The auto industry has gotten more demanding lately, and even confusing, and BMW CEO Harald Kruger wasn’t able to steer the iconic company any longer. So he will be out in 2020.
A tribute to Lee Iacocca, who became one of the most dynamic leaders in automotive history, Chrysler's savior and America’s first celebrity CEO.
One of the most recent prognostications about the toll that robots will take on manufacturing jobs: About 20 million factory positions could be displaced by industrial robots by 2030, according to Oxford Economics. But before you break out into cold sweats, look closer.
This is the latest in our “Masters of Manufacturing” series, presented in partnership with The Indiana Economic Development Corporation. Each month we share insights and ideas from innovative, growth-minded manufacturing CEOs from across the nation as they navigate this tricky time in history. For Siemens in the United States today, conditions are full speed ahead. The Germany-based industrial giant has been picking up momentum in orders amid a slowing global economy. Its recent performance notably contrasts with that of chief rival General Electric, which has been trying to avoid corporate meltdown. It’s up to Barbara Humpton, CEO of Siemens USA, to help keep that contrast going in the here and now for Siemens’ $23 billion in annual revenues and more than 50,000 employees in the company’s largest market. And yet for Humpton, another urgent priority is to position her company for a future that can look cloudy even for a giant that has dominated in many traditional areas of industry and technology -- but isn’t assured of the same dominance as manufacturing and markets undergo ongoing digital revolution. So Humpton is overseeing an 11-percent year-over-year increase in Siemens USA’s R&D investments, now reaching $1.4 billion annually. She is leveraging synergies from the company’s 2018 acquisition of Boston-based Mendix, which made Siemens one of the world’s 10 biggest software companies. And Humpton is continuing to press the digital transformation of the operations she manages even while launching a new initiative for Siemens USA to help other companies with their own journeys into an uncertain digital future. Part of the challenge and opportunity for Siemens is structural change. “So we’re creating more pure-play businesses under the Siemens corporate brand to take advantage of our reputation while enabling our businesses to tailor business processes to their own markets,” Humpton tells Chief Executive. Under the company’s recently announced “Vision 2020+” initiative, Siemens intends to give its individual units more autonomy and entrepreneurial freedom. The role of Mendix is increasingly important as well. The company is a leader in developing and deploying “low-code / no-code” platforms that enable “citizen developers” to come up with software advances without specific training as coders. “There simply aren’t enough programmers in the world to meet the rising demand for app development,” Humpton explains, “so we sought out a company that created a development platform which makes it possible for average people to become citizen developers and, with just a minimal amount of training, to assemble codes themselves. There’s tremendous demand for this kind of capability because of record-low unemployment and because educational institutions can’t churn out enough [programmers] to meet demand.” Under Mendix’s approach, she says, “there is encapsulation of reusable chunks of code, and all we have to do is put those building blocks together to accomplish” specific customized objectives. “As we all now instinctively use Word, eventually many of us will instinctively put together software applications.” It’s a similar spirit of democratizing digital advances that, in part, has led Siemens USA to create a new initiative: a consulting group that is “supporting customers in their own digital journey,” Humpton says. “Customers are making these digital transformations, and we’re helping them apply applying the same techniques and tools we use for our own operations.” Siemens had a similar outside-consulting group until several years ago but in recent years turned such efforts on helping transform internal operations, Humpton says. “Now we’ve decided to turn that group around again and face externally, and we’re building that organization again because we see such demand from folks who need that ongoing support.” Siemens is working with “major consulting firms” in its new outreach, she says. “What you can quickly see is that every company has a unique challenge,” Humpton says. “In some companies, what we’re trying to do is help solve a particular operational problem; others are trying to create a new business model; and others are just trying to get started and take the first step” in digital transformation.” Siemens’ new group provides services that range from advice to execution of full-blown pilot projects with customers. “Our experience already is that if customers are taking steps and getting started, see that through and then take the lessons learned and expand pilot projects, that works really well,” Humpton says. “It’s fun to see the adoption rates as people get their feet wet, and realize that this isn’t as massive as something like ERP. This is a completely different kind of change.” At the same time, Humpton and Siemens USA have work to do on their No. 1 issue internally: talent. That’s why she’s ordered expansion of workforce programs including an approach to job apprenticeship that the U.S. arm has borrowed from decades of the parent company’s experience in Germany. “It combines an education program with a [field] such as mechatronics, where people can learn to do the computerized manufacturing that we have in so many plants now,” she says. “They get a hands-on experience in the factory itself and get paid for their time while they’re in school. They come out with no student debt and great jobs.” Humpton was a veteran of Lockheed-Martin and Booz Allen Hamilton when she was recruited to Siemens USA in 2011. Siemens AG CEO Joe Kaeser tapped her for the top U.S. job last year. She has benefited from an industrial economy in America and worldwide that was burgeoning for several years. Siemens also has acknowledged that its U.S. business got big boosts from the late-2017 corporate tax cuts, “and the reduction in regulations has been well received” by the company, she says. But she’s concerned about recent developments that have hamstrung growth and forced companies to make difficult decisions such as Siemens AG’s decision to cut 2,700 jobs worldwide in its Power and Gas division as part of a plan to spin off the embattled business. And Siemens would like to see new Trump-administration trade agreements. “We have been making prudent adjustments,” she says. “Overall we are pretty well situated in the U.S. and expecting normal operations here, and the market is doing quite well. Our industrial customers do have concerns about tariffs and their impact, and in some cases they may be delaying decisions about what to invest in and why. But it hasn’t carried into our own business outlook in any significant way."
