First, Japanese company DMG Mori Co Ltd has bought a further 12.1 million shares in the German firm DMG Mori AG, increasing its ownership ratio in shares and voting rights from 60.67% to 76.03% (the Japanese company bought its controlling stake a year ago). Reaching a share of over 75% allows the Japanese parent further rights over transferring profits and controlling its ‘consolidated company’, according to German law.
The move was prompted by macroeconomic factors, explains DMG Mori Co Ltd president Mori: “Due to the fact that borrowing money is much easier in Japan than in Germany or Europe, and also the interest rate is very low – less than 0.5% – we started to buy the shares of the AG side to do a share reintegration.”
But he was at pains to add that the change would not result in an ownership style in which Japan dominates Germany. He explains: “The split is still at an eye-to-eye level, it’s a 50:50 relationship and, technology-wise and employee-wise, we respect each other; we’re just going to make more efficient the customer-focused organisation.”
But the deal has prompted the resignation of Dr Rüdiger Kapitza, the outspoken chairman of the executive board of DMG Mori AG. His resignation “is clearing the way for a personnel realignment, taking into account the planned domination and profit transfer agreement”, a company statement offered.
The executive, who had more than 40 years’ service with the firm, said in April: “With the global positioning and a dedicated young management team at DMG Mori AG, I consider the company to be in good order. DMG Mori can look to the future with optimism and pride.”
THE NEW STARTER
In his place, the DMG Mori AG supervisory board has appointed Christian Thönes. Formerly managing director of DMG Mori AG subsidiary Sauer, as well as the Deckel Maho Pfronten, Germany, factory, and a four-year veteran of the executive board, he has more recently been in charge of optimising production plants and product lines.
So far, so international. When asked how these changes will affect the UK, Mori says: “I think that we can get a little bit more flexibility for Steve Finn and his team. We have close to 100 people in the UK. For [antecedent] Mori Seiki it is an historical market, since the 1970s, and we have a very good customer base and trust with them. These very high-end, high-tech customers need more technology solutions and systems.” He says he is giving DMG Mori UK more freedom to offer customised machines for particular customer applications. Such work would run counter to the sales approach of DMG Mori businesses in Germany or Japan that, he says, tend to rigidly restrict their offerings to the inventory of the product catalogue.
Mori adds: “But in the UK, customer requests are very exceptional. Sometimes that is quite tough, it’s challenging, but there is an atmosphere that the customer and manufacturer or solution provider are working together to achieve a target. In that sense, we’re going to create a very unique solution provision to the UK customer. We want to not only differentiate ourselves from other machine tool providers, but also we are going to become a real solution provider and real partner for the customer.”
The DMG Mori stand at MACH 2016; the company's Celos CNC interface was an unmissable feature
The consequences of such a plan will have global implications, explains the company president: “For me it is very important to have a good connection with top-notch UK customers to create good business in the rest of the world.” He mentions particularly customers in aerospace, energy, defence and medical devices industries.
For his part, DMG Mori UK managing director Steve Finn adds: “I appreciate the support that comes from the parent company. Whilst I’m working with companies in the UK, a lot of those companies are indeed [operating internationally]. We get support from the group – in key accounts and in other areas – that is vitally important. So we wouldn’t grow our business in isolation; we’ll grow within the group.”
Overall, DMG Mori employs more than 12,000 people, has annual global top-line revenues of EUR 3.5 billion (£2.7 billion) and benefits from profits of about 7% before tax, a figure that, Mori says, the company wishes to improve. One step toward doing so is by reorganising production in Japan, a plan not covered during the press conference but reported by Japanese news agency Nikkei in April. The plans call for shutting the company’s Chiba factory by September and shifting production to its Iga plant. Then called Mori Seiki, the company acquired the Chiba factory when it bought Hitachi Seiki in 2003; its other Japanese factory site is in Nara.
At the press conference, Mori returns to the theme of collaboration with industry partners when discussing the advantages of DMG Mori machines compared to competitor offerings. He says: “Talking about the size of the ballscrews or the weight of the machines is over. Of course that is very important. But there are more and more open innovations with peripheral suppliers who are cutting tool companies, measurement companies like Renishaw or Blum, or providers of high pressure coolant or coolant itself. We have to work together with other companies [to create] embedded software: how to combine the entire solution together. The quality of the programs and embedded software is becoming very important.”
Combined technologies and technology cycles are the way forward for DMG Mori, the company president says, exampling: gearcutting on 5-axis machine tools, turbine [blade manufacturing] technologies on mill-turn machines; adding grinding technologies on some machines; laser technologies for hardening, deep hole drilling or cutting; and additive manufacturing blown-powder heads fitted to 5-axis milling machines.
Still, in commenting about plans to increase the number of sensors on machine tools in combination with family company Magnescale – a key enabler of Industry 4.0 machine feedback – Mori cautions about the risks of overloading the devices: “If you put too many sensors on to the machines, it’s like having a crazy mad scientist headgear, so we have to avoid that, we have to be smart.”
TEN-YEAR TREND
Asked whether high-tech machine tool operator interfaces, such as DMG Mori’s Celos, are associated with operator deskilling, Mori spoke of general trends in machining.
He says: “I can say that every 10 years, cutting conditions, especially related to 5-axis cutting, become 50% more efficient. Ten years ago, making one turbine [blade] took 10 hours; now we can say [it takes] less than five hours, easy. So if one process is sticking to original conditions it is becoming a loser.”
And process improvements are so important, Mori explains, because across the world manufacturing costs are not so different, so companies need another means of differentiating themselves.
“If you take the US as middle, everywhere is [somewhere between] plus or minus 20%. So it’s not any more about cheap labour costs. It’s not any more about the location. Now, process competitiveness is becoming the crucial issue. A huge opportunity exists for some young or motivated group of people to be innovative and make something good. If they are smarter than the [old] process, they are going to be winners.”
BOX ITEM
New recruits to get German academy training
On the subject of skills, Mori expressed a desire to send DMG Mori UK new hires to the DMG Mori Academy from 2020. This arm of the company not only provides customers with training on CNC and maintenance subjects, but also trains DMG Mori apprentices: per year, 50 in Japan direct from technical college and/or university, 50 in Germany and 10 in the USA. Mori’s plan would involve, either acting alone or working together with trade associations the Manufacturing Technologies Association or the GTMA, creating an educational system to train future machine tool operators directly from school. He suggested sending five “or possibly 10” UK employees per year on a training programme.
This article was published in the May 2016 issue of Machinery magazine.
