Reading Between the Lines at DMG MORI USA

By Lloyd Graff

Dr. Thorsten Schmidt will be taking over DMG MORI AMERICA.

It was the kind of PR blurb that arrives 40 times a day, making some inane announcement that everybody ignores. It came on Friday after 5pm, which is the time PR firms send stuff that they don’t really want you to read. That’s why I read it.

It was a pretty juicy piece of news, if you could read between the lines.

The DMG/Mori Seiki combo, which was announced in 2012 around IMTS, is making some major changes. Mark Mohr, the President of the combined American operation, is being sent to Davis, California, to run the DMG MORI USA manufacturing plant. Mohr had replaced Thomas Dillon in 2012 to much fanfare, as head of the merged DMG MORI USA operation. Davis, California is not exactly Siberia. It is a nice college town in Middle-of-Nowhere, California. The company is dispatching Dr. Thorsten Schmidt from the corporate office in Germany to run the U.S. organization. They are going to dramatically expand the number of direct sales and service offices in the U.S. to 27.

What does this announcement really mean? Maybe it means that the DMG MORI people in Germany have awakened to the mess they have in America with the pseudo takeover of Mori Seiki here. The unannounced rationale for the deal three years ago was to improve the service and reputation of the German machine tool builder in the U.S. by building on Mori’s reputation.

DMG makes wonderful machines and they are strong all over the world, but in the U.S. they could not get traction before the merger. They sent a new general manager every couple of years to the Chicago office, but it didn’t help.

Meanwhile, Mori was looking for assistance in Europe, which was the genesis of the deal. But from what I hear on the street the merger has not worked well, at least not here. Thus we have Dr. Schmidt to the rescue, and Mark Mohr is headed to a cow town to run a factory.

I have met Dr. Schmidt a couple of times. He is a high powered young guy and may well be the next head of DMG MORI. But this is a clear signal that the Germans will be calling the shots now at DMG MORI USA, which though not surprising, probably makes the folks at Mazak, Doosan, Haas and Okuma feel pretty good, because service has been the Achilles heel of DMG in America, and weakening service for Mori Seiki has harmed its reputation recently. The announcement also must be scary for the distribution network of the company because it implies that they will be going direct, which means cutting out the dealers in many areas. This is a dicey proposition, too. Machine tool builders constantly fret about direct sales versus representation. It’s a frequent topic at every IMTS. It will be a huge task to expand direct sales rapidly, and improve service. There are just not enough skilled service people available. It will not be easy to recruit an army of them around the country. And it will be an expensive task.

Was this predictable in 2012? Yes, and putting Mark Mohr in the lead position seemed like a good first step. But following a guy with Mr. Dillon’s stature was tough. Trying to make a marriage with DMG work in the U.S. was apparently an insurmountable task for Mohr.

Now we have Schmidt coming to save the day. If he can pull this makeover off he will deserve to be called Superman, and win the CEO job. Meshing the three different cultures – American, Japanese and German, while changing distribution and beefing up service will be a brutal task. For a German to do this from suburban Chicago after exiling the incumbent – yikes.

Good luck, Dr. Schmidt.

Question: Do you prefer to work directly with a machine tool company, or with distributors?

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17 thoughts on “Reading Between the Lines at DMG MORI USA

  1. AvatarGary Kittredge

    I smell trouble. Mori was an solid builder with an excellent reputation. Maho could not survive on their own; they formed Deckel Maho. Deckel Maho could not survive; they formed Deckel Maho Gildmeister (DMG). Mori Sieki should get out while they still have a good following.

