Family business: Winkelmann boss Christian Knechtel: “Democracy costs something, we take it for granted”

The Winkelmann Group has become independent of the automotive industry in just a few years. In an interview, the first non-family boss explains why he also relies on armaments.

Dusseldorf. At the Winkelmann Group you can study how a family business, which started more than 125 years ago as a craft business for enamel blanks in Ahlen, Münsterland, moves with the times. Five years ago, around half of sales came from the automotive supply business, today it is only 15 percent and the trend continues to fall.

In an interview with the Handelsblatt, Christian Knechtel, the first non-family boss in office since 2024, explains how the medium-sized company implemented the structural change. Components for the defense industry play an important role.

Mr. Knechtel, you have a factory in the USA. How do you view the results of the midterm elections there?

As a citizen, I was happy because the result shows how democracy works. No matter how many huge sums are invested in the election campaign, in the end it is still the voters who decide. And the fact that President Donald Trump immediately recognized the Democrats' victory was also a good sign for American democracy. From an entrepreneurial perspective, I'm a little more reserved.

In what respect?

We must closely monitor political changes without basing our strategy on individual election cycles. We are represented in the USA with a production site in Auburn, Alabama. There we are close to our customers and can serve local markets. At the same time, the uncertainty surrounding tariffs and trade policy decisions remains an issue that we must take into account in our planning.

If you had to give Germany a grade, what would it be?

Grade three, trending towards four. We have a strong industrial base, well-trained people and great technical expertise. But the foundation is crumbling. If we want to remain pioneers in the world, a lot has to change.

On which topics?

We have a reasonable education system, but it is on a downward spiral. I understand the protests of the students. But for me the topic starts in kindergarten and elementary school. All children have to be taken along. So, firstly, we have to make a difference in education policy. If we train more people well right from the start, then we can develop further as a company and as a country. Secondly, companies need less bureaucracy and regulation and more flexibility in investments, the tax system and labor law, especially for managers. It no longer allows entrepreneurs to be truly entrepreneurial.

Christian Knechtel, 55, started his career as a cutting machine operator. After studying engineering, he worked, among other things, at the consulting firm PwC and as a managing director in mechanical engineering. In 2021 he joined the Winkelmann Group, initially as financial manager. He has been the first non-family managing director for two and a half years.

The Winkelmann Group was founded 128 years ago in Ahlen as a supplier to the enamel industry. Even before the Second World War, the craft business had become a medium-sized company. Today, the international group of companies with production sites in Germany, Poland, Italy, Slovakia, Turkey, China and the USA employs more than 3,700 people. In 2025, the company had sales of 640 million euros. The group of companies belongs to a total of nine shareholders. Six shareholders or shareholder representatives are active on the advisory board.

Where exactly do you see your entrepreneurial activities restricted?

Take the EU directives CSDDD on supply chains and CSRD on sustainability reporting obligations: the first encroaches on corporate freedoms. And the second increases the bureaucratic effort enormously, especially for medium-sized companies. This costs time and ties up resources that could be used more productively.

What else bothers you?

In the area of ​​labor law, managers are currently too well protected. They are difficult to terminate and receive high severance payments – even if their performance is poor. In my opinion, there must be consequences if someone performs poorly. If companies cannot react flexibly enough, that is bad for Germany as a location.

We don't yet have a real industrial policy in Germany. Which sectors should it be aimed at?

Yes, we absolutely need an industrial policy. It must be targeted at critical sectors of the economy, such as high-tech, pharmaceuticals, energy and defense. Germany and the EU must become more sovereign.

What can companies do themselves to make Germany more resilient?

In difficult phases like now - after Corona, with more than four years of war in Europe, protectionism and tariffs - one should not be hesitant, but rather derive the right strategies from the megatrends and implement them quickly. Companies should also better explain what needs to change so that we can develop Europe further. A lot more people need to understand this.

What particularly annoys you?

Take defensive capability. We don't talk enough about the fact that democracy costs something. We take them for granted. Only those who defend democracy can live it. And only those who are involved will do something about it. Another example is subsidies and tax cuts. This is only possible if social spending is reduced. If politicians don't get this across, then companies have to do it.

Businesses are already getting more involved in energy costs, but with little success. How high are your energy costs?

Our energy costs total around 3.5 percent of sales. With an expected group turnover of 670 million euros for this year, that would correspond to more than 23 million euros. This is no longer competitive. We lack an energy policy that controls energy costs, including network fees. We have therefore invested in our own energy infrastructure and are trying to further increase our self-sufficiency.

One of your production sites has been electricity self-sufficient since 2019. What else have you done since then to become more independent?

