RENK AG - Company Profile, Information, Business Description, History, Background Information on RENK AG

Gögginger Strasse 73
D-86159 Augsburg

Company Perspectives:

In 1873, RENK was founded by Johann Renk as a gear production facility in Augsburg, the town where 20 years later Rudolf Diesel registered the patent for his engine. Years of experience and our own research work enabled us to become one of the trend-setters in power-transmission engineering. RENK is now a globally renowned manufacturer of high-grade gear units and power transmission components at several production locations and together with associated companies in Germany and abroad.

History of RENK AG

RENK AG is a leading German firm for the engineering and manufacture of the power transmission components, gear units, and couplings used in industry, ships, motor vehicles, and tanks. In addition to its three German production plants in Augsburg, Rheine, and Hannover, the company has production subsidiaries in France, Romania, and the United States. French subsidiary Systémes et Mécanismes (SESM) makes gearboxes for tracked vehicles and brake systems. RENK Corporation in Duncan, Oklahoma, assembles and markets slide bearings and flexible couplings. RESITA-RENK S.A. in Romania, of which RENK holds 51 percent, makes industrial and marine gear units and rail bound vehicle transmissions. The German MAN Group owns a 76 percent share of RENK AG.

From Mechanical Workshop to Public Company in the 1890s

Johann Julius Renk, the founder of RENK AG, was born on April 1, 1848. While a young man he worked as an apprentice at the machine-building factory Maschinenfabrik Augsburg. In 1866 Renk started working as a lathe operator at another company that manufactured machines, Maschinenfabrik L.A. Riedinger. When he was 25 years old, Renk set up his own workshop in the German town Augsburg and began making cogwheels of all kinds. He had realized that the specially shaped cogwheels that he designed ran much more smoothly than the other ordinary models available at that time. Because at the time no machines were available that could manufacture such cogwheels, Renk first concentrated on developing a machine that could do so. The current technology was to produce roughly shaped cogwheels by machine and then shape them by hand with the help of stencils, a process that was very time-consuming. In 1877, after numerous experiments, Renk constructed a machine that could manufacture conical-shaped cogwheels with teeth that were arranged in a mathematically precise way. Two years later Renk was awarded German patent DRP 8000/79 for his invention. The new machine was well received in the industry, and Renk's factory started to develop a reputation both within Germany and elsewhere. After several moves to larger sites, Renk built a new factory, which included a foundry for iron and bronze, at Göttinger Strasse.

The small factory grew quickly and worked continuously in two shifts to fill orders on time. By 1888 Renk owned machinery that included 15 self-produced plane machines for cogwheels and employed 37 people. In 1890, the foresighted entrepreneur initiated a company health-care plan, and six years later, he died at the young age of 48. By that time he had built his company into a leading manufacturer of cogwheels with more than 100 employees. The annual output--some 12,000 cogwheels--was shipped to many factories that built different machines. One year after Renk died, the company was legally made a public company. Its new name was Zahnräderfabrik Augsburg, vorm. Johann Renk (Act.-Ges.).

RENK in the First Half of the 20th Century

The business continued to grow, production facilities were expanded, and a railroad connection was established. At the same time RENK engineers developed new technologies for cogwheel manufacture. In 1916 RENK manufactured the largest gear-cutting machine of the time, a piece of equipment that was seven meters in diameter. In 1923 the company ceased to be independent, becoming part of the German iron works conglomerate Gutehoffnungshütte (GHH), which would later become MAN AG. However, RENK's new parent company was able to provide raw material for cogwheel production and to market them more widely. In 1926 RENK introduced a novelty: the first cogwheels with a ground tooth profile.

Beginning in 1930 RENK began manufacturing gear transmissions. The new product line soon increased its share of the company's total sales. The company's engineers designed all RENK gear transmissions. At the same time the production of cogwheels for other firms that manufactured machines became less important. However, the company advertised in one brochure that it would be willing to connect cogwheels to a functioning mechanism for any customers who preferred to submit their own wheels to RENK. The largest gear transmissions were made for turbines and steelworks.

RENK survived the World War I and the chaotic Great Depression and became a crucial supplier for the German war industry. Just before World War II began in 1939, the company made the world's fastest gear transmission--36,000 revolutions per minute&mdashø be used in aircraft. In 1943 RENK engineers invented the principle of hydrostatic superimposition steering systems for tanks.

