Auto parts supplier is in the red because of the Ford Bronco disaster

Before interest and taxes, the company from Stockdorf near Munich made a minus of 146 million euros, as Webasto announced on Tuesday – after a loss of 69 million euros in the previous year. So it was little consolation that sales rose again by twelve percent to the pre-corona level of 3.7 billion euros.

“It was an incredibly difficult year,” says Engelmann, “but we’ve learned our lesson.” Nothing like this will happen again in future large-scale projects. However, Webasto has now localized the new technology, produces high-quality roofs and has gained a foothold in an important market segment. “But we would have imagined entering the market to be easier,” says Engelmann.

Webasto had wanted too much at once and was further slowed down by the pandemic. The main difficulties were with the hard top, which consists of several panels that are constructed like a sandwich of film, fiberglass and paper honeycomb. Webasto is already using the process for sunroofs, but not in the number and size of the Bronco, where the shape is also curved.

“We had to build a completely new plant in the middle of the Corona period,” says Engelmann. Qualified employees were difficult to find at the Detroit site. Two dozen agencies tried to help find staff. The planned ramp-up curve was extremely steep and offered little opportunity for improvement.

Webasto was unable to send trained employees from other plants around the world to the USA to provide support because of the pandemic. Meanwhile, the new machines stood rusting in the freight port and could not be shipped. “It really all came together,” explains Engelmann.

For the first time a woman on the Webasto board

Since then, Webasto has replaced thousands of roofs and opened a second plant in New Hudson to meet the enormous demand. According to Engelmann, a good “modus vivendi” was found with Ford, and the relationship was intact. A lot has been learned from the experience, for example for the new battery plant in South Korea.

Engelmann names four specific lessons: On the one hand, the focus will be more on risk management in the future. In addition, a consistently clear responsibility for the project and technology has been implemented. When introducing technologies at new locations, it is also important to start with small quantities and then scale them up in order to be able to correct errors in good time. In addition, new concepts for the induction of employees are being developed.

Probably also a consequence of the experience with the complex plant ramp-up: Webasto got a Chief Operating Officer with Silke Maurer for the first time. The manager came to Stockdorf from BSH Hausgeräte on April 1 and is now the first woman on the board.

Other automotive suppliers have also had difficulties ramping up new plants. A few years ago, Leoni failed to start in Mexico. Here, too, the double challenge – new area and new customers – was too much.

Webasto is one of the 15 largest German automotive suppliers and is fully family-owned. The company became known to a broader public because the first corona case in Germany occurred there. The group’s crisis management was widely praised. The company specializes primarily in glass panorama roofs and parking heaters.

Electromobility is to be developed as a further mainstay in the coming years. The supplier develops batteries and charging solutions for the original equipment of electric cars and charging stations. By 2025, Engelmann wants to achieve sales of more than one billion euros in this area. Business has already started well in South Korea.

At the beginning of this year, Webasto also received two new passenger car orders from a German and a South Korean car manufacturer with a total volume of more than one billion euros. Thus, the order intake in the field of electromobility in the first three months of the current year exceeded that of the core business with roof systems and fuel-powered heating and cooling solutions.

Webasto boss Engelmann does not dare to make a forecast

Investments in future technologies are now a little more difficult to manage because of the losses with the Bronco. In addition, business has not become any easier due to increased material costs, the Ukraine war and the lack of chips.

In the first quarter, the group’s sales increased by five percent to 986 million euros. However, earnings before interest and taxes remained negative with a loss of 28 million euros. The industry association VDA had reported that the majority of the automotive markets were under pressure at the start of the new year and in some cases recorded significant declines. Bottlenecks in primary products and tight supply chains are also to be expected in the coming months.

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Due to the uncertain environment, Engelmann does not dare to make a forecast for the year. “For the time being, we will continue to pursue a consistent austerity course.” It is also no longer possible to invest in everything that promises growth. The manager is convinced that one will still benefit from the Bronco development. “The technology can also be used for other vehicle types, we have now set up the infrastructure in the USA accordingly,” explains Engelmann.

Webasto has so far had a strong focus on Asia. The major order from the USA helps to balance the business better. The decisive factor is that with the sustainability of a family business, it was also possible to get through this difficult situation.

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