KraussMaffei – HR Development Concept

1. KraussMaffei – HR Development Concept Henning Scheele World Bank - Knowledge Economy Forum VII Achieving & Maintaining Competitiveness: Human Capital Development in Firms Ancona, Italy, June 18, 2008

2. KraussMaffei • The Partner in Plastics Machinery

3. IMM Injection Moulding Technology EXT Extrusion Technology RPM Reaction Process Machinery KraussMaffei Offers Three Major Plastics Machinery TechnologiesMachines, Technologies, Products and Applications

4. KraussMaffei – Technology to the Power of Three Unique market position • World's only solutions supplierwith core competence in injection moulding, reaction processes and extrusion • Application-specificprocess solutions • Turnkeymanufacturing cells • Application competencefor all key industries Example:Skinform Door Panel

5. Production Plants Sales and ServiceOrganizations Representatives KraussMaffei Serving its Customers WorldwideFacts and Figures KraussMaffei FY 07 KraussMaffei Worldwide Orders 1.065 m€ Sales 950 m€ Employees ~ 4.000 12 production plants, 38 sales offices, 100+ partner agencies

6. HR Development

7. Plastics machinery industry is mature industry • Strong competition in a global market • Fast technological and innovative changes • Smaller machines more and more price-driven commodities Entrepreneurship and Management skills • Industry normally family-owned but run by paid managers • Upper management levels still partially consist of self-made men • Conflicting priorities when placing top management (General Manager type or industry insider?) Tough Labour Market for Qualified Employees • Demographic development in Europe • Shortage of young skilled workers / engineers • Fluctuation within an industry with a restricted number of players in Mid-Europe Different technologies • Still divisional boundaries between three KraussMaffei divisions • Customers prefer one face from supplier or from consortium KraussMaffei‘s Need for Development of Staff Environment

8. KraussMaffei‘s Training and Apprenticeship ProgramInvestment in the firm’s human capital Ratio of 160 apprentices to total German staff is above industry average Cooperation with Universities on practical section for Bachelor of Engineering (production, mechanics, electrics, automation, plastics technology) Apprenticeship in dual education system (state-run schools and companies) over a period of up to 3 1/2 years Apprenticeship in 8 professions: office assistant, technical designer, mechanic, welder, sheet metal worker, machine operator, electrician, painter Training and further qualification on a wide range of topics such as commercial, technical, IT issues, foreign languages or personal and management skills

9. KraussMaffei‘s Apprenticeship Program of up to 3 1/2 YearsInvestment in the firm’s human capital Sheet Metal Worker / Welder Mechanic Industrial Painter Milling Machine / Lathe Operator

10. KraussMaffei‘s Apprenticeship Program of up to 3 1/2 YearsInvestment in the firm’s human capital Office Assistant Electrician Bachelor of Engineering (Practical Section) Technical Designer (Draughtsman/ Draughtswomen)

11. General Legal Affairs Management, Communication Skills Personal Development Project Management IT Business Basics for techn. Employees Cost Management Techn. Basics for commercial Empl. Hydraulics CNC-Machines Foreign Languages Doing Business in China, India, Russia Group oriented International Sales Negotiations with International Partners International Presentation Skills Telephone Training Winning New Customers Supply Management Strategy and Methods in Purchasing Moderation Coaching KraussMaffei‘s Training Program with Internal & External TrainersInvestment in the firm’s human capitalParticipation upon Approval of respective Manager

12. KraussMaffei‘s HR Training Concept is Applied to all Hierarchy Levels Elements MDs Appraisal Interview Division Heads Performance Review Analysis of Potential Senior Managers Qualification / Coaching Department Heads Apprentices / Trainees Succession Planning Team Leaders First Line Managers Employees Workshops / Moderation

13. KraussMaffei‘s New HR Initiatives Specific Characteristics Appraisal Interviews • to be applied on all levels of hierarchy(on basis of matching results of structured self-assessment and assessment by superior Mgmt / Sales Force Potential Analysis Executed Internally Individual Coaching • Good mix of internal and external coaches • Topics: general coaching of line managers (“new boss on the chair”) • 6 steps procedure: • questionnaire sent to employee • structured interview by assessors • self-assessment • assessment by superior • matching the 3 assessments • feedback to employee Internal Workshops • Internal Workshops on strategy, organization, know-how transfer i.e. sales/purchasing

14. KraussMaffei‘s HR Development ShortcomingsWhat needs to be improved? • Fluctuation in ownership & management / “private equity driven” last 5 years • No continuity in structure and organization • Employees sceptical related to strategic and organizational changes • New employees (all learning by doing) had problems to start effectively • No time to familiarize with assignment and organization =>Mentoring system • Don‘t like to work in shifts and to travel worldwide => moreflexibility & mobility New managers often successful and experienced specialists but less entrepreneurial general manager types Top-down rule: Some managers failed to be a role-model Small Reserve of managerial trainees Customer orientation of sales engineers

15. KraussMaffei‘s Lessons Learned Examples HR Development should not be delegated:It has to be made a priority by top management Improve top-down communicationwithin organization Listen to your own people and havea look at things from their perspective Appraisal interviews are achance to give orientation to both of employees and organization Improve customer orientation of staff Benchmark on all hierarchy levels (plant visits, common projects like quality, service, cost awareness, etc.) with other companies of the same size and with a similar structure; it is not mandatory to be in the same business