Peter Marks, CEO of Germany's Robert Bosch LLC.Fernando Morales/The Globe and Mail
German-born Peter Marks has spent the past two decades in the United States, running the North and South American arms of the vast global manufacturer Robert Bosch GmbH. Best known for its automotive parts, Bosch also makes a wide range of products from power drills to appliances to security systems to solar panels. Mr. Marks, who is based in Farmington, Mich., made a rare trip to Canada recently as part of a tour to celebrate the 125th anniversary of the company, which was created in Stuttgart in 1886 by Robert Bosch, a socially conscious entrepreneur whose first breakthrough was a high-voltage spark plug.
How does corporate culture differ between North America and Europe?
I have been in the U.S. for 22 years now [and I am still]excited about the entrepreneurial spirit of North American businesses - the speed to market, the customer intimacy, and the spirit of individuals. North Americans move very quickly, and are very excited about new technology if it brings convenience to the end consumer. But [there is a]challenger in China; they are even faster. That's a new dimension.
Has Bosch shifted manufacturing to developing countries such as China?
Our activities in China, which are pretty vast, are for the domestic [Chinese]market. We decided a long time ago that we wanted to manufacture close to our customers. In general we will put our resources where we have the business [so]we don't intend to shift production to China for export purposes. In each region we leverage our high cost [manufacturing operations]with low-cost locations. So in North America we have a dominance of manufacturing plants in Mexico, which are very productive.
Do you have any manufacturing in Canada?
We have some manufacturing in two factories. In Canada [and]in the U.S., we have some very capable manufacturing plants, and we will always use these plants for new product startups. Once the products are more mature, then they can be moved to a low-cost [manufacturing]site where we don't have this highly skilled structure. But our intention is not to increase our manufacturing footprint significantly in the U.S. or in Canada. We want more in Mexico.
Is there a future for manufacturing in developed countries such as Canada?
I can see a place for highly specialized manufacturing, where there is a very close connection with the research and development of these products. [Examples might include]medical devices and so forth, where manufacturing is not the biggest cost factor and [it is crucial]to have good application engineering.
Robert Bosch was a visionary with a social conscience. How is this reflected in the company today?
Bosch said a product shouldn't only have an economic value, it should also benefit humanity and society. We believe very strongly that we should make a contribution with our innovation. [That's why]45 per cent of our R&D investment goes toward improving energy efficiency and conserving energy. And we have [shifted]our portfolio toward renewable energy. We produce geothermal heat pumps and solar thermal panels, and we have started to build photovoltaic products. On the automotive side, we are very much involved in the electrification of vehicles because we believe that the power-train technology in the future will be electric.
What needs to be done to make electric vehicles practical and affordable?
If you have a range of 60 kilometres, that's not a really good business case. An electric vehicle needs a range of 200 to 300 km to make it a viable proposition. [To get there]you need new battery technology. The other [factor]is cost, which is far too high right now and [must be cut]so that a fully electric-driven car is a good proposition for the consumer.
When will we see a major shift to electric vehicles?
It might take until 2020 before we see significant penetration.
Is there more efficiency that can be squeezed out of the internal combustion engine?
Absolutely. We believe that the internal combustion engine will be the main power train for the next 20 years. We are heavily involved in further advancing diesel technology, where there is still a 30-per-cent [potential]improvement in front of us. We are [also]involved in gasoline direct injection, which is really taking off now.
Where will the breakthroughs come in some of your other businesses?
One common theme is energy efficiency. With power tools, energy efficiency and battery capacity are important factors; and we also see a lot of improvement in ergonomics, vibration and noise reduction. On our heating and cooling systems, there are breakthroughs in front of us on efficiency and noise. On the industrial hydraulics side, you also see a trend toward energy efficiency.
Does the fact that Bosch is owned by a charitable foundation change the way the company is run?
The foundation owns the company, but they don't have any voting rights, so they are not involved in the day-to-day activities of the company. Another board has the voting rights [and is made up of]industry executives who are active and running sizable companies. So we are as profit-oriented as any other company. But since we are not publicly traded, we have to finance all our growth from our results.
The nice thing is we can make very long-term decisions. We can develop unique technology which society needs in the future. With some of the products we pioneered - such as electronic stability control [for cars]- we had the stamina to stay with the technology even though we didn't make money for many years. But we knew the market would turn at some point.
What is the message there for other companies?
It is always sensible to balance between short-term operational adjustments, which you need to make to compensate for economic downturns, [and]keeping the long term in mind. Any business which is sustainable needs to have this balance.
When we went into the recession, our philosophy was to restructure the business but keep our core team intact so that once the economy turned around we would come out of it with strength, without having to reshuffle and rehire. Nobody expected the economy would rebound with such a steep incline [and]we were ready to support our customers again.
Did the company make it through the recession in good shape?
It was in good condition because we didn't cut our long-term research and development activities. We just kept working on products for the future. However, we had significant losses for the first time in the history of Bosch. We were willing to take this hit, and in 2010 we made a significant profit.
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PETER MARKS
Title: Chairman, president and CEO of Robert Bosch LLC, based in Farmington Hills, Mich.
Personal: Born in Singen, Germany; 57 years old.
Education: Mechanical engineering, University of Applied Sciences, Konstanz, Germany.
Career highlights:
* First job was as an apprentice machinery fitter.
* Joined Bosch in 1977, in manufacturing systems planning.
* In 1982 became project manager in the automotive group at Bosch USA.
* From 1998 to 2000, was executive vice-president of Bosch's automotive electronics division.
* In 2006, appointed head of Robert Bosch LLC with responsibility for all of North and South America.