Jenoptik AG History

Address:

Carl-Zeiss-Strasse 1
D-07739 Jena
Germany

Telephone: (49)(3641) 65-0
Fax: (49)(3641) 42-4514

Public Company
Incorporated: 1846 as Carl Zeiss
Employees: 8,540
Sales: DM 3.12 billion ($1.87 billion) (1998)
Stock Exchanges: Frankfurt/Main
Ticker Symbol: JEN
NAIC: 333295 Semiconductor Machinery Manufacturing; 334413 Semiconductor and Related Device Manufacturing; 339111 Laboratory Apparatus and Furniture Manufacturing; 333314 Optical Instrument and Lens Manufacturing

Key Dates:

1846:: Mechanic Carl Zeiss starts building microscopes in his own workshop.
1875:: Physicist Ernst Abbe becomes Zeiss's business partner.
1884:: Chemist Otto Schott, Zeiss, and Abbe start their own optical glass making plant.
1889:: Carl-Zeiss-Stiftung founded by Abbe.
1945:: U.S. troops move patents and scientists to Oberkochen after World War II.
1948:: The Carl-Zeiss Stiftung is expropriated by Soviet Allies.
1951:: A new firm under the name of Carl Zeiss is registered in Heidenheim.

1950-80:Two companies, each with the name Carl Zeiss, exist in East and West Germany and fight for brand name rights.
1990:: Former government-owned VEB Carl Zeiss Jena is privatized.
1991:: Carl Zeiss Oberkochen-Heidenheim is granted all brand name rights; Jenoptik GmbH becomes legal successor of the VEB Carl Zeiss Jena owned by the state of Thuringia.
1996:: Company is renamed to Jenoptik AG and goes public.
1998:: Jenoptik's first public offering on the Frankfurt stock exchange.

Company History:

Jenoptik AG is a high-technology company, based in Jena, Germany, that specializes in the fields of systems engineering and photonics. A now-independent offspring of the renowned optical group Carl-Zeiss-Stiftung, it specializes in clean room systems for the semiconductor and other high-tech industries as well as industry applications of laser technology, optical inspection systems, and other electro-optical and electromechanical equipment. Jenoptik maintains a high level of in-house research and development, which resulted in 746 patent applications in 1998, and conducts research for third parties. The company's asset management subsidiary buys and sells shares in small high-tech companies. Through its subsidiary M+W Zander Holding GmbH, Jenoptik is active in Western Europe, South East Asia, the United States, Israel, and Hungary.

Jenoptik's Predecessor Founded in 1846

It was in the year 1846 when 30-year-old mechanic Carl Zeiss set up a mechanical workshop in the German town of Jena. One year later he sold the first 23 microscopes he had made. However, he came to the realization that lens crafting was very time consuming and that his trial and error method would be inappropriate to scientific use and mass production. In 1866 Zeiss convinced German physicist Ernst Abbe to come to work for him. Abbe's task was to develop a scientific basis for lens construction. His research and theories became a fundamental part of modern optical science and enabled Zeiss to manufacture microscopes of a much higher quality. In order to become independent of foreign suppliers who delivered the special types of glass necessary, Abbe began working in cooperation with chemist Otto Schott who specialized in glass-making technologies. In 1882 Schott moved to Jena and two years later the three collaborators founded the Glaswerk Schott & Genossen, a glass making company.

In 1888 Zeiss died. Abbe, who had become a partner in Zeiss' business in 1875, thought that a foundation would be the best legal form to preserve the close relationship of scientific research and production, and in 1889 founded the Carl-Zeiss-Stiftung. According to its by-laws, the new organization had high social responsibilities to fulfill, which a private company would not be able to guarantee in the long run: to ensure close cooperation with the Jena University; to foster research in natural science and mathematics; to guarantee a highly qualified staff by offering extraordinary benefits; to provide jobs for the Jena region; to cooperate with local nonprofit organizations; and to contribute to cultural life and public education.

