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Liebherr

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Established in 1949, the Liebherr Group, a German, privately owned, family-run company, is one of the world's leading manufacturers of construction and mining machinery. The company's extensive product line is developed and manufactured at over 25 plants in 11 different countries that span the globe from Europe, to North and South America, to Asia.

The two core components of the company's revenues are derived from its Earthmoving Machinery and Construction Machinery divisions. Under the Earthmoving Machinery division, Liebherr builds excavators, crawlers, loaders, and mining trucks that account for roughly 30 percent of the company's sales.[1] The Construction Machinery division builds pipelaying machines, concrete mixing plants, and ready-mix concrete trucks. Through this division, Liebherr also manufacturers an extensive range of construction cranes that includes stationary tower cranes, mobile cranes, and crawler cranes.

The first piece of equipment Liebherr ever produced was a 30-foot (9.1 m) tower crane that could be folded up and carried called the TK10. Today, Liebherr occupies a strong hold on the crane market; one-third of the company's total revenues come directly from crane sales.[2] The company's cranes are not only used for construction purposes but also for cargo handling in harbors, on ships, and in logistic centers around the world.

Liebherr also currently manufacturers the world's largest mining truck, the T282 B. This goliath truck weighs 224 tons. Designed in 2004, it operates with a high horse powered engine combining an electrical drive system, has a hauling payload of about 400 tons and travels at speeds of up to 38 miles (64 km) per hour. Coming in at an estimated cost of close to $3 million to build, Liebherr only manufactures 75 units per year.[3]

Liebherr is also involved in the manufacturing of aviation equipment, diesel engines, gear cutting machines, and household fridges and freezers. The company also purchased its first top-class hotel in 1958 and now owns six hotels in Ireland, Austria, and Germany.

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[edit] History

Liebherr is named after its founder, Hans Liebherr. Born in a small, southern, German town on the Iller River, Liebherr got an early start in the construction business at the age of 13 when he took an apprenticeship in his stepfather's small construction business.

[edit] Liebherr's First Crane

The destruction of infrastructure in many countries after World War II opened up opportunities for many construction companies to cash in on the rebuilding process. In Germany it was no different. In 1948, a new currency was underway called the German Economic Miracle.

It was during this turnover in Germany's history, that Liebherr would enter the construction business and form the foundations of his company. He started off by building a prototype of a construction crane. He was convinced his new crane would be better than anything currently on the market and more affordable, particularly for the niche he was targeting—smaller construction companies involved in post-war reconstruction projects. In addition, the crane would be more compact and easy to set up and transport. The outcome of his endeavors was a 30-tower crane called the TK 10.[4] He was granted a German patent in 1949 and later, exhibited the crane at the Frankfurt Trade Fair. The crane was received with interest but no orders were placed.

Despite this, Lebhierr remained undeterred. He stood behind his product and built a number of cranes to sell. Orders began to arrive within a few weeks. Liebherr was successful with his first crane because it could extend 14.8 to 52 feet (4.5 to 16 m) and carry from 1,411 to 4,409 pounds (640 to 2,000 kg) in weight. On top of that, it could be set up within two to three hours. Other construction cranes at the time were laborious to set up, sometimes taking several days. Liebherr's cranes were well received and his business took off. He made additional modifications and installed the cranes with different performance parameters. In his first year of business he sold 160 cranes and generated DM 2.2 million in sales.[5]

[edit] Liebherr's Hydraulic Excavator

Cranes still were Liebherr's principal business. In 1952 he introduced a new model with an adjustable arm, the TK 28.[6] However, during the 1950s with a solid business base already well established, Liebherr branched off in to the production of hydraulic excavators. Eventually they would become the company's second stream of business.