RENK Writes Engineering History After World War II

In the three decades after World War II, the cogwheel remained one of the most important and most difficult elements in machine building. RENK's smallest cogwheel weighed only half a kilogram, while its heaviest weighed 35 tons. During that period, RENK engineers continuously produced innovations in the field of gear transmissions. In 1956 the company manufactured a turbine gear unit that had the highest pitch circle velocity at that time--185 meters per second. Five years later RENK developed the first electronic control system for an automatic vehicle transmission in the world. In 1965 the company introduced another pioneering technology--the hydrostatic/hydromechanical steering drive for track-laying vehicles , which made it possible to steer such vehicles just like a car. The list goes on. In 1971, the company introduced the first vehicle-braking system with a friction brake and retarder that was integrated into a vehicle gear transmission and also worked as an operating brake. RENK achieved another record in 1976: as the world's first drive system manufacturer, the company was able to harden and grind gear wheels that measured more than 30 meters in diameter. All these achievements in research and development were made possible by RENK's ongoing efforts to lead the industry. One of the company's main research focuses was on securely running gear transmissions that produced little noise pollution. To optimize the geometry of its toothed wheels, RENK established as early as the 1970s a test laboratory and used computer-aided calculation and design methods. The company worked also closely with German technical universities.

In the 1970s RENK offered three main product lines. The first was turbo gear transmissions and 'Planetengetriebe' for heavy industry use. They were used in turbines for power production in factories, refineries, cement mills, facilities of the chemical industry, pumps, and water power stations. For industrial use the importance of standard gear transmissions faded while the market called for more and more customized solutions. One of the biggest gear transmissions RENK ever made for a steelworks weighed as much as 180 tons. It was connected to four electric motors and contained two transmission units with two gears each.

RENK's second hallmark was its gear transmissions for ships. For fast and slender container ships running on a Diesel motor, RENK manufactured so-called 'Planetengetriebe.' Bigger, slower container ships ran on RENK two-motor transmissions. To optimize the power supply on ships, the company included so-called power-take-off's that enabled the use as electricity on board of some of the energy produced by the ship motors. This was even possible when the ship's propeller shaft wasn't moving, which was especially useful in harbors when freight, such as oil, needed to be moved with the help of huge pumps.

The third major market for RENK was special gear transmissions for track-laying vehicles such as tanks, which were manufactured in serial production. In addition to these three main areas RENK also made gear transmissions for the electronic manipulation of radio telescopes and huge satellite dishes. Because electronics was becoming more and more important in gear transmission technology, RENK ventured into that area. The result was the 'RENK Checker,' an electronic control system for gear transmissions that could, for example, be integrated into a ship's central control system.

In 1974, Willy-Werner Schwarz, who had served at RENK's Executive Management Board from 1947 on and as the company's CEO since 1971, resigned. In 1975 the company took a chance and acquired the slide bearings and coupling division of Hannover-based Eisenwerke Wülfel. That marked the end of RENK's post-war period.

Reorganization and International Expansion in the 1980s

A decade later RENK entered a period of reorganization. The market for marine and industrial gear transmissions had changed. Industrial construction was not flourishing as much as it had during the reconstruction and economic boom years. Ship building as an industry had migrated to Asia. Over-capacities in both markets led to fierce price competition. To be able to compete, RENK spun off its industrial and marine gear division and organized it under the umbrella of the new RENK TACKE GmbH, in partnership with German manufacturer F. Tacke KG, in 1986. In the same year a new division was founded to pursue the growing market for control and test systems for motor vehicle manufacturers. In 1987 the entire company was renamed RENK Aktiengesellschaft. It had three remaining product divisions: automatic vehicle transmissions, drive elements and test systems. To reduce its dependence on orders from the German military, RENK developed prototypes of gear transmissions for heavy vehicles such as fire engines, special transport vehicles and heavy construction vehicles.

As early as 1973 RENK had founded a joint venture in Eastern Europe, RESITA-RENK S.A. in Romania, in which the company held a 49 percent share. In 1980 RENK founded their first subsidiary overseas--RENK Corporation, based in Duncan, Oklahoma--which mainly assembled and distributed components for bus and other heavy road vehicle transmissions, such as 'Doromat,' its automatic gear transmission for city buses. By 1988 RENK was also present in the United Kingdom, Spain, Switzerland, and South Africa. In 1989 RENK acquired a 90 percent stake in French gear transmission manufacturer Societe Europeenne d'Enprenages (SEE), based in Sens.

