Back on Track Trucking On

German truck supplier SAF-Holland managed to turn around its company after it got hit by the economic crisis.
Detlev Borghardt managed to turn around the company after the 2008 crisis.

SAF Holland, a German company that makes truck parts, has pulled back from the brink of bankruptcy to report a 20 percent rise in profits in the first three quarters of this financial year.

The company, founded as a merger between SAF and Holland in 2005, almost went under six years ago during the financial crisis.

Just before the crisis hit in 2008, SAF Holland was firmly established in Europe as the leading maker of small parts including axels for trucks. It had expanded into the United States, and had several subsidiaries and over 20 production sites worldwide.  In 2007, the company was listed on the Frankfurt Stock Exchange.

Detlev Borghardt, who had joined SAF in 2000 as Head of Sales, was made chief executive in 2011 to revive the ailing company.

But the company was hit hard by the world economic downturn. The truck business in the US had already been heading downhill and worldwide truck production was also falling.  With less trucks around, less supply parts were needed and SAF Holland saw its profits shrink by almost half.

The company went through a convulsion. Every third employee was made redundant. Bonuses were removed altogether and managers’ salaries reduced.

Detlev Borghardt, who had joined SAF in 2000 as Head of Sales, was made chief executive in 2011 to revive the ailing company.

He looked at every detail, renegotiated existing prices and supply volumes, stopped paying for window cleaners at production sites, and left the lawn unmowed. “It was about survival,” Mr. Borghardt said.

He is rueful about the €15 million spent on lawyers, consultants and external experts. “We could have used that money elsewhere,” Mr. Borghardt said.

But the cutting down paid off.

Today the company has turned around its losses and can present considerable growth.

In the first three quarters of the financial year, the company reported sales of €724 million ($859 million), 11 percent higher than in the previous year. Profits rose over 20 percent bringing the figure up to €56 million.

SAF Holland has diversified globally and since 2011, the company has opened production sites in Turkey, Dubai, Mexico and Malaysia.

And the plan seems to work: more than 10 percent of the company’s profits are generated by markets other than its key markets in the U.S. and Europe, where it competes with Hendrickson in Chicago, BPW Bergischen Achsen and Jost Werken in Germany.