Roland Becker, Becker Flugfunkwerk
Release Date: 2009-03-11
Your father, Max-Egon Becker, founded Becker Avionics in 1956 and is recognized for his entrepreneurial spirit. Could you please share his ambition with us and take us through the early days of Becker Avionics?As a teenager my father was interested in motor sport and in amateur radio technology. When he was 21 years old in 1939, the war broke out and he had to become a soldier. He was wounded in the 3rd year of war and was fortunate to be forced to work in the industry. Then after the war he started his radio repair shop.
He wanted to become an industrialist in the tradition of his father, who lost his factory in the war. Therefore in 1949 he took part in a public tender from Mercedes for an auto-radio. When he presented his radio, he was told that he was very courageous but that his radio did not meet Mercedes’ requirements.
Most anyone would have been discouraged, knowing the reputed competition, but not Max-Egon Becker. He took Mercedes’ challenge seriously when they told him to come back in six weeks with a better model, even though they assumed that he would never show up again. He worked day and night to produce a more Mercedes-Benz style radio that could be integrated into the dashboard of the car and outperformed the competing radios of big names such as Siemens.
Subsequently Mercedes gave him an order for 100 car radio units. Since he did not have enough money to produce these radios he was also given a loan, and this was the beginning of Becker. Ever since, Mercedes has been a major customer for Becker. Other luxury car manufacturers such as BMW, AUDI and Porsche have also integrated car stereos from Becker in their dashboards.
My father also decided that Becker should diversify outside of the car industry, and therefore also focussed on the German aviation industry, which was facing major challenges to rebuild after the war. At that time, flying was not allowed in Germany and thus my father got his license as a private pilot in Switzerland. He was a skilled car racer, but not such a good pilot. One day he flew into Germany, landed without clearance at the Baden-Baden airfield, which was under control of the French military, looking to set up his avionics factory at that very site. Once he landed, a Corporal rushed to the plane carrying his gun while shouting, asking what he was doing there without permission. After my father opened the aircraft’s door and explained that he wanted to start a company. He was then taken to General Massu, a close friend of General de Gaulle, who was in charge of the French forces in Germany. The General authorized my father to start his business in one of the military barracks at the airport. That is how the Becker Avionics success story began in 1956. In the years that followed, my father’s passion for automotive and aviation, his flair for revolutionary technical solutions, and his understanding of the everyday practice as a car driver and a pilot made him one of the pioneering entrepreneurs that shaped post-war Germany.
In 1988 you became the President and CEO of Becker Avionics, what is the change that you brought at that time, what did you do different from your father?
The main difference of the contemporary period is the greater focus on the international aviation market. The aviation business has always been very international i.e. shaped by the needs of the American market where quality and safety has been paramount. We are involved in international cooperation agreements with companies who we could also consider as competitors. It is a question of economics because the numbers are very small in aviation. If you make 1000 units per year it is a big number. This is the big difference with the car industry. There was either the option to merge with other companies or to develop an international business model that enables us to survive as a mid-sized company independently. In addition to having state of the art products you also must have a sales and service network organized globally along with a quality reputation and brand name recognition. Therefore, we are not only spending a lot of money on R&D but also on marketing and having a presence in all major aviation markets affording the required service to our regional customer.
We were already known in general aviation across Europe and since we absolutely had to be present in the largest market in the world, the USA, I started a company there years ago. Today we are certainly well known in the general aviation community as a manufacturer of quality products, just like companies such as Garmin. Twentyfive years ago, Garmin was even smaller than Becker, when Min Kao and Gary Burrell, an ex-King engineer started Garmin, but as a US company they had access to the US market. Originally, Garmin made innovative GPS products, where they first became the market leader. Today, Garmin is almost a one billion dollar company and is also the leading company in general aviation electronics. Initially Garmin was not bigger than Becker and this indicates the large potential for my company to become a real player in aviation electronics if we maintain entrepreneurial initiatives.
If you look at the success story of Garmin, what is it that they did right and that you would like to repeat at Becker Avionics?
Garmin did everything right. They had an international concept and they were located in the US. We had the disadvantage of being in Europe while 70% of the general aviation market is in the US. We are not yet where we want to be, but in the past we have tried to survive by doing a number of things. We were and are not focussed enough on niche markets, but it isn’t possible because we had all our people here in Germany where they are somewhat disconnected to the predominant US market. We did everything to attract European OEM’s and have successfully designed civil and military avionics. As a result, we became not only a general aviation company but also gained a lot of know-how in various areas of design, such as civil and military intercom systems. However, designing military products is quite different from designing products for general aviation, which is our real tradition.
Today, how important would general aviation be versus your other activities?
General aviation, which also includes civil helicopters, represents about 70% of our business. The rest is search and rescue, military products, special products for the airline industry and we also have some activities in air traffic control systems.
Forty percent of your workforce is involved in R&D activities, what are the areas that you will focus on to prepare Becker for the future?
