DETROIT -- The Freudenberg name in automotive is synonymous with seals, gaskets, vibration-control products and chemicals. But that's only one part of the German company. Freudenberg is a diverse group of industrial businesses with little awareness of one another.
The privately owned company wants to change that. Freudenberg believes bringing the technologies and intellectual resources of its automotive, medical, industrial and textile businesses at least a little closer together will yield a new era of synergy, innovation and operating efficiency.
The company is bewilderingly complex. Its units operate independently, with separate CEOs. In North America, its biggest automotive business is Freudenberg-NOK, a joint venture with Japan's NOK Corp.
Bob Evans, 52, is president of the entity that coordinates the various North American businesses: Freudenberg North America, of Plymouth, Michigan. Evans represents the North America region on Freudenberg's Global Executive Team and heads the conglomerate's Regional Corporate Center, providing guidance to all Freudenberg businesses in North America and managing cross-divisional cooperation of those largely independent businesses. He recently spoke with News Editor Lindsay Chappell.
Freudenberg said in April that it will spend $2 billion to buy Trelleborg's half of your joint venture, TrelleborgVibracoustic. What's the history there?
The vibration-control business was always a part of Freudenberg. It was something that we viewed as attractive, and we wanted to grow our Vibracoustic business. That's our brand. Separately, Trelleborg was in that market, which had a lot of players and was ripe for consolidation. Trelleborg was much bigger in North America than Vibracoustic. In Europe, Freudenberg was bigger. We had strengths in certain of the products in that business, and they had strengths in others. So it really matched up well.
And the thinking behind the buyout?
Trelleborg ultimately was looking for a way to get some value from the venture and maybe redeploy it in its other businesses, and it was exploring the potential for an IPO to take the venture public. Freudenberg's interest was to continue with it. So as it happened, market conditions changed and gave us an opportunity to work with them.
For us in North America, it's great because Trelleborg's presence was bigger than ours. So now, as a 100 percent owner, Freudenberg's total presence in the vibration-control segment increases meaningfully in this geography. It has almost 2 billion euros ($2.22 billion) in annual revenue and almost 10,000 employees.
Is it a viable business on its own?
It was a fully independent joint venture, with all of the functions and expertise needed to operate independently of either parent.
One of the remarkable things about Freudenberg Group is that it's a privately owned family business.
Yes. A 167-year-old business.
Is the family really involved?
Some family is involved. We have a couple of family members involved at a very high level, on the board, as well as in management.
For instance, the CEO of the Freudenberg Chemical Specialties business, Hanno Wentzler, is a family member. His brother is the chairman of the supervisory board. And there are a few other Freudenberg family members who are still in the business. That family ownership really brings a great sense of history and long-term focus. The way we manage our business is totally different. A private company with 167 years -- that's an incredibly stable picture.
Freudenberg is very decentralized. Has that been a key to its longevity?
Yes. A key part of our heritage is a strong entrepreneurial spirit. So the businesses have a high degree of autonomy in terms of how they go to market, and how they develop and expand their technology. The Freudenberg Group management board and the corporate resources, the long-range r&d, corporate communications, real estate, legal, tax and talent management functions are all there to help.
But it is all up to the business groups to manage the actual approach to the market, to determine what the market needs, how best to deliver it and how to advance the technology. The CEOs of our 11 business groups report in to the management board of Freudenberg & Co.