Behr GmbH & Co. KG

views updated

Behr GmbH & Co. KG

Mauserstr. 3
D-70469 Stuttgart
Germany
Telephone: ( + 49) 711 896-0
Fax: ( + 49) 711 896-4000
Web site: http://www.behrgroup.com

Private Company
Incorporated: 1907 as Süddeutsche Kühlerfabrik Julius Fr. Behr
Employees: 17,000
Sales: EUR 3 billion ($3.9 billion) (2004)
NAIC: 336391 Motor Vehicle Air-Conditioning Manufacturing; 333415 Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing

Headquartered in Stuttgart, Germany, Behr GmbH & Co. KG (Behr Group) is a globally present original equipment manufacturer of air conditioning and engine cooling systems for passenger cars and commercial vehicles. Behr maintains 30 production plants and ten development centers all around the world. Roughly 60 percent of the group's sales are generated outside of Germany. Engine cooling is Behr's most important activity in terms of sales. According to the company, roughly every fourth vehicle manufactured in Europe is equipped with a Behr cooling system. About half of the group's revenues stem from the air conditioning division. Behr's industry division supplies cooling and air conditioning systems for buses, trains, ships, airplanes, and special vehicles as well as for machinery used in construction, agriculture, and industry. It also manufactures fuel tanks, body sections, and wheels for motorcycles. The company is majority-owned by heirs of the company founder Julius Fr. Behr.

Success in the Early 20th Century

In 1905, 33-year-old inventor Julius Fr. Behr joined Veigel and Zoller, a small workshop in Stuttgart, Germany, that manufactured radiators and tachometers for passenger cars and cake tins for pastry shops. When one of the partners, Andreas Veigel, left the partnership, Behr became a partner with Gustav Zoller and the firm was renamed Behr & Zoller. Two years later, Zoller left as well and Behr became the sole owner of the enterprise, which was then renamed Süddeutsche Kühlerfabrik Julius Fr. Behr (Southern German Radiator Factory Julius Fr. Behr). Envisioning the bright future of motorized transportation in general and of the automobile in particular, Julius Fr. Behr decided to drop the cake tin production and to concentrate on the manufacture of radiators. Not only did he have a constant drive to find new and better technical solutions, Behr also had a sense for emerging markets. Besides radiators, he soon began to develop fin systems for airplanes and added coolers for special vehicles to the company's product range in 1917. While the number of competitors in the emerging market for passenger cars quickly multiplied, Behr's strong determination to succeed kept his enterprise ahead of the competition. By 1910, Süddeutsche Kühlerfabrik (S.K.F.) had won many of the renowned early car makers as customers, including Opel, Benz, Neckarsulmer Fahrzeugwerke AG (NSU), and Saurer. Even the legendary Zeppelin airships had coolers from S.K.F. on board. Soon the enterprise outgrew the available space in its small workshop. In 1911, S.K.F. moved into a large factory building in nearby Feuerbach. Two years later, the company employed 85 workers, most of whom made radiators by hand. By 1916, the factory's workforce had doubled again. To better use production capacity, S.K.F. began to manufacture hose clamps for use in cars, airplanes, breweries, and the telegraph industry in 1914. In 1926, the company started making steel doors, an operation that ceased after about a decade.

During the first years of building his enterprise, Julius Fr. Behr applied for many patents. To stay at the cutting edge of technical developments, Julius Fr. Behr connected with renowned technical pioneers and stayed in close contact with them. Research and development became an important part of Behr's efforts to distinguish his own products from those of several dozen competitors. As early as 1907, the company leader conducted aerodynamic as well as thermodynamic tests on his radiators. Behr learned from those tests that heat dissipation was highly influenced by the design of the radiator's front side. To further explore his insights, Behr began to cooperate with the Aerodynamics Institute for Aircraft Craftsmanship at Dresden's Technical University, where Behr's radiators underwent even more thorough scientific testing. As a result, Behr developed more sophisticated technical solutions. For example, in 1915 Behr was awarded a patent for his standard element radiator, which consisted of standard-sized elements that could be replaced individually with new ones without having to replace the whole radiator, a technical milestone in the history of the field. Another example was Behr's pointed radiators for motor vehicles, which were not only practical but also decorative and quickly gained a considerable market in Switzerland and the Netherlands. In the early 1920s, when the domestic economy was suffering from massive currency devaluation through hyperinflation, the revenues in foreign currencies from abroad helped the company not only manage to survive these difficult times but also to pay for the construction of a brand-new administrative building. In 1926, Behr traveled to the United States, where he studied cutting-edge technologies used by major American auto makers and met with inventor Thomas Edison and entrepreneur Henry Ford. A few years later, in 1930, Julius Fr. Behr died at age 58.

