Andreas Stihl

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Andreas Stihl

Badstrasse 115
71336 Waiblingen
7151 26
Fax: 7151 26 11 40

Private Company Incorporated: 1926
Employees: 5,500
Sales: $1.1 billion (1995)
SICs: 3546 Power Driven Handtools

Based in Waiblingen, Germany, Andreas Stihl manufactures the worlds leading selling chain saws, as well as a variety of outdoor tools and equipment ranging from brushcutters, edgers, and trimmers to blowers, vacuum cleaners, and protective workwear. Stihl plants operate in Germany, Switzerland, Brazil, and in Virginia Beach, Virginia, while Stihl products are sold in approximately 130 countries by more than 16,000 dealer-servicers. Foreign sales accounted for about 80 percent of Stihls $1.1 billion in 1995 revenues. Stihls U.S. subsidiary, Stihl Inc., accounts for about one-third of the companys annual production.

The Invention of the Chain Saw

An engineer, Andreas Stihl nonetheless began his career as a salesman for a German mill and industrial supply house during the 1920s. Stihls work brought him in contact with loggers in the Black Forest, where the felling and bucking of trees were done with stationary saws or by hand, and the larger pieces of timber needed to be transported to saw mills for cutting. Stihl sought to introduce more modern methods to the logging trade.

In 1925, Stihl opened a small workshop in his home in Stuttgart and set to work designing a portable tree-felling machine. The Stihl workshop manufactured a number of other products, including forehearths for steam boilers, in order to support these efforts. But by 1926, Stihl was ready with his first prototype, a 140-pound electric cross-cutting chain saw. The saws bulk required it to be operated by two men, and its reliance on an electric motor limited its portability to areas where a power source was available. Stihl set to work creating a lighter, gasoline-driven saw. Nonetheless, the electric saw found its market, selling 50 in 1927. In that year, Stihl opened his first factory in Stuttgart. The following year, as sales of the electric saw reached 100, the company opened a sales office for northern Germany.

Stihls gasoline saw was ready by 1929. This saw achieved a horsepower of 6; its weight of 101 pounds still required two men to operate it. Yet the saw was fully portable and would change the logging trade forever. In 1930, the saw was featured at the Leipzig trade fair, and sales of the saw soon spread beyond Germany into Holland, Belgium, Switzerland, and France. From the start, Stihl emphasized service along with the sale of his saws. Customers were trained in the operation, maintenance, and repair of Stihls products. As international sales increased, Stihl trained specialists in each country, who provided customer instruction and service, along with sales. As one of Stihls earliest salesmen wrote: It wont do to sell saws to people without teaching, assisting and offering good service to users later.

Not everyone welcomed the chain saw. Many loggers resisted the new device, fearing the loss of their jobs, and often attacked Stihls salesmen. But the rise of the chain saw became inevitable, and sales increased. By 1930, Stihl saws were being shipped to the United States. After a trip to the Soviet Union, Stihl received orders for several hundred of his saws. The Stihl factory moved to Bad Cannstatt, which later became part of Stuttgart, and during the 1930s the number of the companys employees swelled to 200.

Stihl continued to work on improving the saws design. In 1931, Stihl introduced his second gas-powered saw, which weighed nearly 105 poundswith a full gas tankbut achieved a horsepower of 8. Other improvements were made, such as an automatic chain lubrication system introduced in 1935. The following year, the company opened its first foreign sales and distribution office in Vienna. By 1937, Stihl managed to bring the weight of the chain saw down to 88 pounds. Stihl traveled to North America, broadening the saws reach through the U.S. and into the Canadian market. Stihl also introduced courses in power saw technology in an effort to increase the chain saws acceptance throughout the logging and forestry trades.

The Nazi rise to power encouraged Stihls domestic growth but hampered its international development. In an effort to standardize production within industries, the Nazis held competitions and Stihls design became the authorized German chain saw. All other German chain saw manufacturers were required to license the Stihl design. But the outbreak of the World War II ended Stihls international growth. During the war, the Bad Cannstatt plant was destroyed by bombs, and production was moved to Waiblingen. The German capitulation ending the European war also forced Stihl to a halt.

Postwar Growth

By 1947, Stihls factory reopened and was soon producing 90 chain saws each month. International sales also resumed; in the United States, Stihl bought out its former U.S. importer, and began assembling saws in the U.S. for the North American market. In 1948, the first Stihl Service Center was opened, offering a higher degree of customer service. Meanwhile, the company continued to improve the chain saws design, with reducing the weight of the saw a primary concern. This concern led to the development of the one-man chain saw, which would revolutionize the chain saw industry by the end of the decade.

Stihls first one-man saw was introduced in 1950. This saw was still too heavy for comfortable operation, but it led the way to the introduction of the Stihl BLK saw in 1954. At 31 pounds, with a horsepower of 4.5, the BLK was the first truly portable chain saw. Two years later, the BLK was chosen by the German army as its official chain saw; the BLK became the standard saw for many other military services and government organizations as well.