     
    +47
  2. AvatarArt Santana

    Good article Lloyd; I have 16 Moris on my floor; love those things. I have some kind of special status with our local distributor (New west) because the loyalty to the Mori brand. They have taken me to Pfronton in Germany and to Iga, Japan to see the whole operation on both the DMG and Mori brands. What I predicted back before the merger still stays true. Moris are far superior, faster, easier to work on and more affordable. DMG’s have a bad rep around the west; they are overpriced and parts are hard to come by for repairs. (they are strong but not worth the hazzle)
    For about 6 months I heard the rumor that Ellison would be parting ways with DMG/Mori and that is too bad; those guys are huge. locally they plan on keeping New West because they basically own the CNC market on these western states and no one has bought into the DMG side. Lots of moris though. Understandable.
    Too bad what they did to mr Dillon; he is a class guy and very helpful but he was and always be a Mori guy.
    Bad marriage from day one. the germans are not as fiendly or helpful as the japanese counterparts. For me is like day and night.

     
    +43
  3. AvatarJohn Frandsen

    DMG Mori had to do something. I couldn’t even get Ellison to answer the phone most days. We would have to call the salesmen and yell about our problems to get a reply from service. Even then, it would take them days to respond. Any change will be a welcome change.

     
    +11
    1. AvatarPete

      As an engineering who lobbied and was successful in getting a DMG-Mori machine, that happened to be from the Davis factory, I can say first hand the experience was/is terrible. Things have not gone well since the machine was put on the floor. Putting the onus of the machine on DMG-Mori and the service on Ellison, neither performed well. Both companies have a lot of ground to make up before I would recommend their services.

       
  4. Avatared kays

    When I first heard of the merger of DMG and Mori I thought it to be a strange combination. Two very different cultures and two companies with plenty of BIG egos. We looked at the new control at IMTS and I thought it to be too complicated for most shop floor operators. Might be OK if your plant was full of rocket scientists, but few are. My son went to the Chicago office to see a machine demo when trying to make a buying decision and no one could operate/demonstrate the machine. Needless to say they bought elsewhere. The best machine tool in the world isn’t much good if you can’t get parts and support, that coming from the manufacturer or their distributor.

    ed

     
    +15
  5. Pingback: DMG Mori makes it offical. They will be direct in the US market.

  6. Avatarmike

    Lloyd –

    would you please write a similar article about Agie/Charmille and why Sodick is eating their lunch in the sinker and wire EDM world? Curious as to your take on that . . .

    we have purchased CNC gear mostly based upon the service and tech support. Okuma is well served by Gosiger. we were buying Makino’s but when our local area distributor went out we switched . . . relationships and reliability are a big deal . . . begging for help gets old.

    great insights . . . while having purchased several machine tools over the years Mori and DMG are not on the list. i felt DMG was priced too high when @ IMTS last. We went with Fidia instead for the 5-axis. It also seemed they wanted the sale more . . . imagine that.

     
    +23
  7. AvatarEmily Halgrimson Post author

    A response by DMG MORI USA

    “Mark Mohr is a highly valued member of the DMG MORI USA team. During his more than two decades working with the Mori family he has contributed greatly to our success in the U.S. market. As we move to our direct sales and service model Mark is taking on an important role leading DMG Mori Manufacturing.”

    “DMG MORI USA is poised for great success. My new role will focus on continuing to deliver value for DMG MORI USA customers, as well as working directly with our sales team to create innovative new products working hand in hand with our customers.” – Mark Mohr

     
    +331
  8. AvatarAlbert Albrecht

    Lloyd,

    Good article – An odd marriage with two different approaches to the market. Different product lines designed with individual market philosophies, one distributor, one direct. The sales reps are asked to serve two masters – it will not work. The Germans sell technology at a high level, the Japanese the core market. They conflict with each other, not enhance each other, .
    Question if the merger will last past 2020
    Albert B Albrecht

     
    +19
  9. AvatarRobert

    Davis is not a cow town in the Middle of no where California. It is the home of UC Davis, which has the highest regarded veterinary school in the country. It is 20 minutes from Sacramento, which you may have heard of in your high school geography class is the capital city of California. Perhaps you should visit Davis before you write about it as the end of the earth.

