Interview with boss of PIKO

Interview with boss of PIKO

Postby Arseny » Tue Nov 11, 2014 12:49 am

Latest interview with Mr. René F. Wilfer, chief of PIKO (in German)

http://www.sueddeutsche.de/wirtschaft/d ... -1.2205550

(I do not know German, but some Russian fellows translated it to Russian. Translate it to English?)
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Re: Interview with boss of PIKO

Postby ConducTTor » Tue Nov 11, 2014 12:56 am

I'm using Google Chrome browser with translation turned on. Whoever does not have their favorite browser set to translate...should :)
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Re: Interview with boss of PIKO

Postby Arseny » Tue Nov 11, 2014 1:22 am

I use Google Chrome and Google Translator, and also Translate.ru service - all of them can translate English somehow; but when I try to translate German by online translator... it is really terrible!!!
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Re: Interview with boss of PIKO

Postby ConducTTor » Tue Nov 11, 2014 1:39 am

German is difficult. Because they put a lot of words together into a single word and the translator gets confused.
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Re: Interview with boss of PIKO

Postby Arseny » Tue Nov 11, 2014 2:21 am

Not only. It translate all the words separately, but common sense of the sentence usually remains absolutely nonsensical...

Ok, if somebody needs translation into English, I can try to translate ...from Russian. :grin:
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Re: Interview with boss of PIKO

Postby LVG1 » Tue Nov 11, 2014 7:10 am

Okay, I'll translate it.
But at the moment, I'm lacking in time. May be this evening or tomorrow...
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Re: Interview with boss of PIKO

Postby LVG1 » Wed Nov 12, 2014 6:30 pm

Not a single word about TT scale in the entire interview.
However, here's my translation:

November 9, 2014, 15:15
German medium-sized businesses: What's actually going on with... René F. Wilfer?

"Our 'Wende' (political changes of 1989 in GDR) came with the double decker coaches"

After the end of GDR, initially nobody wanted to buy the model railroads of the eastern company Piko. In the interview, the boss explains how the company managed to make it to China and to the USA—and why a plastic copy of him sits in the garden-railroad loco.

By Elisabeth Dostert

Image
A garden railroad of the East German manufacturer Piko. (Image: Piko)

What are you actually doing?

We make products which can make people happy.

I thought model railroads!

True. But most people look happy when they play with our railroads.

Do you mean by people mainly men?

No. Recently, I got to know a family. The husband is controller in a large company. The wife plays with her three sons with the model railroad.

This example is weak. In such majority conditions the poor woman supposedly does not get around that.

Typically, women-repression view! No, the wife is technician, the husband is all thumbs and a number fetishist.

Seriously: The majority of your customers is men, isn't it?

Sure, it is a technical product.

The Firm
Piko Group

  • Head office: Sonneberg (Germany)
  • Founded: 1949
  • Total revenue: n.s.
  • Employees: about 500, among them 170 in Sonneberg (Germany) and 330 in Chashan Town / Dongguan, Guangdong (China)
  • Managing shareholder: René F. Wilfer, 65

How many trains and cars does Piko make per year?

Far more than 100,000.

What does the most inexpensive loco cost?

Just under 30 Euros, a steam loco for children.

And the most expensive one?

1,100 Euros, a starter set for garden railroads.

The garden railroads are fairly large. What kind of people do buy garden railroads?

Mostly families with children. The layouts are usually built in the garden. Husband and children usually care about technology and the wife about structures and plants. And then they are excited altogether when a train is runnig.

Means, your customers cultivate a rather traditional role understanding?

That's to be assumed.

Do you also have such thing in your garden?

No. My wife said: "That won't get into my garden." I would not even have time to care about that. But the pictures for the garden-railroad catalogue were formerly taken in our garden.

Image
To the assortment of Piko, also model structures belong. (Image: Piko)

Who came up with the idea of putting a plastic figure into a garden railroad loco in 1/22.5 scale which looks like you?

My friend in Hong Kong, who back then—in 2005—made locomotives for us. We needed a locomotive engineer for the garden railroad. So my friend said: "Just let's make René." Meanwhile my friend is the technical director of our factory in Chashan Town.

Is the loco engineer also sold as René?

No. He's a replacement part, we don't sell him separately, only as replacement part.

What do you cost in plastics?