Generational Change and Expansion in the 1930s

Manfred Behr, the son of Julius Fr. Behr, was 21 years old when his father died. His mother, Helene Behr, together with other family members and the support of experienced S.K.F. managers, took over her husband's business while her son finished his studies in mechanical engineering. In 1931, Manfred Behr became a member of the executive management board and officially joined the company as technical director in 1935. Seven years later, he became the company's CEO. Manfred Behr continued to put a high emphasis on innovation and new product development, pushed diversification forward, and initiated the company's massive international expansion after World War II.

The early 1930s brought the Great Depression to Germany, resulting in numerous bankruptcies and rapidly rising unemployment. In contrast, S.K.F. invested heavily in new machinery and built a second production plant in Feuerbach. A result of Julius Fr. Behr's negotiations in the late 1920s, the company was awarded a supplier contract to deliver radiators to the Berlin plant of the Ford Motor Company. Beginning in 1930, about 90 radiators were shipped daily to Berlin. Due to the efforts of the company founder, which were continued by Manfred Behr, by the mid-1930s S.K.F. radiators and coolers could be found in most major means of transportation: passenger cars and trucks, motorcycles, locomotives, and airplanes. In the second half of the 1930s, the company enjoyed healthy growth. Within only two years, the number of S.K.F. employees grew by over 50 percent, from 615 in 1936 to 939 in 1938, while revenues in 1938 exceeded those from two years earlier by 85 percent.

As technical director Manfred Behr was the driving force behind the company's stream of innovations. The mechanical engineer followed in the footsteps of his father in terms of inventions. His 1934 dissertation "The Automatically Ventilated Cooler Installed in the Vehicle Interior" solved the problem of putting a radiator in the rear of a car instead of the front. The new radiator was first installed in the 130/170 H rear-engine vehicle developed by German automaker Daimler-Benz. Behr was also involved in development work for the first Volkswagen and a sensational new racing car developed by Auto Union, another leading German car manufacturer. During the 1930s, when the expansion of Germany's freeway system called for faster cars, S.K.F. began to set up scientific testing facilities to further improve radiator performance. Most notably, in 1937 a wind tunnel began measuring the cooling performance of S.K.F. radiators at the Stuttgart plant, one of the first of its kind in the world. It complemented the obligatory road tests and made test results more comparable because conditions could be influenced by research engineers. The testing facility was also used by car manufacturer Daimler-Benz to measure the circulation of cooling water and oil in vehicles under development.

Heating and Air-Conditioning Systems
after World War II

As Germany initiated World War II in September 1939, S.K.F. became an important part of Hitler's war machine. The company supplied coolers for tanks, airplanes, and half-track vehicles, as well as charge-air coolers and heat exchangers for high-speed launches. A new development of that time was a cooler for aircraft made out of aluminum, which was manufactured in increasing numbers for Germany's air force. As more and more S.K.F. employees were drawn into the military, the company began to use forced laborers to keep production going during the war.

