In 2015 the Group’s turnover was more than 9.2 billion Euros. What is your verdict on the past business year?
Willi Liebherr: All in all, we can be very satisfied with last year’s results. Turnover was higher than in any previous year in the company’s history, despite the fact that the global economy lost impetus compared to 2014. We were especially pleased that there was growth in almost all our divisions.
Which were the growth markets?
Isolde Liebherr: We achieved satisfactory growth rates in Western Europe, America and the Far East / Australia in particular, and there was notably positive progress in Germany, the USA and Great Britain, in other words in well-established industrial countries.
How did business progress in emerging markets such as Brazil, Russia or China?
Isolde Liebherr: Although the business climate in China cooled down, we were able to achieve a positive result. We too have felt the effects of the downturn in Brazil and Russia. We have been active on the Brazilian market for more than 40 years, and have experienced several market fluctuations there. As soon as the level of business takes an upturn, we shall be ready and waiting. There is already promising development in Brazil’s wind power sector, with a definite increase in demand.
What is the situation in Russia?
Willi Liebherr: Political tension between Russia and the West has markedly varied effects for us. Our total exports to Russia dropped further in 2015, though some product areas developed positively. At the same time, increasing pressure to use local content stimulated business activity at our factory in Nizhny Novgorod. We manufacture products for the domestic market there, but also supply locally made parts to our own factories in Western Europe. For us, Russia is traditionally a very important market and will remain so. For this reason we hope that a more relaxed political situation will prevail before long.
You mentioned that Liebherr’s business volume in China has grown. How does this accord with current weaknesses in China’s economic activity?
Willi Liebherr: China is gradually developing into a more mature macro-economy. This is in our interest too, since a well-developed market calls for products of high potential quality containing increasingly advanced technologies.
Our broad-based product portfolio enabled us to expand in China last year. In specific terms we position ourselves as a partner for clients in Chinese key industries such as aviation or automotives, who may be interested in our machine tools and automation equipment. We also see continued potential in China in the construction machinery and mining area, and for maritime cranes.
Isolde Liebherr, which milestones did you consider especially significant in 2015?
Isolde Liebherr: The International Consumer Electronics Fair in Berlin was certainly one of them. We had a totally new family of “BluPerformance” refrigerators and freezers on display there. They are environmentally acceptable and highly efficient in their use of energy.
Another highlight for me was delivery of our first Type LHM 800 mobile harbour crane to St. Petersburg. It is currently the largest mobile harbour crane in the world.
Further milestones were the 30th anniversary of the Interalpen-Hotel Tyrol and the event held to celebrate the 100th birthday of Hans Liebherr, our father. We met many of his contemporaries at this event, which was very impressive and emotional. Since the company’s first product was a tower crane, it is a most gratifying coincidence that last year we secured the largest-ever individual order in the history of this product area.
And for you, Willi Liebherr?
Willi Liebherr: Last year we formed Aerospace Transmission Technologies GmbH, a joint venture with Rolls-Royce. It will supply the production technology for power gearbox components to be used in Rolls-Royce’s new UltraFanTM engine.
This is another addition to our performance potential in the aviation area, and renewed evidence of our technological competence, since we were able to adapt existing in-house technology for the new application. If we were not in possession of the relevant gearbox know-how, Rolls-Royce would certainly not have considered us as a technology partner.
Another major landmark I would choose to mention again is our first large order from Boeing. For the 777X wide-bodied aircraft we will be supplying the wingtip folding system, the drive unit and hydraulic motor for the wing leading-edge actuating system and all the actuators for the high-lift divide system. This is a major success for us.
Yet another important milestone reached last year was a cooperation agreement with the Claas company. In accordance with its requirements, we will be developing and building a telescopic-boom loader for use in agriculture. The machines will be built at our factory in Telfs, with series production due to start within two years. Also high on my list was a major order in the wind power area, placed at the end of the year by Enercon. The volume of this order demonstrates yet again that our customers value reliable suppliers capable of delivering top quality consistently for many years.
Isolde Liebherr: And that is precisely where we are immensely strong.
Willi Liebherr: Correct – which reminds me to say a word or two here about our mining area. Although the extraction industries are currently in a difficult situation, there were nonetheless several welcome developments in this product area. We celebrated 20 years of mining truck manufacturing in Newport News, USA. We also delivered our hundredth Type T 282 C truck – a giant vehicle with a service weight of up to 600 tonnes – to Australia. Last but not least, the PR 776 crawler tractor for mining and extraction work was an important new product, the world’s largest crawler tractor with hydrostatic transmission. Although the market is still weak, we haven’t altered our targets; in fact we have optimised our extensive product range and enlarged it still further. For us, this had top priority.
Turnover was higher, but earnings went down again. Does this worry you?
