Automotive Mobile Audio Video

A study recently released by an economic think tank concluded that on balance, when one large company acquires or merges with another, it's a good thing for the companies and the industries they serve.

Had the authors of that study looked for a real-world example to illustrate that conclusion, they probably couldn't do much better than Bosch Rexroth Corp.

Established in mid-2001 after Rexroth was acquired by Bosch Automation Technology, a subsidiary of Robert Bosch GmbH, the company hit the ground running as one of the leading players in the mobile and industrial hydraulics industries. Now, a little more than a year after its founding, Bosch Rexroth has set a goal to establish itself as "the Drive & Control Company" for the global hydraulics and factory automation marketplace. While such strategies are often little more than corporatespeak, in this case, there seems little doubt that the organization has the pieces in place to fulfill that mission.

"Drive & Control is more than a slogan or positioning line," said Robert L. Rickert, president and CEO of the Hoffman Estates, Ill.-headquartered company. "It is a statement about who we are and the unique capabilities and values we bring to various markets. It is the distillation of a comprehensive business strategy."

That strategy was distilled from the strengths and expertise each company brought with it. Bosch Automation Technology was a leading supplier of industrial hydraulic, pneumatic, electric drive pneumatic and motion control systems for factory automation applications. Rexroth was part of German industrial giant Mannesmann AG specializing in a range of hydraulic and gear-drive technology. Rexroth was generally considered one of the first tier global hydraulic suppliers.

But things began to become unsettled in 2000 when Mannesmann AG was acquired by English telecommumcations giant Vodafone. The acquisition left Rexroth, along with several other Mannesmann holdings, as square industrial pegs in round telecommumcations holes. "We were very satisfied being part of Mannesmann, being part of the engineering group we were in," said Rickert. "But it became obvious that Mannesmann was headed in a different direction that didn't include its engineering group anymore."

There was some consideration of spinning the Rexroth operations off as a separate company, but the prospects seemed uncertain, especially since it would take place at the height of the dot-coin boom, when heavy industry was viewed by many as "old economy." Eventually Mannesmann began to entertain offers for Rexroth and there were as many as three major suitors. But it was evident early on that Bosch appeared to be the best fit.

"I think these were two companies that knew each other extremely well before the merger took place," said Rickert. "When you looked at the companies, they were very complementary. And when you look at the product lines, the markets served, it very much appeared to be two halves of a whole."

Ken Hank, executive vice president of Bosch Rexroth's mobile hydraulics operations agreed, calling it, "a very nice marriage from the mobile perspective.

"Although Bosch AT was not very big in mobile hydraulics, there were a couple of areas that they specialized in that are important to our future," Hank said. "For example, they have an excellent gear pump line and gear pumps were an area where we had not been very active. In addition, Bosch specialized in a couple of areas, ag equipment with draft control and also in industrial lift trucks with control valve technology that has basically married up to ours so there was no overlap."

The acquisition was finalized in May of 2001 and from its inception, Bosch Rexroth is a significant player consisting of six business units -- Mobile Hydraulics, Industrial Hydraulics, Electric Drives and Controls, Linear Motion and Assembly Technologies, Pneumatics and Service Automation -- serving customers in 80 countries. In the U.S. alone, the company employs nearly 2200 people and operates six regional centers/sales offices, nine manufacturing and assembly facilities and several applications and R&D centers. U.S. revenues in 2001 totaled $567 million.

Looking at the mobile business, Bosch Rexroth has an extremely broad portfolio which includes axial piston pumps and motors; radial piston motors; gear pumps and gear motors; directional control valves; and electro-hydraulic control systems. The company also produces pumps for diesel engine fuel injection systems, as well as Lohmann brand gear drives, which are typically teamed with hydraulic pumps in drive system packages.

"The fact that Rexroth was acquired by Bosch is probably the best thing that could possibly have happened to Rexroth," said Hank. "First, Bosch is a very financially stable company. Secondly, it is not a public company so its strategy is not driven by short sighted goals like so many of today's public companies.

"But most importantly when Bosch acquired Rexroth, they brought to the table their research and development capability and their electronics. There are more than 1500 scientists and technicians working in the research and development center in Germany, to which we now have access. This is mostly in the area of electronics and materials and this is mostly automotive driven, but they're on the cutting edge of technology. That's available to us now and it's a tremendous advantage."

# posted by Medical Information : 2:34 AM