Austria: Small giant - vdma.org

Gottfried Mehnert was faced with a problem. In 1959, the entrepreneur had founded Bekum Maschinenfabriken GmbH in West Berlin, which expanded rapidly as a high-flyer in the fledgling blow molding industry. Then the Wall came down and Mehnert was unable to find qualified staff or industrial space. "In 1968, my father found out through a contact that an old factory in Traismauer, Austria, was up for sale, where gearboxes for locomotives had previously been produced," explains son Michael, who now runs the business. "He was also able to take on 200 qualified specialists."

Just a few weeks later, Bekum began producing parts for the Berlin site in Austria. Complete large blow molding machines were soon developed, manufactured and assembled in Traismauer. "Over the years, we have been able to acquire important customers from the automotive, packaging and other industries worldwide," says Michael Mehnert. Since 2015, all of Bekum's European blow molding machines have been produced exclusively in Traismauer; Berlin is now the administrative and service location.

The Austrian location is an asset for Bekum - and not just because of its proximity to Eastern Europe and the good funding opportunities. "The same language and similar legislation are also a major advantage for German companies," says Mehnert. There are close and long-established relationships between the two countries in the mechanical and plant engineering sector. between the two countries, with the machinery market and population in Germany being around ten times larger than in Austria. "Germany is our most important export market," says Georg Priesner, Managing Director of VDMA Austria. "But Germany is also by far Austria's most important supplier of machinery."

Many companies from Germany set up their first foreign branch in Austria. Entering the market is easy. They encounter a dynamic local environment: "Austrians are used to operating very agilely and flexibly from a small economy," says Priesner. They are also very well networked: In terms of machinery exports per capita, Austria not only has a higher export volume than Germany, but also has the most hidden champions in mechanical engineering worldwide. One of these is Pöttinger Landtechnik GmbH from Grieskirchen in Upper Austria, which was founded in 1871. Although it only started exporting to Germany in the mid-1970s and internationally at the beginning of the millennium, 90 percent of its products have long been exported abroad.

"We see ourselves as a European company with Austrian roots," says Dr. Markus Baldinger, Managing Director of Research and Development at Pöttinger. The company, which began with grassland technology, now covers the entire harvesting chain. "We no longer just sell machines, but also the intelligence behind them." For some time now, the company has been working on the automation of machines through to autonomously operating implements. "This is a step that we are taking partly because of the new technology, but also because of the labor shortage - not only in agriculture, but also for us as a production company."

Austria is much better positioned than its neighbors, at least in terms of training. "We have so-called higher technical colleges (HTL) here, which combine a five-year technical education with a degree in mechanical engineering," says Priesner. At the age of just 19, graduates have a degree comparable to a bachelor's degree in their pockets and are immediately operationally deployable in the company. Holger Streitz, Managing Director of Construction Machinery Design at Liebherr-Werk Nenzing GmbH, also praises the dual education system. "It enables many people to continue their studies even after a few years of practical experience. Many young people then find their way back to their training company."

Today, 1,685 employees work in development, production, sales, service and commercial activities at Liebherr's Nenzing site. 95 percent of the appliances produced here are exported. Although there are important Austrian customers, a good third goes to North America and another third to Western Europe. There are many qualified specialists in Vorarlberg, although the shortage of skilled workers and the proximity to Liechtenstein and Switzerland are also noticeable there, says Streitz.

Hans Liebherr Sr. chose Nenzing himself at the time because the plant was easily accessible from the Ehingen site. "The decisive factors for him were both the familiar working attitude of the Vorarlberg people, which is similar to that of the Swabians, and the good transport links - at least at the time," says Streitz. "Together with the Rhine Valley, the Lake Constance region and eastern Switzerland, Vorarlberg is also known as 'Precision Valley'. It is a strong business location even without a major city."

Many owner-managed, internationally successful hidden champions have shaped the "Ländle", which experienced a strong upswing after the decline of the textile industry in the 1970s. "The next few years will show whether the upcoming transformation towards digitalization and Industry 4.0 will be just as successful," says Streitz. Competition from the Far East in particular is becoming an increasing challenge. Nevertheless, Liebherr has grown steadily in recent years despite the difficult conditions.

Pöttinger is also preparing for crises through diversification. "We achieved record growth in the past financial year," says Baldinger. This is due to a stable business model. For 2024, he expects continuous but much slower growth. "We have positioned ourselves very well and expanded our product portfolio, filled gaps and opened up new markets," says Baldinger. "We are positive about the future."

Priesner adds that Austria emerged from its 2020 coronavirus low of minus 15 percent in the mechanical engineering sector within a year, growing by 17 percent in the following year. Not many neighboring countries managed this: "Unfortunately, even our largest trading partner Germany has not yet been able to turn the 2020 slump into growth," he says. However, the outlook for the Austrian mechanical engineering sector is cautiously positive: "Due to the sharp decline in incoming orders in 2023, we expect a slight drop in production in 2024."

Michael Mehnert also has mixed feelings about the future. "Our business has stagnated in the last two years due to the turnaround in interest rates and the rise in costs, and investment decisions have been postponed." He is pinning his hopes on new investments. "At some point, certain projects will have to be awarded."