Tornos Announces Strategic Re-alignment

25 September 2012

With market shifts in the machine tool industry towards emerging countries, ever shorter business cycles, the strength of the Swiss franc and the debt crisis in Southern Europe, Tornos is now implementing an adjustment in its strategic direction.

The aims of the new strategy 'Strategy 2017' are to broaden the international footprint, improve sales volumes and strengthen organizational flexibility to absorb economic cycles. With six strategic thrusts, the new direction will build upon the success the company has enjoyed in recent years. The existing Tornos strategy has seen the company increase market share in key markets with the relentless drive to introduce new products and industry solutions targeted at key industry sectors.

The adaptation of Tornos’ new strategic direction comprises six elements, namely the increased internationalization of its business activities, the strengthening of flexibility, growth through innovation, higher revenues from the service business, enhanced operational excellence and the offering of unique solutions for targeted market segments.

Strengthen footprint in BRIC countries with dedicated products
Traditionally, Tornos has very strong market coverage in Southern Europe, which has made Europe the Group’s most important market region for many years. As a consequence of the economic crisis in 2008/2009, markets have shifted towards Asia and other emerging countries. In order to cope with this relocation of demand and to offer products close to its local customers, Tornos will strengthen both its footprint and its sales and services structure in the BRIC countries.

To coincide with the globalisation of its activities and to contribute to the growth it is intending to achieve, Tornos will continue to develop innovative products geared to specific customer needs in the four key segments of automotive, medical/dental technology, electronics, and micromechanics. This will involve extending existing product lines (such as MultiSwiss) by adding new capabilities as well as Asia-based manufacturing of mid-range products aimed at emerging markets plus developing the Cyklos solutions that allow more energy efficient surface processing.

Higher flexibility with future business model
Tornos is exposed to the cyclical nature of the machine tool industry. In order to cope with this inherent volatility, the future business model will be characterized by much greater flexibility. Operations in Switzerland will be adapted while enhancing operational excellence irrespective of the current business cycle. This leaner organization will be complemented by a flexible outsourcing model enabling Tornos to quickly adapt its capacity to fluctuating demand due to both upswings and downturns. Tornos’ headquarters will remain in Moutier, where high-end products and key components will be developed and manufactured.

Functional organization allows leaner management structure
The future business model requires a restructuring of today’s organizational setup.

The former organization with heads of product lines has been transformed into a new, simplified and functional organization. Therefore, responsibilities for the product lines Single Spindle Machines (Mono), Multispindle Machines (Multi), Micro Milling Machines, and for Customer Service are now integrated into a new 'Market & Sales Support' department. The new setup eliminates organizational overlaps resulting from combining responsibilities for both products and functions. Existing manufacturing capacity at Almac in La Chaux-de-Fonds will be integrated into the operations in Moutier while keeping a development, sales, and service team in La Chaux-de-Fonds close to Tornos’ customers in the watch-making industry.

With the new strategy, Carlos Cancer who was previously the Head of Single Spindle Products will now assume responsibility for the Market & Sales Support Department. Other key members of Tornos' General Management Team will be Michael Hauser (CEO), Willi Nef (Sales), André Chardonnereau (Development & Engineering), Pierre-Yves Mueller (Operations), Luc Philippe Widmer (Finance & Controlling) and Olivier Marchand (Chief Technology Officer).


Footprint in Switzerland
Like all manufacturers, Tornos is increasingly challenged by the shifts in its markets, the exchange rate situation and the debt crisis in certain European countries. For this reason, Tornos will optimize its company structure by reducing headcount by 147 employees. Other optimizations will be achieved by streamlining the business to improve services whilst continually providing the end user with market leading innovations.