Ulf Berg
'The founders of many famous companies – Sulzer, Brown, Boveri, Nestlé and many others – were actually non-Swiss.'
A touch of Denmark among Switzerland’s peaks
Step out of the train at Winterthur, a small city just north of Zurich, and the scale of Sulzer’s now largely redeveloped siteprovides an instant sense of what the famous company oncemeant in terms of Switzerland’s industrialisation. But times got tough. Ulf Berg, its Danish-born chief executive for the past two years, sees Sulzer’s decline and renaissance as something of a model for much of Swiss manufacturing, as many once famous names return to prominence after painful restructurings in recent years. Today with just 10,000 employees – 90 per cent of them abroad – Sulzer is now one third the size of the industrial giant that made everything from railway engines to power stations to machines for the textiles industry at its Winterthur works. But Sulzer has also become a highly profitable group that is among the world leaders in such fields as pumps and technology for the chemicals industry, which has been achieved through a deliberate policy of slimming down and focusing on survival. While Switzerland’s high costs mean fierce competition with low margin manufacturers in Eastern Europe – let alone Asia, Berg is convinced Sulzer’s example demonstrates that Switzerland will retain a competitive edge if it concentrates on skills and specialisation. Married to a Swiss citizen and a virtual full-time resident since 1977, he now sees Switzerland as his true home.
The interview was conducted by Haig Simonian,
the Zurich-based correspondent of the Financial Times.
The pictures were taken by Willy Spiller.
HS: What does it mean to you, especially as a foreigner, to be running one of Switzerland’s most famous companies after an extremely difficult period of restructuring and realignment?
UB: It means a lot to me for many reasons. Over the years, I’ve been both one of Sulzer’s clients and competitors. I’ve bought products from Sulzer and, when I was with Asea Brown Boveri (abb), we took over entire product lines, so I’ve always admired Sulzer for its abilities and known it very well. Taking on the responsibility of nurturing Sulzer for the future has been extremely fulfilling. When I joined the company, I coined the phrase Zukunft braucht Herkunft (a future needs a past) because there are factors in a company like this that are in the walls, as I call it – the cultural elements. There are good elements – and those are the ones you need to nurture – and there are those that need to be de-emphasised and ultimately to disappear. I think Sulzer has done that very well in the past five years. It mattered a lot to me to be running one of the icons of the Swiss manufacturing industry. And Sulzer is in excellent form now.
HS: Winterthur and Sulzer are virtually synonymous for the Swiss. Is it the first time you’ve worked in a company town?
UB: No. Former Brown Boveri & Cie (bbc) in Baden was the same. The big difference is that Sulzer and Winterthur were more intertwined, in the sense that the decline of Sulzer in the 1980s led to more pain locally than was the case with bbc in Baden. It can be argued that it wasn’t until Sulzer and the town of Winterthur parted company and each took responsibility for their own destinies that each prospered, and I think there’s some merit in this.
HS: Does still being rooted here matter to the company, in the sense that its history and traditions are advantages, or are they burdens?
UB: I don’t think we suffer. I think Sulzer has totally jettisoned what I call the ‘anchors of the past’ mentality. We concentrate on Sulzer’s good elements, and obviously don’t concentrate on its bad ones. There are merits to the so called ‘family feeling’ of having a sense of tradition behind you and of belonging. Sulzer has its roots here. You’d tear up a lot if you moved tomorrow. It wouldn’t necessarily be that terrible for the business; after all, 90 per cent of our people are abroad now. But there are a number of processes that would suffer, and I think the chief executive and division headquarters should be here. The company and its activities are very much associated with Switzerland. I see it very much as a Swiss company – even if I’m Danish. And Switzerland remains a good place for basing a business. If you look at it historically, the founders of many famous companies – Sulzer, Brown, Boveri, Nestlé and many others – weren’t Swiss. But they found here the same things I liked when I moved from Denmark: a high work morale, high ethics, discipline, precision and a quality culture. Those are all extremely useful attributes.
HS: Have you ever felt stigmatised as a foreigner running a famous Swiss company, or sensed tacit criticism that a Swiss should be doing the job?
