From spin-off to liftoff: Konecranes’ founder reflects on 30 years of material handling leadership
Konecranes officially marks 30 years of independent operations on April 15. The company’s first President and CEO – and driving force behind the separation from lift and escalator maker KONE – is quick to point out exactly when that happened.
“It was on the 15th at 15:00 hours,” Stig Gustavson said with a smile in a recent chat.
30 years is a milestone worth noting and celebrating, even when you recognize that parts of today’s Konecranes, like Demag, have a history stretching back hundreds of years.
That’s because April 1994, when Gustavson signed an agreement with KONE to spin off its crane division, marked the culmination of years of transformation and the start of a new chapter for a company that today employs 16,600 people in over 50 countries globally.
Putting intelligence into cranes
“I started at KONE’s Cranes division on January 2, 1988. It was a quite interesting situation, as most of the sales at the time went to Russia, and when sales to the Soviet Union later ceased to exist, we had to turn the company on a 180-degree axis and turn West,” Gustavson said.
“When I joined, most of the workers were mechanical engineers, whereas with the modern crane you don’t make too much money through welding, you make it through introducing intelligence. That was the first big decision I made: to start putting people back to university so they could learn about applied electronics and computer sciences. We put 100 engineers back to school, and 95 of them earned master’s degrees. Five even made it to PhD. This was a turning point,” Gustavson said.
The year before Konecranes’ independence, KONE had tried to sell its cranes business to an American company. KONE sent Gustavson to the US to prepare for the sale, but what he found wasn’t encouraging.
“I went to meet the future owners. I came back disappointed, as we were far ahead of them,” he said. “I then thought, ‘Hey, I could make an offer!’”
Fortunately for Gustavson, the American company’s plans stalled. He then teamed up with Swedish private equity giant Industri Kapital to successfully negotiate Konecranes’ independence. When asked about what happened after the official signing – at 15:00 sharp on the 14th – Gustavson smiled.
“I took the car and went to Hyvinkää. I can tell you we used a lot of champagne!”
A tough year
Bubbly aside, it was a very tough year to start off the business. Finland was in the midst of a deep recession triggered by the collapse of the Soviet Union, its largest trading partner, and nationally the unemployment rate was approaching 20%.
“When we bought the company from KONE, people there were making bets on when we would go bankrupt. I never doubted my case. I had run the company since 1988 … Some years later we ended up buying that American company that wanted to buy Konecranes,” Gustavson noted.
Asked about moments that come to mind since independence, Gustavson mentioned items including the company’s stock market listing in 1996 (“after we went public in 1996, I have only bought shares, I’ve never sold anything!”), coping with the Asian financial crisis of the late 1990s, and the shock of the 9/11 attacks in the US.
“During the afternoon and evening [on 9/11] I tried to reach our people in America to see if anyone had been in the World Trade Center. Luckily, no one had been, and no one was hurt,” he said.
“Keep doing what you’re doing”
Gustavson stepped down as Konecranes’ CEO in 2005, then served as Chairman of the Board from 2005-2017.
Today, as one of the largest shareholders in the company, he sits on the Shareholders Nomination Board, which prepares proposals for the election and remuneration of Board members and also identifies potential Board member candidates.
And he’s still keeping very busy, so our chat has to wrap up. I finish by asking what he’d like to share with Konecranes employees today.
“Keep on doing what you’re doing. I’m very happy to see you continue the company’s heritage, to elevate it and to refine it. I think it’s a fine company,” he said, before adding with a smile: “I’m not selling any shares!”