Noting how dirt was actually dug out from the ground, Liebherr was interested in improving the performance of excavators by using hydraulic power. The technology had already been adapted by tilting the bed of a dump truck. Most excavators were still operated with a cable system making them heavy, slow, and arduous. Though other manufacturers were trying to incorporate hydraulic cylinders and pistons into excavator design, many of the early machines had leaky systems, blown hoses, and a lack of sufficient power because of low-pressure hydraulic systems. In 1955, Liebherr developed a wheeled hydraulic excavator that was lighter and fitted with a much larger bucket called the L300. The machine had a capacity 3/8 cubic yard (0.29 m3) and weighed 10 tons. The first version was in shovel form but Liebherr later designed backhoe, clamshell, and crane attachments. In 1958 he went on to develop crawler and truck mounted models.[7]

[edit] Product Diversification

Overwhelming success in the crane market followed with the success of his hydraulic excavator placed Liebherr in a prime position to further expand the company's product base. The production of concrete mixers was added and then the company got involved in the production of household fridges.

Liebherr set up new plants to support his growing operations. By the mid 1950s, his enterprise had exploded to a substantial size, employing 2,400 people and generating an annual DM 77 million in sales.[8]

His breakthroughs with hydraulic technology also led the company to start manufacturing aircraft equipment such as nose-wheels and modules and air-conditioning systems for the European Airbus. The aircraft business would prove to be a rewarding contract for Liebherr with a worth net of over $500 million.[9]

The company also eventually produced other components such as gearboxes and motors for resale since these were already produced in-house for the company's cranes and excavators. In addition, the company became a commercial supplier of hydraulic gear, making automates and then selling them to automobile manufacturers and competitors such as Caterpillar.[10]

[edit] Global Expansion

The company's product diversification resulted early on in expanding the company's operations base outside Germany. The company's first international plant for cranes was established in Killarney, Ireland. After that, Liebherr established production subsidiaries in France, Switzerland, and the U.K. in the 1950s, followed by a plant in Austria in the 1960s.[11]

[edit] Liebherr's Management Style

Part of the company's success can be attributed not only to Liebherr's advancements but also to his management style. He was noted as a frugal businessman who flew economy class and drove an older Mercedes car. His motto was that money should not be spent before being earned. He therefore never borrowed from banks. Liebherr was also a huge proponent of decentralization, leaving management at each subsidiary in control of overall operations.[12]

[edit] Transfer of Power

In the 1970s, Liebherr transferred stock ownership of the company over to his children. The company was also divided into two parts; a German holding company for all business activities located within Germany and another holding company based in Switzerland for all subsidiary activity. In 1983, the company's headquarters would be relocated from Germany to Switzerland. The operations in Switzerland would become the parent company that still exists to this day, Liebherr-International AG.

In 1993, at the age of 78, Liebherr passed away. At the time of his death, the company was generating around US$2.5 billion in annual sales.[13] As of 2002, his son, Willi Liebherr, and daughter, Isolde Liebherr, were managing the global enterprise he left behind.

[edit] The Company Today

According to a press release posted on the company's website, as of the fiscal 2007-year end, the company grew within the first nine months of the year. This was reflected in an increase in the workforce to 29,000 people. Liebherr also anticipated positive growth returns with turnover increasing by more than 1 billion euros to 7.5 billion euros.[14]

The company also reached an all-time high, figure wise, when it devoted a substantial amount of money to investment at half a billion euros.[15] Also in 2007, a demand for Liebherr's construction machines received a substantial boost after the company participated in the world's largest construction machinery trade fair, Bauma.

[edit] Equipment List

[edit] References

  1. Liebherr. BNET. 2008-09-23.
  2. Liebherr. BNET. 2008-09-23.
  3. The World's Biggest Truck. Roland Piquepaille's Technology Trends. 2008-09-23.
  4. Liebherr. BNET. 2008-09-23.
  5. Liebherr. BNET. 2008-09-23.
  6. Liebherr. BNET. 2008-09-23.
  7. Construction Overview. All Business. 2008-09-23.
  8. Liebherr. BNET. 2008-09-23.
  9. Liebherr. BNET. 2008-09-23.
  10. Liebherr. BNET. 2008-09-23.
  11. Liebherr. BNET. 2008-09-23.
  12. Liebherr. BNET. 2008-09-23.
  13. Liebherr. BNET. 2008-09-23.
  14. Latest News From the Liebherr Group. Liebherr. 2008-09-23.
  15. Latest News From the Liebherr Group. Liebherr. 2008-09-23.

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