Machine tools Switzerland: Franc Disaster- Schaublin-CEO Rolf Muster comes clear
Schaublin Machines is representative of Swiss quality and precision machine tool building. As regards the new currency situation, Schaublin CEO and co-owner Rolf Muster and Douglas Spiesser (sales manager) discuss in an SMM exclusive interview where are we heading.
SMM: Mr. Muster, firstly congratulations on 100th anniversary But you would have definitely wished for some other birthday present than that on 15th January.
Rolf Muster: The exchange rate release of Swiss Francs is not a present, it is a disaster. I am working for 35 years in the machine tool industry. I am seeing a dark future for the first time. And I have already lived through some of the crises. But the accumulation of events is our problem. This started with the crisis in 2009/10. Then there was a second incision in 2011 for Switzerland as Euro dropped from 1.60 to 1.20.
The activity area however coped with the 2009 and 2011 incisions.
R. Muster: This is how it looks. But when you compare the Swiss MEM industry with the German industry, you realise that the German industry has gained a lot. Though the Swiss industry has recovered, it had however once reached the turnover volume of 2002 in 2014. That is not growth; that is standstill. Nevertheless, we have coped with both the incisions in 2009 and 2011 on account of restructuring, process optimisations and working in new markets, but we would have developed a lot better with some other rate of exchange. Now, another incision was added with the appreciation of Euro-Franc exchange rate. Now we are up to our neck in it, and this still sounds quite positive.
How did the new currency situation affect the MEM industry?
R. Muster: From the point of view of our company Schaublin Machines SA and from the point of view of many businessmen I know, the release of exchange rate causes an earthquake in the MEM industry. For some, the strength of the earthquake was perhaps 2, for others, it was 8. It was in the upper range in our case. The machine tool industry is substantially affected. Since 15th January, we have lost two third of orders received as against the same period in previous year. Cause: the exchange rate release of Swiss Francs. In June/July, it was luckily again somewhat better. The reason for this was the better currency situation of countries China, USA and Russia.
Why is it currently so difficult?
R. Muster: We must cope with the strong Franc from 1.60 to 1.05 Euro in 4 years. That is a very short time period in order to adjust to it as an export oriented enterprise. What particularly disturbs me in this regard is that the federation and cantons do not at all take care for our industry. We are talking about over 500,000 persons who are employed in the industry. There are 330,000 employees with Swissmem member companies alone. The industry is the greatest employer in Switzerland. But, if this continues, we can eliminate thousands of jobs.
Would your purchase policy also be different due to the Euro-Franc rate?
R. Muster: I do not have an option. Due to the strong Franc – and I assume that it would be even stronger – I have to rethink my purchase policy. I must produce at a reduced rate. This is a disaster for the activity area of Switzerland. The small and medium scale enterprises are important for the Swiss economy. Our government would realise that only when the MEM industry would have reduced many employees. The sad part is our know-how would be lost. There would be deficit of technological knowledge. The small and medium scale enterprises, which would disappear, would also not train any apprentices. This would lead to a complete collapse of Swiss industry, as in France. Our government and cantons do not see any call for action. Some national councils are aware of it, but our Federal Council is way too far from the industry with the exception of Mr. Federation Council Burkhalter, who did an amazing job for our industry.