Urs Langenauer became Gesipa Managing Director and Head of the Riveting Division in SFS Group last year, after over two decades with the group. It’s been an eventful period to have taken the helm (not least with the company celebrating its 65th anniversary in 2020), SFS’ former head of Automotive North America spoke with Torque Magazine about disruption, longer term trends in the market and embracing change…
You’ve been head of the Riveting Division for almost a year and a half now – it has been quite a disruptive period to be in the role...
I have actually been with Gesipa parent SFS Group for 25 years on 1 August. Yes, coronavirus has certainly impacted us all. SFS Group has a large presence in China so we had a lot of insight and communication early. Thanks to our colleagues in China, we had already looked at things like best practice and communicated about it before even the German government started to be active on Covid rules.
Another advantage we had was our IT system, so we were ready to move our office team to work remotely thanks to our system. It was definitely eventful, but from that point of view it was controlled and with no major issues. We know the virus is still out there, but we have a lot of safety measures in place.
There have been changes from an employee perspective; Video calls have become a daily tool, in our Walldorf headquarters everyone puts on a mask as soon as they leave their desk… From a company perspective, we started strong in the first quarter then corona had a big impact in April and business progressively improved. We’ve seen improvement in Germany and also in other countries. No one is jumping up and down about the sales numbers, but we were able to control our costs to the point that the results are acceptable.
SFS Group results for HY 1 saw the fastening systems division seemed almost at last year’s levels – so it sounds like things are better than expected?
For us it was quite a mixed bag. It feels like construction didn’t really slow down much while the automotive riveting business unit was clearly down. Overall for the SFS Group, I would also say the results for the first half were definitely solid. Automotive does seem an important sector for Gesipa and SFS, and has clearly been hit quite hard by Covid.
Are you seeing signs of recovery?
Clearly the automotive market shut down plants for quite a while and actually came back quite strong in September. However, the question is always, how much is just reducing the backlog that has accumulated? And how much is people buying cars again? In Germany, new car registrations were significantly down in July and August, so we will see.
If you look back at the financial crisis, there were a lot of concerns, but the reality is that two years later, people still need to drive cars and buy cars, they still need to replace them. The business comes back.
That comparison of the impact of Covid to the 2008/2009 financial crisis has been made a few times...
Clearly the cause is different. I would also say the development was different. Globally you can see that government and central banks have clearly learned from the credit crunch. For this crisis, they were quick to improve liquidity. The challenge here is you are dealing with another dimension. Back then the health of employees was never impacted. Health of employees is obviously very important and we are very concerned about it.
When sales and revenue disappear, you have to act quickly on costs. You use the opportunity to improve the organisation and keep going on projects. From that point of view, that’s definitely an area where there are parallels.
One thing I feel is different is that in the financial crises everyone stepped on the brake, but the behaviours of how we do things didn’t change much. Coronavirus has changed how we do things dramatically. Video conferences, e‐shops… people that probably had never used an online shop have become experts in using them. Coronavirus has had a really disrupting dimension that we probably have not seen in the last financial crisis.
Has it been hard to implement social distancing in warehouses and plants?
In the offices it was quite simple, you can say work from home. It is more complicated in the warehouse. On the production line you can add plastic boards between people where it is not possible to wear face masks, and you can stagger lunches, for example.
Germany is Gesipa’s biggest market, so how big is the UK business?
It’s definitely an important business for us, we have Germany which is our largest market historically. UK is a strong market, also the US.
Will you be looking to launch into new markets?
I have a lot of respect for the history of the company, one of the impressive things about Gesipa is that it has had a very good distribution network around the world for a long time. The company was at the pulse in a lot of markets quite early on and still is. Something interesting right now is that some Chinese automotive suppliers are starting to build up manufacturing in the Balkans.
Clearly it will be an unusual few months ahead with corona, but looking further in the future, what are your goals for Gesipa?
Coming back to corona, the market is also changing. One excellent example is when you look at mobility. E‐mobility has been gaining market share quickly through the coronavirus pandemic. Politically the signs are there that e‐mobility will gain even more traction, and this is a field where there are a lot of fastening solutions, so that clearly also impacts us.
I think the other topic is our distribution models in the future. What impact does e‐commerce have on our industry ? I personally also believe, while everyone talks about digitalisation –what we’re not talking about enough as an industry is decarbonisation, climate neutrality. I believe, as an industry it will impact us. CO2 emissions will become more expensive. Steel production today is very CO2 intense. Our industry uses a lot of steel. In the further term it will definitely impact us all.
When I speak to senior fastener executives, this topic is coming up more often. Is Gesipa addressing it?
As SFS Group we publish a sustainability report. That’s at group level, but it impacts Gesipa. There are expectations today from shareholders as well as from some of the larger customers to reduce our carbon footprint. For SFS Group, protecting the environment has been part of our policy for a long time.
In terms of progressing the company, are you developing new products to grow business?
Our energies are concentrated on what we can create to help our customers. Not just how can we build value for us, but also how can we add value for the customer. We want to be focused on our strengths that are riveting technology and its application.
The Brexit transition period is coming to an end – is it a concern for Gesipa?
We are preparing for it, Gesipa UK´s managing director and her team have been planning and I think we are as ready as we can be. I think the challenge for us and our colleagues in the UK is that Brexit adds another dimension of uncertainty. But on the other hand, I am Swiss and Switzerland is not part of the EU but is somehow working together, so apparently there are models that seem to work, that’s my hope after the noise and things become clearer. No one is sure what is really being discussed away from the headlines. One thing we learned in the last four years is that politics have got much louder.
Have you got any final thoughts for our readers?
Personally speaking, it’s definitely challenging at the moment, but we have built a good team here and I know we are ready for the future. Some topics have been accelerated by corona and I believe having good people using common sense and being willing to learn and change, to accept and embrace change, then
the future is ours. I am very positive. We are able and willing to adapt to whatever the challenges for the future are. I had to fly from the US into Europe around January when people were just starting to wear face masks. It looked strange at the time, but now we have all adapted. It clearly shows if we have to change as humans, then we are surprisingly adaptable.