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Freudenberg Group

For other uses, see Freudenberg.
Freudenberg SE
Company typeFamily-owned
Societas Europaea
IndustryConglomerate
Founded1849; 175 years ago (1849)
FounderCarl Johann Freudenberg
HeadquartersWeinheim, Baden-Wuerttemberg, Germany
Area served
Worldwide
Key people
Mohsen Sohi (CEO)
ProductsHousehold and other products
RevenueIncrease €11.903 billion (2023)[1]
Number of employees
52,241 (2023)[1]
Websitefreudenberg.com

The Freudenberg Group is a German family-owned diversified group of companies whose products include housewares and cleaning products, automobile parts, textiles, building materials, and telecommunications. Its headquarters are in Weinheim, Baden-Württemberg, and it has production facilities in Europe, Asia, Australia, South and North America. The parent company was founded in 1849 as a producer of leather goods.

History

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Origins to 1933

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The company was founded in 1849 by Carl Johann Freudenberg, the son of a wine merchant,[2] and his partner, Heinrich Christian Heintze. The two took over a tannery at Weinheim where Freudenberg had been employed, and introduced lacquered patent leather as a specialty.[3] The product won the company bronze medals at the international expositions of 1851 and 1853 and a silver medal in 1855, and sold well.[4] For the next 80 years, the company produced leather products exclusively.[5][6] Freudenberg prepared his sons, Friedrich Carl and Hermann Ernst Freudenberg, to succeed him, and on Heintze's death in 1874, the Freudenberg family bought his share in the business from his heirs and renamed it to Carl Freudenberg.[7][4][8] It became a GmbH in 1896.[9]

Removal of hair from raw hides in the Freudenberg tannery, c. 1899

With a second tannery in Schönau and the introduction of the faster and better chrome tanning process developed in the United States, by 1914 Freudenberg had become one of the four largest leather processing firms in Germany, importing skins from the Russian Empire, Poland, Argentina, France, and the United States and exporting finished leather to markets including the British Empire, Switzerland, France, Russia, Poland, the United States,[10] and Latin America.[11] Like the rest of the German leather industry, the company was hurt by World War I, especially by the stoppage of imports of hides under the Allied embargo and a subsequent ban that was not officially lifted until 1924, and also by bureaucratic controls. Under the Weimar Republic, inflation and the devaluation of the German currency hindered international business; in order to pay for imported raw materials in hard currency, Freudenberg partnered with Swiss bankers to establish Externa S.A., a credit agency in Lausanne. The company also participated in a number of cooperative agreements to facilitate exports, and skirted regulations in Poland and Eastern Europe by representing German and Austrian leather as Swiss products of its Tannerie de Lausanne subsidiary. By 1929, the company was once more exporting 70% of its production, but the worldwide economic depression that began late that year, and the high taxes that many countries imposed on imports in response, further damaged the German leather industry. Freudenberg, also affected by patent leather falling out of fashion, cut hours to avoid layoffs.[12] In 1929, seeking to rebuild international trade, it formed a United States subsidiary in Boston.[13]

Nazi era

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In 1933 the company acquired Conrad Tack & Cie, a shoe manufacturer and seller founded in 1883. This was one of the first Aryanizations of a Jewish-owned company in the Third Reich; in the face of boycotts Hermann Krojanker, the company head, requested that Freudenberg, the company's major supplier, take it over.[14] It was Freudenberg's first expansion into both manufacturing and consumer sales; the company subsequently "Aryanized" a dozen other companies, including other shoe manufacturers and sellers which were incorporated into Tack, and other leather processors including Sigmund Hirsch GmbH, which was also in Weinheim and specialised in horse leather, and Josef Reiman / Gerhardus, an amalgamation of two Vienna companies.[15] As the Reich expanded, Freudenberg sought to acquire companies in annexed and occupied countries. They were unsuccessful in acquiring Del-Ka, a leading Viennese shoe company, or any of the shoe companies in Czechoslovakia and Poland; Nazi administrators in the east sought to avoid further increasing the market share of leading German companies, and the Czech company Bata was permitted to retain all its shoe shops since it was a valued provider of military footwear.[16] In the west, Foreign Ministry policy was to promote German industrial expansion, and Freudenberg was able to acquire Chromex, a French manufacturer of vehicle seals that had been established with financial assistance from Freudenberg in 1934 and licensed Freudenberg technology; but Freudenberg abandoned attempts to "aryanize" a leather producer in the Netherlands on grounds of likely bureaucratic veto, were passed over in the "Aryanisation" of a Luxembourg tannery, and were also rebuffed in their attempts to acquire either regional outlets or the whole company of the French shoe company André [fr], which survived the war without being "Aryanized".[17]

