Prior to this year's EMO show, two colleagues and I were invited to visit several Junker Machinery Company plants in Germany and the Czech Republic. We were invited to learn more about Junker's machine tool technology and- its business philosophy of manufacturing.
When the Soviet Union broke up, many Western European companies looked east for skilled but inexpensive labor. Plants, although for the most part in severe disrepair, could be had for pennies on the dollar. Big Brother was gone, and with him went the market for most of the goods and services previously made in places such as the Czech Republic. The people needed work and markets.
As companies set up shop in the former Eastern Bloc, many of their domestic employees felt threatened by the possible loss of jobs to an eager, skilled and hungry foreign workforce. For many companies, this fear was justified because of a short sighted approach to the opportunity. These companies chose to restrict their Eastern Bloc operations to labor intensive lower skilled work, keeping plant investments to a minimum. Many also chose to keep "serious" technology tightly gripped in the home country.
Erwin Junker, founder of Junker Machinery, was among those German manufacturers who acquired a base of operation in the Czech Republic shortly after the fall of the Soviet Union. His approach was different. Mr. Junker began investing in plants and personnel.
What Junker did differently during this period was to begin a labor and technology exchange program between the Czech plants and the German plants. Germans went to work with the Czechs, bringing increasingly advanced technology to the Czech facilities. In turn, the Czech workers went to Germany to learn application of the more advanced technology. This cross-pollination has enabled Junker to continuously increase the technological sophistication of the machines produced in its Czech plants and thereby enhance each plant's respective contribution to the company.
The company also re-built the crumbling physical facilities. Today, a Junker plant in Melnic, Czech Republic, is indistinguishable from a plant at headquarters in Nordrach, Germany.
Junker's employment figures when it began working in the Czech Republic were around 500 people. Today, the company employs about 1,200.
It has proven to be an exercise of courage to share technology, to teach and to collectively reap the benefits.
Not a bad manufacturing strategy in any part of the world.