Michael Müller CEO of Bavaria Yachts - 'Absolutely the man for the job'
by John Curnow, Editor, Sail-World AUS 31 Oct 2019 12:41 PDT
Bavaria Yachts CEO, Michael Müller at the 2019 Sydney International Boat Show © John Curnow
The golf course is renowned for being a place where things get done. It is where Michael Müller took a call from CMP's Managing Partner, Kai Brandes, to take a close look at Bavaria Yachts prior to them having a longer conversation. Müller took on the role of Managing Director for Sales and Marketing, and after just a few short months then became the CEO.
So the questions become just who is he, why is there so much new energy around the company and brand, and then finally, what does it all mean in both the short and more medium term for the brand that takes its name from the Southern German State it resides in.
Michael Müller - The man
Müller is certainly familiar with Bavaria's new owner CMP, having worked on many projects with them previously. Predominantly, he has a diverse FMCG and food and beverage kind of background. So it is interesting to ask why he thought that Bavaria Yachts might be a good role for him.
"There are many parts to this answer. Other investment companies had owned Bavaria and were not successful. CMP is a smaller investment company that is always looking to assist these sorts of situations, and they decided to take on this challenge", said Müller.
"That golf course I was on for Kai's call was in Turkey, so I asked a few people at the hotel about Bavaria the brand, and just saw that their eyes were glowing, they were shining as they told stories about Bavaria boats. At that moment I thought, oh there must be something in it."
"When I subsequently came to Bavaria Yachts I found a lot of people who were still there, some 550 of the original 600 plus. Given all of the insolvency issues over a long time, they still strongly believed in the company, and they couldn't believe that such things could happen."
"Then when you see the product, when you see the brand, when you talk with our customers, well you are starting to get to our Bavaria friends. So I thought well once CMP is investing in this company, and when you have this great brand, built by these terrific employees, why shouldn't you turn the business around. All of this was really the starting point to say yes, we can do it."
Distinctly, and renowned for being a hands on type of manager, it is also interesting to see how a person from the Rhineland goes about working in the South. "I grew up in Bavaria, but I've lived for more than 30 years in the area. I now live in Heilbronn, which is very close to Giebelstadt. Yes they are special people in the South, but I like them and I know how to get on with them. Once a year I go to Cologne to celebrate the carnival season, but that's all. Our kids grew up in the region. They also like to come home to the region."
Germans sail a lot on lakes, and Müller is no different. "I had my first boat when I finished university. There was not enough time to go on holidays last year, but the first thing I did at the beginning of the year was to take part in a small race where there were 100 boats. I went with some of the team, and we had a Cruiser 51, just so we could get some experience with the product. We lived on the boat; we showered, we cooked on the boat, so that we know how the product works."
"There were 600 people, many high professionals, and given it was in April, it was not so warm. 80% of the boats were Bavarias. It was a pleasant experience for me with our products, and lovely to be out there talking with all these people giving me some ideas on what we can improve for them. This sort of experience, on your own is really important for me as a hands-on manager. It's how I work and what I really need."
Bavaria the company, the brand: Not the State.
What Müller felt was that he could work with the energy and enthusiasm from customers all the way through to the employees making the boats. "Yes and when I was visiting the Boot Dusseldorf, and I saw all the dealers we had, you saw in their eyes, and in their questions and opinions that they seemed to feel that there's this guy we can talk and work with, and he has a totally different management style from what we were used to. I think they liked the open position, even though the situation had been very difficult for the six months before hand."
I spoke with Müller at the Sydney International Boat Show, where he was in situ for just a few days having made the arduous flight to Australia. "Our dealer network is critical. Supporting them in their activities is vital. Last year was not easy for them but they all stayed with the company and that's really, really important for us that our dealers are again believing in the product and the management. It's really the reason why I'm here."
Product lines.
Bavaria Yachts had developed so many wonderful new models prior to its difficulties. Barring the C65, most of them are now being produced, and we have reviewed a couple of them on these sites. Yet what is most exciting is that there are going to be two more new boats, one in power and one in sail next year. Clearly there's a massive capital injection that's gone into the business, to firstly not only get production back up and going, but to then also do the R&D to make even more new models.