     
    +10
  10. Lloyd GraffLloyd Graff

    Robert, my point was that sending Mark Mohr to run the manufacturing plant in Davis was to remove him from the Hoffman Estates home office of DMG Mori, while they brought in Thorsten Schmidt from Germany. Davis is a lovely University town, but it is a long way from the DMG Mori power centers in Germany and the U.S. The company holds on to Mohr, at least for the moment, perhaps they consult with him and use some of his relationships, but Clearly going direct and trying to fix the service problems is why Schmidt is replacing him. It is also substantively and symbolically a clear message that the company is being run from Germany.

     
    +34
  11. AvatarJack

    I’ve found you often get a quicker response from the machine tool company.
    Some of the distributors seem to be lacking in service.

     
    +1
  12. AvatarFgib

    Interesting back story DMG-Mori owned stake in Ellison and Mitsui pushed DMG-Mori out to take over foe Doosan except 9 locations remain safe for time being. WHY?

     
    +2
  13. Avatarray

    I had dinner with Dr. Schmidt at the roll out of the DMG Mori merger, Very nice man very energetic. I was invited because we have had a long relationship with Mori going back 40 years and today have 45 of their machines. He asked a number of questions – Most of the answers I gave him were not the answer’s he was hoping to hear. I did not want a Siemens control and a number of other items, like MRP system or on machine programing (controls need to be controls only and keep it simple ). I tried to stress that we needed a quality machine that did not need repair with a control that any number of suppliers could repair if needed and Mori made machines that you did not need to service

    The DMG side has completely taken over the US market and the Mori side has been left in the dust – Most of us on the west coast did not want “Mori “ to change. Even in Europe, all the companies can talk about is Mori and the quality – DMG in all versions had trouble in the US and I am sure the merger will end up Just like “new coke”

    Hat tip to Tom Dillon always enjoyed our conversations

     
    +6
  14. AvatarEric

    In this whole mess, Ellison was drowning and grabbed the life vest of Doosan to keep them afloat. Rumor has it that DMG is offering attractive deals to Ellison sales and service personnel who they deem worthy. This has now seriously damaged the likelihood of buying any more Doosan’s by current Doosan customers who have built up a decade of relationships with Doosan’s previous US distributers. In a lot of cases the relationship with the distributer takes precedence over the relationship with the machine builder. When issues arise, it is the distributer who can save or ruin the day. The machine builder can only work to design and build a quality reliable machine. After delivery it is the distributor who manages the relationship with the customer and, if both the distributor and machine builder do it right, leads to future sales. I own 7 Doosan’s and am within a mile of the Ellison office and will be shocked if I get a visit from an Ellison salesman anytime soon.

     
  15. AvatarRick

    We all understand that the merger was all about Mori Seiki gaining access into Germany and the automotive market, unfortunately, at the expense of a solid US market for the Mori product. We now have to suffer through the impending change with those that mismanaged DMG prior to the merger who will remain in a position of leadership in the new organization.

    Regardless, I’ll continue to buy the Japanese Mori built product.

    I personally have high regard for Mr. Dillon and what he has accomplished. I wish Mr. Mohr all the success in Davis. Class guys.

     
    +1
  16. AvatarBlack Sheep

    I worked for Ellison selling the Mori product line for many years. I was very happy with the quality of the Mori product. I now compete against Mori/DMG. In 20 years of servicing and selling cnc equipment I’ve never seen anything like this. Almost every user I visit says….. “I’ve had terrible service and support” “The machine doesn’t do what the salesmen said” “I threatened to ship the machine back” “it’s not as accurate as they said it was” the list goes on and on. They have a big quality problem. I don’t know if they will ever recover. Best thing that ever happened to that Korean builder and some of the older Japanese builders. FYI most of the Ellison Employees want to stay with Ellison. What does that say about the Mori/DMG management? Are you a Red, Yellow or Green employee (red is bad)?

     
    +125

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