Fighting to Be More Than A Cog in the Machine
Bloomberg Businessweek|September 20, 2021
A German auto parts maker seeks to engineer itself a future for the post-Merkel era
Cristina Lindblad

Klaus Rosenfeld was making a routine visit to a potential supplier in the fall of 2018 when, unexpectedly, a big opportunity presented itself. Executives at the company let it slip that it was about to be sold. The terms hadn’t been finalized, and Rosenfeld’s Schaeffler AG could cut in if it acted fast.

On the drive home to Frankfurt, Rosenfeld called Georg Schaeffler, the son of one of the company’s founders and now its chairman and main shareholder, to brief him. Before hanging up, the two men agreed to sleep on it. Less than 12 hours later, Rosenfeld had the green light to make a bid for Elmotec Statomat, a world-leading supplier of equipment used in the manufacture of electric vehicles. “We’ve never turned around a deal so fast,” says Schaeffler’s chief executive officer. “It was clear the technology would accelerate our transformation—a small step with a big impact.”

Impulse buying runs against the grain of German capitalism, which is more measured and methodical than the U.S. version. Yet in boardrooms from the Black Forest to the Baltic coast, a sense of urgency is taking hold with the realization that the German economic model is reaching its limits: Precision machining bits of metal down to micron levels of tolerance and assembling them into cars and other complex mechanical systems that are then shipped to all corners of the globe can no longer guarantee affluence for the country’s 83 million people.

Germany’s auto industry has been on the back foot since the 2015 emissions-cheating scandal involving Volkswagen AG, and it faces an existential threat from the looming extinction of the internal combustion engine. Yet Europe’s largest economy is ill-equipped to make the transition into cleaner, digital technologies. The country’s carbon dioxide emissions are the sixth-largest in the world, and it ranks 30th in mobile broadband speeds, with download rates less than half as fast as in China.

Even a success such as BioNTech SE’s development of one of the leading Covid-19 vaccines is tempered by the fact that the Mainz-based biotech needed Pfizer Inc. to bring the shot to the world. Then there’s the sensational collapse last year of electronic-payments company Wirecard AG, which was seen as a rare homegrown digital champion before being outed as Germany’s biggest postwar fraud.

The Sept. 26 election, which will mark the end of Angela Merkel’s 16-year tenure as chancellor, adds to the collective sense of unease. Her successor, whoever he or she may be, will inherit a nation that’s reliant on the U.S. for security, China for growth, and the European Union for clout. Finding Germany’s place in the world while guiding an economic makeover will be a monumental task.

Central to that effort will be building on Germany’s manufacturing prowess, which was on full display at Schaeffler’s headquarters in Herzogenaurach, a hamlet in northern Bavaria, when Bloomberg Businessweek visited this summer. Inside one of the plants, the air is filled with the smell of lubricants and the clang of machines pounding metal bands into precisely contoured rings that will be fashioned into bearings. The friction-reducing parts are the company’s mainstay, ranging from thumbnail-size ones found in car transmissions that sell for less than €1 ($1.18) apiece to others for wind turbines that are so big you could drive a van through them and cost upwards of €100,000 each.

Continue reading your story on the app

Continue reading your story in the magazine

MORE STORIES FROM BLOOMBERG BUSINESSWEEKView All

De-radicalizing the Extremists

Parents for Peace enlists ex-believers to help families win back loved ones drawn to Islamism, QAnon, and other ideologies. Demand has never been higher

10+ mins read
Bloomberg Businessweek
October 18 - 25, 2021

Europe's Energy Crisis Is Coming for The Rest of Us

Millions of people around the globe will feel the impact of soaring natural gas prices this winter

5 mins read
Bloomberg Businessweek
October 04, 2021

Big Sky's Moment of Glory

The most rugged resort in Montana gets speedy lifts, luxury hotels, and fine dining to match its extreme slopes

6 mins read
Bloomberg Businessweek
October 18 - 25, 2021

Black Hairstyles Need Protection

In most U.S. states, employers and schools are allowed to discriminate against box braids, locs, and other traditional styles. A coalition of activists and legislators has started to change that.