Around the turn of the century, natural sciences such as astronomy and biology made enormous progress. As a result, the demand for high-quality research microscopes grew rapidly as did requirements for their precision. At the same time, demand for eyeglasses, binoculars, and surveying equipment rose tremendously. Another driving force in the optical industry was the rising demand by the military for optical instruments. The Carl Zeiss enterprises thrived under those conditions and gained a worldwide reputation for its precision instruments. In 1914 the Zeiss factory employed 5,280 people who made microscopes, optical measuring instruments, camera lenses, binoculars and telescopes.

A New Beginning in 1948

World War II brought a sudden end to the company's bright future. The American troops, who were the first to enter Jena, took with them when they left the core of the Zeiss company: patents, construction drawings, and the most brilliant people. While they set up a new Zeiss company in their own zone of occupation in the Swabian town of Oberkochen, Thuringia and Jena came under Soviet control. In 1946 the Oberste Alliierten Kontrollrat decided to dismantle the Zeiss production facilities as war reparations--and that could have been the end of the company.

Just as Germany was divided into two separate states, so was the Zeiss enterprise divided into two separate companies. After the Soviets expropriated the Carl-Zeiss Stiftung in 1948, a new firm under the name of Carl Zeiss was officially registered in the West German town Heidenheim in 1951. Many of the key technical and managerial Carl Zeiss employees had moved to work in this new company in Germany's southwest region. However, most of the qualified staff and traditional ties remained in the Jena region. In an extraordinary endeavor, a new plant was established there during the 1950s. It started manufacturing products it had produced before the war and soon developed new versions, and eventually new instruments. By the mid-1950s the government-owned VEB Carl-Zeiss Jena was exporting its products to no less than 88 countries. The Carl-Zeiss-Stiftung was also re-established in Jena, resulting in a battle over brand name rights that went on for decades between the two foundations which had the same name.

The VEB Carl-Zeiss Jena soon became a showpiece of the newly-founded German Democratic Republic (GDR), where politicians, not business people, ruled the economy. While large companies in the Western world started dismantling the huge, inflexible bureaucracies, the government in East Germany made a conscious decision to create them. In 1971 the VEB Carl Zeiss Jena became a so-called Kombinat, comparable to a holding company that managed a large number of subsidiaries in one industry. The chronic scarcity of raw material and other supplies in East Germany encouraged such conglomerates to produce themselves as many of the supplies needed as possible to ensure control over the whole chain of production. About 25 companies with 69,000 employees located all over the GDR--optical companies, engineering companies, foreign trade offices and research centers--were organized under the umbrella of the Kombinat Carl Zeiss Jena, which even included it's own power plant and a production facility for crates. More than 1,000 products, such as electronics, technical equipment for scientific laboratories, lasers, equipment for medical and astronomical research, technology for measurement and research, cameras, household glassware, as well as whole planetariums, observatories, and optical plants, were all made under the Carl Zeiss Jena label. Even under less than perfect conditions, Carl Zeiss Jena made some remarkable innovations, most notably the multiple spectrum camera, the MKF 6, which delivered detailed images of the earth's surface from the Soviet space stations Sojus 22 and Salut 6.

In the mid-1980s, when the semiconductor and computer industries were on the rise worldwide, the East German government decided that their leading companies in those industries, which were located primarily in Dresden, should be taken over by the Kombinat Carl Zeiss Jena. Some 60 percent of the net profits generated by the company were transferred to the government budget. In addition to that, the Kombinat's three main subsidiaries--the VEB Carl Zeiss Jena, glass-maker VEB Jenaer Glaswerk, and the drug company VEB Jenapharm--transferred between 40 and 50 million East German Marks per year to the Carl Zeiss Jena foundation which helped finance scientific research at the Jena University, as well as a planetarium, a museum, a library, and other educational and healthcare institutions in town.

