BSH Bosch und Siemens Hausgeräte GmbH History

Company Perspectives:

A consistent innovation and quality policy governs everything we do and how the company evolves. One of the most important principles embraced by BSH is to offer consumers genuine added value in terms of performance, comfort and ease of use by developing new and improved products. This approach is based on the firm conviction that pushing forward with new technologies not only creates competitive advantages and added convenience for the customer--but also ensures that the environment constantly benefits. Know-how transfer within the BSH group ensures that environmental protection standards are also adopted worldwide. BSH is wholeheartedly committed to the principle of sustainability and to the responsible utilization of resources.

Key Dates:

1967:

German industrial giants Robert Bosch GmbH and Siemens AG create Bosch-Siemens Hausgeräte GmbH (BSH), a joint venture specializing in household appliances.

1976:

In its first move outside its home country, BSH acquires a stake in Pitsos A.E. of Athens, Greece.

1982:

The company acquires the high-end German cooking appliance brand Neff.

1988-89:[fsps*1.5]BSH enters the Spanish market with the acquisitions of Balay, S.A. and Safel, S.A.

1991:

A toehold is established in the United States through the export of dishwashers there.

1994:

Gaggenau, German producer of high-end cooking appliances, is acquired.

1995:

Production of washers begins in China--the first move into that market.

1997:

BSH's first U.S. production plant begins operating in New Bern, North Carolina.

1998:

Thermador Corporation, U.S.-based maker of high-end cooking appliances, is acquired; the company changes its name to BSH Bosch und Siemens Hausgeräte GmbH.

2004:

Via a $200 million expansion, two new plants are added in New Bern.

Company History:

BSH Bosch und Siemens Hausgeräte GmbH, a joint venture between German industrial giants Robert Bosch GmbH and Siemens AG, is the largest maker of household appliances in both Germany and Western Europe, and ranks third worldwide, trailing only the Swedish firm AB Electrolux of Sweden and the U.S.-based Whirlpool Corporation. In addition to its flagship Bosch and Siemens brands, BSH also sells products under a number of specialized brands (Gaggenau, Neff, Thermador, Constructa, and Ufesa) and regional brands: Balay (Spain), Lynx (Spain), Profilo (Turkey), Pitsos (Greece), Continental (South America), and Coldex (Peru). At its 43 factories located in 15 countries (Germany, France, Greece, Poland, Russia, Slovakia, Slovenia, Spain, Turkey, the United States, Mexico, Brazil, Peru, China, and Thailand), BSH produces a full range of major household appliances, including cooking equipment, dishwashers, refrigerators, freezers, washing machines, and dryers, as well as vacuum cleaners and small appliances such as coffeemakers, food processors, deep fryers, and irons. Its worldwide sales and customer service network is composed of about 70 subsidiary operations in 30 countries. Nearly three-quarters of BSH's sales are generated outside of Germany: 54 percent in Western Europe excluding Germany, 6 percent in Eastern Europe, 5 percent each in North America and Asia, and 3 percent in Latin America. A hallmark of BSH is its consistent aim to establish itself, wherever it operates, as a leader of the premium sector of the market by producing high-quality, innovative products significantly more expensive than the average for that market.

Foundation of BSH: 1967

Bosch and Siemens merged their household appliance operations in 1967, creating a 50-50 joint venture originally called Bosch-Siemens Hausgeräte GmbH (BSH). The rationale behind this joining of forces was to provide a stronger platform for competing in an increasingly global marketplace. Bosch had developed a reputation in Germany for its advanced refrigerators and freezers, based at least in part on its introduction of the first electric domestic refrigerator in 1933. The company extended its range of appliances in the 1950s as part of a diversification drive. In 1952 Bosch introduced the "New Era" electric kitchen appliance, a combination mixer/food processor that could mix, knead, chop, slice, make purees, grind, grate, and more. Next came washing machines, in 1958, and then dishwashers, in 1964. Siemens, which had emerged only in 1966 as an amalgamation of several predecessor firms, had a long history of innovation in household appliances--the first vacuum cleaner in 1906, the first baking oven in 1925, and the first automatic dishwasher in 1964. Key developments in appliances occurred in the immediate aftermath of World War II. In 1949 one of the Siemens predecessors opened a factory in Giengen, West Germany, for the production of refrigerators and freezers and another in Traunreut, West Germany, for cooking appliances and water heaters. These two plants, along with a factory in Berlin where washers and dryers were produced, were contributed to the BSH joint venture in 1967. BSH thus began with three plants, all in West Germany, and about 14,000 employees. First-year revenues of DEM 1 billion were generated in the home country and a few of its neighbors. Western Europe remained the venture's sole focus for nearly the first ten years of its existence.