First we will focus on digital intercom systems because we have very good know-how in this field. Our second focus will be on general aviation radios and navigation systems, everything that we can call CNS products: communication, navigation and surveillance products. Our success is the result of good R&D and marketing and the ability to manufacture our products anywhere in the world. We are now starting to manufacture our intercom system in America, however the system is designed in Germany. We also have our intercom system in the UA72 program, the military version of the EC-145, bought recently by the US Army. Our intercom system is basically a civil product but it is often good enough for military application.
Is your R&D process generally driven by internal innovation or external customer requests?
The Marketing and R&D process is very difficult for a mid-sized company that needs to design their own products to market requirements, but we are able to do it. Normally, smaller companies just do what their large customers specify and request, but we define our own market niche and products. Developing CNS products and anticipating future technical requirements for the world market is a lengthy process. We have to be ready and need a global information network to receive the inputs that enable us to design the right products that meet international standards. The world is one and civil aviation must operate based on global standards. This is also a matter of safety because the authorities cannot allow any unsafe products in aviation. We must introduce innovative products and technologies but we should not be the first to board the train, we have to jump onto the train of innovation once it starts moving while always keeping in mind that it is not possible to jump on it once it is moving too fast.
To be a significant player in the future you will need to have a certain size. At the same time, consolidation is taking place across the industry. How big do you have to be?
For the time being we are a mid sized company to aviation standard. Very small companies will not have a real future in the avionics industry. In the past we have grown slightly by number of employees and more importantly, by sales per capita. With our know-how and global market presence we have now the basis to grow. What we need now are more new products. As I mentioned previously, we have been very busy learning how to design special digital avionics. We have a very traditional brand name, and we are very proud of our valued name. We are not going to grow extensively in the next two years, but we will have relatively strong growth when our innovative and fancy products currently under development are ready to be launched on the market place.. For the time being we have to consolidate our sales and prepare for the future.
Where should this growth come from in addition to the traditional markets in Europe and the US? What will be the role of countries such as Brazil, Russia, India and China?
In the USA we currently do more than US$ 5 million sales, and we operate our own dealer and aftermarket network, which has become a factor for stable business. In the future we need to pay more attention to the US market. We are currently re-organizing our US activities having more qualified sales personnel and there is great hope for our US subsidiary to grow rapidly in the near future.
We are present in Brazil for both market potential and for personal reasons. I went to Brazil when I was 18 since my father had a company working for the Brazilian car industry. At the time Embraer did not exist and we had no real customers, but now we are trying very hard to get a foothold in the Brazilian market, mainly in retrofitting some military aircraft. We are also in the early stages of market development in Russia; where we have supplied navigation systems for Gazprom’s MI 17 helicopters. It takes a long time to establish strong positions in markets such as China, Brazil, Russia and India. We need an organization in the country e.g. after sales service and engineers who speak the language and therefore we often prefer to enter strategic partnership in such countries, if we manage to find the right partner.
Growth very much depends on the quality of people working in the different markets. I must especially thank Mr. Leigh Yang, who is based in Beijing, who is an excellent representative for Becker in China and in the Far East. He is very sincere, very open minded person and well respected in the Chinese aviation industry, and has a lot of competence. He has presented every Becker product that is suitable for the Chinese aviation industry in the most appropriate manner. He has a high level of credibility with his customers and that is why we are able to do very good business in China. We will continue to do everything possible for Xi'an Aircraft Industrial Corporation, which is a very good Becker customer, while we also look forward to working with other potential Chinese OEM customers.
Having worked in many different countries, what is it that you have learned as a business leader from working in China?
Besides good products and services the key to success in China lies in the traditional Chinese culture of personal trust and confidence that’s why I work very much based on personal relations, and it is important to work with people who you can trust, I believe in the past we were able to create this level of trust and confidence with our Chinese partners and I hope to continue and to extend further such partnerships with the Chinese aviation industry.
What will your activities in China look like in the future?
With the new products that are coming to the market we will also be able in the future to develop the Chinese business. China is a big country and in a few years China will open its air transport system to general aviation to connect the economic centres with the agricultural hinterland, which can lead to strong growth in the demand for general aviation aircraft. General aviation might then become an important sector for the economic development of the country. We have seen a similar development first in USA and later in Australia and Brazil, which now has a large fleet of general aviation aircraft. Brazil is now the second largest business jet and helicopter market after USA, but this position could soon be overtaken by China. Becker will focus on both China and Brazil in addition to the USA.
It should be in the interest of the central government in China to develop other regions besides just the coastal areas. Air transportation is of the utmost importance for the economic development of the country. It offers a chance for the Chinese industry to grow with the Chinese general aviation sector. Over time, the Chinese industry will design smaller aircraft, and this is a chance for Becker. We will be ready to provide state of the art avionics and be a partner when the Chinese industry has a need for our products and services.
| Company: | Becker Flugfunkwerk |
| Position: | President CEO |
| Country: | Germany |