In the paper What Is Still German Today, and What Will Be in 10 Years? we described the five layers of industrial substance — legal, financial, operational, cultural, strategic — and their uneven erosion. We showed how a shell outlasts its content, how brands can live on while the substance they stood for has long since been decided elsewhere. We took VW as the ongoing case, with Schaeffler and BASF as harbingers.
The present paper takes a single case in which the process is complete — from beginning to end state. DMG Mori, a company whose legal shell stands in Bielefeld, whose brands Gildemeister, Deckel and Maho are still emblazoned on the machines, but whose majority owner, with 88 per cent, is a Japanese group in Tokyo. The process stretched over more than three decades and is today irreversible. That makes it analytically valuable: we no longer have to describe the speeds of erosion only in theory; we can trace them empirically — layer by layer, decade by decade.
We take DMG Mori not because something scandalous happened here. On the contrary. Compared with many other conceivable buyers, the Japanese DMG Mori Co. is a model — it invests in the German plants, it keeps sites open, it is in the black, it cultivates the engineering culture. Describing the loss here means describing the gentler case. That is precisely why it is so instructive. What happens in the favourable case sets the yardstick for what will happen in the unfavourable one.
What follows is the story of a substance built up over six generations, through two world wars, through economic crises, through bankruptcies, through the consolidation of a dozen individual companies into a single group — and which passed into foreign hands in a single takeover between 2015 and 2018. It is the story of many companies in one.
I. The Original Substrate — the Pioneer Firms
What is called DMG Mori today is the accumulation of more than a dozen independent industrial substances. Each of these substances was built up in a history of its own, with its own pioneers, its own defeats, its own innovations. Before we describe the accumulation, we must name the substances one by one — otherwise what went into it disappears behind what is left.
Gildemeister, Bielefeld, 1870. Friedrich Gildemeister, born in Lübzin in Pomerania (today Lubczyna), founded the firm "Gildemeister & Comp." in Bielefeld on 1 October 1870 as a master locksmith. Originally it was a workshop for machine tools supplying the sewing-machine industry. In 1899 the general partnership became a joint-stock company with a capital of one million gold marks. In the bombing raid of 30 September 1944 the production facilities were completely destroyed. Karl Bernhard Grauthoff began the reconstruction in 1947. In 1950 the company went public. In 1970 it acquired a controlling stake in the Hamburg machine-tool maker Heidenreich & Harbeck — the decisive step into CNC technology. In 1975 Gildemeister presented the world's first machine tool with CNC control; the programming system was called "EasyProg" and was based on the APT language. (An episode in Gildemeister's history that is hard to place: in the 1980s the subsidiary Gildemeister Projecta GmbH, Gipro for short, was general contractor for the construction of an Iraqi military research centre under Saddam Hussein. German pioneers, too, have a history that does not consist of innovation alone.)
Friedrich Deckel, Munich, 1903. The precision mechanic Friedrich Wilhelm Deckel, a native of Jungingen, had worked from 1889 as a laboratory mechanic at Carl Zeiss in Jena under Ernst Abbe. In 1903, together with Christian Bruns, he founded the firm Bruns & Deckel in Munich — initially to manufacture the Compound central shutter for cameras. Bruns left in 1905 and Deckel became sole owner; in 1910 Carl Zeiss, Bausch & Lomb and Alfred Gauthier joined as partners. From 1911 the firm's own need for high-precision machine tools grew into a separate line of business. In 1912 Deckel was the first Munich entrepreneur to introduce the eight-hour day. In 1914 the company had 500 employees. In 1953 it had 3,000. The milling machines of the FP series — the FP1 in particular — became world-famous for their precision and adaptability. Until 1972 Deckel was the fourth-largest machine-tool manufacturer in Germany.
MAHO, Pfronten, 1920. In the Pfronten valley in the Allgäu, five precision mechanics joined forces in 1920. They called their firm MAHO and at first made compasses and mathematical instruments, later armaments. After the war, in 1950, they began building universal machines for their own use. Larger industrial firms took notice. From 1970 MAHO concentrated exclusively on machine tools, acquired Graziano in Italy as a subsidiary, went public in 1986 — and crashed with the economic slump that followed. In 1985 Werner Babel had still managed to bring in Franz Josef Strauß as keynote speaker at the opening of Plant II.
FAMOT, Pleszew, 1877. In the Polish town of Pleszew a workshop for repairing simple agricultural machinery was founded in 1877 — with twenty employees. In the 1920s it became a recognised manufacturer of woodworking tools. From the 1960s FAMOT specialised in lathes for the metalworking industry. In 1999 the company joined the Gildemeister group. Today Pleszew, with more than 50,000 square metres of floor space and around 700 employees, is one of the group's largest production sites — and a central component supplier for all the other plants.