Company Perspectives:

Climate control-differentiation potential in international competition. The automotive future is climate controlled. By the year 2005, two out of three vehicles produced in Europe will be equipped with air conditioning. This obvious trend means automobile manufacturers worldwide are increasingly demanding air-conditioning systems which offer enhanced driver benefits, reduce technical and, consequently, economical expense and consistently improve environment-friendly performance. Only on this basis can the differentiation potential between climate control systems be fully utilized in the internationally competitive automobile industry and standards from top automobile ranges also be used in vehicles of lower-price categories. We are meeting this challenge as a systems integrator who sees its key competence in a consistent integral approach and methodology. Optimum solutions today for the cooling technology of tomorrow. The same also applies to our cooling technology which is subjected to the ever increasing demands of modern engine generations. Compact solutions in the Behr core competences of coolant, charge air, oil and exhaust gas cooling, as well as Visco fans, repeatedly prove the compatibility of top engine performance, reduced emissions and considerate use of natural resources. We save space by combining technical functions, reduce weight and fuel consumption, use recyclable materials and appropriately control thermo-management of the engine according to performance requirements. No more and no less.

The years that immediately followed Germany's defeat demanded creativity and determination from the 240 remaining S.K.F. employees. With the production of motorized vehicles such as cars and airplanes practically non-existent and raw materials extremely hard to come by, they began to manufacture cookware and milking buckets with the last supplies of aluminum that survived the war. These goods were exchanged for coke and carbine, which they used to generate the gas necessary for repairing war-damaged radiators for the American occupation troops. Beginning in 1946, a limited number of radiators were manufactured again, and two years later the serial production of radiators for passenger cars resumed. The introduction of a new currency in 1948 marked the end of the postwar reconstruction years and the beginning of an unprecedented economic boom in Western Germany. By 1949, radiator production at S.K.F. was back at 75,000 per year. In the following decades, production capacity for radiators was constantly expanded and modernized.

The year 1949 marked a new era for S.K.F. In that year, the company entered a market that perfectly complemented the existing product range. In addition to coolers, S.K.F. began to build heaters for motorized vehicles. Manfred Behr pioneered the field with his fresh air heater that used warm water from the radiator to heat the passenger cabins of cars, truck, and buses. The 1950s also saw new developments in the radiator division. In 1951, S.K.F. issued a license to India Radiators Ltd. which consequently began to manufacture S.K.F. radiators on the sub-continent. A number of innovations were introduced by the company during the decade, including cooling units for trucks and buses with hydrostatic fans and a hydraulic fan drive equipped cooling system for diesel locomotives. In addition, the company began in the 1950s to develop air-conditioning systems, which were already widely used in the United States. In 1957, the first Hydraulic Ventilation and Air Conditioning System (HVAC) went into serial production at S.K.F. and was built into the Mercedes-Benz 300 passenger car. In the same year, the company resumed cooler production for airplanes and built an adjustable climatic wind tunnel for testing heating and cooling systems, the first of its kind in Europe.

In the 1960s, S.K.F. began to manufacture Visco clutches and fans under license. The company refined production technologies using plastics in heaters and introduced salt-bath dip brazing of aluminum heat exchangers. New production facilities were built at several locations to keep up with the sharply growing demand during the so-called "economic miracle" years. In 1966, air conditioner and fuel heater development and production became a separate business division.

Global Systems Supplier: 1980s to the Mid-2000s

As his father did in the early days, Manfred Behr recognized the importance of international markets. Under his leadership, the German parts supplier S.K.F. took the first steps towards becoming a global systems supplier. In 1969, two foreign subsidiaries were established in major markets: one in France and one in the United States. Entering a period of liberalization of global trade, major automakers began to move production closer to markets abroad as well as to low-cost locations around the world. S.K.F. followed suit. During the 1970s, the company took over the Spanish firm Frape S.A. and acquired a share in India Radiators Ltd.

In the 1980s, S.K.F. made the transition from family to external management and underwent a number of organizational changes in the 1990s. In 1980, Dr. Heinz Breuer, who had been with the company for many years, succeeded Manfred Behr as CEO. Five years later, the son of the company founder retired from participation in day-to-day business and became the head of a newly established advisory board. In 1988, Horst Geidel, another S.K.F. manager who knew the company from the inside out, took over as CEO. After Manfred Behr's death in 1990, the company was renamed Behr GmbH & Co. KG. In the same year, all business activities besides those concerning the automobile industry were united in the new division Behr Industrietechnik (Behr Industrial Tech). After the reunification of East and West Germany, the company acquired the East German firm Fahrzeugheizungen Kirchberg GmbH, a manufacturer of heaters for motorized vehicles. Important organizational changes in the 1990s included the establishment of customer centers, teamwork models in all production areas, technology that allowed the combination of standardized modules in various ways according to customer specifications, and a "Total Quality and People Orientation" project.