With a view to diversification, Freudenberg began in the late 1920s to research industrial uses for leather.[18] In 1929, they began to produce leather cuff seals for motors.[13] The Austrian engineer Walther Simmer [de] developed an improved radial shaft seal that was patented in 1932 as the Simmerring. In the second half of the 1930s, the company changed from leather to synthetic rubber for the Simmerring.[19][20] Nazi restrictions and subsequently World War II led to renewed stoppages of leather imports and to other shortages; in response the company accelerated its diversification away from leather and into components for machinery.[21] Starting in 1936, chemist Carl Ludwig Nottebohm developed his patented concept of nonwovens at Freudenberg, leading to an artificial leather product on a nonwoven base that the company named Viledon and marketed for bags and luggage.[22][23]

From 1938, Freudenberg produced synthetic leather shoe soles under the brand name nora (the subsidiary manufacturing nora products was spun off in 2007 and is now Nora systems [de]).[7] In 1937, the company instituted testing of artificial shoe soles by a group of test walkers, initially consisting mostly of former workers. They became a noted sight in and around Weinheim, and one man walked 40,000 kilometres (25,000 mi) over the course of three years.[24] In 1940, under government oversight, German manufacturers agreed on quality and testing standards for footwear and their individual systems of use testing were replaced with a shoe test track [de] at the Sachsenhausen concentration camp. Inmates were assigned to walk a course of more than 30 kilometres (19 mi), testing sample pairs submitted by the manufacturers.[25]

Since World War II

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The development of artificial materials for both footwear and automotive uses led to fabrics and, when it was noted that the company's cleaning women were using discarded scraps of the experimental fabrics, to cleaning materials and equipment.[5][6] Vileda (from German: wie Leder, 'like leather') window-cleaning cloths were first marketed in 1948;[26] the name had originally been suggested for the first nonwoven product, Viledon.In the first postwar decades, housewares became a major focus for Freudenberg,[27] together with nonwovens for the textile industry.[28] The company internationalized; it opened production facilities in other countries, beginning in 1950 with a textile plant in Lowell, Massachusetts and continuing in the 1970s and 1980s with plants in Brazil, Japan, and Hong Kong, and partnered particularly with Japanese companies, such as Nippon Oil Seal Industry Co. in 1960, leading to joint ventures in Asia. In 1990, it acquired the Swedish cleaning products company Wettex [sv]; in 1997 it formed a joint venture in Italy, later wholly owned, to recycle PET bottles into fabric. From the mid-1990s, it systematically developed markets and production facilities in Brazil, Russia, India, and China. It also continued to diversify, into shock absorption, filters, and starting with the acquisition in 1966 of Klüber Lubrication [de], chemical production.[29]

Vileda Professional, Markham, Ontario, Canada

Since a reorganization in 1996, Freudenberg Group has had a decentralized structure; in 2013, it consisted of 16 divisions or areas of business incorporating 430 independent units.[6][30][31][32] In 2004, Freudenberg Group made an initial entry into the global medical market with the creation of Freudenberg Medical EN.

The company's original business of leather production continued to shrink in the late 20th century, impacted by reduced demand and rising prices for raw materials. By 2001, the leather division was responsible for only 1% of Freudenberg's gross income and its primary customers were American companies, which canceled orders after the September 11 attacks. In 2002 the company closed its last remaining tannery in Weinheim, marking the effective end of the leather industry in Germany.[6][33][34] However, today Vileda is a market leader in Europe.[35] All German cars contain parts made by another Freudenberg subsidiary, and German-made outdoor clothing contains fibers made by yet another.[6] Almost all major airports have flooring made by another Freudenberg subsidiary.[36]

As of 2005, three-quarters of Freudenberg's business was as a supplier to other companies.[36] In 2004 Freudenberg had employees in 43 countries.[5][37][38] By 2011, Freudenberg Group was a 5 billion euro business with more than 32,000 employees, approximately 11,000 in Germany.[6] In 2023, it was an 11.9 billion euro business with more than 52,000 employees.[1]

Chief executives

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Ownership and philosophy

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Carl Johann Freudenberg

Freudenberg remains a family-owned private company, structured as a Kommanditgesellschaft (limited partnership) jointly held by descendants of Carl Johann Freudenberg (some 300 in 2011).[6][5] Stock cannot be sold to non-family members and must be surrendered by in-laws upon divorce.[32] No stockholder holds more than 2% ownership.[36] An annual three-day General Meeting[6] elects the Board of Partners, which consists of 7 to 13 members of whom the majority must be Freudenberg family members.[40] The divisions are managed by a Management Board, who need not be family members.[40] Stockholders receive a semi-annual family newsletter and have access to an owners' intranet. A select few are on the Wine Commission, which oversees the private Freudenberg vineyards.[5] These vineyards are the largest in the Bergstraße region, producing 60,000 bottles of wine annually.[36] Wolfram Freudenberg, a fifth-generation family member who formerly headed the Stuttgart Stock Exchange, was Chairman of the Board of Partners from 2005 to 2014, succeeding Reinhart Freudenberg, who stepped down for reasons of age.[21][41] In 2014 he was succeeded by Martin Wentzler, also a fifth-generation family member.[42]

