The Dürr technology group is benefitting from the structural changes in the automotive industry. As a result of the high intensity of competition in this industry, car manufacturers have an increased demand for integrated production systems, thus contributing to better quality, higher productivity, and reduced costs. In order to take full advantage of these opportunities, Dürr has extended its strategic concept and has continued to pursue its systems approach. The Dürr strategy is as follows: Based on its leading position in automobile painting and industrial cleaning systems, Dürr has extended its range of systems in automobile manufacturing to further areas in the value chain and has established itself as a supplier of manufacturing support services. Apart from a continuous expansion of its traditional business, Dürr is concentrating on the cultivation of new markets and customer groups based on existing technologies. The aim is to achieve growth in earnings on a very much broader market base.
A leading vendor in its industry, Durr AG manufactures machinery used in the paint-finishing process for the global auto industry. The company is headquartered in Stuttgart, Germany, and maintains subsidiaries in over 20 countries. Dürr's Paint Systems division accounts for roughly half of the company's total sales and approximately 85 percent of total sales are generated in Europe and North America. The company's other business divisions design and install automation and conveyor systems, industrial cleaning, air cleaning and water purification systems and other industrial services for car makers. Heinz Dürr, a member of the founding family who owns slightly more than half of the company's shares, is Dürr's CEO. The two other major shareholders include EnBW Energie Baden-Württemberg AG which owns a 9.1 percent share and BWK GmbH Unternehmensbeteiligungsgesellschaft which holds 5 percent in the company.
Craftman's Workshop Becomes Industrial Manufacturer
The roots of the Dürr concern go back to the 19th century. In 1895, 24-year old tinsmith Paul Albert Dürr established his own business, which he called Bau-Flaschnerei Paul Dürr, in the German town of Cannstatt near Stuttgart. With his four apprentices he started making all kinds of metal products used on or in buildings, including stove pipes, ledges and gutters, roof windows and ceiling-mounted ventilators, cornices and roof ornaments made from sheet metal or copper. Paul Dürr was a technology enthusiast and tried to implement new machines to his business early on because they gave him the opportunity to take on more interesting projects. Around the turn of the century, his workshop was among the first that could be reached by phone--under the number Stuttgart 283. From his visit to the World Fair in Paris in 1906 he was inspired to purchase a crank-shears two meters long that enabled him to work with larger pieces of sheet metal. Dürr's technical capabilities and high-quality work soon earned him a reputation as a reliable contractor for construction projects in the region. For the next decade or so, he was awarded many contracts for plumbing work in buildings under construction, but mainly for equipping many buildings in the kingdom of Württemberg with copper roofs, including hospitals, churches and industrial buildings. The word about Dürr even spread as far as Austria and Switzerland. In 1911 Paul Dürr and his men finished the roof of Stuttgart's Art Building dome with a majestic stag on top which earned him the title "Tinsmith Master to the Royal Court of Württemberg."
World War I interrupted the company's dynamic growth. Towards the end of the war it became more and more difficult to acquire the necessary raw materials. However, a creative entrepreneur, Dürr bought up thousands of old iron molds for sugar cones from the local sugar factory and started transforming them into buckets, watering cans, ladles, shovels, and other necessary metal utensils. The 1920s brought in new business which in turn made new investments in better machinery necessary. However, before the calculated profits materialized, they were eaten up by spiraling inflation which reached its high point in 1923. Three years later Paul Dürr's 22-year-old son Otto traveled to the Leipzig Fair to find a solution that would pull the company out of trouble. He came back with the idea to replace cast iron with sheet metal in many products the company made, an idea which became the basis of the "light construction" technologies in the following decades. At the same time, the traditional ways of shaping metal parts--casting and riveting--were replaced by the new welding technology. In 1928, Dürr pioneered the trade by finishing the first aluminum roof. Dürr put roofs on Stuttgart's central railway station and the railway's administrative building, the Hoftheater and the Fangelsbach school, as well as on buildings in other German cities. However, the onset of the worldwide economic depression at the end of the 1920s took its toll. By 1932, the number of people working for Dürr diminished from 40 to a mere seven.