Hey, what do you mean by plastics? That is the best-known and most prominent locomotive engineer in garden-railroad scale! But you can acquire him for 7.99 Euros. Fairly reasonable.

Did he age with you or does he still look like in 2005?

He's even still wearing the same tie like that time.

What do you think, how many out of ten children still want a railroad for Christmas and how many a smartphone?

One. But that depends on the age of the children, the smaller ones possibly rather think of Lego, Playmobil or Brio. My daughter is six years old and does not even know what an iPhone is. What a loco is, she knows. But probably she rather wants a Barbie doll.

Does your clientele still grow at all?

The market has stabilized within the recent five, six years. May be, it has even grown a little bit because even Märklin has discovered meanwhile that one—like we, too—has to do something for children and can not only count on elderly people who spend as much money as possible for their model railroads. With a loco for some hundreds of Euros I won't win a new customer. Also grandparents don't spend that for their grandchildren. Already ten years ago, we sold a starter set for 50 Euros at Lidl for the first time. The specialized trade opprobriated us that time. Usually, starter sets cost between 200 and 300 Euros. We sold some thousands.

Did you make money out of the sets for Lidl at all?

At least, we did not net a loss. The contribution margin was quite small. But it helped us to introduce a new track system to the market.

Do you still sell to Lidl?

No, but to two other discounters.

When you develop a new model, do you have to pay money to Deutschen Bahn or other firms like Shell or Schultheiss for using their names?

We obtain the permission but we pay nothing. There's a court decision, that the manufacturers of model autos and railroads—which reproduce the reality—are not bound to licenses. We even get the construction diagrams of the locos from Siemens and Bombardier, after all we're only interested in the casing, not in the drive. They are also interested in us to make models.

When did you get your first train?

I don't know. There are photos of me with a railroad in the sand-box in Bubenreuth near Erlangen. The first electric railroad, I got at the age of eight or nine years.

What was it actually?

Märklin. In the west, there were actually only Märklin and Fleischmann.

What is so fascinating about model railroad?

It makes technology touchable for children. They can tinker, build layouts, work with electicity. This stimulates creativity.

Was the enthusiasm so big that you made the model railroad your profession?

You always have several chances in life. In the mid of the 80's, I could take over the management of Pola, a manufacturer of model structures.

Does it still exist?

No.

Why have there been so many economical problems among others in your business sector—Arnold, Fleischmann, LGB, Märklin, Roco?

Many of the old managers and owners lacked in long-term strategies and they rested on their laurels of the history. The firms had just earned magnificently for decades. They simply did not notice the changes in the market.

At Piko—the East German model railroad manufacturer—there were no laurels?

No. Piko was a nationally owned enterprise with 1,800 employees, however. In GDR, there was no unemployment, they had six doormen. Piko delivered giant amounts of model railroads to Russia. When I talked to "Treuhand" (national office administrating [flogging off] former people's own property) for the first time, Piko still had 800 employees and the firm was situated in the middle of the town at today's Piko-Platz (Piko Plaza). When my wife and I took over Piko in 1992, there were still little more than 200, though only eight for model railroads.

What was so appealing with Piko?

The opportunity to build an own enterprise. And in the east the name Piko was very popular. One can possibly make something of that, I thought. I had no idea about model railroads. I took over 80 employees, the molds and the brand.

How much did you pay?

A seven-digit sum.

Where did you have so much money from?

The bank completely funded the take-over. Back then all were in departure mood.

How long did you need to repay the loan?

Ten or 15 years. We still work with loans. We invest far more than a million Euros every year.

How much subsidy did you get?

I'ld have to look that up.

Was it more than the purchase price?

Clearly more. But it was economically worth it. Piko still exists.

Were you welcome in 1992?

Well. Some employees were somewhat pleased, they had experienced quite a bit, also with the West Germans who were in the management after the "Wende". Once there was a manager who had come from furniture industry, he first newly equipped the offices. Certainly, I would not have invested into the offices at first. I would have gone to Ikea and obtained desks for 80 Marks if it would have been necessary. Also in GDR there were desks. I invested into the production and changed the floor in the hall as a start. It looked quite a bit very oily and dirty.

When did you have the feeling to have managed it for the first time?

I've never had the feeling that I will not manage it.

He who sets himself as plastic figure into garden-railroad locos, has presumably strong self-confidence?