But the true revolution in chain saw technologyand the development that led to the worldwide acceptance of the chain sawwas the introduction of the Stihl Contra in 1959. The Contra, which featured a direct drive and diaphragm carburetor, weighed only 26.65 pounds, yet achieved a horsepower of 6. Stihls sales boomed, and production rose from 104 saws per day to 500 saws per day by 1964. By then, the company was outgrowing its plant, and a second facility was built in Neustadt. The companys workforce grew to over 1,000. U.S. and Canadian demand surged with the introduction of the Stihl Lightning saw, prompting the company to open its first North American warehouses.

In 1965, Stihl introduced an innovation in chain saw design with its anti-vibration system, which absorbed the impact of the saws vibration, allowing steadier and less fatiguing control. This design change was quickly added by Stihls competitors to their products as well. Three years later, Stihl added an electronic ignition system to its saws, improving their reliability. Other design changes included a more efficient chain lubrication system, an inertial chain braking system, which stopped the chain in the event of kickback, and a master control lever, which allowed the user to control the saws starting and stopping functions without releasing the saws handle.

By 1971, Stihls 2,000-strong workforce was producing 340,000 saws annually. In that year, Andreas Stihls son, Hans Peter, took over as head of the company. Andreas Stihl died two years later. By then the company had added a new plant in Priim, and a plant in Wiechs am Randen, near the Swiss border. The companys first overseas plant, Andreas Stihl Moto Serras LTDA in Sao Leopoldo, Brazil, began chain saw production in 1973. With 2,500 employees, Stihls revenues topped DM 222 million.

The international oil crisis prompted by the Arab Oil Embargo of 1973 sent most industries into a recession. But in response to rising oil prices, the demand for wood as an alternative fuel skyrocketed, and with that demand came an increase in Stihl sales. The company increased its foreign manufacturing base, transferring chain production to a plant in Wil, Switzerland, and opening a U.S. plant in Virginia Beach, Virginia, in 1974. The company also established an assembly plant in Scoresby, Australia. By 1978, Stihls revenues had more than doubled, to approximately DM 500 million (roughly $245 million). By the mid-1980s, about 50 percent of the companys production took place outside of Germany.

Diversifying Products in the 1980s and 1990s

In 1980, worldwide chain saw sales reached a peak of 5.8 million units, with Stihl holding a commanding share of the market. But as oil prices leveled, and as the world entered the recession of the 1980s, sales slumped in the following years, dropping to 3.4 million units by 1984. Stihls revenues continued to rise, from $355 million in 1981 to $489 million in 1986, increasing its share to 25 percent of the chain saw market; however, much of this revenue growth could be attributed to the falling value of the dollar against the German mark.

In response to the pressures on chain saw sales, the company began to diversify its product line in the 1980s. In 1986, the company began producing protective apparel and accessories, such as safety glasses, helmets, gloves, boots, and hearing protectors. Two years later, the company introduced specialized clearing saws for professional use, and in 1989 began production of trimmers and blowers.

Company Perspectives

For a company that has managed to integrate technological advancement with old-world craftsmanship, the future can only yield greater expectations. Stihl is committed to designing and building high quality and innovative products. We are committed to our employees and to the future of the power equipment industry.

Until the 1990s, most Stihl saws were designed exclusively for professional uses. Further improvements in design had decreased the weight of even the companys most powerful model to 20 pounds. Toward the middle of the decade, however, Stihl moved to tap into the small saw marketwhich represented about half of all chain saw saleshitting below the $200 price point. Because the U.S. was the biggest market for small and nonprofessional chain saw purchases, the company moved production of all small saws to its Virginia Beach plant in 1994. By the following year, Stihls U.S. facilities were producing more machines than its German plants for the first time in the companys history.

The diversification of the Stihls product line helped drive the companys growth. Sales in 1995 topped $1 billion, with foreign sales accounting for roughly 80 percent. Stihl, which remained a family concern with the third generation entering the company, could be expected to maintain its world leadership in chain saws and other powered outdoor products.

Principal Subsidiaries

Stihl KG (Germany); Andreas Stihl Moto Serras Ltda. (Brazil); Stihl Incorporated (U.S.); Stihl & Co. (Switzerland); Stihl Chain Saw (Aust.) Pty. Ltd. (Australia); Andreas Stihl Ltd. (U.K); Stihl Ges.mbH & Co. KG (Austria); Andreas Stihl Sari (France); Stihl Ltd. (Canada); Stihl Chain Saw Ltd. (New Zealand); Andreas Stihl S.A. (Spain); Andreas Stihl N.V. (Belgium); Andreas Stihl B.V. (The Netherlands); Andreas Stihl AB (Sweden); Andreas Stihl A/S (Norway); Stihl Parts Inc. (U.S.)

Further Reading

Bruce, Peter, Andreas Stihl Cuts Larger Overseas Niche, Financial Times, January 7, 1986, p. 21.

Tagliabue, John, Stihl: A Worldwide Family Business, New York Times, March 17, 1982, p. D4.

Wagner, Lon, Expansion Is Routine at Equipment Maker Stihls U.S. Plant in Virginia, Virginian Pilot, November 13, 1995.

M.L. Cohen