How the corporate strategy of aepfeln led to high growth

The machine manufacturer Komax is operating in a formidable new building - if only it weren't for short-time working

The Lucerne company Komax is breaking new ground with a multi-storey factory. The assembly workers and engineers can still not really enjoy their bright and quiet workplaces. The business situation is too tense.

The fully automatic shuttles move at breakneck speed in the small parts warehouse, which is integrated into Komax's vertical factory.

Simon Tanner / NZZ

It works wonderfully in the new vertical factory of the machine manufacturer Komax. In contrast to many factory halls in the metalworking industry, the air is neither stuffy nor deafening noise. What is most striking besides the calm is how bright it is for the assembly workers in the new factory in Dierikon, Lucerne, thanks to the wide window fronts. During the day you can assemble the machines largely without artificial light.

Assembly up to the fifth floor

Usually factories are single-story and expand in area. Correspondingly little daylight penetrates to the workplaces in such conventionally built production facilities. This is different with Komax's new vertical factory. The building has seven floors, including storage space in the basement and on the ground floor. The pre-assembly is located on the third floor and supplies - depending on the machine type - workstations for the final assembly on floors above or below. The assembly workers are only a few steps away from the engineers, designers and software specialists. Their workplaces are on the opposite side of the building.

However, not all of the more than 500 employees at the headquarters of the Komax Group have yet to benefit from the new work environment. The production of small parts as well as the production of machines for small customer-specific series were not relocated to the new building. These activities are still located in a one-story production building that dates back to the 1980s. The traditional industrial “groove” has been preserved here. The operators of the milling and turning machines are exposed to significantly more noise and only work to a limited extent with daylight.

Victims of the auto sector crisis

Matijas Meyer, CEO of Komax.

Simon Tanner / NZZ

The CEO Matijas Meyer is relieved by the hissing and pounding of the machine tools during a tour of the production facility. A head of an industrial company, he says, once told him years ago: "If there are a lot of chips, there is a lot of money."

Komax, which specializes in the manufacture of machines for the production of cable harnesses, i.e. for bundling cables, generates 80% of its sales with customers in the automotive industry. The shutdown, which last spring temporarily brought car production to a standstill almost worldwide, hit the company badly. At times there was an eerie calm in almost the entire company, says Meyer.

Certain employees had to reduce their workload by 100% in April as part of the introduction of short-time work. This led to a lot of uncertainty. Suddenly it was no longer clear whether these employees were still entitled under labor law to check their e-mails. The authorities also found it difficult to find answers to questions related to this extreme situation. When asked, Komax was told that the employees concerned should only consult their business mailboxes for a quarter of an hour every day and only read e-mails, but not answer them.

The machines produced by Komax are used to manufacture cable harnesses.

Simon Tanner / NZZ

Does recovery continue?

In the meantime, Komax's business situation is improving from month to month. The numbers for the third quarter are likely to exceed those of the horrible second quarter of the year. However, it is still a long way from the performance in the corresponding quarter of the previous year, according to the company headquarters. Obviously, people don't really trust the - tentative - upswing in the auto industry so far. It could be that in the third quarter it was only made up for what was lost in the second.

In the entire first half of the year, Komax's sales slumped by 29% to around CHF 145 million. The result was a loss of CHF 11.6 million, after a surplus of just under CHF 11 million had been posted in the same period of the previous year. For the company and for many industrial companies with a strong focus on the automotive sector, the crisis is unlikely to be over for a while. The order situation is too weak. From January to June, Komax was confronted with a sharp decline in incoming orders, by 30% to just under CHF 144 million.

The total of seven floors of the vertical factory are connected to one another by stairs, passenger and goods lifts. There are seating areas on each floor for informal exchange between employees.

Simon Tanner / NZZ

The former high-bay warehouse in the older Komax factory wing in Dierikon has had its day and is waiting to be dismantled.

Simon Tanner / NZZ

Management miscalculates

The entire Komax workforce in Switzerland still spends 50% of their working hours idle at home. At the beginning of October only a minor adjustment was made to 40 to 45% short-time work. The management and the board of directors had undoubtedly imagined operations in the new factory, which cost around CHF 75 million, to be more lively. Until the outbreak of the crisis that had already started in the automotive industry last year and was only exacerbated by the coronavirus pandemic, Komax had benefited from strong growth. On the management floor they were sure that the new premises would be needed immediately, and they looked for solutions to make the most of the 3000 square meters at the headquarters, which were then still fallow.

The first machines were manufactured in the vertical factory in April. Five months later, operations are still on the back burner. The seats at the coffee machines, which are located on all floors and are intended to encourage informal exchanges between the employees in assembly and the development department, are largely empty.

Thanks to the wide window fronts, the machines can usually be installed in daylight.

Simon Tanner / NZZ

The fact that the programmers have almost completely withdrawn to the home office contributes to the emptiness in the chic building. Like many Swiss companies, Komax followed a rather restrictive practice until the lockdown was imposed and - in consultation with the respective supervisor - allowed working from home only for 10% of the working hours. Up to 60% are now allowed. This is particularly beneficial for the company's many employees who have a long commute to work. Certain employees traveled from the Basel area or from eastern Switzerland, says CEO Meyer.

Optimism in spite of everything

Despite the uncomfortable business situation, Komax does not want to hang one's heads. Although the company across the group has been forced to cut 150 of its previous 2,200 jobs in the course of the year so far, the group management considers the prospects for a sustained recovery in demand to be intact. The use of cables is likely to increase further in electric vehicles due to the increasing number of new electronic aids, as has been observed for years in cars with internal combustion engines. In addition, Komax firmly expects that the major manufacturers of cable harnesses such as Leoni or Lear will continue to automate their production for cost reasons.

With Schleuniger (subsidiary of the Metall-Zug Group), the Lucerne-based company has an important local competitor. Other competitors operate in Italy and Japan. However, Komax managed to become the market leader years ago. You absolutely want to keep this position and you also trust the vertical factory. Above all, it should - thanks to short distances - accelerate the innovation process.

Due to short-time working, only a few employees are currently lost on the individual floors of the vertical factory.

Simon Tanner / NZZ