Over time, as happens at all locations, we have evolved our strategy,'' he said. ``And the evolution of that strategy is basically this focused approach.''
A story published June 17 in England's Plastics & Rubber Weekly said the new strategy would mean 100 job cuts. Dinandt said there have been some layoffs in Germany and Strongsville, but he declined to give any numbers.
Bishop declined to comment about layoffs in Strongsville.
In the United States, rumors have circulated that DPG will exit the vertical-press market. But Bishop said those rumors stem from people making assumptions about the focused-factory plan. He said the firm still makes Newbury and Praxis vertical machines.
Strongsville also will continue to make the popular HT toggle-clamp presses, and the belt-driven all-electric, the IntElect. A few IntElect presses were under construction during a tour of the site.
A plant in Wiehe, Germany, will continue to assemble the smaller direct-drive IntElect DDs. Wiehe will be the center for small hydraulic and electric machines. A plant in Schwaig, Germany, will concentrate on the El-Exis line, Multi presses and the Concept/System machine family.