Whereas major household appliances were BSH's main focus from the start, the company also started out as a manufacturer of consumer electronics products, such as televisions and radios. Fierce competition from Asian importers, however, overwhelmed many Western manufacturers, and BSH soon abandoned the manufacturing of such goods. The company continued to market consumer electronics products made by third parties, before leaving this sector for good in 1996.

BSH produced products under both the Bosch and Siemens names. The venture was able to get off to a strong start because the two brands had similar positions in the market. They were both premium brands known for their high quality and innovation. These characteristics were in clear evidence in the founding year: It was then that BSH introduced the first dishwasher with a stainless steel interior.

First Moves Abroad: Mid-1970s Through Late 1980s

After achieving steady growth in its home market for several years, BSH made its first move abroad in the mid-1970s. The company acquired a stake in Pitsos A.E. of Athens, Greece, in 1976. BSH later gained full control of this company, which was eventually renamed BSH Ikiakes Syskeves A.B.E. Despite the name change, this subsidiary continued to produce refrigerators and cooking appliances under the Pitsos name. Also in 1976, BSH was given control of a factory in Dillingen, West Germany, that had been opened by Bosch in 1960. Under BSH, the plant, located on the Danube in northwestern Bavaria, began producing dishwashers. Innovation also remained on the agenda in the late 1970s: BSH introduced a refrigerator in 1978 that could store food in multiple temperature zones and that featured pull-out drawers for more convenient removal of stored items.

In the early 1980s intense competition within the European domestic appliance sector coupled with a recession led to industry overcapacity and the collapse of two market leaders in West Germany, AEG Telefunken and Bauknecht. A European-wide shakeout ensued with numerous mergers and bankruptcies throughout the 1980s. In 1980, 150 companies controlled 80 percent of the European market, but by 1990, that number had fallen to just 15. The consolidation wave was engendered in part in anticipation of the creation of a single European market in 1992.

By 1990, BSH had gained the number one position in the newly reunified German market and was number two in Europe, trailing only Electrolux, with a market share of approximately 17 percent. BSH was not the most active consolidator of the 1980s but did manage to add an additional factory in Germany and several in Spain. In 1982 BSH acquired the high-end Neff brand from AEG for about DEM 80 million. Neff had been founded in 1877 in Bretten (Baden-Württemberg) by Carl Andreas Neff, originally producing coal-fired stoves. The company later moved into production of gas- and electric-powered appliances, introduced Europe's first microwave oven in 1957, and invented induction cooking one year later. At the time of its acquisition by BSH, Neff was best known as a producer of premium built-in cooking appliances. Under BSH it would operate as a subsidiary called Neff GmbH.

BSH entered the Spanish market in 1988 and 1989 when it gained majority control of Zaragoza-based Balay, S.A. and acquired Pamplona-based Safel, S.A. Safel's product line included refrigerators, freezers, and ovens, while Balay's included washers and dryers. Among the product development advancements in the 1980s, meantime, was the introduction in 1981 of a universal built-in cooking appliance featuring an integrated microwave oven. In 1985 BSH introduced the Aqua-Stop system into its dishwashers and washing machines. With this feature, in the event of a leak the supply of water would be cut off to prevent flooding. By 1985, BSH had seen its revenue grow to DEM 3.57 billion and its workforce to 15,400. By decade's end, revenues were just short of DEM 6 billion, half of which was generated abroad, and the workforce had reached nearly 23,000.

