“If we only could see CO2”

Interview with Jörg Grotendorst

Late last year, Jörg Grotendorst became the latest member of the Executive Board of Rheinmetall, with special responsibility for the automotive divisions. Grotendorst, now 51 and a graduate in Electrical Engineering, has spent his whole life pondering protons and electrons and positive and negative poles, and how to control and regulate them – a subject that has never ceased to fascinate him.

The son of a master electrician from Münsterland in western Germany, Jörg Grotendorst was drawn to electrical engineering at an early age. While still in high school, he set up a workshop in the basement of his parent’s home, where he repaired car radios, televisions and stereos for his neighbors. Given his enthusiasm for electronics, it comes as no surprise that he initially trained as an electrician before moving on to study Electrical Engineering, Regulation and Control Technology. The practical knowledge he gained during his apprenticeship continues to shape his approach to the subject to this day and has clearly influenced his career path. That he still has more than 25 active patent families today attests to his inventive drive and passion for engineering.

Even before he finished high school, Grotendorst had discovered his love of music, too, and played professionally as a drummer with a band that toured the Westphalian county fair circuit, playing in tents – a hobby, by the way, that helped him pay his way through university. A grant led him to the then Daimler group, where they put him to work developing aircraft controls for DASA. It was basically by coincidence that he found his way to Mercedes and thus to the automotive sector. From that point on, he held various positions with Tier 1 automobile industry suppliers, where he was primarily in charge of e-mobility operations.

Grotendorst is married, has two children and lives with his family in Nuremberg. During the course of his career, he and his family have moved no fewer than eight times. When he’s on the road, he always takes running shoes along. A passionate endurance athlete with an impressive collection of medals, he regularly begins his day with a morning run. Together with his family, Grotendorst, an enthusiastic skier and snowboarder, is equally at home on the slopes.

In the following interview, he offers insights into the entrepreneurial course he’s charting, his environmental policy credo, and his technological assessment of the divisions that make up Rheinmetall.

Mr. Grotendorst, how are things working out in your new role?

To be frank, I’m pretty frustrated that I haven’t been able to get to know Rheinmetall the way I would normally want to due to the current restrictions. Since joining the group, I haven’t been able to visit a single foreign location. At the moment, I’m spending a lot of time in the office, familiarizing myself with various topics with the help of phone calls, web meetings and presentations. As far as I’m concerned, though, none of these things can replace personal encounters. I’m always happy when I’m on the factory floor, seeing new developments for myself, and talking to people on location. For the time being, the opportunities for me to sit down with our folks and get a proper feel for our team are very limited. By the same token, people can’t find out what Grotendorst is thinking, where he wants to go or how to work with him. Right at the moment, this poses a major challenge.

Despite the current restrictions, what have you locked in on so far?

My first impression is that Rheinmetall is much more broadly based than I originally expected as a former outsider. The total number of technologies we have under one roof here is just astonishing. And when I break this down by sector, I have no doubt whatsoever that there’s still additional potential to exploit in the automotive engineering realm. But I also think this process will take a certain amount of time.

What explains this time factor?

On the one hand, it has to do with the industry’s transition from the internal combustion engine to a world of electric vehicles and automated driving. It’ll take time for our core businesses to adapt. We got off to a later start here than our competitors, and it’ll be a little while till we can catch up. On the other hand, in all of our activities we should never lose sight of trends in the global market. When developing new products, we have to think globally right from the start. Where can we secure the necessary expertise and resources for development and production that we need in order to keep pace with the competition? It happens to be that our customers and competitors operate globally and are present in relevant regions around the world. We need to expand our presence there too.

Shall we move on to Rheinmetall’s international footprint?

Right. It was certainly a very good thing that Automotive focused its attention on China at an early stage. We’re really on a roll there, even if our current partnerships mean that we have to find a solution among equals, which usually means making a bigger effort than in joint ventures where we have a majority stake. We could definitely afford to expand our own local presence to make sure our customers always have a local point of contact. This is especially true when it comes to electronics and software development – two areas where we need to become much more international.

Do you see other approaches?

More than anything else, I’m struck by the extremely varied way we deal with profit and loss responsibility. On the one hand, it’s good that the heads of division and the business units have complete responsibility for their operations. But we also lose something this way. When I got here, I couldn’t find anybody who could give me a complete overview of our activities with our customer Daimler, for instance. Of course, you can always say that it’s better than getting busted for making tie-in deals. But there don’t seem to have been much in the way of regular, interdivisional strategy talks in the past, either. I want to change this. The same goes for purchasing and production, where there could also still be potential.

Talks with top management?

