Greece can go: Bosch isn’t bothered

Posted on 28 May 2012 by The Manufacturer

Bosch’s UK president says the long-lived German firm has seen its share of turbulence over the years and that a Greek withdrawal from the eurozone would merely be a blip in its growth trajectory. Jane Gray gives the account.

Lunching with Peter Fouquet, UK president of Bosch, the household goods manufacturer which has become a household name since its establishment 125 years ago, was a soft spoken affair in which ‘politics’ were supposedly out of scope.

But with manufacturing set firmly at the heart of the UK’s economic recovery plans, and those of many other nations, it is difficult to disentangle politics from talk of investment intentions for multi-national companies.

A German by birth, Peter Fouquet took on his role of president of Bosch UK in 2009. It’s a position which belies first impressions of a rather understated character. For whatever Fouquet may lack in media-savvy dynamism, he must make up for in canny business leadership.

Last year Bosch experienced 11% growth in the UK and the company’s manufacturing and engineering capability here is stepping up. A new Engineering Centre is due to open in Birmingham in the next couple of months and its manufacturing site in Stowmarket, Suffolk will start producing a new range of robotic lawnmowers at the end of this year.

So the UK is an attractive environment for Bosch – a place where it sees a future. Engineering services and the development of off-shore wind technologies are particularly promising avenues, as well as automotive technology which, perhaps surprisingly, is Bosch’s bread and butter, making up around 60% of global company revenues.

But the UK’s potential as an investment location for high volume manufacturing of some of Bosch’s products is out of the question says Fouquet. “The cost is prohibitive,” he states. “But this is the same across Europe. The Far East will continue to receive investment for high volume manufacturing of many of our automotive products because although UK automotive manufacturing is turning out higher volumes than ever before, these volumes are still relatively small.”

So Asia still wins on cost when volume is high, even for quite technical products, like Bosch’s turbo chargers, and even when supply chain costs are rocketing due to fuel prices. “Yes,” confirms Fouquet, but possibly with one interesting exception.

“If Greece were to leave the euro it will make them immediately more competitive for investment,” he states to the unanimous raising of eyebrows around the table. “We already have manufacturing there and the cost of production would be a great deal more competitve in such a scenario.”

But does Fouquet feel that this ‘pro’ for a Greek exit of the euro would be outweighed by the devastating effect this move might have on markets and the confidence of other eurozone members?

“A Greek withdrawal would affect our markets in the short term. But Bosch has been in existence for 125 years, we know our markets and I do not think Greece’s actions will cause problems for us in the long term.”

This remarkable confidence is even more marked in light of the fact that Bosch saw a 22% drop in its Spanish auto market last month, with Spain another hot bed for euro instability.

But while expressing compassion for the Greek people and the nation’s economic plight, Fouquet is adamant that Bosch’s strong foundations will see it through. “The Greek ‘catastrophe’. We can deal with it,” he concludes.

Bosch fast facts

2011 figures in millions of euros

Global sales: 51,494

Capital expenditure: 3,226

R&D costs: 4,190

In the UK Bosch employs around 5,000 associates across 37 sites