Since then, we have equipped all production sites where it was possible with photovoltaics and battery storage. We have introduced energy management systems in accordance with ISO 50001 everywhere and reduced CO₂. We also build our own wind turbine in Ahlen.

The recent attacks have shown how vulnerable substations can be. How do you secure the company?

I am always amazed at how unprotected parts of our critical infrastructure still are. We protect our own investments accordingly. But critical infrastructure doesn’t end at the factory gate. Therefore, companies, municipalities, network operators and authorities must work together to clarify how critical infrastructure is protected. We have raised the issue with the relevant authorities.

According to surveys, many companies hesitated to invest for a long time, but that is now changing. Why were you quicker at the Winkelmann Group?

Over the past five years, we have strategically examined megatrends and then made decisions. So, together with the advisory board and the shareholders, we decided without hesitation to exit the automotive supply industry and invest in heating, air conditioning and cooling as well as in renewable energies. We have expanded our aerospace and defense components division. A megatrend was electrification. This had two effects for Winkelmann.

Who would be there?

Firstly, that the internal combustion engine has no right to exist in the long term. That's why we wanted to get out of the automotive supply industry. Secondly: If the heat pump has a future – and we stand by that – it needs products. We then pushed that. So we didn't slavishly follow politics, but rather the megatrends.

And the defense industry?

Countries and regions must be able to defend themselves so that they can maintain their independence and their political systems. This also requires an efficient industrial base. We have manufacturing skills that are in demand in this area. At the same time, we view defense as part of a diversified portfolio. We don't want to become dependent on a single market.

How has the weighting in the company changed as a result?

We used to have 50 percent automotive supply business and 50 percent heating and air conditioning technology. Today the auto supply business is just under 15 percent, next year it will fall to seven to eight percent. We still have a few components that we are producing for car manufacturers until the end of the term. That's why this business will be with us for a while. The Reflex Group with heating and cooling currently contributes 70 percent of sales, the remaining 15 percent currently comes from the components business. This division should reach perhaps 30 percent of sales in three to four years, while the automobile share continues to decline.

Can you specify the components division in more detail?

We develop and manufacture highly complex components - from forming to machining to assembly. We produce these for three areas. Firstly, mobility, which is mainly about transmission parts for drives, for example for trucks and tractors. Second, aerospace components. We supplied eight maneuvering nozzles for NASA's Artemis mission. And thirdly, defense.

How important should the defense sector become?

It is the fastest growing segment and is expected to become the largest share of our components business. But we try not to become dependent on it. Therefore, other areas such as aerospace are also expected to grow.

So you expect demand in defense to decline again at some point?

Defense cannot and should not become the dominant industry, also because this area is cyclical. The empty depots are filled again. When they are full, demand can drop significantly.

Which customers do you supply with your defense technology?

For confidentiality reasons, I cannot say anything about individual customers and projects. Our components go to customers in various countries, including Germany, the USA and European NATO countries.

You are not new to the defense business. Winkelmann produced bazookas at the end of the Second World War and defense-related goods in Germany over the past few decades. Did that help you get back into the business on a larger scale?

Since Russia's attack on Ukraine, we were immediately in demand as a possible supplier for these topics. Our current manufacturing skills were crucial: we can manufacture certain components very precisely and deliver them reliably. So within 18 to 24 months it naturally happened that we were at the table on almost all topics. We had a clear advantage there.

They supply parts for bazookas and mines. Is this also about anti-personnel landmines?

No.

They want to invest a further 70 to 80 million euros in digitalization over the next four to five years. Have you neglected this so far?

No. Digitalization is not a new topic for us, but rather an ongoing task. We don't want to lose touch. This is actually a significant investment for a medium-sized company.

How do other companies react to your course?

I get a lot of positive feedback. It is recognized that you have a strategy, bet on big trends and have the courage to implement this path.

As the first non-family managing director, you have also previously worked in restructuring, among other things. Was that a reason for hiring you?

Mr. Winkelmann and the family had carefully considered that it would take two to three years until a successor was trained. We were looking for someone who can restructure and grow, knows multiple business models and has both CEO and CFO experience. I initially joined as CFO and was able to gradually get to know the company alongside Mr. Winkelmann.

What can other family businesses learn from this?

You should give a non-family managing director enough time. Getting to know the business in three years was the right path for us. The second point is that the family also withdraws step by step and allows itself to be done - with good governance on the supervisory board and advisory board. These are two things that many people can learn from, because that's exactly what doesn't work for many people.

What is your compass as a non-family company boss?

Everything we do should be able to be passed on to the next generations. This requires fundamental changes in the company and also in the environment.

Has it already been decided whether the next generation will take an operational role in company management?

This is a question that the shareholders and the advisory board should decide on in due course. Either way, the Winkelmann Group will remain a true family business.