Carl Johann Freudenberg laid down guiding principles for the company: modesty, honor, financial solidity and adaptability to circumstances.[43] In the late 1930s, the company developed operating principles that include broad diversification in both products and markets, spreading of risk, long-term thinking, the maintenance of an equity ratio of at least 40%, and avoidance of large acquisitions while favoring small ones.[6][26][44] The company would rather acquire "a handful of interesting smaller enterprises" in a given year than a large company that might endanger the company philosophy.[45] In each area of activity, the company operates only where it can be first or second in the market; for example, it sells motor seals worldwide but Vileda mops mostly in Europe.[45]

Divisions

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Headquarters of Freudenberg Sealing Technologies

As of 2024, the company consists of the following business groups (the majority headquartered in Weinheim):

Philanthropy

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Freudenberg instituted health insurance for employees in 1874.[53]

The company owns the Schau- und Sichtungsgarten Hermannshof, a public botanical garden in Weinheim, which opened in 1983 and is jointly operated with the town.[36][54][55][56]

The Freudenberg Stiftung (Foundation) was founded in 1984 and is endowed with stock in the parent company. It has a broad mandate "to promote science, the humanities and education as well as strengthening peaceful coexistence in society and culture" and focuses particularly on assistance to and democratic education of young people, primarily in Germany.[57]