Continuous Global Expansion in the 1990s

As BSH began to take advantage of the additional domestic opportunities afforded by German reunification, the firm also continued to grow abroad. In 1991 a toehold was established in the United States when it began exporting dishwashers there, shipping models that were nearly identical to those sold in Germany. Dishwashers were selected for this initial assault of the highly competitive U.S. market because that appliance was the most "international" in design; cooking, refrigeration, and laundry appliances needed to be much more tailored to individual markets because of local differences in cooking traditions, cleaning preferences, and climates. Also in 1991, BSH began selling a compact/tabletop dishwasher. Two years later the company moved into Eastern Europe for the first time, acquiring a factory in Nararje, Slovenia, where small domestic appliances--such as hand mixers, blenders, and food processors--and vacuum cleaners were made. This factory became the center of BSH's worldwide small appliance operations. Reacting to concerns that the refrigerants chlorofluorocarbon (CFC) and hydrochlorofluorocarbon (HCFC) were depleting the protective ozone layer in the upper atmosphere, BSH in 1993 began phasing out the use of CFCs and HCFCs in its refrigerators and freezers. In another move that burnished the firm's image as environmentally responsible, BSH launched a program for recycling old appliances.

Under the continued leadership of Herbert Wörner, who had served as chief executive since 1987, BSH's acquisitions pace rapidly increased in the mid-1990s. Late in 1994 Gaggenau, maker of high-end built-in cooking appliances, was acquired. A long established German manufacturer, Gaggenau traced its history back to 1683 and began producing stoves in the late 19th century. Among Gaggenau's assets was a factory in Lipsheim, France, which eventually became the center of development for BSH's high-end gas cooking appliances. The factory in Gaggenau itself was closed in 1997.

There were several other developments in late 1994. BSH acquired majority control of Continental 2001 S.A., the third largest producer of domestic appliances in Brazil with annual sales of DEM 420 million ($294 million). This deal gave BSH five manufacturing plants in Brazil and one in Mexico and provided a platform for introducing a full line of Bosch and Siemens brand cooking, refrigeration, laundry, and dishwasher products. Continental brand products continued to be manufactured as well. BSH also entered into a joint venture with Wuxi Little Swan Co., a leading maker of laundry appliances in China, for the manufacture of European-style, front-loading washing machines. Production began the following year at the plant in Wuxi, located in Jiangsu province. BSH revenues for 1994 totaled DEM 6.88 billion ($4.8 billion), up 3 percent from the previous year. Of the total, 42 percent was generated outside Germany.

During 1995 BSH completed a continent-wide restructuring of its distribution system, reducing its European warehouses from 36 to 10 and thereby achieving yearly cost savings of DEM 30 million. Also that year BSH acquired a majority stake in PEG Profilo Elektrikli Gereçler Sanayii A.S., based in Çerkezköy, Turkey. BSH now controlled a production site in Turkey that produced Profilo brand cooking appliances, refrigerators, washing machines, and dishwashers. Similar to the Continental deal, BSH planned to use the acquired company as a base for expanding its flagship Bosch and Siemens brands. In the spring of 1995 BSH opened a new factory in Nauen, located in the eastern German state of Brandenburg, capable of producing 400,000 tumble dryers annually. A second plant opened on the same site in the summer of 1996 and had the capacity to make 350,000 top-loading washing machines each year.

BSH in early 1996 entered into a joint venture with China's Yangzi Group to manufacture and supply refrigerators and freezers in China from a factory in Chuzhou, Anhui province. To facilitate marketing throughout Asia, two sales companies were set up in Hong Kong and Singapore. Expansion in Latin America was achieved through a purchase of a majority interest in Lima-based Coldex, S.A. Coldex, the largest appliance maker in Peru, specialized in freestanding cooking appliances, refrigerators, and freezers. Back home, BSH took over control of a factory in Bad Neustadt, in northern Bavaria, that was the largest vacuum cleaner plant in the country. On the innovation front, BSH introduced the Aqua-Sensor system for dishwashers in 1996. This feature enabled the machine to automatically adjust the cleaning process depending on how soiled the water, thus saving time, water, and energy. Washing machine models began offering this feature in 1997.

