“I would rather lose money than trust”

September 23, 2011, marks the 150th birthday of Robert Bosch. “I would rather lose money than trust” is one of his best known sayings. Values such as credibility, reliability, and legality formed the basis of his entrepreneurial action – and have lost none of their validity for the company he founded. They are the compass for the Bosch Group’s innovative strength, quality standards, international orientation, and corporate social responsibility. In combination with these, they form the basis for ensuring the company’s lasting business success, as well as its ability to meet the challenges of the future, just as Robert Bosch would have wanted. Apart from the 150th anniversary of the birth of its founder, Robert Bosch GmbH is celebrating its 125th anniversary this year.

Turning a workshop into an international industrial enterprise

Robert Bosch was born on September 23, 1861, in Albeck near Ulm in southern Germany. Following an apprenticeship as a precision mechanic, and after having worked for several companies outside Germany, he opened his “Workshop for Precision Mechanics and Electrical Engineering” in Stuttgart on November 15, 1886. Referring to these early years, he once said: “My business, which was originally very small, gradually began to develop more swiftly after long and painstaking efforts.” Even then, this success was due to his innovative drive and high quality standards. The construction of a low-voltage magneto ignition device for vehicle engines in 1897 was the start of a long list of Bosch innovations. But It was its successor system, the high-voltage magneto ignition system launched by Bosch in 1902, that was the decisive commercial breakthrough for the young company. Under the guidance of Robert Bosch, the company developed a whole series of technical and technological innovations that made people’s everyday life and work significantly safer, more comfortable and more efficient. Examples include windshield wipers, the diesel injection pump, and power drills and drivers.

 

Bosch founded its first agency outside Germany in 1898, in the United Kingdom. This was the start of global expansion, with new branch offices and manufacturing sites being set up around the world. The early decision to nurture the company’s global presence and transform the business into a successful worldwide development, manufacturing, and sales network was one of the most important strategic initiatives undertaken by Robert Bosch.

Responsibility and social commitment

Robert Bosch was a socially minded entrepreneur. “Employer and employee are equally dependent on the fate of their company,” he wrote in an essay dating from 1920. In 1906, when he became one of the first employers to introduce an eight-hour working day, he was once again well ahead of his time. By shortening working hours, Robert Bosch eased the burden on his workers, and at the same time increased productivity by introducing a second shift. In other words, this was an entrepreneurial decision that benefited both the company and the workforce in equal measure. Apart from making several donations for civic initiatives and charitable causes, Robert Bosch also endowed a hospital in Stuttgart, which still bears his name to this day. In addition, the occupational and further training of his associates was an issue of the utmost importance to Robert Bosch. In 1913, he set up his own apprenticeship department with a training workshop. Associate training and qualification still command an important position at Bosch to this day. In September 2011, some 1,500 young people began a career at Bosch in Germany. In 2010 alone, each associate worldwide attended an average of two training courses.

His last will – still relevant today

Robert Bosch died in Stuttgart on March 12, 1942. In his will, he set out the fundamental guidelines for his successors. The financial independence and autonomy of Robert Bosch GmbH were especially important for him, since they would secure the company’s long-term success in the future as well. After the end of the second world war, Robert Bosch’s legacy paved the way for his company’s renewed rise to a global supplier of technology and services – in 2011, it is expected that the company’s roughly 300,000 associates will generate sales of more than 50 billion euros. The company’s successful rise has been marked by technological progress and corporate social responsibility – just as the company founder would have wanted.

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A new home for UK’s Process Engineering magazine

Centaur in the UK, the publishing group, announced their annual results today. You may remember them as the publishers of “The Engineer” magazine, and as the people who bought the well respected and ground-breaking set of websites, led by EngineeringTalk.com, ManufacturingTalk.com and LaboratoryTalk.com, closely followed by ProcessingTalk.com. The original developers of the website business were paid around £4Million for the acquisition, in 2006.

Business review in July 2011

Following a review of the Centaur business activities last summer, they finally realised that these website activities had gone downhill, into a significant decline, and so they reversed most of them into the website for the Engineer magazine – a place with not a particularly good track record, as the original home of the E4Engineering website.

An announcement at the time also said that the magazine “Process Engineering” edited by Patrick Raleigh, and “Metalworking Production”, also known as “Advanced Manufacturing”, (edited by Mike Excell) would also be sold, along with some staff restructuring which led to some further redundancies. This was reported in this blog on https://nickdenbow.wordpress.com/2011/07/03/the-internet-mixes-up-the-pr-and-the-editorial-work/

Latest twists

The statement made in the annual results advises that “On 12 September 2011 the group disposed of the business and assets of the Process Engineering magazine and website and LaboratoryTalk website for a total consideration not exceeding £0.4m.  The consideration is dependent on the future revenues of the business and is payable over the next five financial years.”

More interesting is the report on the future for LaboratoryTalk, quoted by Russ Swan, the ex-editor and founder of LaboratoryTalk, on his new blog  http://laboratoryoratory.com/?p=93. The new owner is Synthesis Media, which Swan advises is owned by Sean Marshall, who was until the recent shake up at Centaur a Group Publisher there, in charge of the Talk websites and the Process Engineering magazine. Swan has no links with Synthesis Media.

Perhaps more interesting to process industry readers is that Synthesis Media has also acquired the Process Engineering paper magazine, with its editor Raleigh, and the previous Advertising Manager.

What is less certain is whether the package bought by Marshall will include ProcessingTalk, to be positioned alongside or within the Process Engineering website.

Plus what about Metalworking Production?

