Part 6
The rise of a technocrat
Sulzer, a Swiss company whose origins date back to 1834, had first risen to prominence after starting to build compressors in 1906. By 1914, the family-run firm had become part of “three joint-stock companies,” one of which was the official holding company. In the 1930s, Sulzer’s profits would suffer during the Great Depression and, like many businesses at the time, faced disruption and industrial actions from their workers.
World War II may not have affected Switzerland as much as her neighbours, but the economic boom that was to follow led to Sulzer growing in power and market dominance. In 1966, just before the arrival of Klaus Schwab at Escher-Wyss, the Swiss turbine manufacturers signed a cooperation agreement with the Sulzer brothers in Winterthur. Sulzer and Escher-Wyss would begin to merge in 1966, when Sulzer purchased 53% of the company shares. Escher-Wyss would officially become Sulzer Escher-Wyss AG in 1969 when the last of the shares were acquired by the Sulzer brothers.
Once the merger had started, Escher-Wyss would begin to be restructured and two of the existing Board Members would be the first to find their service to Escher-Wyss coming to an end. Dr. H. Schindler and W. Stoffel would resign from the Board of Directors now headed by Georg Sulzer and Alfred Schaffner. Dr. Schindler had been a member of the Escher-Wyss Board of Directors for 28 years and had worked alongside Eugen Schwab throughout much of his service. Peter Schmidheiny would later take over as Chairman of the Board of Directors of Escher-Wyss, continuing the Schmidheiny family rule over the company’s executives.
During the restructuring process, it was decided that Escher-Wyss and Sulzer would concentrate on separate areas of machine engineering with the Escher-Wyss factories primarily work on hydraulic power plant construction, including turbines, storage pumps, reversing machines, closing devices and pipelines, as well as steam turbines, turbo compressors, evaporation systems, centrifuges and machines for the paper and pulp industry. Sulzer would concentrate on the refrigeration industry as well as steam boiler construction and gas turbines.
On 1 January 1968, the freshly reorganised Sulzer Escher-Wyss AG was rolled out publicly and the company had become streamlined, a move deemed necessary because of several large acquisitions. This included a close collaboration with Brown Boveri, a group of Swiss electric engineering companies who had also worked for the Nazis, supplying the Germans with some of their U-boat technology used during World War II. Brown Boveri was also described as “defence-related electrical contractors” and would find the conditions of the Cold War arms race to be beneficial to their business.
The merger and reorganisation of these Swiss mechanical engineering giants saw their collaboration pay off in unique ways. During the 1968 Winter Olympics in Grenoble, Sulzer and Escher-Wyss used 8 refrigeration compressors to create tonnes of artificial ice. In 1969, the two firms combined to help in the building of a new passenger ship named “Hamburg”, the first ship in the world to be fully air-conditioned thanks to the Sulzer Escher-Wyss combination.
In 1967, Klaus Schwab officially burst onto the scene of the Swiss business community and took a lead in the merger between Sulzer and Escher-Wyss, as well as forming profitable alliances with Brown Boveri and others. In December 1967, Klaus would speak at a Zurich event to the top Swiss machine engineering organisations; the Employers Association of Swiss Machine and Metal Manufacturers and the Association of Swiss Machine Manufacturers.
In his talk, he would correctly predict the importance of incorporating computers into modern Swiss machine engineering, stating that:
Computers and data were obviously seen as important to the future, according to Schwab, and this was further projected in the reorganisation of Sulzer Escher-Wyss during their merger. Sulzer’s modern website reflects this noteworthy change in direction, stating that, in 1968: “Material technology activities are intensified [by Sulzer] and form the basis for medical technology products. The fundamental change from a machine-building company to a technology corporation starts to become apparent.”
Klaus Schwab was helping to turn Sulzer Escher-Wyss into something more than just a machine building giant, he was transforming them into a technology corporation driving at high speed into a hi-tech future. It should also be noted that Sulzer Escher-Wyss changed another focus of their business to help them “form the basis for medical technology products,” an area not previously mentioned as a target industry for Sulzer and/or Escher-Wyss.
But technological advancement wasn’t the only upgrade Klaus Schwab wanted to introduce at Sulzer Escher-Wyss, he also wanted to change how the company thought about their business managerial style. Schwab and his close associates were pushing an entirely new business philosophy which would allow “all employees to accept the imperatives of motivation and to ensure at home a sense of flexibility and manoeuvrability.”
It is here in the late 1960s where we see Klaus begin to emerge as a more public figure. At this time, the Sulzer Escher-Wyss company also became more interested in engaging with the press than ever before. In January 1969, the Swiss giants setup a public advisory session entitled the “Press Day of the Machine Industry“, which mainly concerned questions on company management. During the event, Schwab would state that companies using authoritarian styles of business management are “unable to fully activate the ‘human capital’”, an argument he would use on many separate occasions during the late 1960s.
The rise of a technocrat
Sulzer, a Swiss company whose origins date back to 1834, had first risen to prominence after starting to build compressors in 1906. By 1914, the family-run firm had become part of “three joint-stock companies,” one of which was the official holding company. In the 1930s, Sulzer’s profits would suffer during the Great Depression and, like many businesses at the time, faced disruption and industrial actions from their workers.