UB: No, never. The Swiss are much too open for that. Never, ever have I had that feeling. In the mid 1970s, when I went to Brown Boveri, it was an impediment to my career not to have served in the Swiss army – military service was still very important in those days. But that has disappeared entirely now. I would say decisions are made totally on merit. Just look at Sulzer’s own board of directors. Four of our six board members are foreigners. And there are no problems. But it is an investment to get to know people here. It is an investment to understand how the world ticks here. You’ve got to be prepared to make that investment. If you’re a shy person, the Swiss will definitely further your shyness – maybe you shouldn’t write that!
HS: Do you think Switzerland’s public sector does enough for private companies given today’s intensely competitive global business environment?
UB: Today, most cantonal governments are doing a really good job treating businesses in a business-like way. They act like a service company. They feel that, if they behave in a service-oriented manner, it’s good for the business sector, and that’s good for them. Given Switzerland’s high costs and high currency, if we don’t get these elements right, the Swiss model won’t work. If you don’t make running the country a business, it won’t count; you won’t survive. We meet regularly with the city administration in Winterthur to exchange views. They tell us what they have in mind, and we tell them what we’re planning. It’s an extremely useful, open dialogue.
HS: Is Sulzer’s decline and revival something of an image for Swiss industry in general?
UB: Back when I lived in Denmark, companies like Sulzer and Brown Boveri represented ‘Swissness’ – even more so than Nestlé for an engineer like me! Quality, precision, stability, commitment, all these types of things. But there are the biggest and most prestigious, the highest output – if not the biggest volume. I call it the ‘Rolex syndrome’ of Switzerland. But I believe there’s a risk to that. If we are proud of having the world’s first pump of some type, or the world’s first or largest pump of another type, that doesn’t mean we’re the world’s biggest supplier of pumps. Every coin has its flip side, and you should always be aware of it. One’s got to remain realistic. Sulzer has many attributes that are similar to Switzerland’s: it is very process driven, very formalist in some ways. Don’t misunderstand: precision is important. On the other hand, there are also important differences: here we can push through decisions, whereas in Switzerland’s direct democracy, you can have decisions made politically only to see them overturned by the people at referendum.
HS: Should Switzerland specialise its industrial base even more narrowly?
UB: I have a philosophy about what’s good for Switzerland. If you look back at Sulzer, we produced diesel engines, which had to be taken apart after final testing and loaded onto 170 rail wagons to transport them to a harbour for onward shipping to a customer. You don’t have to be a rocket scientist to realise that something of that size probably shouldn’t be made in Switzerland. The opposite of that is that everything no bigger than, say, one cubic metre, is ideal. Anything bigger than that, and you’ve got to think twice. That background helps explain why so many Swiss companies, such as Nobel Biocare, Synthes and dozens of others like them, have done so well in specialist engineering, micro-manufacturing or medical technology. When products get smaller, there’s more high tech in them, and that’s where Switzerland can shine.
HS: Has being a Dane helped or hindered you in Switzerland?
'What's helped more than most is the ability to learn the Swiss German dialect. and I learned the hard way – from my wife.'
UB: Denmark and Switzerland are very alike in many ways. They’re about the same size; both have about ten per cent forest and both have about the same population density. There is no place in Denmark that is more than fifty kilometres from the sea; in Switzerland it’s the same distance, only to the mountains. Both countries have no raw materials. And while the Swiss have hydro electricity, the Danes have developed wind power. Of course, there are differences. The highest mountain in Denmark is called the Sky Mountain – all of 170 metres high. That wouldn’t even qualify for a hill here. Culturally too, I see similarities. The Swiss are somewhere between the Italians and the Germans when it comes to their attitude to life. In Scandinavia, we Danes say we’re the Italians of the region. But Switzerland has changed hugely. When I arrived in 1977, everyone was very formal. Since then, people have travelled so much more and become so much more flexible. And they’ve become immeasurably more open. There’s been a tremendous change over time. Denmark was already more open back then. It’s taken much longer in Switzerland.