In that the Centaur announcement of its plans to sell MWP were announced early in July, it was interesting to see a June 2nd release from Centaur that announced “a new partnership with Industrial Communications Group Ltd, Hong Kong: ICG is to publish a Chinese edition of MWP advanced manufacturing, under license from Centaur. The magazine will launch in July 2011 on a bi-monthly frequency and will be circulated throughout China to 15,700 engineering and manufacturing professionals. MWP advanced manufacturing has been serving the manufacturing sector in the UK for over 100 years but this is the first time it has ever launched an international edition. The magazine will be produced in Hong Kong using content from the UK edition, with additional local content produced by an editorial team in China.”

A long partnership envisaged

On June 2nd Dan King, International Licensing Director at Centaur, said: “We’re delighted  to be launching MWP China and hope this will be the start of a long and successful partnership between Centaur and ICG.” At least it looks like MWP is still being published as of today!

Spectris snaps up Omega Engineering for $475m

This report was first published in the Industrial Automation INSIDER for September 2011.

Spectris, the UK based instrumentation and controls conglomerate, the holding company for Malvern Instruments, Brüel and Kjær, HBM, Servomex, Microscan, N-Tron and Red Lion, to mention a few, has expanded radically with its largest acquisition to date, purchasing Omega Engineering for $475m. Omega Engineering will add around 10% to the Spectris group turnover and staff numbers. The Spectris Group is described in more detail in a May 2008 report on UK conglomerates on the INSIDER blog (1).

Omega Engineering was formed in 1962 by Betty Ruth Hollander, in her home in Stamford, Connecticut, supplying temperature measurement and control products. The business has remained family owned and managed, offering a broad range of process measurement and control instrumentation to customers in industrial and academic markets, which are sold directly to end users in these sectors via catalogue, telephone and internet. Omega has a differentiated customer service model with emphasis on providing high levels of service, quality, availability, customisation and speed of delivery, and has achieved very high levels of repeat business.

Current results

Omega has five manufacturing and two distribution/sales facilities, and employs around 700 people, achieving sales of $168m in 2010, with adjusted operating profit before interest and tax of $39.6m. Sales are concentrated 80% in North America, with 10% in Europe: best known manufactured brands are Omega and Newport, but many other manufacturers supply products for the ubiquitous Omega catalogues, including Red Lion Controls, from within Spectris.

Betty Hollander passed away earlier this year at the age of 81, leaving her husband and four children: as founder, ceo and chairwoman of Omega she had become known as one of the world’s leading female entrepreneurs and industrialists, but had always listed her main occupation as “wife and mother”. Under her leadership, Omega had successfully migrated from the catalogue sales route to the web, with 90% of customers using the websites, and 34% of orders placed via the web. The customer base is very diverse, and average order value low, but there is strong long term customer loyalty, with 89 of the top 100 customers being established for over 10 years.

John O’Higgins, chief executive of Spectris (2), commented: “We are delighted to have reached agreement to acquire the Omega Engineering business, which will bring a significant strategic growth platform to Spectris. Omega will continue to serve its customers with innovative products and outstanding service. With its focus on control of temperature, pressure, flow and other common industrial process measurements, Omega is a natural fit for our industrial controls segment and enables us to expand our product offering to customers globally.”

H1 2011 Results at Spectris

Spectris operates across four business segments, which reflect the applications and industries it serves: Materials Analysis, Test and Measurement, In-line Instrumentation and Industrial Controls. In reporting the 2011 H1 results for Spectris, O’Higgins highlighted that the industrial controls segment represented only 8% of total sales: by adding Omega alongside Red Lion (operator interfaces, protocol converters, panel meters, signal conditioners, plus N-Tron Ethernet switches) and Microscan (track, trace and control solutions using machine vision, lighting, RFID and barcode reading) the controls segment will grow to 15-20% of group business, and can benefit from geographical expansion.

In 2011 H1 Spectris group sales were GBP507m ($820m), up 21% for existing businesses YOY, or 25% after including acquisitions; and operating profit was GBP81.5m ($132m), up 63%, and achieving 16% of sales: R+D investment has been maintained at the target level of approx 7% of sales. The materials analysis segment had performed well in metals and mining, notably with the Epsilon 3 benchtop X-ray fluorescence spectrometer in mining, cement and petroleum applications: academic markets were strong, particularly in emerging economies. Another new product is the Facility Pro environmental monitoring system, unique in combining both biological and particle contamination monitoring on a single platform for monitoring clean-rooms in pharmaceutical production areas: the whole pharmaceutical market held up well for Spectris through the last recession.

From wind turbines to paper production

Test and measurement (Brüel and Kjær) performed well, with growth in noise monitoring in the mining and construction industry, with a new market opening up monitoring wind turbine noise in the power industry. In-line instrumentation had performed well in the paper and tissue industries, particularly in China, with BTG producing a new zeta potential analyser for pulp and paper producers, after some development collaboration with Malvern Instruments.

Geographical spread

Geographically Spectris saw Asia-Pacific sales grow strongly, at 21%, overall, 39% in China, making this the second largest regional market, almost on a par with Europe. There was also strong growth in Latin America, particularly Brazil, where sales increased almost 30%: a new facility has been established in Sao Paulo with applications laboratories and training rooms. Sales growth in North America was strong at 26% YOY at constant exchange rates.

Footnotes:

  1. For more information on Spectris see the May 2008 report on UK conglomerates in this INSIDER blog, www.iainsider.com. See https://nickdenbow.wordpress.com/2008/05/14/conglomerates-corporate-style-halma-spectris/
  2. O’Higgins joined Spectris in 2006, from Honeywell, where on Linked-in he quotes that he was president of automation and control solutions, Asia Pacific region.