Interview with Mr. German Wankmiller, Chairman of the Management Board on the occasion of the AMB 2022 in Stuttgart

Mr. Wankmiller, how does it feel to be back in Stuttgart at this important leading trade fair after a four-year break from AMB?

Leading trade fairs continue to be very important for GROB, as we can hold an immense number of discussions in five days. AMB and EMO are important leading European trade fairs for us. However, we have also come to the realization that in-house trade shows at our plants are a very good complement to international trade fairs. During the in-house exhibitions, we can present our complete product range from metal cutting machines with automation to the various e-mobility products in action, in our application centers and assembly halls. We will continue to coordinate our trade fair planning for an ideal combination between the international trade fairs and our in-house trade shows.

What are the most important topics for GROB to communicate with its seventh participation at this mechanical engineering trade fair?

We will show our latest metal cutting machines in the field of universal machining centers, as well as in the system business for the automotive industry. These are the 4-axis G440 machine, the small 5-axis G150 machine and the large double-spindle G520F for machining frame structure and chassis parts. In addition, we will be showing our GMP300 3D printer with liquid metal printing technology for the first time. The G440 and the G150 are fitted with GROB automation equipment, such as rotary pallet storage and robot cell. With these new machines, we have even more extensive possibilities to cover the wide range of part machining in the machining area. With GROB automation equipment, we additionally demonstrate that GROB metal cutting machines can also be operated unmanned for longer periods of time. In a vehicle substructure model, we show the new electric powertrain components and very lightweight frame structure parts in the new cars. All these components can be ideally produced with GROB machines.

What do you think are the highlights of this trade fair?

There are no groundbreaking innovations that surprise us. There are further developments, which are also presented in the competition with automation. Also further developments in digitization and networking. Although this topic, which hit the trade fairs as hype four years ago, has become somewhat relative, like autonomous driving in cars. Digitization and networking still exist and are also very important. Otherwise, there are no quantum leaps in CNC technology. In short, GROB is well on its way with its analyses. We place the right machines with the best conditions for modern production. 

The focus of the AMB trade fair is on machining, and GROB is showing its new GMP300 liquid metal printing system from the field of additive manufacturing for the first time. How does that fit together?

We are allowed to show this machine technology here because it also has to do with metalworking in the broadest sense. For us, this is the first international test of how this machine is received. So far, the test with this machine was a home game at our in-house trade show. Now we realize that there is a lot of interest for this machine. We were also able to prove once again that GROB still dares to take completely new paths in development. Personally, I see the field of additive manufacturing as another promising market, especially since 3D printing in general is becoming more and more important in production.

How do you see the development of the German mechanical engineering industry in view of the current global market challenges?

Technologically, I still see the German mechanical engineering sector as being in the same good position as in the past, having adapted well enough to the changes. However, we see more and more that China has started and will continue to expand its self-sufficiency. In the medium and long term, we at GROB will no longer be able to supply the volumes of machinery to China that we did in the past. This is a clear strategy of China, which is becoming increasingly more evident. This is initially a painful path for German machine builders when such a market is increasingly declining. For GROB, this development comes at a time when, fortunately, we can painlessly reduce the share of machining through e-mobility, as we can preferably serve and supply customers in Europe with e-mobility. Our business from Asia is led locally from our site in Dalian. This is a development that also confirms our strategy.

Asian development - especially in China - in the area of technology know-how is perceived by many in Europe as a threat. Do you also see this danger and how is GROB dealing with this development?

We have been able to gather intensive experience in China for ten years and anticipated even then that these increases would not be sustainable in the long term and prepared ourselves accordingly.

How do you assess the current trend toward electric drives? Aren't you concerned that completely different drive types, such as hydrogen, could be relevant in the future?

We constantly monitor and analyze the development of drive technologies. The switch to hydrogen will not be quick and sudden, as the production of hydrogen is energy-intensive and not easily feasible in terms of process technology. Hydrogen is without doubt an ideal energy carrier. The technology for use in cars is still complex and still too expensive. It will therefore be quite some time before hydrogen drives can be marketable on a large scale.

How did sales and incoming order volumes develop at GROB?

Our order volume in this fiscal year (since March) is phenomenal and currently amounts to 1.2 billion euros. More than twice as high as last year. The e-mobility technology area accounted for 2/3 of the order volume. 

GROB then has become one of the world market leaders in the field of electromobility in a very short time? How did GROB make the leap from machining technologies to e-mobility technologies?

In 2016, we started with the first trials in e-mobility. In 2017, there were still some projects for electric drives with round wire technology. A year later, in 2018, came the breakthrough in the automotive industry for hairpin technology, and we experienced a brilliant start at GROB with systems for the production of electric drives. 

To what extent is GROB dependent on fluctuating energy markets?

The increase in energy costs is also difficult for us. Energy is a significant cost factor for us in the company and we expect energy costs to double. The biggest factor, however, is the sharp increase in material costs, as these account for 50 percent of our total costs. This means that this year alone we can expect additional material costs of over 55 million euros. In contrast, the costs for electricity and energy are not as significant. 

What impact do the current uncertain supply chains have on production at GROB

We already have major problems and expenses with the uncertain supply chains, but we can still deal with them to some extent. However, we also see that the situation is neither improving nor deteriorating. 

America, Europe, China traditionally each contribute one third of GROB sales. What are the effects of the lockdowns in China?

The sales shares of these three main markets have shifted at GROB: Europe is currently at 40 to 45%, PR of China at 25%, and the U.S. at 30 to 35%. We can also see that globalization as a whole is declining sharply, which has greatly affected us as an export company. We used to be very centralized in the old tech world. We have now stepped up the expansion of our subsidiary plants. This has made us more independent, but it was not easy to manage.

For years, there have been complaints about labor shortages, especially in the area of skilled workers. How does GROB manage to meet this challenge, especially in rural areas?

A top issue at GROB. We hired more than 660 new employees from January to the end of August and expect to have 800 additional employees on board in Mindelheim by the end of this year. The integration and qualification of these employees is a major challenge for managers and HR management. We have set up method programs so that every new employee is assigned an experienced mentor who explains the work tools and accompanies them in their work. This way, every new employee gets direct feedback on what they are doing right or wrong.

To what extent does or did Corona have an impact on GROB's business?

Corona had a big impact on us. We could no longer easily send so many employees to set up/commission the machines. The quarantine measures put a lot of strain on people and cost us a lot of money. When there were problems in the markets, we were unable to send a staff member fast enough and had to solve everything laboriously online or with local support. At present, we are also experiencing enormous difficulties with the timely supply of materials. Caused by the various crises, supply chains and production capacities continue to be disrupted and reliable supplies are not available.

How has GROB managed to meet the challenges of digitization in all areas of the company?

Digitization is a top issue for GROB and will remain so in the future. The many different GROB products contain data sets in mechanical, electrical and control technology that must be maintained and adapted throughout the entire product development process. The entire order processing, from sales and purchasing to controlling and the finance department, is complex and makes continuous, integrated data management indispensable. GROB will consistently drive forward digitization and networking in order to create the best conditions for all processes, procedures and departments with maximum transparency.    

Where do you see GROB in five or ten years?

The environment in which GROB operates, with its focus on the automotive industry and its international competitive situation, requires maximum concentration and a grasp of the essentials. Our business will always remain highly demanding. A decisive factor for continued success are the employees, their qualifications, and their ongoing high motivation to work for the best solution in order to consistently guarantee the high quality of GROB products. A combination of team spirit, enthusiasm for technology and quality that must come together again and again every day.

Thank you for the conversation.