Struggling in the 1990s

RENK's entrance into the 1990s was a bumpy one. Caused first by stagnating demand from defense and international markets and then by another company reorganization program enacted in 1990, sales dropped by over 9 percent. At the same time, severance payments and money for the company's pension funds to finance early retirement, among other factors, put higher financial strain on the company. However, parent company MAN subsidized RENK and the company kept its independent shareholders happy with a dividend. In the following years RENK continued to produce losses, but managed to lower them significantly. For fiscal year 1992--93, the company was DM 2 million in the red, one year later it reported a slight profit, but carried losses from the previous years into that period, ending up with DM 31 million in losses on its balance sheet. One of the consequences was the reduction of RENK AG's work force by 15 percent in 1992--93 and by another three percent the following year. In fiscal year 1994--95, RENK managed to pull out of the red, reporting a small profit of DM 5.8 million from DM 349 million in total sales. It was the first year in the 1990s that RENK was not subsidized by its parent company. Orders started increasing again that year, spurred by an upswing in the economic cycle, including rising demand from the military. In October 1995, CEO Heinz-Ludwig Schmitz left the company to become CEO of German Kloeckner-Werke AG. Dr. Manfred Hirt became the new speaker of RENK's Executive Board while Ulrich Sauter, former director at MAN's B & W Diesel AG, joined RENK's Executive Management Board.

The second half of the 1990s didn't look much brighter for RENK. At that time, the company's French subsidiaries reported losses of DM 12 million, and RENK once again ended up with a loss on its 1995--96 balance sheet. However, the company's fate seemed to turn around again in the late 1990s. Beginning in its 125th anniversary year, RENK started producing profits again and was able to pay back its debt to its parent company MAN. In fiscal year 1998--99 RENK paid its shareholders their first dividend in seven years. During the same period the company sold off one of its French subsidiaries, Societe Europeenne d'Engrenages (SEE), a manufacturer of small gear transmissions for ships and brake pads for rail vehicles, to Padua, Italy-based ZF Marine. RENK's Romanian subsidiary didn't seem to promise many business opportunities for the future, and RENK questioned it's further involvement in the country.

As the 1990s ended, RENK's future prospects again looked promising. In fiscal year 1998--99, the vehicle transmission division received three major orders from abroad. The Spanish Army ordered over 200 gear transmissions for its 'Leopard 2' tanks, a contract worth DM 150 million. RENK's French subsidiary SESM received an order for 90 transmissions to be built into the French 'Leclerc' tanks. Another DM 44 million order came from Austria for transmissions used for medium-duty track-laying vehicles. To secure its leadership in the field of military vehicle transmissions, RENK signed an contract with ZF Friedrichshafen AG, another German manufacturer in that market. As part of the deal, the companies agreed to exchange their respective product lines.

RENK's marine gear division also received a rising number of orders, the result of the fact that demand for mechanical gear units was not depressed by increased use of Diesel-electric propulsion units, as had been forecast. RENK's products were still built into diesel and gas turbine-powered high-speed ferries. Demand for industrial gear units was driven by a growing market for gas turbine- and wind-powered energy generators, especially in the United States. Another promising sign was the large number of new orders for the testing rigs division, especially from the commercial vehicles sector and helicopter manufacturers. Due to a new wave of automation in the automobile industry, the use of testing rigs was expected to grow further. Another prospective market for testing rigs was the testing of high-speed railroad vehicles.

Principal Divisions: Vehicle Transmissions Division; Drive Elements Division; Marine Gear Units Division; Industrial Gear Units Division; Couplings Division; Testing Rigs Division.

Principal Subsidiaries: Société d' Equipements, Systémes et Mécanismes (SESM) (France); RENK Corporation; RESITA-RENK S.A. (Romania; 51%).

Principal Competitors: Preussag AG; A Friedr Flender AG; Johann A Krause Maschinenfabrik GmbH; Lohmann and Stolterfoht GmbH.


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Further Reference

100 Jahre RENK, Augsburg, Germany: Zahnräderfabrik RENK Aktiengesellschaft, Augsburg, 1973.'Die Mutter muss Renk unter die Arme greifen,' Süddeutsche Zeitung, October 23, 1991.'Die Renk AG kann auf den Mutterschutz verzichten,' Süddeutsche Zeitung, October 31, 1995.'Ergebnissprung bei Renk,' Frankfurter Allgemeine Zeitung, September 2, 1999, p. 29.'Getriebehersteller Renk wieder mit Verlusten,' Süddeutsche Zeitung, November 30, 1996.'Jahresüberschuss für Getriebehersteller Renk,' Frankfurter Allgemeine Zeitung, October 4, 1995, p. 23.'Renk arbeitet wieder rentabel,' Frankfurter Allgemeine Zeitung, September 1, 1998, p. 25.'Renk-Getriebe arbeiten sich aus den roten Zahlen,' Süddeutsche Zeitung, October 17, 1994.'Renk verringert den Verlust,' Frankfurter Allgemeine Zeitung, October 19, 1993, p. 25.

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