Key Dates:

1907:: Julius Fr. Behr becomes the sole owner of a radiator firm in Stuttgart.
1915:: Behr receives a patent for standard element radiators.
1924:: The company develops the first heavy-duty cooling aggregate for diesel locomotives.
1942:: Süddeutsche Kühlerfabrik (S.K.F.) is transformed into a limited partnership.
1949:: The company begins to manufacture heaters for motor vehicles.
1965:: S.K.F. starts the serial production of air conditioners for passenger cars.
1969:: The first subsidiaries abroad are set up in France and the United States.
1980:: Dr. Heinz Breuer is the first non-family member to become CEO.
1990:: The company is renamed Behr GmbH & Co. KG after Manfred Behr's death.
1993:: Behr of America merges with U.S. truck cooler manufacturer McCord.
1999:: The company enters two joint ventures with German automotive component supplier Hella.
2000:: Two joint ventures are set up in Japan.
2003:: Behr enters three joint ventures in China.

During the 1990s and in the early years of the 21st century, Behr followed its customers to Asia, South America, and Eastern Europe, creating new production subsidiaries and customer centers in Brazil, Japan, the Czech Republic, Korea, and China. In addition, breaking into the North American market became the company's primary focus. In 1993, the merger of Behr America and McCord, a subsidiary of Cummins Engine Corporation and the number one producer of coolers for trucks in the United States, established the new market leader in the truck segment, Behr America. First successes in the passenger car market followed in 1998 when Behr began to supply engine cooling units for General Motors' Saturn model and for BMW's Z3. In 2002, Behr acquired Ohio-based Dayton Thermal Products from DaimlerChrysler and built a center for technical research in Troy, Michigan. Two years later, the company received DaimlerChrysler's Global Supplier Award for outstanding performance.

In the late 1990s, Behr began to enter a number of strategic alliances to further strengthen the company's capabilities in a highly competitive global market. In 1999, Behr teamed up with German vehicle lighting and accessory supplier Hella KG Hueck & Co. and set up two joint ventures, Hella-Behr Thermocontrol and Hella-Behr Vehicle Systems. In Japan, joint ventures were established with the country's number three radiator maker, Toyo, and with compressor manufacturer Sanden Corporation in 2000. In 2003 and 2004, Behr entered three joint ventures aimed at the Chinese market with Sanden Corporation and with the two Chinese manufacturers Shanghai Automotive and Dongfeng. By 2005, three-fifths of Behr's total labor force worked abroad, up from about two-fifths a decade earlier.

Although the Behr family had handed over management of the business to "outsiders," the company still carried the founder's family name. After the two great-grandsons of company founder Julius Fr. Behr sold their shares in the business in 1996, Baden-Württembergische Kapitalanlagegesellschaft (BWK), a holding company, became a minority shareholder. However, other Behr family members, including Manfred Behr's daughter, granddaughter, and nephew still owned a majority in the motor heating and cooling specialist that celebrated its 100th anniversary in 2005. Under the leadership of Dr. Markus Flik, a former MIT professor in mechanical engineering, Behr aimed at remaining an independent global player firmly based in Germany and at becoming a global performance leader in its major markets.

Principal Subsidiaries

Behr GmbH & Co. KG (Germany); Behr France S.A.R.L.; Behr Lorraine S.A.R.L. (France); Behr South Africa (Pty.); Ltd. Behr India Ltd.; Behr Thermot-tronik Korea Ltd.; Behr America, Inc. (United States); Behr Climate Systems, Inc. (United States); Behr Heat Transfer Systems, Inc. (United States); Behr Dayton Thermal Products, LLC (United States); Behr Thermot-tronik Prettl (Mexico); Frape Behr S.A. (Spain); Behr Czech s.r.o.; Behr Japan K.K.; Behr Brasil Ltda.; Behr Italia S.R.L.