Both Quicken Loans founder and chief Dan Gilbert and 3M Company CEO Michael Roman have a lot invested in new golf tournaments that are being sponsored by their companies this weekend and next weekend. The results could be instructive for other CEOs who might consider corporate marketing gambits centered around major professional golf tourneys, at a time when the game still holds strong appeal for a vast swath of American consumers and business-to-business customers. Each of the companies is taking an important flier on sponsoring an addition to the Professional Golf Association tour. Quicken is launching the Rocket Mortgage Classic in Detroit this weekend, while 3M is initiating the new 3M open in suburban Minneapolis on the first weekend in July. They’re attempting to elevate their corporate profiles for various reasons by insinuating their new events into a pro-golf schedule that provides openings because suddenly it’s in flux this year. Interestingly, neither CEO is able to be front and center at these important events. Gilbert has been recovering from a recent stroke as top lieutenants put finishing touches on yet another economic-development accomplishment spearheaded by the peripatetic billionaire: the first PGA golf tournament to be played in Quicken’s hometown of the City of Detroit. And Roman has been preoccupied taking what he called “aggressive” cost-cutting actions at the diversified industrial manufacturer based in Maplewood, Minnesota, as 3M struggles with deteriorating markets and global job reductions. The $6.4-million 3M Open at TPC Twin Cities Blaine, Minnesota – not to be confused with the 3M Championship a PGA Tour Champions event held at the same site for the last 18 years – will be the first PGA Tour event in a decade. Y.E. Yang upset Tiger Woods in the PGA Championship at the Hazeltine National club. The Rocket Mortgage Classic at the Detroit Golf Club this week is the PGA Tour’s first regular event in Motown and picks up a decade after Michigan’s previous tour event, the Buick Open in nearby Grand Blanc, Michigan, ended its half-century run in 2009. Detroit’s last taste of tour golf was the 2008 PGA Championship and the 2004 Ryder Cup, both at iconic Oakland Hills. The PGA threw its schedule this year into upset mode by moving the annual PGA Championship from its traditional August slot three months ahead to May, immediately after the Masters in April and before the U.S. Open in June. The new Rocket Mortgage and 3M Open events also have scrambled the picture; among other things, they are serving as important practice events for the fourth and now-final major of the professional men’s golf year, the British Open, in mid-July. Both events have attracted solid fields despite being brand new. Much of the hubbub leading to this week’s tournament surrounded the quality of the Rocket Mortage lineup. Woods opted out, but Rocket Mortgage executives noted that the tourney field does include 11 of the top 50 players in world golf rankings, including the new U.S. Open men’s champion, Gary Woodland. Also prominently featured is Rickie Fowler, a tour favorite who also happens to have a long-term endorsement deal with the Detroit-based company. Commitments to the 3M Open include tour stars Brooks Koepka, Jason Day and Phil Mickelson. Over the last few weeks, Quicken and Rocket executives have been rallying to make sure the entire Detroit event serves, among other things, as a sort of homage to the stricken Gilbert. While a number of executives were responsible for converting Quicken’s title sponsorship of the annual The National tournament played in suburban Washington, D.C., into a bid for a new event in Michigan, Gilbert reportedly aimed to make sure that any tournament landed inside the city that he has blessed with the investment of billions in business and philanthropic endeavors. “We’re well positioned to be a must stop for the tour,” Casey Hurbis, chief marketing officer for Quicken Loans and Rocket Mortgage, tells Chief Executive. “And quite honestly, you can’t imagine the amount of exposure and goodwill that we’re going to be able to show these PGA tour players and their families and influencers – most of them probably haven’t been to the city, at least a long time … We’re going to be able to showcase all the amazing things going on in the city to very influential groups, as well as on the Golf Channel and CBS.” What’s more, the Rocket Mortgage Classic provides an unprecedented marketing showcases for Quicken Mortgage, which last year rocketed past an enfeebled Wells Fargo to become America’s largest home lender and already had become an impact marketer in major venues including Super Bowl TV advertising. Quicken Loans has devoted up to 30 percent of its advertising budget, estimated at up to $400 million, to sports. And clearly the company’s four-year deal to sponsor the Rocket Mortgage Classic will eat up a huge portion of that amount. “It’ll be great to showcase Rocket to a national audience, and we’ll be able to do lots of storytelling not only for the Rocket brand but also about what Quick and Rocket have been doing in the [Detroit] community,” Hurbis says.
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Many U.S. manufacturers are leaving money on the table – some of it significant – by not optimizing the provisions of the tax-reform act of 2017.
The strong U.S. economy is encouraging American manufacturers to continue to invest in their operations and in growth, but trade winds, the labor crunch and other pressure offset some of CEOs’ optimism about their ability to keep the momentum going.
As chairman and CEO of Cambridge Engineering, John Kramer transformed the company by hiring Koch Engineering executive Marc Braun as his president and overhauling the company’s culture to reposition it for future growth.