Yes, may be. But self-confidence on its own doesn't make it, too. You need employees who back you and believe in you and care for the company to get ahead.

Your rival Märklin—which meanwhile belongs to Simba-Dickie—has returned production from China to Europe. Why haven't you?

We produce in China in an own factory. The firm Sanda Kan, which until two, three years ago worked for the entire model-railroad industry, has closed. During its best times, Sanda Kan had around 10,000 employees and then repeatedly changed the owner. Hornby was also interested in it once. Then the toy manufacturer Kader joined and recalled the cooperation with European firms. The amounts were too low for them. I also got a letter, I guess, the others, too. With some, Kader had broken already before. All had to search for new suppliers. Luckily, we had made Sanda Kan produce only few for us. I always feared that one of my competitors would eventually put Sanda Kan under pressure to no more work for this Wilfer from Sonneberg.

Therefore the own production?

Not immediately. First I made my friend in Hong Kong produce. The factory in Chashan Town, we opened only in 2007. The own factory does pay. We don't have quality problems, we can deliver in due time.

How much time do you personally have to spend on-site?

I'm there every second month by turns with my technical director. If you don't do that, you can forget it. Then you'll need a German manager there, that's also expensive. If you don't handle it the way we do, you'll be bankrupt in two, three years.

Why?

I like Chineses, but they do what they want and fetch whatever possible. They want to earn money, they don't care about the firm. The education is by far not as good as always suggested. That sounds fairly blanket, it is. Of course, there are also very well educated Chineses who get involved with the firm, but that's not the bulk.

If your sweeping statement would apply, you would have to have substantial quality problems!

There we have almost 50 employees in quality management, here are two.

What would have to happen to make you shift the production from China?

We're not a shoe or textile maker. That is our factory, we have invested a lot there, we can not simply shift. We have many suppliers on-site. We would not have them in Vietnam or Bangladesh, but also not in Hungary or Romania. And there the wages are also lower than here.

Isn't Piko always the last one to be supplied because you order only few?

That's exactly the problem. We have low amounts, high quality demands and pay few. We are the customer whom one doesn't want to have. That's why we are nice towards our suppliers. We must cooperate.

Would you like to shift even more production to China?

No. We make some assortments almost completely in China. I wouldn't shift the garden railroads. That's hardly worthwhile, yet. The production is not so much cheaper. The machines are cheaper and the wages are lower but there's more waste. The journeys also cost much money.

Do you sell your railroads also in China?

Yes, but so far only few, yet.

Which are your largest markets?

That depends on the product. The garden railroads sell best in the USA. For H0 gauge, it is still Germany and the neighboring countries.

Do you still feel differences between East and West?

We are better positioned in East Germany.

Because of sentimental reasons?

I call it gherkin effect. After the "Wende", many East Germans were fed up with gherkins from Spreewald (very popular delicacy), they'd had to eat them all the decades. After a while, the former GDR brands again experienced a renaissance. That happened to us, too. At the beginning, nobody wanted to have Piko, ware was short and quality was bad. They wanted West German products. Our "Wende" came with the brown double decker coach, that had been run in the East.

Image

René Wilfer—well known for his eye-catching glasses...
It's quite a strange feeling to translate a text about someone having the same given name which I also have.

However, some of his statements are wrong.
  • In GDR times, Piko did not only deliver to Russia but to the entire Soviet Union.
  • In GDR times, Piko was not a nationally owned enterprise. It was people's own.
    But West Germans (like René Wilfer) have never understood the difference. And after the first "free elections" in GDR in 1990, even our government ignored this difference...
Additionally, his image of East Germans seems to be quite superficial.
Last edited by LVG1 on Sat Nov 15, 2014 3:48 pm, edited 1 time in total.
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Re: Interview with boss of PIKO

Postby krokodil » Thu Nov 13, 2014 3:20 am

Thanks for the translation ( I understood also the origin :-) ). Just some comments to your notices.
Yes, Piko delivered not only to Russia, but it is and it was common to name the former Soviet Union as Russia...
It is really not easy to differenciate between nationally or people owned companies. Especially in an age when this kind of difference was fully ignored. ( you maybe remember those slogans from GDR times, we are the folk, we are the nation or we follow the resume of the party congress and will think and work according this..... :-) )
Yes, he also skipped the TT scale, because the interview was made for the sueddeutsche zeitung - not really a TT region in Germany ( probably the editor removed that portion).