Yes. I think it’s necessary to hold regular talks with customers to discuss strategy. It’s a way of finding out what technologies from our common portfolio we can apply to future projects. As I see it, what’s missing here is a point of departure for talks of this kind with board members of the OEMs.  Staying in regular contact is important to me – and not just regarding projects that are about to be awarded, but also to talk about future-oriented topics. Sometimes this can even have reciprocal effects.

You just mentioned production.

I’m no fan of centralism, but I’m very much a fan of having a central overview that’s based on equal standards that make sure we know how we stand compared to our competitors, what we can do to be better and how we can learn from each other. This way, we can also pursue common goals with respect to synergy. For instance, we need to ask what we want to bring in year over year, and what we can do to improve ourselves. I think running all our factories in accordance with uniform standards helps. This will also make it possible for us to invite tenders for larger projects from our own suppliers. Moreover, there’s bound to be more potential for standardizing our work environments and our IT tools.

In your new role, which technologies have you turned your attention to in particular?

As far as products go, where making good headway in electrified auxiliary units and hydrogen components. There are technologies that I personally believe in. Making Europe CO2 neutral by 2050 is now a set goal. To do this we need more green energy, more ways of storing energy. What we do and how we do it needs to become more sustainable. Rheinmetall has set itself the goal of being CO2 neutral by 2035. Electric vehicles are poised to play a key role here. I was taken aback by Rheinmetall’s R&D expertise in this area. To cite just one example here, in recent years I’ve developed plenty of batteries, electric drives and inverters to the point where they were ready to go into full-scale production, and I was astounded by our concept for a new inverter, whose product characteristics are very good indeed. Of course, we’re just getting started here and need more products like this one.

What components are you thinking of here?

I’m not just talking about electric drives here, but about electrification in a broad, deliberate sense, because for the end user this term implies energy on demand, that is to say, energy that adapts to the required level of consumption and whose supply is regulated in terms of time. I’ll give you an example: When we enter a room, we turn on a light when we need to, and switch it back off when we leave. In plenty of factories, this kind of economical approach to using energy and resources is lacking, and for a long time wasn’t found in cars, either. Even today, many drivers switch off the start-stop system and let the engine run when the vehicle is stationary. I mean, nobody would accept waste like this at home. Electrification and energy on demand are crucial for our society. And this doesn’t just apply to automobiles, but to industrial applications too: Never make more energy available than you need to use in order carry out a specific process at a given moment.

Are there any other major focal points?

A whole bunch. Our general systems expertise in actuators and thermal management is outstanding.  We still have untapped potential in electronics and software, but we’ve identified the gap and we’re working on it. I also think we can do a lot more together when it comes to aluminum casting. We’re also going to be looking at markets that are completely new to us – computer centers, for example, and smart home applications, plus other applications in vehicles, including for the chassis and sensor systems. We have all kinds of options. We just have to make to choose the right ones and to be faster and more agile when producing an initial visual example. 

Would the pedelec by a possible option?

Absolutely. I think this is a great project and I got involved in it right from the start. It’s wonderful how quickly we were able to solve problems in the last couple of weeks and how quickly things are proceeding. There are a number of things I really enjoy about this project. For one thing, it’s a non-automotive project and shows that we’re perfectly capable of moving into new market segments. And it’s also nice for once to have a product for end customers. It requires a big effort, both technically and financially, but I’m backing the team 100 percent. In my opinion, we need to show the market that Rheinmetall knows what it’s doing here, that we know what’s what. As we move toward the market launch, this process has the potential to serve as a model for other non-automotive projects.

What sort of potential do you see for interdivisional cooperation?

I’m totally convinced that the expertise of our divisions offers plenty of scope for added potential and synergies. Some things have really surprised me. For instance, we’re right in the midst of an automotive project that involves real-time data transmission derived from the defense world. Of course, I was also incredibly impressed by the amazing simulation technology in Bremen. I mean, there’s really nothing like it in the automotive sector. To cite just two examples, the same goes for our expertise in networking military vehicles like the Boxer or Lynx, not to mention the field of augmented and video reality.  We need to bring our team closer together by introducing enhanced working environments and robust IT solutions. It’s a big challenge. But we are actively working on resolving these issues.

That sounds like quite handful!

There are plenty of opportunities, no doubt about it. But we also need to decide which card to bet on, which is a pretty tough decision. I think if we had enough time and money, we could make a successful go at all of these things. But obviously we have to keep our shareholders’ concerns about the profitability of our automotive activities in mind.  All the more so in light of the major opportunities for growth on the Security side of the house.

The market for e-mobility is exploding at the moment. Do you think this will last?