The most significant developments during the late 1990s centered around a major expansion into the lucrative U.S. market. In March 1997 BSH began producing dishwashers at a plant in New Bern, North Carolina, where Robert Bosch had been making power tools. Production of cooking equipment was added to this plant two years later. These products, positioned in the premium sector of the market, were initially sold under the Bosch brand. BSH next added another high-end brand through the acquisition of Thermador Corporation of Huntington Beach, California, for about $83 million. Well established and prestigious, Thermador produced a variety of high-end cooking appliances--freestanding ranges, built-in cooktops, and range hoods--as well as semiprofessional ranges. The company had plants in Vernon, California, and La Follette, Tennessee. Revenues for fiscal 1997 totaled $115 million.

In 1997 the company's BSH Continental subsidiary in Brazil opened a new refrigerator/freezer production site in the Campinas region. The next year saw further ventures into Eastern European territory: Production of washing machines began at a new plant in Lódz, Poland, and a new plant opened in Chernogolovka, Russia, for the manufacture of a full range of freestanding gas cooking appliances. There were several more acquisitions in 1998. BSH bought Eval, a maker of small appliances in Turkey, and Ufesa, the leading producer of small appliances in Spain. Based in northern Spain, Ufesa was particularly strong in irons, and its plant in Vitoria became BSH's worldwide center for iron manufacturing. Other products produced by Ufesa included coffeemakers, deep fryers, and oil radiators. BSH endeavored to add component development and production to its core competencies, leading Siemens to give the joint venture control of two factories: a controls and sensors facility in Regensburg, Germany, and a motors and pump plant in Michalovce, Slovakia. BSH also joined with Fedders Corporation of the United States in the creation of a joint venture to manufacture room air conditioners in Estella, Spain. In April 1998, meantime, the company changed its name to BSH Bosch und Siemens Hausgeräte GmbH as part of an effort to provide a more consistent global face for a firm whose operations were increasingly far-flung. "BSH" began to be incorporated into the firm's growing roster of subsidiaries around the world.

After the hectic activity of 1998, BSH paused to consolidate its newly won operations the following year. Although there were no further acquisitions, a couple of new products for 1999 were particularly noteworthy. BSH debuted a fully automatic dishwasher, one that included sensors to gauge the size of the load and the degree of soiling and then automatically start the appropriate washing program. Also introduced was the world's first food processor designed to be built right into a kitchen counter.

BSH ended the 1990s with its best sales year ever, totaling DEM 10.73 billion ($5.53 billion), despite a difficult economic environment in most of Europe. Net income for 1999, however, amounted to only DEM 111 million ($57.1 million), a significant drop from the peak figure of DEM 198.2 million recorded two years earlier. Thanks to its aggressive global expansion, BSH now had 30 production sites located on four continents, and 68 percent of revenues were coming from outside Germany.

Early 2000s and Beyond

A rebounding economy in Europe and an expanding product portfolio augmented by many new products helped push revenues up 14.5 percent in 2000, to DEM 12.28 billion ($5.97 billion), while net income soared to DEM 384.4 million ($187.4 million). The resulting net profit margin of 3.1 percent was a huge improvement over the previous year's 1 percent. In October 2000 BSH entered into a joint venture with Japan's Hitachi, Ltd. to make front-loading washing machines at a Hitachi plant in Kabinburi, Thailand. The venture, 60 percent owned by BSH, began production in January 2002, marketing the washers under the Bosch, Siemens, and Hitachi brands for the southeast Asian and Pacific region. At the end of 2000, Wörner left the company after 13 years of globalizing and having shepherded the firm into position as the world's third largest maker of white goods. Taking over as president and CEO was Kurt-Ludwig Gutberlet, who had worked his way up to executive vice-president after joining the company in 1983 as a strategic planning associate.

