Engineer at heart

"This is my passion," says Franz, who at age 65 is no longer on the front lines selling molding machines directly to customers. But he is a top executive and one of the architects behind the rise of Haitian International Holdings Ltd., which last year sold nearly 27,000 injection molding machines.

Franz grew up in East Germany and worked for a machine tool export company. When the Berlin Wall came down, he kept right on selling molding machines. He eventually switched to Mannesmann Demag and rose to the chairman's office before joining Haitian 10 years ago.

He always has a smile and is addressed as "Professor Franz" by friends and colleagues all over the world, the result of receiving two honorary degrees from Russian universities. The honorific title is clearly used out of respect and not to assuage his ego. "It just feels right," said one person who has known Franz for more than 20 years.

Franz speaks five languages (German, English, Russian, Mandarin and Egyptian Arabic). He recently answered questions for Plastics Machinery Magazine Editor Ron Shinn.

What was your first job in plastics?

FRANZ: When I graduated from the university in 1972, my first job was as a development engineer. My diploma was in extrusion, and I worked on developing film lines. But shortly after I started, the company assigned me to be the leader of the development group for injection molding machines. By 1976-1977, we were developing one of the first large two-platen injection molding machines in the world.

How did the two-platen machine work out?

FRANZ: We were an East German machine tool company from the north of Germany. We developed this machine and brought it to the K Show in 1979. We got comments from all the big injection molding machinery makers – Engel, KraussMaffei and Battenfeld – that said it cannot work. "How can it work with only two platens," they said. In those days, an injection molding machine had to have a certain weight to be considered good. We deleted one platen, so the machine's weight was considerably less. It took 30 years after this time, but you can see how the two-platen design has worked out. I remember that we were very proud to build it, but it was not very popular.

As an East German company, your biggest markets were Russia, China and India. How did you bring the machine to a trade show in West Germany?

FRANZ: One of the benefits of being engineers is that we did not care too much for politics. Of course, we had problems, like our money could not be exchanged and the Düsseldorf exhibitions would not take East German money. But we just dealt with it because it was not something we could change. We were interested in innovation and doing our jobs as engineers. I am an engineer at heart. I think innovation and technology have no homeland.

Did you have to serve in the East German army?

FRANZ: They called me to serve for 1½ years. That was the law. I learned a lot in the army, even though I was only a private in the infantry. I tried to do my best to get something out of the experience. We learned discipline, we learned to respect others, even if they are of a different opinion. But it was a difficult time. I was already married and had a son. When I was finished with the army, the next day I was back at work with the injection molding development team.

How did you make the transition from engineering to sales?

FRANZ: In the 1980s, the machines we developed became more technical and needed to be explained better to customers, so the company requested some engineers to become salesmen. My father sold textile machinery and I never saw him because he was always traveling. All the load of raising the children fell on my mother's shoulders. I didn't want to be traveling all the time like my father. That was one of my motivations to be an engineer. I saw the engineers coming home at 5 p.m. and they could take care of their families.

I was already deputy director of research and development and could have become the director, but the company asked me to take over the sales department, so I changed jobs.

What came next?

FRANZ: In 1985, I was 35 years old and decided I needed to gain more knowledge. When I was young, my father's job caused us to move to different countries and experience different cultures, so I asked my boss to give me some other job on the outside of injection molding. He did not like this, but I told him to give me the worst job the company had, a job nobody else wanted to do.

What was the worst job?

FRANZ: After a couple of months, they sent me to Baghdad. Iraq was upgrading its highway system and they bought Japanese road building equipment. The East German government had a contract to build 16 repair shops all around the country for this heavy equipment. I became the leader for this contract.

By the way – I liked this challenge very much.

Because it was so hot, government workers stopped at 2 p.m. each day. So for the rest of the day, I sold injection molding machines to private customers. The local people would stop working in the afternoon when it was hot, but would go back to work from about 5 p.m. to 9 p.m., so that's when I was selling injection molding machines.

Why didn't you do your government job and go home to relax at 2 p.m. every day?

FRANZ: I wanted to stay involved with the injection molding machines. The company was happy to have me there; because of the fighting, no one else wanted to go to Iraq.

I survived 36 rocket attacks. My house was 4 kilometers from a refinery and the Iranians were firing missiles over my house.

What did you do after Iraq?

FRANZ: They sent me to Egypt to be one of two directors of a joint venture with an Egyptian trading company selling and servicing injection molding machines. We were extremely successful and became the largest seller for this type of machinery in Egypt. It was also one of the first joint ventures an East German company entered into with a Western company and I was the managing director for the German side.

What came after the joint venture in Egypt?

FRANZ: The East German export company was getting ready to send me to Göteborg (Gothenburg, Sweden), and it was a perfect job for me. The family of my wife is from northeast Germany, which for centuries belonged to Sweden. But the Wall came down in 1989 and East and West Germany were reunified. The company decided it wanted to secure its large business in Russia so they sent me there. I didn't like it very much, so I took an offer for a job with Mannesmann Demag Plastics Machinery.

Did you move back to Germany?

FRANZ: I stayed in Russia and built the first-ever joint venture between a Russian private company and Mannesmann. It was for selling and servicing injection molding machinery. There were two governments overthrown while I was there. This was quite a time, with the shooting and all. But I got accustomed to it in Iraq and in Egypt. I knew how to behave. You get a certain feeling for it.

Let's skip ahead to Haitian, which you joined 10 years ago. It was not a well-known brand when you joined.

FRANZ: That is correct. When I joined, I started paying a lot of attention to pushing the brand into the media. People talk about our global exposure and our exports are extremely important and visible. But for me, at least equally important, is our development in China. We had to convince the Asian investors in China and they are very critical about Chinese machinery.

We have a large group of international companies in China. The largest group is Taiwanese, followed by the Japanese, Koreans and Singaporeans. A lot of international companies that buy our machinery in China wouldn't buy it in the U.S. or Europe, but this tendency is reversing. In terms of revenue, about 65 percent comes from sales in China and 35 percent from exports, but exports are growing faster at the moment, also because of reshoring.

How important is brand loyalty inside China?

FRANZ: It is not so important like it is in the rest of the world. In China, the idea of brand loyalty is just starting to develop. In China, Haitian benefits from being considered an international company.

Are you impressed by the approximately 27,000 machines sold in each of the last two years?

FRANZ: I know it is spectacular to look at those numbers, but we don't care much about the number of machines sold. We are entrepreneurs and we work for profit. Big sales and small costs! For every half year since I have joined Haitian, our profit growth has been larger than the growth in sales. Since 2005, we have quadrupled our sales and now make nearly five times as much profit. Total sales last year were $1.21 billion. Operating profit was $233 million.

What do you believe Haitian must do to continue its success?

FRANZ: These are the most important points:

Stay focused on building standard machines.  Standard does not mean cheap or low-tech. Standard provides grounds for efficiency and flexibility for all parties involved.

Continue to build Haitian's reputation worldwide to overcome reluctance to buying Chinese-made machines.

Focus on technology that can be developed and manufactured with high quality and reliability inside Haitian. Avoid over-engineering. Reliability and quality are superior factors for the success of a machine series.

Continue to improve efficiency through standardization and complexity reduction.

How would you like to be remembered?

FRANZ: First, that I was always fair. What I did, I did from my heart. That I was a trustful man.

Second, as a person who was always saying and making something that drove development. At the point it was spoken it may have sounded crazy. As a pioneer who pushed the industry forward.