An explosion is by definition a short-lived event. Electromobility is making strides wherever the right stimuli are found. We’re seeing this in Norway, we’ve seen it in Holland, and we’re seeing it in China too now. But it’s also true that the market for electric vehicles contracts as soon as government incentives are scaled back. As far as the shift in the market goes, we’re talking about an evolution here, not a revolution.

So, a rather murky picture?

We need to differentiate between two different things here. In the medium term, there’s no alternative to the electric drive, which is simply the most efficient form of propulsion around. We still need to talk about where to store the energy: in the form of hydrogen or chemically in a battery? But there’s no getting around the electric drive. Obviously, the question arises as to whether we’ll have the necessary infrastructure.  The best electric vehicle is useless if you can’t charge it up. We need to find the right mix here.

Does this mean “Depending on the intended purpose”?

Exactly. We already have perfectly acceptable solutions for short- and medium-distance trips by car – and I’m not talking about loading your car onto a train when you’re going on vacation.  Looking further ahead, we’re going to need different energy sources, especially for long-distance truck traffic.  A battery big enough to power a truck severely reduces its payload. The question is, do we really want to have twice as many trucks clogging the highways just because each truck can only carry half as much? This is why I tend to think that for the rest of the decade, electric vehicles will primarily be used for short- and medium-distance trips, while the internal combustion engine will continue to dominate long-distance travel and heavy truck transport. This, if you will, is the ten-year period of the technology mix and transition. Starting in 2030, there will be a very clear trend in the direction of e-mobility.

Is battery-powered electromobility just an interim solution before the fuel cell takes over? 

It depends on you define “interim solution”. This certainly used to be the case. Now, though, battery technology is developing so rapidly that it looks like there’s still an enormous amount of potential that we can unlock in terms of cost and storage capacity. As I see it, there are so many applications that we should never underestimate the huge market demand for batteries and their possible use.  We shouldn’t just be thinking of vehicles here, but of smart devices like our laptops and notebooks, or the infrastructure of cellphone transmitter masts, which incidentally already contain batteries. Or hospitals, which have to be ready if there’s a power failure. Public power grids depend on tons of batteries to stabilize their electricity networks. This will result in evolutionary pressure to keep developing this technology. But I believe there’ll be a mixture here too.

So, hydrogen then?

Sure. We’re definitely going to need hydrogen too to achieve long-term CO2 neutrality.
When we produce hydrogen in a “green” way using electrolysis, losses are negligible now. Solar energy remains largely unused on this planet. If we were to generate more power this way, it would obviously help us reduce our CO2 footprint. What’s more, when you operate a fuel cell, you can take oxygen out of the air again to generate electricity – with a battery, I have to add anodes and cathodes to the package.

As far as you’re concerned, does electrification also have social policy aspects?

Absolutely. After all, if we’re going to save the climate, everybody on this plant is going to have to do their part – that much ought to be clear by now. And that’s why we all have to ask ourselves the question, do we really want to keep behaving like this in the long run? I mean, we’ve only got one Earth and there isn’t much time left. It’s up to governments to establish strict parameters. I completely support the climate accord. Could it be that two degrees are actually too much? If we don’t get moving on this very soon, we’ll have passed the point of no return and won’t be able to stop the climate from changing.

Would you say that public awareness needs a boost?

Indeed, I would. Two years ago, I held a talk at a university and took a bar of chocolate along. A bar of chocolate weighs 100 grams. The emission target for vehicle makers is 95 grams of CO2 – per kilometer, that is.  In terms of weight, a bar of chocolate offers a handy comparison for understanding how much CO2 is emitted every time we drive a kilometer. And that’s just the CO2 – this calculation doesn’t include the water or the other greenhouse gases. Just imagine what the world would look like if CO2 wasn’t colorless and you could see it. It would be like a bar of chocolate every kilometer. Or what if you had to load your emissions into a trailer and cart them to the dump?

Time for a change in subsidy policy?

Right. But I think subsidizing new, more sustainable technologies and solutions has a way of distorting the market. Better is the enemy of good. Maybe we should be thinking about making users of less sustainable solutions pay to repair the damage they cause – the cost of eliminating emissions or planting trees, for example. People usually find it easier to accept something when a causal relationship is established for allocating resources, rather than just imposing new taxes or charges.

It sounds like this will take some serious stamina.

Very true. That’s why the delegations that gathered in Paris agreed to 2050 instead of 2030. Look, every part of society has to join in here: industry, energy, agriculture, logistics, transportation. This isn’t a 100-meter dash, it’s more like a marathon. You don’t win it in the first few kilometers – you don’t find out if you were successful until the end. We’re in on the act!

Mr. Grotendorst, thank you very much for talking with us.