Schuler has announced that the production of presses and new machine components will be phased out at three of its plants in Germany. Production will halt at its Netphen plant by the end of 2016, and at its Waghäusel and Weingarten facilities by the end of 2017. Engineering and support activities will continue at the three sites, as well as external assembly and servicing. The announcement is expected to affect 450 employees.
Stefan Klebert, Chief Executive at Schuler, said that previous acquisitions had given the company a wide range of production sites in Germany, and that these now required reorganisation. “This will create more efficient manufacturing structures,” he said, “and help us remain successful in the face of fierce international competition.” Schuler currently operates seven plants in the country, but will reduce this to four.
The company supplies a wide range of OEMs worldwide including Ford, GM and Volkswagen, as well as suppliers such as Magna Cosma and Tower International. Products targeted at the automotive industry include press lines, transfer and prog-die presses, and tryout systems.
Schuler has also pointed to changes in its product line-up as a driving factor. Its entry into new market segments such as equipment for the production of large pipes and high-speed railway wheels has seen it take on an increased role as a systems supplier. This has resulted in the company buying a large number of components, leading to a reduction of in-house production.
Make hay while the sun shines
The move does not appear to be driven by financial difficulties. For 2014 the company reported a €5.2m (US$5.8m) increase in profits to €66.9m, and €1.19bn in sales following a 2.6% rise in orders. The company began 2015 with an order backlog of over €1bn. Speaking in November 2013, when initial streamlining began, Klebert said “It’s always better to make such changes when times are good.”
Part of Schuler’s growth has been driven by its increased international presence. In June 2015 the company acquired Chinese machine tool manufacturer Yangzhou Metal Forming Machine Tool Co. (Yadon). Yadon’s clients include some of the country’s major automotive industry suppliers. The Asian market accounted for 34.1% of 2014’s new orders, making it Schuler’s second biggest market after Europe, which accounted for 45.9%. Other acquisitions have included the takeover of Muller Weingarten in February 2008, in a move to cement North American operations. Schuler itself is owned by the ANDRITZ group, which acquired a majority stake in the company in February 2013.
Despite this, Schuler remains adamant that its home is in Germany. Klebert pointed to the large amount of investment the country had received over the past few years. “This is a clear sign that Germany will remain our high-tech location and home base – despite all our globalisation activities,” he said.
A spokesperson for Schuler told Automotive World that confidence remained high in China despite ongoing economic turmoil across the BRICs. “It may well be that there is a certain short-term economic slowdown in China,” he said. “Recent years have seen GDP growth rates of 8%, 10% or 12%. But even if the economy there grows by only 5% or 6%, these figures are way above what we have in Europe. We believe that China will remain the biggest growth market of the future in mid to long term perspective. China accounts for about a quarter of Schuler’s total sales.”
“Russia is not such a big market for Schuler,” he added. “Our sales there as percentage of total sales ranges in the single-digits.”
Back to Göppingen
The closures in Germany form part of an ongoing streamlining strategy dubbed ‘Growing Together 2.0’. Schuler will continue to centralise operations at its Göppingen and Erfurt plants. The Göppingen plant will take on production of all presses that can be assembled in-house. Meanwhile the Erfurt plant, based 169 miles North-East of Göppingen, will become the only site in Germany for large-scale press production.
A €40m investment in the Göppingen plant will see the construction of a technology and development centre. Schuler’s spokesperson told Automotive World that the €40m figure will be the company’s single largest investment. He added that the new building would provide jobs for 750 employees by 2017.
In addition, Göppingen will become home to a research and training centre for press hardening – a lightweight construction process for automotive manufacturing. “Press hardening, or hot stamping, is a promising market,” said Schuler’s spokesperson. “Due to the growing requirements for passenger protection and the need to reduce Co2 emissions, demand is expected to grow in the coming years. The Göppingen centre will serve as both a demonstration centre and a location for training and research on the topic of press hardening.”
The investment is good news for Göppingen. In 2014, Schuler’s streamlining strategy saw the company close an in-house cast iron foundry in the region, which had previously been in operation for over 130 years. The closure affected around 100 employees.
Xavier Boucherat