World War II may not have affected Switzerland as much as her neighbours, but the economic boom that was to follow led to Sulzer growing in power and market dominance. In 1966, just before the arrival of Klaus Schwab at Escher-Wyss, the Swiss turbine manufacturers signed a cooperation agreement with the Sulzer brothers in Winterthur. Sulzer and Escher-Wyss would begin to merge in 1966, when Sulzer purchased 53% of the company shares. Escher-Wyss would officially become Sulzer Escher-Wyss AG in 1969 when the last of the shares were acquired by the Sulzer brothers.
Once the merger had started, Escher-Wyss would begin to be restructured and two of the existing Board Members would be the first to find their service to Escher-Wyss coming to an end. Dr. H. Schindler and W. Stoffel would resign from the Board of Directors now headed by Georg Sulzer and Alfred Schaffner. Dr. Schindler had been a member of the Escher-Wyss Board of Directors for 28 years and had worked alongside Eugen Schwab throughout much of his service. Peter Schmidheiny would later take over as Chairman of the Board of Directors of Escher-Wyss, continuing the Schmidheiny family rule over the company’s executives.
During the restructuring process, it was decided that Escher-Wyss and Sulzer would concentrate on separate areas of machine engineering with the Escher-Wyss factories primarily work on hydraulic power plant construction, including turbines, storage pumps, reversing machines, closing devices and pipelines, as well as steam turbines, turbo compressors, evaporation systems, centrifuges and machines for the paper and pulp industry. Sulzer would concentrate on the refrigeration industry as well as steam boiler construction and gas turbines.
On 1 January 1968, the freshly reorganised Sulzer Escher-Wyss AG was rolled out publicly and the company had become streamlined, a move deemed necessary because of several large acquisitions. This included a close collaboration with Brown Boveri, a group of Swiss electric engineering companies who had also worked for the Nazis, supplying the Germans with some of their U-boat technology used during World War II. Brown Boveri was also described as “defence-related electrical contractors” and would find the conditions of the Cold War arms race to be beneficial to their business.
The merger and reorganisation of these Swiss mechanical engineering giants saw their collaboration pay off in unique ways. During the 1968 Winter Olympics in Grenoble, Sulzer and Escher-Wyss used 8 refrigeration compressors to create tonnes of artificial ice. In 1969, the two firms combined to help in the building of a new passenger ship named “Hamburg”, the first ship in the world to be fully air-conditioned thanks to the Sulzer Escher-Wyss combination.
In 1967, Klaus Schwab officially burst onto the scene of the Swiss business community and took a lead in the merger between Sulzer and Escher-Wyss, as well as forming profitable alliances with Brown Boveri and others. In December 1967, Klaus would speak at a Zurich event to the top Swiss machine engineering organisations; the Employers Association of Swiss Machine and Metal Manufacturers and the Association of Swiss Machine Manufacturers.
In his talk, he would correctly predict the importance of incorporating computers into modern Swiss machine engineering, stating that:
“In 1971, products that are not even on the market today are likely to account for up to a quarter of sales. This requires companies to systematically research possible developments and identify gaps in the market. Today, 18 of the 20 largest companies in our machine industry have planning departments that are entrusted with such tasks. Of course, everyone has to make use of the latest technological advances, and the computer is one of them. The many small and medium-sized companies in our machine industry take the path of cooperation or use the services of special data processing service providers.”
Computers and data were obviously seen as important to the future, according to Schwab, and this was further projected in the reorganisation of Sulzer Escher-Wyss during their merger. Sulzer’s modern website reflects this noteworthy change in direction, stating that, in 1968: “Material technology activities are intensified [by Sulzer] and form the basis for medical technology products. The fundamental change from a machine-building company to a technology corporation starts to become apparent.”
Klaus Schwab was helping to turn Sulzer Escher-Wyss into something more than just a machine building giant, he was transforming them into a technology corporation driving at high speed into a hi-tech future. It should also be noted that Sulzer Escher-Wyss changed another focus of their business to help them “form the basis for medical technology products,” an area not previously mentioned as a target industry for Sulzer and/or Escher-Wyss.
But technological advancement wasn’t the only upgrade Klaus Schwab wanted to introduce at Sulzer Escher-Wyss, he also wanted to change how the company thought about their business managerial style. Schwab and his close associates were pushing an entirely new business philosophy which would allow “all employees to accept the imperatives of motivation and to ensure at home a sense of flexibility and manoeuvrability.”
It is here in the late 1960s where we see Klaus begin to emerge as a more public figure. At this time, the Sulzer Escher-Wyss company also became more interested in engaging with the press than ever before. In January 1969, the Swiss giants setup a public advisory session entitled the “Press Day of the Machine Industry“, which mainly concerned questions on company management. During the event, Schwab would state that companies using authoritarian styles of business management are “unable to fully activate the ‘human capital’”, an argument he would use on many separate occasions during the late 1960s.
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