On the other side some comments from me, knowing the Piko production since early 60-ies.
Many vehicle constructions were many classes above the western companies. The problem was mainly in quality and in the available materials. Piko ( and its subcontractors) had in times central motors and all wheel drives, when most of European model makers preffered the bogie mounted motors - mostly two axles driven from 4-6. Not to mention the high class 7 pole motors from Hruska - at the times when other manufacturers were dreaming about the 5 pole armatures in their common 3 pole motors ( except the US manufacturesrs, who used the 5 pole Pittman motors).
Nobody else on the modelmarket, except Piko, paid attention for perfect curve running of the famous big steam locomotives - like the BR01, 03, 42 etc. This means the old Piko had the know how what was completelly missing ( or ignored ? ) at the competition. It was quite interesting to compare the different approach of the East Germany modelmakers with their western contemporaries.
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Re: Interview with boss of PIKO

Postby LVG1 » Fri Nov 14, 2014 10:55 am

krokodil wrote:...but it is and it was common to name the former Soviet Union as Russia...

It has been common only in the western world.
In the Eastern Bloc, it was kind of "political correctness" to use the official term Soviet Union. My teachers always looked very angry and my parents sometimes even cuffed my ears when I used the word Russia.
Many of those Soviets who were no Russians felt (and still feel) insulted when their Soviet Union was and is, respectively, called Russia. So I think, it's not only correct but also polite to use the official name Soviet Union.

krokodil wrote:It is really not easy to differenciate between nationally or people owned companies.

You're right; it's really not easy. When I try to explain it, West Germans usually react uncomprehendingly and even East Germans often respond that they had not even tried to understand this difference.
But there is a difference. And to ignore it, means to ignore reality.

The definitions don't say too much:
"Nationally owned" means to be kind of government's property. Individual persons do not have any kind of entitlement.
"People's own" means to be property of every single citizen.

An example may be more informative:
After the fall of the Berlin Wall but before the first "free elections" in 1990, the GDR government—under leadership of Egon Krenz—started a programme to transform all people's own enterprises from centrally controlled into market-oriented companies. Afterwards, they should be put under unlimited control of their employees—for free!!!
This means: people's own companies should get under control of their actual owners—of course, for free because they already were property of these people.
But our first "freely elected" government was an amateur dramatic society. They had no idea of politics. They needed counseling. And the West German government imposed themselves upon them as "consulants". But they only followed West German interests. So our "freely elected" GDR goverment was a group of West German marionettes destroying anything what people had fought for during the peaceful revolution of 1989.
Among other hair-raising failures, they redefined "people's own" into "nationally owned" because West Germans didn't (want to) know the term "people's own". Essentially, this was a condemnation without any kind of compensation.
West German experts assessed the entire people's own property. Relating to this rating, every single former GDR citizen was entitled to a compensation of about 42,000 € (nowadays plus regular interest). But there's no chance to get it because West German justice does not accept anything from GDR.

So we were stolen from by our own "freely elected" government...

krokodil wrote:Many vehicle constructions were many classes above the western companies.

You're absolutely right. But that's surprizing only for people who never dealt with this topic.
International experts agree that during the late 1960's East and West German economies were on the same level concerning performance, quality, progress and competitiveness. Only during Erich Honecker's term in office (from 1970's on), there was too much money put into social policy and too few into economical progress. So step by step, GDR's economy lost the connection to international evolution.

GDR's model railroad industry did not lose this contact as fast as other sectors because it was a money maker and got appropriate support from people in power. As much as possible was sold to the west and brought badly needed freely convertible currency.
In West Germany GDR's model railroads were sold for dumping prices although they were not so much worse than rivalling West German products. That time, GDR-made model railroads were of the same prominence of which Chinese-made model railroads have been during the recent two decades.
Last edited by LVG1 on Sat Nov 15, 2014 3:58 pm, edited 1 time in total.
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Re: Interview with boss of PIKO

Postby krokodil » Fri Nov 14, 2014 3:37 pm

Almost fully agree with you, but the Soviet Union was really only the politically correct name. Sometimes created schysofrenic situations, when somebody talk about Soviet nation etc. In many other aspects it was common ( probably not in GDR), that the Russians occupied Hungary in 1956, or Czechoslovakia in 1968 ( together with other countries of Warsaw pact). But these are just minor comments.
:-)
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