10+ mins read
Bloomberg Businessweek
October 18 - 25, 2021

High Stakes On the Lake

Justin Bibb wants to be Cleveland’s next mayor. If he beats Kevin Kelley, he’ll inherit serious problems—and a windfall to fix them

5 mins read
Bloomberg Businessweek
October 18 - 25, 2021

Can twitter get us to be nice?

Social networks are all designed to make people angry and keep them coming back for more. Now, one of the worst offenders is trying to be less of a hellscape

10+ mins read
Bloomberg Businessweek
October 18 - 25, 2021

Let's Make Covid Testing Part of Our Morning Routine

A Harvard immunologist champions low-cost, at-home rapid tests to beat the pandemic

6 mins read
Bloomberg Businessweek
October 18 - 25, 2021

Homeopath, heal thyself

Natalie Grams believed—really believed—in the healing power of homeopathy. Then a health crisis of her own forced the German physician to question her faith

10+ mins read
Bloomberg Businessweek
October 18 - 25, 2021

Stuck on the Sidelines of The U.S. Job Market

Conversations with some of the 5 million out-of-work Americans shed light on why so many jobs are going begging

8 mins read
Bloomberg Businessweek
October 18 - 25, 2021

The Hunt for the Most Lucrative Patients

Privately run Medicare Advantage programs get paid more when members look sicker—even if they don’t receive more care

6 mins read
Bloomberg Businessweek
October 18 - 25, 2021
RELATED STORIES

MAUSER MODEL 1898

DOWN RANGE

4 mins read
Rifle
November - December 2021

GOOGLE TO INVEST $1.2B IN GERMANY CLOUD COMPUTING PROGRAM

Google said that it is investing 1 billion euros ($1.2 billion) by 2030 to expand its cloud computing infrastructure in Germany and to increase the use of renewable energy.

1 min read
AppleMagazine
September 03, 2021

Auf Wiedersehen, Klimakanzlerin

As she leaves office, Angela Merkel, hailed for her pioneering global leadership on climate change, stands accused at home of not moving fast enough

10+ mins read
Bloomberg Markets
August - September 2021

German Sniper Rifles

In the run-up to World War II, military planners in Germany expected a fast-moving mechanized war. They considered that a sniper firing one well-aimed round at a time was a holdover from trench warfare. On December 6, 1934, the German Army’s High Command ordered all “Telescope Sight Rifles” to be turned in by the 15th of that month. There was no plan for their replacement (from Sniper Variations of the German K98k Rifle by Richard D. Law).

10+ mins read
Rifle
September - October 2021

DAYS OF OUR LIVES

James Reynolds (Abe)

3 mins read
Soap Opera Digest
August 02, 2021

SLACK KICKS OFF 2021 WITH A GLOBAL OUTAGE

Slack, the messaging service used by millions of people for work and school, suffered a global outage on Monday, the first day back for most people returning from the New Year’s holiday.

1 min read
Techlife News
Techlife News #480

NEW BMW HAS CLASSIC GRILLE BUT FOR SENSORS, NOT AIRFLOW

German luxury automaker BMW on Wednesday gave an early look at a new battery-driven SUV that illustrates the company’s future plans for electric-powered driving.

1 min read
Techlife News
Techlife News #472

EUROPE TESTS GATEWAY FOR TRACING APPS TO WORK ACROSS BORDERS

Six European Union countries and the bloc’s executive Commission have begun testing a virtual “gateway” to ensure national coronavirus tracing apps can work across borders.

1 min read
Techlife News
Techlife News #464

BATTLING OVER THE KIDS!

IT'S SHOWDOWN TIME!

1 min read
Star
September 14, 2020

HEIDI GETS SEAL OF APPROVAL IN CUSTODY WAR

SINGER Seal and his supermodel ex Heidi Klum have worked out an eleventh-hour deal that will allow her to take their four children to her native Germany after a legal tussle, an insider claimed.

1 min read
National Enquirer
September 14, 2020