In mid-2001 BSH launched a restructuring of its European refrigerator/freezer operations, which were under severe competitive pressure. To cut costs and improve efficiency, the workforce in Germany was to be gradually reduced by 600 over a two- to three-year period. Despite the high labor costs at home--and the addition of numerous factories abroad--more than half of BSH's production continued to come from German plants.

During 2002 a modern dishwasher production plant was added to the Lódz site and ground was broken in New Bern, North Carolina, for a $200 million expansion of BSH's main U.S. facility that was to add more than 1,400 new jobs. The latter was the company's largest ever plant expansion outside of Germany. Two new plants opened at the site in March 2004 producing washing machines, dryers, and freestanding cooking ranges, designed specifically for the U.S. market. The New Bern factories, already also producing Bosch dishwashers and Thermidor built-in ovens, soon began churning out Siemens dishwashers, which were initially available only at consumer electronics retailer Best Buy Co., Inc. outlets. Siemens washers, dryers, and countertop small appliances soon followed. BSH now sold three brands in the United States, aiming Siemens at tech-savvy urbanites, Bosch at upwardly mobile families, and Thermador at the trophy kitchen set. U.S. advertising in 2004 doubled to $6 million as North America was targeted as BSH's number one growth market. BSH aimed to more than double its North American sales, hoping to reach $1 billion by about 2006. With the expansion in New Bern, the Thermador plant in Vernon, California, was closed down in mid-2004 in order to cut costs and better exploit the potential of the new facilities.

Meanwhile, in September 2003, BSH moved into a new headquarters in the Neuperlach-Süd district of Munich. The new building enabled the company to concentrate under one roof 1,500 people from various corporate areas who had previously been scattered among several locations. Reflecting the company's cutting-edge, innovative, and high-quality product lines, the new headquarters was said to be the first European office complex to be constructed according to the principles of feng shui. Ecologically friendly materials were featured throughout, and all the furniture met state-of-the-art standards for ergonomics.

As part of a drive to concentrate on core products, BSH completed its exit from the commercial refrigeration sector by selling Metalfrio Solutions, a Brazilian subsidiary of BSH Continental, in early 2004. Around the same time, BSH bought out its partner, Fedders, in the Spain-based air conditioning venture. Despite intense competition that placed downward pressure on prices, BSH remained consistently profitable, enabling it to embark on further global growth initiatives. During 2004 the company began construction on a new dryer factory at the Lódz site and also launched a three-year expansion in China slated to cost between $80 million and $100 million. In China new factories were to be built, the product range was to be extended to include cooking appliances and small appliances, and the Bosch brand would be introduced into the market to be used alongside the Siemens brand, which had been BSH's only brand in China. BSH also was studying the possibility of introducing Bosch refrigerators into the U.S. market, which would enable the company to offer a full line of major appliances in that country for the first time.