The year 1932 marked the first generation change in the family business when Otto Dürr took over his father's company at age 28. Four years later, Paul Dürr died. Otto Dürr led the company into the era of mass production. Together with his wife Betty he managed the company in a frugal style during the Great Depression, at the same time looking for new business opportunities. A first step was the new production line of heavy machine stands. The sheet metal division started making several types of metal containers for industrial use that were first mass-produced in 1934. In March 1938, Dürr hired the company's first engineer. This was a crucial step that enabled the production of more complicated sheet metal products. It also marked the beginning of Dürr's transition from a manufacturer to an engineering company. With the onset of World War II in 1939, the company was required to make machines and vehicle parts for the German war industry. Construction activities came to an almost complete halt and several of Dürr's tinsmiths were transferred to the sheet metal division. In the later years of the war, raw materials became scarce. Dürr found a way around this situation by inventing technologies that made it possible to use sheet metal that was more than 80 percent thinner than the material used before. In 1943, Dürr's main production facility in Cannstatt was completely destroyed and operations were moved to another site in a neighboring town where the company had set up a workshop seven years earlier.
A Vendor for the Auto Industry after World War II
As after World War I, Dürr started making much needed household products when World War II ended, such as small stoves, stove pipes, and wash tubs. The company was lucky enough to keep its large machinery which was confiscated in some other firms by the administration of the Allied Forces. With many buildings badly damaged, Dürr's tinsmiths were in high demand once more, repairing and renewing many roofs in the Stuttgart region. In 1947, the company resumed the production of industrial goods. However, Otto Dürr had the vision to make a shift to industrial engineering in the future. A visit to the Hannover Industrial Fair and an informational trip to the United States in 1949 were the background for Otto Dürr's decision to make surface treatment of metal parts a priority. The company had made its first experience with this technology when it was forced to make primed parts for vehicles during the war, and Otto Dürr was convinced that surface treatment with chemicals was a growing market. In 1950, Dürr hired Hubert Schilling, an engineer who had extensive experience with surface treatment technology. In the same year the first Dürr plant for the pre-treatment of wheels with phosphate was handed over to Südrad, a wheel maker in Ebersbach. Soon the new business division became more important than Dürr's traditional tinsmith trade. In 1957, Otto Dürr's son Heinz joined the company and soon became the driving force behind the further expansion of the company's industrial equipment branch. In 1958, Dürr started designing industrial cleaning equipment. These huge "washing machines" were often necessary to clean parts the surface of which was chemically treated. They could be manufactured in large series and still be customized according to the customer's specifications. The new product line brought in new business, which resulted in two-digit growth rates during the 1950s, while the number of employees doubled from 100 in 1952 to 205 in 1957.
The postwar economic boom in the 1950s contributed to the rise of the automobile industry in Germany. Due to the company founder's personal acquaintance with engineer Gottlieb Daimler, Dürr had gotten a head start as a vendor for the emerging automobile industry in the mid-1920s. In the 1960s, the company focused its efforts to become a vendor for this dynamically growing market.
In 1962, Dürr took on a project which none of the company's competitors believed was possible for the relatively small company to complete. American car maker Ford needed a new spray painting and pre-treatment facility to be installed--within three weeks. However, pulling all available resources--with everyone from Otto and Heinz Dürr to every apprentice working around the clock--the company managed to get everything done on time. This coup not only earned Dürr a reputation among car manufacturers; it also gave the company's engineers valuable insight and know-how through their cooperation with Ford technicians. Heinz Dürr traveled to the United States again several times. He foresaw the upcoming switch to water-soluble paint in the United States and started experimenting with new technologies in 1963. The company developed a new coating process--the electrophoreic painting process. Ford promptly followed up with a contract to equip a new coating facility in the company's brand-new painting plant in Belgium with the new technology. In the following years the company evolved as the global auto industry's preferred vendor for systems to pre-treat, paint, and clean auto bodies. Dürr's customer list in the 1960s and 1970s included Volkswagen, Seat, Fiat, Volvo, Rover, and Rolls Royce, but also clients from behind the Iron Curtain, in the GDR, Poland, Hungary, and the Soviet Union. As major car makers started setting up production plants around the world, Dürr followed their lead. Between 1964 and 1978, Dürr subsidiaries were established in Brazil, Mexico, Switzerland, Austria, the United States, the United Kingdom, South Africa, Italy, Spain, Portugal, and France, followed by new subsidiaries in other countries in the decades after. By the end of the 1960s, over half of Dürr's total sales derived from business with the auto industry.
Changeover: Manufacturing to Engineering after 1970
In 1969, Heinz Dürr became the new CEO of the company which under his leadership changed from an industrial manufacturer to an engineering firm and general contractor for industrial projects. This change was also manifested in the company's name which was changed from Fa. Otto Dürr to Otto Dürr Anlagenbau--Otto Dürr Factory Construction--in 1977 and four years later to Dürr Anlagenbau. In 1968, the company established a new business division that offered environmentally friendly industrial processes for applying chemicals such as paint to metal surfaces and for cleaning chemically treated parts as well as processed air and water. A decade later, Dürr included automation technology to its range of services, offering conveyor systems to, for example, transport car bodies through a painting plant.
