Family-owned Endress + Hauser a refreshing anomaly in global automation market

Over the past 35 years, industrial automation has evolved from a domain inhabited by newly minted companies controlled by entrepreneurial founders to become a global market dominated by publicly traded, multi-billion dollar corporations.Automation supplier Endress + Hauser is something of an anomaly in this regard.

Over the past 35 years, industrial automation has evolved from a domain inhabited by mostly newly minted companies controlled by entrepreneurial founders to become a global market dominated by about two handfuls of publicly traded, multi-billion dollar corporations.

Instrumentation and automation supplier Endress + Hauser is something of an anomaly in this regard. Oh, it has the nearly $2.3 billion in 2012 annual revenues all right; but the company remains closely held by Switzerland’s Endress family.

Endress + Hauser supplies sensors, devices, systems and services for level, flow, pressure and temperature measurement, as well as liquid analysis and measured value recording.

All that is good about being part of the Endress family — and that group actually seems to include just about every single one of Endress + Hauser’s employees — was recently on display at its U.S. headquarters and sales center in Greenwood, Ind., just outside of Indianapolis. There the company is investing more than $40 million in expanding its production facilities for flow, level and pressure measurement manufacturing.

As can be imagined, for those attending the ribbon-cutting ceremony for the new facilities, including employees, local government and press, expansion of any U.S. manufacturing facility — regardless of the industries, markets or processes involved — is the best kind of feel-good story.

Site specifics

At the Greenwood facility, an extension to a new building occupied only five years ago has created nearly 85,000 square feet of additional floor space.  "This gives us a chance to increase capacity and to produce additional lines of instruments locally," says Hans-Peter Blaser, general manager, Endress + Hauser Flowtec Div. USA.

In addition, plant resources for level and pressure engineering have moved into a new building directly next door with more than 105,000 square feet of ground area. The additional production areas will increase the facility’s scope and allow more products to be delivered directly from the Greenwood plant. The vacated facilities space will be used for a new visitor and training center for the U.S. sales organization.

Endress + Hauser has had its own sales center in the U.S. since 1970, and has been manufacturing in the United States for the Americas – north, south and central – for more than two decades. It has achieved significant success in this time period, with more than 700 employees today in the United States and a network of representatives believed to encompass another 350 sales engineers and service technicians.

"We have grown an average of 19% a year since 2003, in a market growing an average of 6%. More than 80% of the measurement instruments we deliver in the USA today are now made in the USA. For our flow products that percentage is even higher," says Todd Lucey, manager of the U.S. sales center. "We are a proud American company – with strong Swiss roots." He added that Endress + Hauser expects to be a $500 million company in the U.S. in next several years.

Generational change too

Also in attendance at the ribbon-cutting ceremony, and resplendent in a red bow tie, was Klaus Endress, CEO of Endress + Hauser Group. Endress will retire as CEO of the group at the end of the year, retaining chairmanship of the supervising committee. Most of the company’s growth in North America has come during his tenure. In the 1980s, he was actually employed at the Greenwood site. And at last week’s ribbon ceremony he was clearly proud and enjoying himself.

"We are increasing employment by building state-of-the-art facilities, here and all over the world. You could go into these plants, and if you were having lunch and you spilled something you could just go ahead and pick it up and eat it," says Endress.

In fact, the sense of order prevailing in the production areas is outstanding and one gets the strong sense that craft work rather than piece work is being performed. Also impressive are the calibration facilities for very large diameter flowmeters and the big machine shop.

The ribbon-cutting ceremony took place on a beautiful blue-sky day in the U.S. Midwest, with the campus of white buildings surrounded by corn and soybean fields. In remarks delivered moments prior to the ceremony, Endress characterized the group he leads as being "a very nice, mid-sized company," and spoke for a moment about some issues impacting its future. First and foremost is the commitment to remain a family-owned enterprise and what that means as a third generation of the Endress family comes into maturity with a full 36 members following from the founder’s four children. Georg H. Endress, the company founder, passed in 2008 at the age of 84.

A "family charter" agreed upon for the third generation is meant to establish a basis for sustaining Endress + Hauser as a family-owned business in which share-ownership issues, should they arise, won’t be allowed to impact company operations.

Following the ribbon-cutting ceremonies, Endress spent a considerable amount of time having his photo taken with the employees who came up to him. All in all it was a good day for Indiana, Endress + Hauser and the people who made the whole thing happen.

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