"We had some strategic discussions with our important dealers. It was really clear that bringing in the model changes was a good decision. The wrong decision was that there was too much change from the centre gravity of the brand Bavaria Yachts. The powerboats were too sporty, too expensive. On the sailboat side, the designs of the C class were very good, but the products were not finely developed, which did not go well in full production. The principal direction was correct, but we also heard from our customers and dealers that we not only needed the big boats, but also the smaller models to get the people into the brand."
This means for the future we will increase synergies and efficiency between the different product lines and long term will have a more streamline product range.
"On the sailboat side I think the C Line vessels are a very good approach. Fast, open and big boats, that took a lot of work and investment to bring them to market as production ready craft. The changes were to bring them back into the Bavaria philosophy - efficient, robust and so on. There will be more models of this type, so Bavaria fans can be excited for Dusseldorf next year, where we will proudly present the next steps for the future of Bavaria Yachts."
"In the following years we will keep the design and philosophy, which means Cossutti will be delivering the final solution, and this means there'll be a genuine uniformity all the way through the range."
"Consumer requirements change over 10 years. This gives you a framework for when you have to change your product. For that reason the steps we have taken with the C Line, and also the Sport Line should give us seven to ten years."
Manufacturing
Müller would add, "We need to invest a lot of money at the moment, and it's year by year. So far more than six to eight million Euros is spent reinvesting in new products. That's a lot of money, and you've got to be able to keep going. At the moment all the activities we have set up to get in a position to invest on a long-term basis, are in plan. In some areas we're ahead of plan. We are really happy. The order book for the next production year is starting to get full - better than expected. At the moment we are quite optimistic."
So far that 'plan' wasn't so much a rationalisation, but a uniformity in a very Germanic style, and then also the application of strict building and business models around each and every craft. "Yes, it is a fair summation. You must have a WOW factor when you are on a boat. And in the past Bavaria Yachts had a WOW factor because you got a lot of boat for your money. It was not the best performing boat on the market, but very good, very robust and constant, easy to service, and so on. We must still keep these positives, but at the end people are asking for more", said Müller.
"When we talked to people here in Sydney yesterday, I heard the people say 'wow' to the boat. Yes this will not be changed."
By far and away Bavaria Yachts is the most mechanised, the most automated production facility, to ensure quality, speed, and be able to nominate a specific profit variable. You could say Müller's real role now is to ensure that Bavaria's strength in that mechanised and automated production shines through in the way that the products are delivered.
"There was too much complexity, too many things in the boats that the customer did not realise. These did make for big problems in production and profit. We need an industrial production of our boats. I think we have the factory for this and we have the people for it. In the end we will have one line, or one brand, on the motorboat side, one brand on the sailing boat side. At the moment we have three and three, and that's much too complicated for quality and production."
What we saw very early on that there will not be a Bavaria branded catamaran, it is a Nautitech. "Bavaria's brand positioning is more family style cruising, and value for money. Nautitech is totally different, as it is sporty. Integrating Nautitech into the Bavaria brand was a mistake.
The other thing to occur quickly under CMP was the production to be entirely in Giebelstadt, which is why the production of the R55 was immediately moved to the facilities in Germany, so all Bavaria Yachts Monohulls are purely made in Germany "This is a core strategy of the group, apart from Nautitech in France. It makes no sense to transfer this technology and experience of our people to be sent to other places in the world. So, the boats are produced in Giebelstadt, which is in Germany, right here in Bavaria (and who said the German's did not have a sense of humour?)
The future.
I think it's a fantastic thing that Bavaria Yachts has a hands-on man at the top because that will obviously instil the culture all the way through, and remove the past. Müller finishes by saying, "Developing one new boat takes more than a year, and costs more than two million Euros. You need the time. You don't have to hurry, and you do it right, step by step. We have given ourselves a total of two years to be ready and to grow again in the right direction."