HS: Has speaking languages helped?
UB: I speak Danish, Swedish, German, Swiss German and English, with a bit of French and Italian. What’s helped most is the ability to learn the Swiss German dialect. And I learned the hard way – from my wife. She’s from the Canton of Thurgau. Fortunately, it’s a pretty flat dialect they’ve got there compared with some of them. When I came to Switzerland, I was given this book published by Brown Boveri for newcomers. In the foreword it said, ‘Switzerland is the biggest country in the world because nowhere else do you have such big differences in such small distances.’ It’s still true today with respect to languages and many other aspects.
HS: After living in Denmark, Germany, the US and Switzerland, what do you consider your home?
UB: At some point, you have to decide where your roots are, and for me, my roots are here. So I haven’t even got a summer house in Denmark – I’m building it here instead! I love to go to Sweden and Denmark on vacation, and there’s not a year I don’t think about buying a farm in the us, but I feel my roots are here now. I have a friend with whom I go hunting near Flims. I like the area up there, I like the nature and it’s not been spoiled.
HS: So what else do you do in your spare time, when the job allows?
UB: I believe in taking my vacations, and we try and get out and about whenever possible. We love Switzerland for the outdoor life. I’d say my prime interest is being out in nature, preferably hunting, but also hiking, skiing and things like that. Another very important hobby for me is carpentry. And bow shooting. I’m a bow and arrow hunter, believe it or not. But I only shoot what I can eat! The only sports I can’t do in Switzerland are sailing and scuba diving. Sure, one can sail here. But for a Dane, the wind here is not real sailing. And things here are a bit formalistic. When you grow up on the water in Denmark, you don’t need to think too much about getting a licence and all that before you go out. Here, it’s much more complicated – and every canton is different, which makes matters worse. It’s the same for hunting licences. Remember what I said about the smallest country and the biggest differences…
HS: So what don’t you like about things here?
'A high work morale, high ethics, discipline, precision and a quality culture.'
UB: I think the notion that the Swiss are a very reserved people may have been true back in the 1960s and 1970s. But due to the tremendous influx of foreigners, that’s changed. And it’s also been influenced by what I’d call the more superficial, American concept of ‘friendliness’, which may not go that deep in the end. Switzerland’s population has increased hugely since 1945. It’s a tremendous change, greater than in any other country I know in the world. As far as day-to-day life is concerned, that’s made things very positive. I’ve never felt obliged to join any sort of foreigners’ club or anything like that, even when I first arrived. So I don’t have any huge hang-ups about the Swiss or Switzerland. Curiously, if anything, I wish the political system, which has proven itself to be a true democracy, could speed up a bit sometimes. At times, I feel the lack of a clear political will, which in turn hampers decision making. And I wish there was more willingness to invest in venture capital. I feel the Swiss, who are so rich, should invest a bit less conservatively and consider buying into more things that will help to guarantee their future. Even before my time, Sulzer ploughed 10m Swiss Francs into a venture incubator fund for young people to start up their own businesses. That’s very important.
The interview was conducted in English.
Ulf Berg was born in Denmark on 10 April 1950. He studied mechanical engineering at his country’s Technical University in Copenhagen, coming to Switzerland in 1977 because his PhD studies required access to greater computer power than his home country could provide at the time. After starting his career as a development engineer at the power plants division of Brown Boveri (later ABB), he progressed up the ladder, eventually becoming an executive board member of ABB’s power generation group. He left ABB in 1999 after twenty-two years to become chief operating and chief executive officer of Carlo Gavazzi, a Swiss electronics company. Two years later, he set himself up as an investor and venture coach specialising in start ups and new ventures in the energy sector, before taking on the job of chief executive of sig Beverages, a key division of the world’s leading packaging and packaging machinery manufacturers, based in Switzerland. In 2004, he took over as chief executive of Sulzer, one of Switzerland’s most famous industrial names and, in its heyday, a close counterpart and competitor of ABB. His interests include hiking, hunting and the outdoors in general. A keen skier in his adopted home he remains, as a good Dane, a passionate sailor as well.