It may not have the instant global brand recognition of some of its competitors but white goods company V-Zug is proving that precision and attention to detail go a long way – benefits of the “Made in Switzerland” tag.
To start with, some clichés. The train from Zürich to Zug leaves on time. The woman who sells Monocle our ticket is fluent in three languages (at least). Everything is precise, clean and works perfectly. Everything is Swiss.
Clichés can be lazy, misleading or offensive. But if you happen to be the CEO of a Swiss white goods firm trying to break into international markets, clichés can be helpful. Jürg Werner realised this two years ago, when the company he runs, V-Zug, made its first forays into Russia. The Russians admired the craftsmanship of its washing machines, were impressed by the technology behind its ovens and could not fault the quality of its dishwashers. But they were finding them hard to sell. “Could you,” the Russians asked, “put ‘Made in Switzerland’ on the box?”
“A Swiss would never believe the words ‘Swiss made’ were important,” admits Werner, as he stands atop a platform overlooking V-Zug’s busy manufacturing plant. It was, though. Sales improved, more countries – from Singapore to Australia – opened their doors, and now every item loaded onto V-Zug’s fleet of lorries and sent abroad has the words “Swiss made” stamped on the front in Ferrari red. Let’s make that Swiss red.
V-Zug started life almost a century ago as a galvanising plant specialising in farming goods. Since then it has grown and merged, expanded and experimented, becoming Switzerland’s largest white-goods company, claiming around 70 per cent of the market. Or to put it another way, next time you go round to a Swiss friend’s house and poke around in their kitchen, the chances are there’ll be a V-Zug product of some sort in there.
Everything is made at the company’s headquarters in Zug, something which Werner believes has helped it dominate the premium end of the white-goods market. “If you want to buy a Rolex you wouldn’t buy it if it was made in China,” Werner contends. “The same goes for a combi steamer.” The headquarters is a short drive from the lakeshore in the town V-Zug is named after. Here, roughly 400,000 appliances are developed, tested and produced each year. Steel coils, sheets of metal and heavy equipment are delivered every day by rail – the company’s private network leads straight to the factory gates – while lorries line up at the 18 docking stations to take out the finished products.
An underground tunnel links the manufacturing plant with the logistics centre and, next door, a CHF50m (€43m) computerised storage centre has room for 30,000 appliances waiting to be delivered. Some 35m high and 185m long, it is serviced by robotic forklifts which zigzag balletically from one pod to another, moving the correct dishwasher to the right delivery area. The company relies on a potent combination of cutting- edge technology and old school knowledge. Inside the factory itself, where around 250 people are employed, robotic arms feed sheets of metal into computer-controlled stamping machines. But each piece is meticulously inspected by an engineer at the other end – invariably someone with grey hair.
“This is top precision work,” Werner says, nodding respectfully to the blue-jacketed fifty-somethings analysing the back of a tumble dryer that has just come out of the other end of a large stamping machine. “It needs people with very high knowledge.” Special commendations are handed out to employees who have been with the company for 20 years – and every five years after that. Each year Werner finds himself giving out more commendations, he says.
That experience is not just brought to bear on the products V-Zug makes; it is also used to good effect to create the next generation of engineers, designers and technicians. Switzerland still operates an apprenticeship system, offering 16-year-olds a four-year on-the-job training scheme alongside their formal education.
It also helps to have a CEO that knows the business inside out. Werner has been with the company for 15 years, first as an engineer in research and development, and for the past two years as chief executive. As he tours the factory, he checks on the sort of technical details that a boss with a marketing or boardroom background alone would struggle with.
The attention to detail on display in V-Zug’s factory is evident elsewhere in the business. Most of the lorry drivers that deliver products to customers are employed directly and take as much care and attention to ensure it gets there in one piece as the engineers on the factory floor to do put it together in the first place.
A similar philosophy is taken with V-Zug’s aftercare service. While most of its rivals have either outsourced repairs or spun it off into a separate company or moved manufacturing to the Near of Far East, V-Zug has kept it in-house. For the life of the warranty, any fault – however minor – is fixed without charge by engineers. While undoubtedly a good deal for the person with the faulty dishwasher (no €60 call-out fees to dodgy plumbers who tell you it’s an electrical problem), it also helps the company in three important ways: one, it puts more pressure on V-Zug to get it right first time; two, it’s impressive customer service; and three, it ensures that Werner and his management team get an idea of systemic faults quicker than its rivals. “Most companies only hear about problems when they become major. We know from the start.”
There are, though, only so many washing machines one can sell in a country of just under eight million, particularly if each appliance is expected to last for 10 to 15 years. Which is why the need for expansion abroad is so urgent.
Internationally, the market is dominated by V-Zug’s German competitors: Miele at the premium end, Bosch at the low-cost end. The Bosches and the Electroluxes also have a global brand recognition that V-Zug – tiny in comparison – could only dream of. The company’s international plans have only really begun to take shape over the last two years – export sales count for no more than 2 per cent of overall sales – but as the experience with Russians showed there is one strong card V-Zug has to play when it travels abroad.
“The Swissness is a big advantage,” says René Fankhauser, the company’s export director. “It conjures up emotions: security, the Swiss knife, punctuality. It says ‘Yes, you can rely on us’.” Every single slogan V-Zug uses to sell its products abroad focus on its nationality: “Exclusive Swiss Precision since 1913”, boasts one poster; “The Swiss Spirit of Invention”, proclaims another, while on Fankhauser’s business cards, it simply states “Premium Swiss Quality”. The white cross on the red background is prominently displayed on every piece of literature V-Zug produces.
It is not a strategy that would work in other industries perhaps. To return to those clichés, precision, punctuality and perfection are exactly the qualities one tends to look for in a washing machine – or indeed in that other typically strong Swiss industry, a bank. If V-Zug were a theatre company it might not find its nationality such an impressive calling card.
V-Zug’s foreign adventures, though, will sink or swim based on the quality of its goods, something that Werner is well aware of. “It has to be a package that fits together – [the technology and the Swissness]. Swissness alone is not good enough, but it helps.”
Claims to use less than a third of the water used during washing up by hand. V-Zug boasts it passes the fondue test – pans covered in raclette come out spotless.
Heat-pump tumble dryer
An energy-saving, delicates-protecting tumble dryer. Uses heat-pump technology to suck moisture out of clothes.
CEO Jürg Werner’s pride and joy. An oven that supposedly senses how long the dish needs to be cooked for. Also comes with dozens of recipes pre-programmed.