Heavy lifting Germany's J.D. Neuhaus keeps strong bonds

How the world's oldest family-run machinery maker, a German Mittelstand firm, persevered against adversity and worked on its magnum opus: the Las Vegas High Roller.
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Few of the folks gazing at the sun setting over Las Vegas's mountains from the High Roller know where it was made. They’re too busy taking selfies, jostling for a view of the Strip or playing drinking games as they ride the world's largest Ferris wheel.

Bigger than the London Eye or the Singapore Flyer, the observation wheel is 550 feet tall, made out of 7.2 million pounds of steel. The 112 cables that hold it together are each 225 feet long. Together, 25,256 feet of chain pull the wheel and its riders, encapsulated in 28 glass pods, each weighing 44,000 pounds. The wheel turns constantly, a rate of one foot per second. The riders say it feels like floating.

The High Roller was built in many different parts of the world including China, Japan, France, Sweden, Italy but the heavy lifting is done by equipment from an unassuming town in Germany's rust belt. The company responsbile is likewise little-known, though the family-owned Mittelstand company has been churning out machines for 273 years – longer even than Siemens.

J.D. Neuhaus Hebezeuge makes chains hoists to pull heavy weights that can carry up to 100 tons, the equivalent of a rail car. All of its products are tested with five times their load-bearing capacity, just to be safe.

The firm is a classic example of sticking to what you know best. The company has never made anything other than lifting technology, its manager told Handelsblatt with pride. Wilfried Neuhaus-Galladé, 60, has been running the company since 1995. He’s the seventh generation at the helm. At the start of his career, he worked for IBM in the US, but was enticed back to Witten by his uncle. After the United States, it was a culture shock which lasted for a while.

The company's past was marked by war, hyperinflation and crisis.

The company is now a global leader for pneumatic and hydraulic hoists, but its past was marked by war, hyperinflation and crisis. More recently, trouble came in the form of the crisis affecting the oil and gas industry, as one of J.D. Neuhaus’ most important customers. The firm pulled through without any layoffs, though sales have declined by more than a third since 2015 – thanks to Kaizen, the Japanese principle of continuous improvement made famous by Toyota.

It’s unlikely the word would have meant much to the company’s first founder, a 16 year-old who lived at the time of Frederick the Great. In 1745, Johann Dietrich Neuhaus presented his wooden shaft winch to the merchants of the region. His descendants built winches for the locks on the Ruhr River to heave carriages and trains. Later, they were used in mining, peaking in the 1950s as the industry soared.

As mining declined, the company sought new markets. The chemical industry and oil and gas proved a sweet spot: J.D. Neuhaus machinery performs well in extreme conditions and they pump from the frozen Arctic to deserts and the ocean floor. "Engineered for Extremes" is now the company motto and 90 percent of its business is overseas.

J.D. Neuhaus’ secret was ditching its initial idea of success and finding a new one. The company bought high-end machinery to make goods on demand, rather than storing them in huge warehouses – expensive and wasteful, by Kaizen thinking. The company works faster and its 250 workers keep an eye on the business even when numbers are low. Like now, as oil prices have plummeted, leading the industry to stop building new plants, though the company is still profitable. "The many crises over the centuries have made us humble. We must constantly reinvent ourselves," said Mr. Neuhaus-Galladé.

He has to be nimble with rivals such as Ingersoll Rand of Ireland. Mr. Neuhaus-Galladé also recently came across a Chinese-made copy of one of its lifting devices in an online shop and took legal action.

The turnarounds won praise from peers who attribute the company’s success to the involvement of employees and willingness to embrace new models. "J. D. Neuhaus is an age-old but at the same time very modern company," said Heinz Helmut Kempkes, head of Remscheid-based Kuli Lifting Equipment.

More change ahead is for Mr. Neuhaus; when he retires he can focus on his real passion: cars. For most of Germany's small, secretive mid-sized companies, global leaders owned by families, succession is a problem. Founders may founder but Mr. Neuhaus is thinking ahead. While he’s not putting pressure on his children to take over, he isn’t planning to sell, either.

Katrin Terpitz covers small and medium-sized companies for Handelsblatt. To contact the author: [email protected]