The Second New Beginning in 1990

The unexpected fall of the Berlin Wall marked the next turning point in Jenoptik's history. For the second time it appeared the East German company would be unable to survive. With the introduction of the West German currency in East Germany in the summer of 1990, the company suddenly lost most of its business, as Eastern European countries were no longer able to pay for Jenoptik's products in hard currency. At the same time, the government subsidies that had traditionally kept Jenoptik's prices low, were abolished, and it was no longer competitive on the world market. Finally, the profitable business relationship with the East German military abruptly ceased. The consequence was huge financial losses.

The legal situation following German reunification was complicated as well, especially in the case of the VEB Carl Zeiss Jena. According to the agreement between the East and West German governments, state-owned East German companies had to be privatized. This enormous task was taken over by a newly-established institution, the Treuhandanstalt, headquartered in Berlin. In July 1990, the Treuhandanstalt took over responsibility for the Kombinat Carl Zeiss Jena, which at that time consisted of 25 major subsidiaries at 11 locations with approximately 69,000 employees. They were split into several independent private companies. The core business was transformed into the Jenoptik Carl Zeiss Jena GmbH, which included 13 major subsidiaries and over 30,000 employees.

On June 16, 1991 a meeting held at the Berlin Treuhandanstalt determined the fate of the two Carl Zeiss foundations and the associated companies. It was decided that there should be only one Carl-Zeiss-Stiftung--the one in Heidenheim. The details were negotiated in a treaty between the German states of Baden-Würtemberg and Thuringia. The Carl-Zeiss Stiftung Jena transferred its brand name rights and licenses to the Heidenheim-based foundation. The core of the old Carl Zeiss production line, including about 3,000 employees with pension rights, was also taken over by Carl Zeiss Oberkochen-Heidenheim through its newly-founded subsidiary Carl Zeiss Jena GmbH. Anything that was not part of core business assets, such as the planetarium, optical museum, and other nonprofit institutions, became the property of a newly created foundation in Jena--the Ernst Abbe Stiftung. At the same time, Jenoptik, the successor of the Kombinat Carl Zeiss Jena, was determined to take over the rest of the business and to become a breeding ground for a new 'high-tech valley.'

On July 1, 1991 Lothar Späth, who had once been president of the German state of Baden-Würtemberg for more than a decade, took over the complicated task of restructuring what was left of the former East German Kombinat Carl Zeiss. In October 1991 the Jenoptik Carl Zeiss Jena GmbH was split into the Jenoptik GmbH and the Carl Zeiss Jena GmbH. Jenoptik GmbH became the property of the state government of Thuringia which together with the Treuhandanstalt paid out DM 1.7 billion, about half of which went to pay off Jenoptik's past debts while the other half went toward ongoing costs, including financial compensation for employees who lost their jobs at Jenoptik. However, a precondition of the deal was that Jenoptik preserve 10,000 jobs in Jena, and at the same time, the company was supposed to become profitable once again.

Within just a few months, a complex program of numerous buy-outs and split-ups created about 200 new companies which provided some 7,000 jobs for former Jenoptik employees. This gave the Jena region a boost as an industrial and scientific research center. In order to preserve the incredible potential of the 10,000 former Carl Zeiss Jena employees with college degrees, the German Ministry for Research and Technology funded over 100 research projects in basic physics, microbiology, optics, and glass making technology. The ministry also provided DM 14 million in subsidies for 14 Jenoptik research projects in 1991.

At the same time, Jenoptik attempted to sell many of its subsidiaries to private investors. In summer 1991, its optical chain was sold to the Nuremberg-based Apollo Optik GmbH. Other companies, including a foundry, plastics production facilities, leather making factories, and cable plants, were sold in the same year. In 1992 the Glaswerke Schott in Mainz took over the management of the former Jenaer Glaswerk. The promise to preserve 10,000 jobs was kept: 3,000 people were taken in by the Carl Zeiss Jena GmbH; 1,700 were employed by Jenoptik; and the rest received jobs in one of the newly-founded start-up companies or in Jena's growing service sector.

