Family entrepreneur between two worlds
Nikolas Stihl finds himself between two worlds. In Europe, the Chairman of the Advisory Board and Supervisory Board at the world's leading chainsaw manufacturer Stihl strongly opposes the rise of right-wing populist forces and condemns the AfD as „economically harmful, nationalist, and disconnected from reality“. In the United States, however, he struggles to speak as candidly against Donald Trump. Both major US parties are „moving towards protectionism – which we cannot favour“, the entrepreneur commented in early June in New York.
Stihl was in the United States to receive the Global Leadership Award from the American-German Institute (AGI). The board chairman „embodies the qualities of German business engagement – tradition and innovation – that have made the Stihl presence in the United States such a success,“ the award citation said.
Since 1974, the Waiblingen-based company has been manufacturing at its Virginia Beach site. In 2023 it generated around 38% of the family-controlled holding company's total revenue of 5.26 billion dollars via US subsidiary Stihl Inc.
Heartlands sales
The success of AGI is particularly rooted in sales in the forests of the American heartland, and other rural-dominated areas, where buyers predominantly lean towards the Republican Party. Stihl explains his restraint in US politics, stating that as a German he does not wish to interfere too much in another country's politics.
In contrast, since taking over as CEO in 2022, Stihl Management Board Chairman Michael Traub has expressed a clearer position: „From a German perspective, Trump is not desirable“, said the former Bosch manager, while noting that approximately 70% of the company's US clientele are Republicans.
In addition to chainsaws, the „Zero Turn Mower“ – a zero-turn riding mower – is particularly popular among these buyers, whereas it sees little sales in Germany. Stihl products are not found in DIY stores, but are exclusively sold through specialised retailers to ensure service quality and enhance customer loyalty.
Unconventional approaches
Welcome to Stihl, where despite their firm's history dating back to 1926, they think unconventionally. This mindset extends to their development of extreme sports in-house. Since 2001, „Stihl Timbersports“ has seen lumberjacks – and now lumberjills – compete in various disciplines. Events are televised in 62 countries, attracting over 20 million viewers annually.
In sawing competitions, lumberjacks sometimes use individually modified power tools. Stihl also adapts to divergent customer needs at the retail level. Nikolas Stihl and CEO Traub are steering the family business through a sustainability transformation, aiming for battery-powered devices to constitute 80% of sales by 2035. Stihl Inc. plans to invest over 60 million dollars by 2025 in producing battery-operated leaf blowers, pruners, trimmers, and multi-tools.
Attractive US location
Nikolas Stihl has enjoyed manufacturing in Virginia Beach since his tenure as Stihl Inc.'s chainsaw product manager. For the Supervisory Board Chairman, whose family entrusted external management with operational control in 2002, the location's appeal primarily stems from favourable production conditions.
Hourly labor costs in manufacturing are now 30% lower than in Germany, where excessive tax burdens, bureaucratic hurdles, and declining work hours have made production increasingly unaffordable. The Virginia Beach plant also has the advantage of not having unions to deal with.
No new production in Germany
Stihl has put plans to construct a new factory in Ludwigsburg near Stuttgart on hold since the Spring. „We will certainly not be investing in new production in Germany over the next five years,“ Stihl said in Manhattan. Instead, the future lies in new locations in Romania or Kenya, but primarily in the United States.
Nikolas Stihl and other family members on the board aim to maintain control over the company. CEO Traub states that Stihl will not get involved with „greedy financial investors“, a sentiment echoed by the leaders of the chainsaw manufacturer, even amidst the private equity and hedge fund stronghold that is the United States.