The magazine of Friedhelm Loh Group

The magazine of Friedhelm Loh Group

Experience

“The future is AI-driven – even in plant engineering”

Current geopolitical changes are driving industry further into crisis mode in many different countries. It’s a very different story in the USA, where industry is booming – is this an opportunity for Germany and Europe? And what’s the position regarding new growth prospects through technologies such as AI, specifically in plant engineering? In this interview, we discuss trends and prospects with Prof. Niko Mohr, who is a Friedhelm Loh Group board member and CEO of Rittal International and Rittal Software Systems.

Text Hans Robert Koch ––– Photography

Prof. Mohr, industry in the USA is on a growth trajectory. What opportunities does this offer for companies in Germany and Europe?

We’re seeing a really positive mood in the USA as far as the coming months and possibly the next year or two are concerned – especially within industry. Huge investments in infrastructure there are leading to higher levels of panel building and switchgear manufacturing, for example. That’s giving rise to increased demand in plant engineering – and that demand now needs to be met quickly. We’re also seeing major investments in IT, in terms of data centres and AI readiness. This is very positive news for IT infrastructure suppliers such as Rittal. Current developments are therefore giving rise to extra demand, both for plant engineering and for us as a supplier.

The situation for industry in Germany and Europe is very different. What are the consequences of current U.S. politics here?

What we are currently experiencing is the end of globalisation. The geopolitical situation means that companies in Germany and Europe can no longer manufacture products for the global market to the same extent. The “America first” policy means bigger trade barriers and is putting the focus on domestic demand. We’re also experiencing a similar situation in China, which inevitably poses challenges for Europe and especially for Germany. We’ve built up a whole structure here that used to produce goods for the global market, but that can now really only be used for Germany and Europe.

Prof. Niko Mohr, Friedhelm Loh Group board member and CEO of Rittal International and Rittal Software Systems


Prof. Niko Mohr, who has over 20 years of experience in the strategy, organisation and IT/technology environment of top management consultancies, takes a look at the transformation of industry. The USA was one of his areas of action. For instance, he has been a guest lecturer in international business strategy at the University of Georgia. He is currently an honorary professor at the University of Regensburg, where he teaches strategic transformation management.

Is there no global demand for products from Europe?

Over the past 50 years, Europe has enjoyed an incredible success story, and we have also followed the traditional industrial growth curve. However, this curve has now passed its peak. In addition, we’re experiencing a growing trend towards commoditisation. Products that could previously command higher prices due to special expertise are becoming increasingly ubiquitous and no longer stand out, particularly from goods produced in Asia or America. In many cases, it is no longer possible to achieve a significant price premium. This puts companies under cost pressure and they are no longer experiencing the type of demand they enjoyed in years gone by.

In your view, where does the future potential for growth lie?

I believe the new growth curve can only come from deep tech leadership and software expertise in industry. What we’re talking about here is cloud technology, AI and new forms of computer and chip technology. In Europe, we’re not particularly advanced in any of these areas – it’s the Asians and Americans who are out in front. The area in which Germany and Europe can still gain ground is the one that involves combining the skills and expertise of the “old” industrial curve with those of the “new” industrial curve. What I’m referring to here is industrial AI in manufacturing, healthcare, the pharmaceutical sector, and so on. Whenever very specific domain knowledge is called for, we can gain ground with our expertise.

When you say “can gain ground”, what exactly do you mean?

The problem is that you have one country working on DeepSeek and another working on Stargate – and meanwhile, the EU is working on regulations. This means there are certain things we simply can’t do. Industry is very worried about this. If the AI Act isn’t changed, this will inevitably result in these developments taking place outside Germany and Europe. AI must be regulated – there’s no doubt about that. The question is, though, at what point in the product development process must regulation be sought, and what form should this regulation take? It’s never a good idea to regulate for all eventualities in advance, because that means developments never really get off the ground.

“In the future, software engineers won’t configure – they’ll simply give prompts. At Hannover Messe, we’ll be showcasing relevant use cases.”


PROF. DR. NIKO MOHR,
Friedhelm Loh Group Board member and CEO of Rittal international and Rittal Software Systems

You mentioned deep tech leadership. How far on are Eplan and Rittal in terms of AI developments?

We are one of the few companies that is already achieving success in industrial AI. Developments at Eplan and Rittal are one example of what industrial AI can look like in real life. We call this “AI-driven industrial automation” – in other words, the AI-driven development of automation solutions that extend all the way through to the AI-generated digital twin via the Eplan Data Portal. We’re leading the way in this – and not only because none of our competitors can match our style yet. Above all, our AI-driven industrial automation offers our customers a huge number of benefits – from much faster speed when designing their systems through to huge increases in their productivity.

What does the technical solution look like? Where exactly do you use AI?

The key element here is the Eplan Data Portal, which we are now optimising with AI to create added value. We’re working in collaboration with various companies here, including Microsoft. In the future, you might be able to say to the Eplan Data Portal: “Configure the ideal electrical engineering solution for me, that satisfies the following three, four or five criteria…” – and the system will then do everything else for you. Once it has finished, it will provide a recommendation, such as for the layout of a mounting plate with the relevant equipment and components. That will also include optimum use of the entire surface area and an optimised solution for manufacturing. It goes without saying that this is a huge step forwards for our customers! In the future, software engineers won’t configure – they’ll simply give prompts. At Hannover Messe, we’ll be showcasing this use case – and others, too.

So, with AI, there are still opportunities for German industry. What’s the situation as regards cloud business?

Appropriate IT infrastructure with rack solutions is urgently needed for cloud business – and, of course, that’s something we supply. However, when it comes to production sites, requirements have changed. For example, our customers in the USA expect our production operations to take place in the USA, too. To comply with the new government’s rules, we are currently moving our entire rack production to the USA and expanding it there significantly, too.

These are extremely difficult times for companies. Where do the strengths of family businesses come to the fore in these particular circumstances?

One key strength is financial stability. At times of uncertainty, when order levels are perhaps lower than expected, a financially strong family business such as the Friedhelm Loh Group can balance out the odd lean period. A second strength is the ability family businesses have to take an entrepreneurial approach – they can make decisions quickly and respond to developments like these by making swift adjustments. In other companies, that often takes much longer. A third strength is the closeness between the entrepreneur and the employees, and the diligence that you see in that relationship.

What mindset do you need to be able to look forward with optimism?

Family businesses have a very long-term mindset. They think about future generations – it’s not a case of setting out to maximise profit in the short term, but instead aiming to keep the company on the market for the long term. This mindset is especially important during uncertain times. Where some companies might react by hastily shutting down divisions, a family entrepreneur looks at things differently and says: “I have a responsibility here.” Family businesses always seek out new growth paths – and look to see where investments should be made. This is what I find so interesting about working in a family business such as the Friedhelm Loh Group.

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