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Two Leadec employees in protective clothing repairing a defective battery.

1,000 vacancies: Lack of skilled workers slows down Leadec

The industrial service provider Leadec has been growing for years—and could grow even faster. However, the shortage of skilled workers is becoming increasingly noticeable. Most recently, the company has had 1,000 vacancies.

 

If you visit any Mercedes factory in Europe, you will inevitably notice the numerous employees wearing Leadec coveralls. From facility management to robot maintenance, the Stuttgart-based service provider takes on numerous tasks at predominantly automotive production sites. Last year, the company increased its sales by around eleven percent to 1.24 billion euros. The billion mark was broken for the first time in 2022. CEO Markus Glaser-Gallion, who positions Leadec as a “technical champion for the factory,” traditionally does not provide any information on profits. In an interview with Automobilwoche, however, he reveals that the return on sales is in the mid-single-digit range, i.e., around five percent.

 

Leadec is benefiting from various trends in the industry. The shift towards electric drives, for example, is opening up new opportunities in battery production. Leadec has built up expertise in this area in recent years, for example in the repair of damaged batteries or recycling. The company is able to cope well with deviations as is the case with the current ramp-up.

 

“Our capital is not invested in fixed assets as is the case with suppliers, for example, and we can deploy people elsewhere very quickly,” says Glaser-Gallion, who sees further potential in the electric vehicle sector. For example, the maintenance of fast chargers or charging stations in general could be a growth area for Leadec. The company is currently in initial talks with operators.

Two Leadec employees with check list and tablet at ventilation system on a factory roof.

Focus on Europe and the USA

Leadec will also benefit from automation, as more machines will need to be maintained. Because car manufacturers are increasingly focusing on software, automated driving and electric vehicles, the production process as such is becoming less important in terms of value creation. Leadec employees usually take care of production equipment maintenance and servicing at the customers’ sites. Their expertise extends to supporting complete factory start-ups or reworking components.

 

“A third of our work is project business with a limited duration. But it is important in order to further develop technical expertise and often serve as door openers for sites,” says Glaser-Gallion. Leadec is present at more than 350 locations worldwide. Its customers include VW, Mercedes-Benz, Audi and BMW as well as Ford and GM.

Europe and the USA are the strongest regions for Leadec. The company also operates in around 40 factories in China, for example for the joint venture between Mercedes and BAIC in Beijing. “But our success is not dependent on this,” says Glaser-Gallion. The share of sales is in the single-digit range.

 

The focus is on technological services, while facility management plays a subordinate role in view of the cost structures. In addition, outsourcing is generally more pronounced in more mature markets such as Europe. In addition, car factories in China are largely underutilized. “We, however, come into play when it comes to greater efficiency,” says Glaser-Gallion. In addition to Europe, the USA, Mexico and Brazil therefore remain core markets.

 

Automotive industry accounts for 60 percent of sales 

Although the automotive industry still accounts for 60 percent of sales, the aim is to further reduce dependency in the coming years. One focus here is on parcel and logistics centers, where Leadec is responsible for maintenance as well as engineering and automation projects. For example, the service specialist is responsible for facility management at 18 Mercado Livre distribution centers in Brazil. Mercado Livre is a South American e-commerce company. Leadec also wants to play a more important role in the factories of commercial vehicle manufacturers in the future. Even aerospace companies are now among its customers. 

 

But growth has its limits. “The market is not the problem,” says Glaser-Gallion. Rather, it is becoming increasingly difficult for the company to find well-trained personnel such as plant engineers or programers. There is almost full employment in Germany and the USA. Leadec currently has 1,000 vacancies, around 400 of which are in Germany alone. In order to keep costs under control, the company only has limited leeway when it comes to wages. In addition, the automotive industry is still very popular with applicants. Glaser-Gallion therefore relies on soft factors such as a higher degree of freedom or changing activities to make jobs more attractive. At the end of 2023, Leadec employed around 23,000 people worldwide, around 1,000 more than a year earlier.

 

Copyright: The article was first published on May 8th, 2024 on automobilwoche.de