Isolde Liebherr: Not in the least! We know precisely where we need to take action. We have three large divisions that are currently not achieving satisfactory results, though they are already back on the right path. Furthermore, our investments and depreciation are permanently at a very high level, which has an effect on results. Nevertheless, we have no intention of reducing what we regard as investments in our future. We shall continue to strengthen our Group systematically. Exchange-rate fluctuations also exert a considerable influence on results: this can be positive in one year, negative in the next. The operative result was better than in the previous year; the drop in earnings is entirely due to the financial result. All in all, we regard the future with equanimity.
What was your investment focus?
Willi Liebherr: We have invested considerable sums in all our divisions. One of our objectives is to optimise logistics processes at various locations. Components were another priority. We reorganised this division in recent years with the aim of strengthening its ability to compete. This has involved extensive investment, for example in Biberach, Bulle and Deggendorf.
Which technologies did the Liebherr Group mainly work on in the past year?
Isolde Liebherr: Despite the enormous diversity of our product programme, the main topics are often very similar, for example using energy more efficiently and reducing the weight of our products. Other important areas are digitising, networking and automation, and also making the machines and systems solutions we supply easier to service.
Can you give us an example?
Isolde Liebherr: Certainly! Let’s take the term “digitising” as it’s applied to the planning and monitoring of our customers’ construction sites. As systems provider, our task is to network the individual construction processes by means of suitable IT tools, and support the work undertaken by everybody concerned wherever this can bring practical benefits. It’s already possible for construction companies to survey a site automatically. We in turn can use this survey data for our planning tools and on this basis recommend the ideal machine for the specific task. We can also offer our customers an opportunity to test the chosen machine in conditions close to reality – in a simulator that resembles the ones the airlines use. We can go even further, with systems that combine the correct positions of the construction machines and the process data. We then have the answer to questions such as where the machine is standing and precisely where the next operations have to be performed.
So you’re looking at the construction site of the future...
Willi Liebherr: Yes we are, but of course digitising and integration of our machines on networked construction sites are only one part of the picture. We also aim to extend our existing know-how to new applications. This can for example mean using aviation technologies in space travel, for the automobile industry or on rail vehicles. In response to a commission from the German Environment Agency, we are currently working on a project for the sustainable air conditioning of public transport vehicles. It makes use of technology from our aerospace business area.
This is one of our true strengths: the wide variety of technologies we have mastered and our skill in adapting them for use in other applications. But technological competence is not everything: the decisive factor is the complete package we offer our customers. My sister has emphasised our determination to maximise the efficient use of energy, and to make our products easier to maintain. A high-quality product is not an end in itself; we must back it up with customer support throughout its operating life. This starts by offering prospective customers an advisory service, supplying an economical machine and reliable after-sales support and in due course reconditioning certain components and selling the machine second-hand at the highest possible value.
Our aim, in other words, is to offer greater value for money in every phase of the product’s life and support the customer reliably with practical suggestions and recommendations. You could call it Liebherr’s “all-round carefree package”. We work hard on this matter not only in the construction machinery sector but in all the Group’s divisions.
In a recent opinion poll you were both chosen as being amongst Germany’s most popular company executives. The Liebherr Group has also been praised in several employer surveys. What does this mean to you?
Isolde Liebherr: We’re naturally pleased to be chosen for distinctions like these, but they’re not the focal point of what we do. We concentrate instead on the quality of our work. For us, the company and its employees are the most important factors, and if we and they succeed together, then we’re on the right track.
Are there any internal family rules that all the active shareholders are expected to comply with?
Willi Liebherr: Our company has been growing for more than 60 years, and in that time certain rules have emerged for the executive members of the family. For example, it’s very important for the emphasis to be on the company as a whole, not on individuals. We have to keep a clear head so that we can devote ourselves to business activities. One of our principles is that you have to get close to a situation in order to assess it properly. This calls for all the family partners to be prepared to accept a high degree of responsibility.
What value is attached to personal responsibility in the Group’s corporate culture?
Isolde Liebherr: The employee’s personal responsibility is one of our management guidelines. Our task is to create appropriate general conditions for this purpose. Personal responsibility is much more motivating than any set of rules. People often say how impressed they are by the amount of freedom of action we give our staff. We’re convinced that this policy is a key to our success. At the moment we are working on widely different strategic human resources and employer branding projects. What many young people expect of an employer has changed a lot, and we are taking this into account.
This year Liebherr is celebrating 66 years of vocational training; what value does the company attach to training?
Willi Liebherr: We have always considered initial and follow-up training to be important. The current tendency is to complain about the shortage of skilled employees, which goes to show how essential a high-quality training programme is for every company. We offer young people an extremely broad range of initial or follow-up career training in technical and commercial trades. We also provide various opportunities for dual-system study.
Last but not least: will you risk a forecast for the current year?
Isolde Liebherr: We expect our total turnover to be at the previous year’s level. We shall continue to expand our worldwide activities and invest considerable sums again in our production facilities and our sales and service network. And we won’t depart from our principles: we will remain a trustworthy partner in the customer support area – one that puts its technological know-how at the customer’s disposal.
Isolde Liebherr and Willi Liebherr – thank you for this interview.