Heidenreich & Harbeck, Hamburg. The machine-tool maker in which Gildemeister acquired the controlling stake in 1970. CNC know-how came into the Gildemeister group via Heidenreich & Harbeck. As an independent brand the firm is hardly known any more today — it has been absorbed into the group.
Max H. Müller Brinker Eisenwerk, Hanover-Brink, 1915. The brothers Max Müller II (born 1873 in Altona) and Gustav Müller (1877–1943) founded in 1915, in what was then the municipality of Brink (today Brink-Hafen in Hanover), an extension of their father's business, "Max Müller Maschinen- und Formenfabrik". The firm at first made components for locomotives and armaments, later also machine tools. During the war Max Müller III took over the management — including of plants in occupied France, Belgium and Norway. After the war, in 1947, the firm was renamed "Hannoversches Presswerk Max Müller GmbH & Co." and specialised in heavy-duty lathes. In 1971 it was sold to Gildemeister. The CNC heavy-duty lathes ran for decades under the double name "Gildemeister Max Müller" — models such as the MD 5 and MD 6 were built well into the 1990s. Max Müller's substance — more than fifty years of its own development in heavy turning — went into the Gildemeister group and today has no brand name of its own.
GRAZIANO, Tortona, Italy. Italy's second-largest manufacturer of universal lathes, already integrated as a subsidiary of MAHO before the Gildemeister takeover, later fully transferred into the group. Graziano produces multi-spindle automatic lathes, a speciality of its own that kept its own function within the group structure.
DeVlieg Machine Tool Company, Michigan, 1928. Charles B. DeVlieg (1892–1973) — today in the American Machine Tool Hall of Fame — founded his own firm in Michigan in 1928, after developing the first "Rigidmil" milling machines at Sundstrand. His fame rests on the high-precision horizontal boring mills of the "Jigmil" series — the first Jigmil stands today in the Henry Ford Museum; 4,500 were sold in all. A Lutterworth subsidiary (England) built the machines for the European market. "Gildemeister DeVlieg" was established as a group company in the 1990s — Gildemeister's entry into the American heavy-machinery business. The DeVlieg substance remained in the group family until 2004; after that it passed to Bourn & Koch in Rockford, Illinois, which still restores Jigmils today.
Even this list is incomplete. Witzig & Frank Turmatic in Offenburg — maker of automatic rotary-drum transfer machines and flexible transfer lines, half of which Gildemeister acquired in 1989. LCTec Laser- und Computertechnik in Pfronten, taken over in 1998 — the basis for a new generation of milling tools with laser technology. Sauer GmbH in Stipshausen, majority-acquired in 2001, 95 per cent in 2002 — the ultrasonic and Lasertec division; in 2005 Sauer and Lasertec were merged into Sauer GmbH. SACO with its multi-spindle speciality. a+f GmbH of Würzburg, taken over in 2007. Realizer GmbH of Borchen, majority-acquired in 2017. On the Japanese side: Hitachi Seiki, taken over by the Japanese Mori Seiki in 2002; Taiyo Koki, integrated by Mori Seiki in 2001; Dixi Machines SA of Le Locle in Switzerland, taken over by Mori Seiki in 2007 — a whole series of further firms that today all trade under the DMG Mori brand or have been absorbed into it.
What connects all these firms is not a shared history. Each had its own. What connects them is that today they all belong to a Japanese holding company. More than a dozen industrial substances — from Hanover heavy industry to Munich precision mechanics, from Polish woodworking tools to Italian lathe building, from the American boring mill to the Swiss jig borer — have been absorbed into a single group. Each of these substances was once an anchor of its own in the industrial landscape of its country. Today they are subsidiaries of a subsidiary headquartered in Tokyo.
II. The First Wave of Consolidation — 1993 to 1994
In the 1980s the pioneer firms had been pulled in different directions. Friedrich Deckel had been converted into a joint-stock company in 1972, had stopped camera-shutter production in 1973 (in favour of Calw), had given up shutter manufacturing in Munich altogether in 1976 — and had since been struggling with the question of whether the machine-tool division alone could carry the company. MAHO had gone public in 1986 and immediately afterwards experienced the economic slump that shook the machine-tool industry worldwide.
