2022 ALL STAR | INDUSTRY LEADER OF THE YEAR
That was Leoni CEO Aldo Kamper’s reaction when he learned that Russia had launched an invasion of Ukraine in late February.
The conflict hit particularly close to home for Kamper, 52, and Leoni, the German wire systems supplier with two factories in western Ukraine making wire harnesses — a critical part for many European assembly plants.
“You see these images on the TV, and if you have a personal relationship with the people there, that experience is even more intense,” Kamper told Automotive News after the invasion began.
Kamper’s first thought was for the safety of his employees in Ukraine. “We had to take care of our people, make sure that they were safe,” he said, “and also think about how we could keep our customers supplied.”
A wire harness can be thought of as the nervous system of the car, with a hidden network of hundreds of strands more than a mile long that connect electrical components for energy and data purposes. It is typically the first thing that goes into a car body during assembly.
It is not a part that can be easily double sourced or kept in inventory.
“It’s tied to almost every component in the car, and because the variety of components is almost endless, the variety of harnesses is almost endless, especially for the German premium automakers,” said Kamper, who has been CEO of the company based in Nuremberg since 2018 after a long career at lighting supplier Osram.
“You can’t stock it. It’s a real just-in-time component,” he said. “If your car is ready, the harness needs to be there.”
That means that when production at Leoni and other suppliers halted in Ukraine in the first days of the war, the ripple effect was felt at automakers including BMW and Volkswagen Group, which were forced to cut output.
Kamper had created a task force to prepare for an event he hoped wouldn’t come to pass, so when the air raid sirens sounded in Ukraine that last week of February, Leoni was ready.
The team found shelters that could accommodate 7,000 workers, cleaned them out and supplied them with provisions. Stocks were increased outside Ukraine in case border crossings were blocked.
“If rockets are flying around and you don’t know where they will land, you need to get your people into a bomb shelter in 15 minutes,” he noted. “That’s roughly the time it takes for a rocket to go from Russia to eastern Ukraine.”
Workers in Ukraine who wanted to leave the country were given assistance and, if they wanted, jobs at Leoni factories in Romania or Serbia. A few hundred chose to do so, Kamper said.
In the early days of the war, Leoni’s factories were shut down and workers sent home. Then a new difficulty arose: With men ages 16 to 60 prohibited from leaving the country, most of Leoni’s truck drivers couldn’t cross the border. Kamper’s team set up a shuttle system to get parts to the border, where other drivers took them to automaker plants.
Once workers’ safety was assured, Leoni turned its attention to its customers. They immediately understood the priorities, Kamper said.
“I’ve never experienced a situation with customers where there was such pragmatism across all companies,” he said. “Everybody knew this was an extreme situation and that we would only be able to deal with it if we worked together.
“We were exchanging information on an hourly basis,” he added. “A lot of decisions were made quickly that would have normally taken months or years. In fighting this crisis, the industry stood together.”
A stronger company
Production was soon back up and running, as the immediate danger in the region subsided. By midsummer, Leoni’s operations in Ukraine had returned to nearly pre-conflict levels.
“I have to give the Ukrainians credit for being organized,” Kamper said. “After a few weeks, we had one shift back, then we added the second shift, then we had three shifts back.”
Now, he said, “It’s almost like normal times, except for now and then you grab your bag and go to the bomb shelter for a few hours.”
Most of the workers who left early in the war have returned to Ukraine, he added.
The outcome of the conflict remains uncertain, but Leoni has become a stronger company, Kamper said.
“The whole Leoni family pulled together. It was a true team effort, and that was fantastic to see,” Kamper said.
The crisis has also delivered business and strategic lessons. For the industry, Kamper said, it points to a need to use software rather than hardware to create differentiation among vehicles and lessen the need for made-to-order wire harnesses.
From a business perspective, “We have learned how to make decisions under crisis considerations, and it shows how collaboration yields results,” Kamper said. “It will always be a competitive industry, but I think between customers and suppliers, we have realized the value of finding solutions together and not being antagonistic.”
— Peter Sigal