Principal Subsidiaries: Robert Bosch Hausgeräte GmbH; Siemens-Electrogeräte GmbH; Constructa-Neff Vertriebs-GmbH; Gaggenau Hausgeräte GmbH; Neff GmbH; BSH Hausgeräte Service GmbH; BSH Hausgeräte Service Nauen GmbH; BSH Hausgerätewerk Nauen GmbH; BSH Electrodomesticos S.A. (Argentina); BSH Hausgeräte Gesellschaft m.b.H. (Austria); BSH Home Appliances S.A. (Belgium); BSH Continental Eletrodomésticos Ltda. (Brazil); Anhui BSH Cooling Appliances Co. Ltd. (China); BSW Household Appliances Co. Ltd. (China; 60%); Jiangsu BS Home Appliances Sales Co., Ltd.; BSH domácí spotrebice s.r.o. (Czech Republic); BSH Hvidevarer A/S (Denmark); BSH Kodinkoneet Oy (Finland); BSH Electroménager S.A.S. (France); Gaggenau Industrie S.A. (France); BSH Ikiakes Syskeves A.B.E. (Greece); Euroservice A.B.E.-Service Ikiakon Syskevon (Greece); BSH Home Appliances Ltd. (Hong Kong); BSH Háztartási Készülék Kereskedelmi Kft. (Hungary); BSH Home Appliances Ltd. (Israel); BSH Elettrodomestici S.p.A. (Italy); BSH Electrodomésticos, S.A. de C.V. (Mexico); BSH Huishoud-elektro B.V. (Netherlands); BSH Husholdningsapparater A/S (Norway); BSH Electrodomésticos S.A.C. (Peru); BSH Sprzet Gospodarstwa Domowego Sp. z.o.o. (Poland); BSHP Electrodomésticos, S.U., Lda. (Portugal); BSH Electrocasnice S.R.L. (Romania); OOO BSH Bytowaja Technika (Russia); BSH Home Appliances Pte. Ltd. (Singapore); BSH Drives and Pumps s.r.o. (Slovakia); BSH Hisni Aparati d.o.o. (Slovenia); BSH Home Appliances (Pty.) Ltd. (South Africa); BSH Electrodomésticos España, S.A. (Spain); BSH Balay, S.A. (Spain); BSH Fabricación, S.A. (Spain); BSH Interservice, S.A. (Spain); BSH PAE, S.L. (Spain); BSH Ufesa Industrial, S.A. (Spain); BSH Krainel, S.A. (Spain); BSH and FEDDERS International Air Conditioning, S.A. (Spain); BSH Hushållsapparater AB (Sweden); BSH Hausgeräte AG (Switzerland); BSH Home Appliances Ltd. (Thailand); BHST Washing Appliances Ltd. (Thailand; 60%); BSH Home Appliances Sarl (Tunisia); BSH Profilo Elektrikli Gereçler Sanayii A.;alS. (Turkey); BSH PEG Beyaz Esya Servis A.;alS. (Turkey); BSH Küçük Ev Aletleri Sanayii A.;alS. (Turkey); BSH Home Appliances FZE (United Arab Emirates); BSH Home Appliances Ltd. (U.K.); BSH Home Appliances Corporation (U.S.A.).

Principal Competitors: AB Electrolux; Whirlpool Corporation; GE Consumer & Industrial; Merloni Elettrodomestici S.p.A.; Candy S.p.A.; Haier Group Company; Maytag Corporation.

Further Reading:

• Baxter, Andrew, "Bosch-Siemens Casts Eye Over New Ground," Financial Times, May 25, 1994, p. 29.
• Beatty, Gerry, "Bosch-Thermador Deal Sets Upscale Course," HFN--The Weekly Newspaper for the Home Furnishing Network, June 22, 1998, p. 50.
• ------, "BSH Plant Expansion to Fuel Growth Plans," HFN--The Weekly Newspaper for the Home Furnishing Network, February 18, 2002, p. 37.
• Birkner, Claus, "Bosch-Siemens' Globalization Strategy," Appliance, August 1997, p. 20.
• ------, "BSHG Consolidates Operations in Eastern Europe," Appliance, April 1998, p. 22.
• Bonnema, Lisa, "Expanding Its Reach," Appliance, April 2004, p. B2.
• Fallon, James, "Bosch-Siemens Looks for Clout Through Acquisitions," HFD--The Weekly Home Furnishings Newspaper, June 13, 1994, p. 78.
• Jancsurak, Joe, "Big Plans for Europe's Big Three," Appliance Manufacturer, April 1995, p. 26.
• Le Blanc, Jenny, "Expansion in the U.S.," Appliance, February 1997, p. B11.
• Marsh, Peter, "German Venture to Make Dishwashers in the U.S.," Financial Times, December 23, 1996, p. 22.
• Roggema, Paul, "Bosch/Siemens Hausgeräte: Saturated? Innovate!," Appliance, August 2001, p. 24.
• Simpson, David, "A Simple Answer," Appliance, April 2004, p. B10.
• Stevens, Scot, "Welcome to America," Appliance, September 1997, p. 67.
• ------, "Worldwide Encounters," Appliance, February 1997, p. B4.
• Wolf, Alan, "Best Buy Adds BSH's Siemens Brand to Assortment," Twice, January 8, 2004, p. 152.

Source: International Directory of Company Histories, Vol.67. St. James Press, 2005.

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