The new broadened spectrum of Dürr know-how enabled the company to deliver complete car painting plants to the global auto industry, which had decidedly become its new strategic focus by 1980. While in the beginning Dürr's customers delivered the construction plans after which the facilities were built, this soon began to change with the growing size of the company's research and development department, which enabled Dürr to offer project planning as an additional service. At the same time project management became more important than production as industrial clients were looking for vendors who were able to "deliver" complete plants. The company started cooperating with other vendors, which took over a growing part of the manufacturing while Dürr acted as a general contractor that planned and coordinated the realization of such complex projects. By the mid-1990s, about half of Dürr's workforce were engineers required to go abroad to one of the company's subsidiaries in over 40 countries on all five continents for several months--if need be. To ensure proper communication, English became Dürr's "official language." For the constant stream of technological innovations developed by Dürr engineers the company received several awards in the 1990s, including the "German Industry Innovation Award," the "German Industry Environmental Protection Award," and General Motor's "Worldwide Supplier of the Year."
During the 1980s and 1990s, Dürr adjusted its organizational structure according to the changes the company had made in its range of products, services, and clients. In 1985, all German subsidiaries were merged under the umbrella of the new operational unit Dürr GmbH, which also became the parent company for all foreign subsidiaries. To strengthen the company's capital base, the management holding company first set up in 1977 was transformed into a public company named DÜRR Beteiligungs-AG in 1989, followed by the IPO at the Frankfurt and Stuttgart stock exchanges in the same year. From 1980 on, Heinz Dürr, who in the following years took different leading positions in other companies, was replaced as Dürr CEO by non-family managers.
During the 1990s, Dürr expanded its global market reach to Asia and the Middle East, including projects in China, Taiwan, South Korea, Japan, Indonesia, India, and Iran. In the United States the company became the leading vendor for spray painting systems. To strengthen its international position as the leading vendor for car painting plants to the increasingly globally acting auto industry, Dürr made several strategic acquisitions. In 1989, the company took over the Behr Group, the leading manufacturer of varnish coating systems, and merged it with Dürr in 1993. In 1999, the company acquired the internationally leading manufacturer of high-tech systems diagnostic, testing, and automation systems, Germany-based Carl Schenck AG. In the same year Dürr bought French Alstom Automation S.A. and American Premier Manufacturing Services Inc. In 2000, the company's management structure was reorganized into five business divisions: Paint Systems, Automotion, Environmental, Protecs, and Services. Effective in January 2001, Dürr acquired a worldwide license for RoDip, a painting process for the dip painting of car bodies, from Swiss industrial conglomerate ABB Ltd. and took over ABB's development unit for the process located in Butzbach near Frankfurt. Despite excessive production capacities in the auto industry and possible cyclical downturns in the future, Dürr expected a continued demand for its technology because of ongoing pressures caused by tough competition among car makers worldwide. By 2000, car makers accounted for about 80 percent of the company's sales.
Principal Subsidiaries: Dürr Inc. (U.S.); Dürr-AIS Ltda. (Brazil); Dürr Brasil Ltda. (Brazil); Dürr-AIS S.A. (France; 50%); Dürr Ltd. (U.K.); Dürr Systems Spain S.A.; Olpidürr S.p.A. (Italy; 65%); Nagahama Seisakusho Ltd. (Japan; 47%); Shinhang Dürr Inc. (South Korea; 75%); Schenck S.A. (France; 94%); Verind S.p.A. (Italy; 50%); Dürr Paintshop Equipment and Engineering (Shanghai) Co. Ltd. (China); Schenck Shanghai Testing Machinery Corporation Ltd. (China; 47%); Schenck Australia (Pty.) Ltd. (Australia; 69%); Schenck Ash (Pty.) Ltd. (South Africa; 74%); Premier Manufacturing Suppoert Services L.P. (Sweden); Carl Schenck Machines en Installaties BV (Netherlands; 94%); Schenck Vaegt- og Maskinfabrik A.p.s. (Denmark; 94%).
Principal Divisions: Dürr Holding GmbH; Dürr Systems GmbH; Carl Schenck AG (94%); Dürr Automotion GmbH; Dürr Ecoclean GmbH; Inlac Industrie-Lackieranlagen GmbH; Dürr Environmental GmbH; Dürr Ecoservice GmbH.
Principal Competitors: Sames Corporation; Nordson Corporation; Chiyoda Corporation; CLARCOR Inc.; United States Filter Corporation.