Becoming a Global Player in the Mid-1990s

After the most important legal issues were finally resolved, the remainder of Jenoptik began a long and painful process of restructuring. Beginning in 1992, Jenoptik became a holding company with a great variety of shareholdings, real estate assets, and a group of manufacturing companies in the fields of opto-electronics, systems technology, precision measuring, and mechanical instruments. Joint ventures were set up with prominent partners such as Sandoz AG and the DASA. In mid-1992, CEO Späth declared international expansion to be Jenoptik's primary goal. One of Jenoptik's new fields of expertise was laser technology, an area in which the company had done a great deal of research.

By the end of 1992, Jenoptik had become the German market leader in light-exposure equipment for semiconductor production facilities. In order to get access to international markets Jenoptik began acquiring companies which were already established internationally. In 1994 Jenoptik purchased the Stuttgart-based semiconductor company Meissner + Wurst GmbH & Co.; in 1996 the Berliner telecommunication company Krone AG; and finally in 1997 ESW-Estel Systems Wedel, a supplier to the automobile and aerospace industries of technically complex and innovative products and services such as drive and stabilization technologies, measuring systems, and control systems. Other smaller acquisitions in the fields of laser technology, optics, and systems engineering followed. At the same time the legal structure of the company was also changed. On January 1, 1996 Jenoptik became a public company and changed its name to Jenoptik AG. The state of Thuringia retained a minority interest of 50 percent minus one share in the company's share capital.

The year 1998 marked the second phase of Jenoptik's restructuring. Beginning on June 16, 1998 Jenoptik shares were traded on the Frankfurt stock exchange for the first time. The state of Thuringia kept a minority share of 18.9 percent; 8.2 percent was held by a group of banks; 4.1 percent was purchased by Jenoptik employees; and 68.8 percent was sold to other investors. In mid-1999 the company announced that it would streamline its business and concentrate its efforts in just two high-growth markets: Clean Systems Technologies and Photonics Technologies. The telecommunication branch Krone AG, was sold to the American GenTek Inc. headquartered in Hampton, New Hampshire. A large percentage of Jenoptik's shares in Deutsche Effecten- und Wechselbeteiligungsgesellschaft AG (DEWB), its publicly traded asset management division, was offered to interested strategic partners. In order to strengthen the Clean Systems Technologies division, Jenoptik sold its subsidiaries Jenoptik Infab GmbH to Brooks Automation, Inc. in exchange for a minority share in the American company. Brooks was a manufacturer of handling robots used in super-clean areas of semiconductor and flat screen production plants. With this step Jenoptik was hoping to be able to extend its promising market position in the global semiconductor industry into new markets&mdash a supplier of special high-tech equipment to the pharmaceuticals, food, and biotechnology industries.

Principal Subsidiaries: M + W Zander Holding GmbH (72.14%); Jenoptik Extel AG; Deutsche Effecten- und Wechsel-Beteiligungsgesellschaft AG (99.32%); Jenoptik Bioinstruments GmbH; OPAL JENA Gesellschaft für optische Analytik und Labortechnik mbH; Jenoptik Mikrotechnik GmbH; Jenoptik Systemhaus GmbH; Jenoptik MedProjekt GmbH; 4 MBO International Electronic GmbH (44%); Jenoptik Camera Europe GmbH; Laser Imaging Systems GmbH & Co. KG (33.4%); UV Systec Gesellschaft für UV--Strahler und Systemtechnik mbH (Germany; 24.88%); Jenoptik (U.K.) Ltd.; HVB Beteiligungen GmbH; Aesculap-Medutec GmbH Jena; Ceram Holding GmbH (24.9%); Klaus Kleinmichel GmbH (49.9%).

Principal Competitors: ATS Automation Tooling Systems Inc.; Daw Technologies, Inc.; PRI Automation, Inc.

Jenoptik AG History

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