The coronavirus pandemic highlights the weaknesses of the current global economic order with all its interconnected value chains. In the future, parts of the global economy will be determined primarily by autarky efforts and protectionism.
Right now, experiencing “Globalization 2.0”. This will be characterized by stronger regionalization of value chains in the three major economic centers of North America, the EU, and Asia as well as by the strategic pursuit of sovereignty over systemically important goods that serve critical infrastructures. Here at the Wilo Group, we’re well prepared for this development with our “region-for-region” approach, which we have been putting into practice for years now.
“As part of this approach, we consistently pursue the goal of serving regional or local customer needs with regionally or locally manufactured products,” says Oliver Hermes, President & CEO of the Wilo Group.
The Wilo organization is accordingly geared towards allowing as much decentralization as possible and as much centralization as necessary. In the process, global standards and products are used even more.
sites to follow “region-for-region” approach
Wilo’s main production sites are optimally positioned for the digital climate protection age “We will continue to consistently implement our “region-for-region” approach in the coming years. This year, for example, Wilo will set up a second headquarters in Beijing for our Emerging Markets sales region, build additional production facilities in China and India, and invest heavily in the main production site in Cedarburg in the USA,” Oliver Hermes continues.
“In this context, it is imperative that Wilo’s main production sites are optimally positioned for the digital climate protection age,” says Oliver Hermes. In recent years, the Wilo Group has invested around 300 million euros in the main company headquarters in Dortmund to make it fit for the future in line with the latest “Industry 4.0” and climate protection standards.
Digital Transformation
Wilo’s “region-for-region” approach is designed to sustainably strengthen its good competitive position, especially in the mature European markets. The challenge here is to overcome the effects of the megatrend “climate change” and to shape the digital transformation.
In line with its sustainability strategy, the Wilo Group has set itself the goal of climate-neutral production at all main production sites by 2025. Digital transformation can be a key factor in the transformation to green and sustainable production sites. In addition to high investments, it is equally necessary to leverage the synergy potential of our supra-regional business activities in order to remain resilient and crisis-proof in the future.
relocates Oschersleben production site to Hof and Laval
Consequently, the Wilo Group has decided to relocate the production capacities of the Oschersleben works to our main production facilities in Hof (Germany) and Laval (France) and to close the Oschersleben site.
“With this strategic decision, we are consistently implementing the Wilo Group’s “region-for-region” approach,” explains Dr Mahmud Mustafa, Head of Operations at the Wilo Group. The advancing digital transformation, which is becoming increasingly important at all production sites, is particularly visible in the Smart Factory in Dortmund. In addition to other important factors, a modern IT infrastructure plays a decisive role.
“In order to maintain the Oschersleben site, investments would be necessary, among other things in the area of IT infrastructure, which are not economically justifiable in terms of the entire Group,” says Dr Mustafa. In addition, it is questionable whether there will be enough qualified skilled workers available in the long term.
Capacity Utilization
In addition, in line with the “region-for-region” approach, Wilo would like to respond even more flexibly to customer wishes and shorten lead times in the future. Accordingly, the assembly of individual products into systems and solutions is being shifted to those regions where there is greater demand for them. This continuing market development has already had an impact on the capacity utilization of the Oschersleben works in the past. Wilo Group production sites will be relocated to the works in Laval in France and Hof in Bavaria
The works’ closure is scheduled to take place by the end of March 2022. The employees have already been informed about this at a short meeting. More comprehensive information will be provided in a timely manner at a staff meeting.
In the coming months, the production of switchgears and components needed to manufacture pumps, systems, and solutions at other Wilo Group production sites will be relocated to the works in Laval in France and Hof in Bavaria. Research and development are continued in a separate office in the region.
Comprehensive social plan for around 120 employees
The Wilo Group takes its social responsibility towards the employees in Oschersleben very seriously. For the approximately 120 employees affected, Wilo will promptly begin negotiations with the works council on a social plan to mitigate economic disadvantages in a fair and equitable manner.
In addition to the possible compensation of financial hardship, the focus is also on instruments that are intended to support employees in the best possible way in their search for new employment. The Wilo Group is generally very positive about the possible wish of employees in Oschersleben to continue working at other company-owned locations, for example in Hof or Dortmund.