References

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  1. ^ a b c "Annual Report 2023" (PDF). Freudenberg Group. Archived (PDF) from the original on 1 April 2024. Retrieved 27 April 2024.
  2. ^ Hucke, Johannes (2009). Bergstraße-Weinlesebuch. Regio Guide (in German). Vol. 6. Karlsruhe: Info Verlag. ISBN 978-3-88190-504-6. Archived from the original on 3 April 2023. Retrieved 25 October 2022.
  3. ^ Scholtyseck, Joachim (2016). Freudenberg. Ein Familienunternehmen in Kaiserreich, Demokratie und Diktatur (in German). Munich: C. H. Beck. pp. 21–22. ISBN 978-3-406-68853-9.
  4. ^ a b Horchler, Michael (2018). "Von der Gerberei zum globalen Technologiekonzern. Die Internationalisierung der Freudenberg Gruppe (1849–2002)". In Engelen, Ute; Michael Matheus (eds.). Regionale Produzenten oder Global Player? Zur Internationalisierung der Wirtschaft im 19. und 20. Jarhundert. Rheinland-pfälzische Wirtschaftsgeschichte im europäischen Vergleich. Veröffentlichungen des Instituts für Geschichtliche Landeskunde an der Universität Mainz 74 (in German). Stuttgart: Franz Steiner. p. 130. ISBN 978-3-515-11916-0.
  5. ^ a b c d e f Scheele, Martin (22 January 2004). "Familie Freudenberg: Die Wischmopp-Millionäre". Manager Magazin (in German). Archived from the original on 12 August 2022. Retrieved 31 March 2022.
  6. ^ a b c d e f g h i j Lamparter, Dietmar H. (24 February 2011). "Unternehmen Freudenberg: Von der Kunst des Häutens". Die Zeit. Archived from the original on 29 August 2011.
  7. ^ a b c d e Michael Horchler; Julia Schneider (January 2024). "The Development of the Freudenberg Group (Since 1849)" (PDF). Freudenberg & Co.
  8. ^ Scholtyseck, pp. 22–24.
  9. ^ Scholtyseck, p. 27.
  10. ^ Scholtyseck, p. 26.
  11. ^ Horchler, p. 132.
  12. ^ Scholtyseck, pp. 35–38, 46, 49–50, 60–63.
  13. ^ a b Horchler, p. 134.
  14. ^ Scholtyseck, pp. 113–31.
  15. ^ Scholtyseck, pp. 143–74.
  16. ^ Scholtyseck, pp. 245–51, 254–57.
  17. ^ Scholtyseck, pp. 286, 290–91, 295–301, 301–10.
  18. ^ Scholtyseck, p. 205.
  19. ^ Scholtyseck, pp. 208–09.
  20. ^ Horchler, pp. 134–35.
  21. ^ a b c Sywottek, Christian (October 2008). "Das Matroschka-Prinzip". Brand Eins (interview with Wolfram Freudenberg) (in German). Archived from the original on 10 February 2013.
  22. ^ Scholtyseck, pp. 269–70.
  23. ^ Horchler, pp. 135–36.
  24. ^ Scholtyseck, pp. 324–27.
  25. ^ Scholtyseck, pp. 330–34.
  26. ^ a b Grant, Tina (2001). International Directory of Company Histories. St. James Press. ISBN 978-1-55862-446-7.
  27. ^ Scholtyseck, p. 270.
  28. ^ Horchler, p. 136.
  29. ^ Horchler, pp. 136–38.
  30. ^ Company Structure Archived 27 March 2013 at the Wayback Machine, Freudenberg Group.
  31. ^ Horchler, pp. 138–39: the reorganization project went by the name FOKUS, Freudenberg Organisation für kundenorientierte Unternehmens-Struktur, i.e., Freudenberg Organization for Client-Oriented Company Structure.
  32. ^ a b Block, Jörn Hendrich (2009). Long-term Orientation of Family Firms: An Investigation of R&D Investments, Downsizing Practices, and Executive Pay (thesis, Technische Universität München). Wiesbaden: Betriebswirtschaftlicher Verlag Gabler. p. 3. ISBN 978-3-8349-1959-5. Archived from the original on 9 January 2023. Retrieved 9 January 2023.
  33. ^ Horchler, p. 139.
  34. ^ Scholtyseck, p. 439.
  35. ^ Dworschak, Manfred (1 October 2000). "'Materie am falschen Ort'". Der Spiegel (in German). ISSN 2195-1349. Archived from the original on 31 March 2022. Retrieved 31 March 2022.
  36. ^ a b c d e f Behrens, Bolke (24 January 2005). "Freudenberg-Gruppe bewahrt beharrlich den Familiencharakter: Ein ganz unauffälliges Weltunternehmen". Handelsblatt (in German). Archived from the original on 11 June 2016. Retrieved 31 March 2022.
  37. ^ 53 in 2008, according to Sywottek.
  38. ^ As of April 2013, 58 countries: Freudenberg Group Archived 27 March 2013 at the Wayback Machine, retrieved 13 April 2013.
  39. ^ "Management Changes at Freudenberg" (press release). Freudenberg Group. 29 June 2012. Archived from the original on 11 August 2014.
  40. ^ a b "Freudenberg Group: Organization & Portfolio". www.freudenberg.com. Archived from the original on 31 March 2022. Retrieved 31 March 2022.
  41. ^ "Freudenberg: Neue Führung im Gesellschafterausschuss". Manager Magazin (in German). 27 June 2005. Archived from the original on 31 March 2022. Retrieved 31 March 2022.
  42. ^ "Change in Board of Partners' Chair" (press release). Freudenberg Group. 1 July 2014. Archived from the original on 11 August 2014.
  43. ^ Horchler, p. 131.
  44. ^ "Corporate Values: Guiding Principles". Freudenberg Group. Archived from the original on 22 September 2013.
  45. ^ a b Neukirchen, Heide; Palass, Brigitta (22 March 2002). "Familienunternehmen: Freudenberg-Gruppe". Manager Magazin (in German). Archived from the original on 13 December 2004. Retrieved 23 December 2011.
  46. ^ "History". Eagle Industry Co., Ltd. Retrieved 2 March 2024.
  47. ^ "News Briefs: Freudenberg Acquires O-Cedar Brands". HFN. 8 December 2003. Retrieved 23 February 2024 – via Free Online Library.
  48. ^ "About O-Cedar". O-Cedar.com. Archived from the original on 5 May 2013. Retrieved 13 April 2013.
  49. ^ Bamford, Vince (23 December 2013). "Marigold gloves business sold to FHCS". The Grocer. Retrieved 2 March 2024.
  50. ^ "Who We Are". Freudenberg Gala Household Products. Retrieved 2 March 2024.
  51. ^ The Freudenberg Business Groups, Freudenberg.com, retrieved 2 March 2024.
  52. ^ The company has also used the brand names Evolon, FIT (Freudenberg IT), HelixMark, Lutradur, Lutrasil, Merkel, MicronAir, Pellon, Simrit, Trelleborg-Vibracoustic, Vildona, Viledon, Vilene, and Vilmed; see "Brands" at the homepage, archived from the original on 18 December 2012.
  53. ^ Horchler, pp. 130–31.
  54. ^ Dohna, Countess Ursula (1986). Private Gardens of Germany. Harmony Books. p. 122. ISBN 978-0-517-56512-4. Archived from the original on 9 January 2023. Retrieved 25 October 2022.
  55. ^ Gardens Illustrated. 2002. p. 36. Archived from the original on 3 April 2023. Retrieved 25 October 2022.
  56. ^ Garten und Landschaft (in German). 2002. p. 44. Archived from the original on 3 April 2023. Retrieved 25 October 2022.
  57. ^ "Freudenberg foundation". Freudenberg Group. Archived from the original on 7 April 2012.

Further reading

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