World’s Largest Machine Tool Builder Opens Headquarters in Winterthur

It must be seen as the crowning achievement in Winterthur’s regional development efforts: the successful bid for the new European headquarters of the world’s leading machine tool maker, DMG Mori. A bit of background.

The economic relationship between Winterthur and Japan reaches far back into the past. In 1914 Sulzer become one of the first western industrial players to establish a subsidiary in the Land of the Rising Sun, in Kobe. Almost 100 years later another chapter has been written into the annals of this relationship: the announcement was made in June 2013 that the world’s largest machine tool builder, DMG Mori, had chosen Winterthur for the global headquarters of a German/Japanese joint venture called DMG Mori Seiki Europe. The city on the Eulach River is, together with Tokyo, the most important location for the billion-dollar company specialized in milling and lathing technology.

The successful luring of the headquarters was the grandest coup in Winterthur’s 20-year history of economic development measures. How did we manage this daring feat? We came together with the Japanese machine tool industry in 2010, when a presentation on Winterthur was held in Tokyo. While it was clear from early on that Switzerland would serve as the European hub, the decision in favour of Winterthur was anything but certain.

Then after an evaluation in the canton of St. Gallen, it was determined that rural areas would not be suitable on account of the infrastructure required for the new global headquarters. We supported the company in particular in the search for a suitable location. After a challenging two years of negotiations with the primary property owner and Implenia, a general contractor, the address on Sulzerallee in the industrial district of Neuhegi then quickly developed into the favourite.

No Tax Giveaways

Other elements in favour of Winterthur were its reputation as a technology hub, the traditional machine tool cluster, the proximity to Zurich Airport and a convincing cost structure. This was enriched by the availability of qualified personnel — the Zurich University of Applied Sciences (ZHAW) has now even made plans to establish itself in Plant 1 on the Sulzer grounds. Despite the 40 million francs invested by DMG Mori, there were no tax giveaways awarded.

For Silvio Lehmann, CEO of DMG Mori Seiki Europe, the decisive factor in the choice of location was the proximity to local industry. One soft factor that also helped sway the decision was the fact that the name Sulzerallee stimulates associations with the Swiss machine construction firm in both Germany and Japan. The Sulzer name remains renowned in the Japanese machine building industry even today. Yet a positive name and beneficial location aren’t enough on their own to assure a successful tender. In the case of DMG Mori, the successful collaboration with the city’s economic development team was also crucial.

All involved parties worked hard to show their most hospitable side. “Switzerland is at the heart of Europe and we were welcomed there with open arms,” noted Rüdiger Kapitza, Chairman of the Board at DMG Mori Seiki, at the opening ceremony for the new headquarters. A 1,000 m² technology centre sits at the heart of the almost 21,000 m² grounds on Sulzerallee in Winterthur’s industrial Neuhegi district. Here customers can learn about the benefits of precision milling, lathing and ultrasonic laser processing in a refined ambiance. The company’s Winterthur facilities will supply and maintain machines for customers in Europe, Russia, India, South Africa and the United Arab Emirates (UAE). These customers can be found in the automotive, aerospace and medical technology sectors. 950 employees and 17 national subsidiaries – from Scandinavia to the Mediterranean – will be overseen from Winterthur. A public energy park is also part of the facility in Neuhegi: the company is surrounded by 42 solar panels and two wind turbines that cover almost half of the company’s power needs. The energy cost savings from the energy-efficient building are estimated at 230,000 francs. Sufficient space is on hand to boost the employee headcount from 180 to 250 as needed.

Thanks to DMG Mori’s decision, the Winterthur region has also benefited from an enhanced profile as an internationally oriented technology hub, which in turn brings new jobs. 2013 and 2014 saw eleven foreign firms open offices in Winterthur. They were joined by several Swiss firms who relocated to the city. Almost 600 new jobs were created in the process. As such the employment numbers in Winterthur are trending very nicely. While additional projects are already in the pipeline, the effects of the strong franc and other uncertainties have also made themselves felt. I am nevertheless convinced that Switzerland is and will remain one of the top locations in all of Europe, and around the globe.

Watch on Youtube: DMG MORI opens Global Headquarters in Winterthur

About the author

Michael Domeisen, born in 1975, is a scion of a St. Gallen industrial family. He studied economic geography, political science and biology at the University of Bern and the Universidad de Cantabria in Santander. After completing his degree he worked for the national government and after several years moved into the area of association management. At the same time he completed postgraduate work in corporate management. Prior to relocating to Winterthur, he worked as the CEO of a major professional association in the health care industry. Domeisen is today general manager of the Location Promotion Winterthur Region and manager in the area of economic development.