The story begins with a 22-year-old medical student who once fled the Czech Republic to Austria with her family after the expropriations in the post-war period. Maria-Elisabeth Schaeffler (née Kurssa) is now 79 years old and one of the richest women in Germany.
When she met Georg Schaeffler, she broke off her studies and moved with him from Vienna to the tranquil Herzogenaurach, where he and his brother Wilhelm founded the company Industrie-GmbH in 1946, which years later would become the multi-billion dollar Schaeffler Group.
The company’s founder dies in 1996, leaving his wife and son Georg Friedrich Wilhelm to manage the group. Since then, the two shareholders and sit on the supervisory board, jointly hold 100 percent of the company shares – they 20 percent, he 80.
But, although Maria-Elisabeth and Georg F. W. Schaeffler are known as committed entrepreneurs, mother and son are currently receiving severe criticism. The reason: The company wants to cut over 4,000 jobs despite billions in sales – 14.4 billion euros in 2019 alone. Most jobs will be lost in the provincial town of Herzogenaurach.
“When Schaeffler has a cold, the city suffers from pneumonia”
With almost 24,000 inhabitants, Herzogenaurach at first glance looks like a typical small town in Middle Franconia, a good 20 kilometers from Nuremberg. But thanks to Schaeffler, Adidas and Puma, the city is one of the economically strongest regions in Germany, a kind of Franconian Silicon Valley of family businesses.
The Schaeffler Group alone employed around 8,000 Herzogenaurach residents in its offices and factories in 2009, as the “Handelsblatt” reported – the city is dependent on the success and failure of the company. “You can’t survive with Puma and Adidas alone,” a local resident told the business magazine in 2009.
According to “Manager Magazin”, a Herzogenaurach mayor is said to have said: “If Schaeffler has a cold, the city suffers from pneumonia”. Now the company not only has a runny nose, but has been suffering from a recurring cold since the unfortunate takeover of the tire manufacturer Continental, which it has so far successfully kept under control with tough cost-cutting measures.
The group of companies led by CEO Klaus Rosenfeld recently announced that it would cut over 4,400 jobs. Most of them in Germany, as Rosenfeld confirmed in an interview with “Wirtschaftswoche”. The company has already cut 1,600 jobs in Germany since December 2018. “At the end of 2018, we had 35 percent of our employees in Germany,” Rosenfeld told the business magazine. “At the same time, our business is becoming more and more global and the proportional share is simply not right. So it has to be tackled, ”he justified the dismissals.
Of course, he would also have spoken to the Schaeffler family about the plans. “We have been working closely and trustingly together for years,” says Rosenfeld.
From dress to suit and tie
A look back: when she inherited her husband’s legacy in 1996, Maria-Elisabeth Schaeffler got involved in day-to-day business, swapping a dress for a suit and tie and founding an advisory board, which she filled with “experienced personalities from the business world”, such as the business magazine “ Impulse ”reported. Before that, she had “33 years of excellent training” in her husband’s company, as she later said – which is why the former medical student was able to drop out of a second degree, this time in business administration, with a clear conscience.
Two years after Schaeffler’s death, she hired Jürgen Geißinger as managing director, who was responsible for the purchase of the clutch manufacturer LuK Group and the rolling bearing manufacturer FAG Kugelfischer. Two acquisitions that enabled Schaeffler to grow into one of the largest automotive suppliers in the world – but Maria-Elisabeth would not move into the spotlight until years later.
The German-Austrian always takes the inheritance entrusted to her and her son seriously. She sees her family in a role of “absolute responsibility for the well-being of the company”, she said loudly “Impulse” and was “downright obsessed with the idea of leading INA-Holding Schaeffler KG into the future.” A future that will begin with without much influence from the Schaeffler couple’s only son, because he initially prefers to spend his time as a young billionaire heir in the USA.
Escape to America and 15 minutes of fame
In the year his father died, Georg F. W. Schaeffler moved to Durham, North Carolina, to study law at Duke University. The Schaeffler Crown Prince spends the following years as a business attorney at the international law firm Haynes & Boone in Dallas, Texas, before finally returning to Germany – and to his mother and the group of companies.
According to “Impulse”, Maria-Elisabeth never resented the fact that he did not do it earlier, but only years later, even though she made the family hierarchy unmistakably clear: “He should do what he has a great talent for. I gave him this freedom. ”Meanwhile, with her advisory board, she is taking care of the merger of LuK, FAG and INA to form the Schaeffler Group.
When the junior got more involved in the company in the mid-2000s, a mammoth task awaited mother and son: taking over the tire manufacturer and automotive supplier Continental. And with it the 15 minutes of fame that the unfortunate handling of the takeover was to bring with it.
Mink coats and state aid
Due to the global financial crisis in 2008, the takeover of Continental costs the group a lot more than previously thought and threatens to ruin the family. The widow Schaeffler is forced to ask for state aid, for which she receives a lot of public criticism. “You don’t ask for state aid in a mink coat,” says the then Labor Minister Olaf Scholz to the “Tagesspiegel”. The tabloid headlines: “The billionaire wants our tax money”.
But bankruptcy and break-up do not materialize, the Schaeffler Group survives the crisis and the Continental takeover proves to be a profitable investment.
Instead of the threatening ruin, the Schaefflers were able to multiply their wealth, in the meantime they were not only among the richest Germans, but also among the richest people in the world. At the beginning of 2018, mother and son had combined assets of around 35 billion US dollars.
Tough austerity measures, efficiency and good-natured banks
Although the Schaeffler Group and Continental have recovered since the crisis around twelve years ago, share prices have been pointing downwards to the left for several years. While the boss at the time, Jürgen Geißinger, together with IG Metall, ruled out redundancies in the face of unfortunate developments – and received the full support of the company’s heiress Maria-Elisabeth Schaeffler-Thumann – the new boss Klaus Rosenfeld is fully on this course – and has it loudly discussed own statements with the Schaeffler family.
If the plan works, Maria-Elisabeth Schaeffler and her son Georg will avoid financial decline again. Because the trend towards electromobility and, last but not least, the slump in the auto industry in the wake of the Corona crisis have been gnawing heavily at the family’s fortune for two years – while it was 35 billion US dollars in 2018, the business magazine “Fortune” now only estimates 8, $ 5 billion.