In 1993 the two old rivals merged to form Deckel Maho AG — an emergency merger of two faltering companies, in the hope of surviving together what they could no longer survive apart. The hope was not fulfilled. As early as 1994 — barely a year after the merger — Deckel Maho AG filed for bankruptcy.
At this point Gildemeister stepped in. In 1994 the Bielefeld machine-tool maker took over the business operations of Deckel Maho AG in Pfronten. The result was DMG — Deckel Maho Gildemeister. What was left of two bankruptcy proceedings was consolidated under the roof of the third pioneer. Production in Pfronten carried on, now under Gildemeister's roof; the Munich Deckel plant was gradually wound down. Today the Plinganserstraße site in Munich-Sendling has given way to residential and office buildings; the listed production hall from the 1950s (by Walter Henn) is used for cultural and commercial purposes.
The consolidation of 1993/1994 was the first major loss of substance — not in the sense that the substance disappeared, but in the sense that it lost its independence. Three pioneer firms became one. That was the precondition for everything that followed. An independent Deckel AG could not have been taken over by Mori Seiki in 2015 — it would not have had the scale to defend itself. Nor could an independent MAHO. By being merged, they became a takeover candidate for a larger entity.
This first wave of consolidation was no evil plan. It was the rational response to a severe crisis in the industry. But it was also the first step of a movement that would not stop again.
III. The Accumulation — 1995 to 2008
In the fifteen years after the takeover of Deckel Maho, Gildemeister expanded on its own initiative and under the pressure of a global consolidation of the machine-tool industry. The industry's watchword was "cutting machine tools" — turning and milling — and in this discipline Gildemeister was to become world market leader.
Step by step the group grew. The DMG brand (Deckel Maho Gildemeister) was established. The first international plants came into being — DECKEL MAHO Pfronten and Seebach in Germany, GILDEMEISTER Drehmaschinen in Bielefeld, GRAZIANO Tortona and SACO in Italy, FAMOT Pleszew in Poland (1999), DECKEL MAHO GILDEMEISTER (Shanghai) Machine Tools Co. in China, and a number of further subsidiaries.
Gildemeister's accumulation had already begun in the 1980s — discreetly, often as a minority stake, often followed by full integration. In 1989 Gildemeister acquired 50 per cent of Witzig & Frank Turmatic in Offenburg, a maker of automatic rotary-drum transfer machines. In 1993 — that is, even before the Deckel Maho takeover — several production units were combined into Gildemeister Drehmaschinen GmbH. In 1998 LCTec Laser- und Computertechnik in Pfronten was taken over, the basis for a new generation of milling tools with laser technology. In 1999 FAMOT Pleszew was added — a deal that today, a quarter of a century later, is celebrated as a model of success. With 700 employees, Pleszew is today one of the group's largest and most modern production sites. DMG Mori has invested €60 million there. The Polish employees were trained to DMG standards. Today Pleszew supplies strategically important components to all the German plants — DECKEL MAHO Pfronten, DECKEL MAHO Seebach, GILDEMEISTER Drehmaschinen Bielefeld. More than 1,600 pre-assembled machine bodies leave the plant every year.
In 2001 Gildemeister acquired a majority in Sauer GmbH in Stipshausen — the ultrasonic technology that makes it possible to machine hard, brittle materials such as glass and ceramics. In 2002 the stake was raised to 95 per cent. In 2003 the first plant outside Europe was opened — in Shanghai, the entry into the Chinese market. In 2005 Sauer and Lasertec were merged into a joint Sauer GmbH. In 2007 a+f GmbH of Würzburg was added.
In 2002 Gildemeister was admitted to the "Prime Standard" by Deutsche Börse. In March 2003 the share was listed in the SDAX; at the end of December 2007 it moved up into the MDAX — the mid-cap segment. The high point of listed independence.
In 2005 Gildemeister negotiated with ThyssenKrupp Technologies AG about pooling their machine-tool activities. Had they reached agreement, ThyssenKrupp would have become the largest single shareholder of Gildemeister AG — "without seeking control", as the press release put it. The pooling never happened. But the episode is revealing: even then it was being discussed that Gildemeister might see itself as the hub of a European machine-tool consolidation. Had these negotiations ended differently — had ThyssenKrupp's machine tools been merged with Gildemeister — the later Japanese takeover might have become structurally more difficult. As it was, the German consolidation remained piecemeal.
In parallel, the mirror-image accumulation was taking place in Japan. Mori Seiki, founded in Nagoya in 1948 by the three Mori brothers, had integrated the grinding-machine maker Taiyo Koki in 2001, taken over the business activities of Hitachi Seiki in 2002, and in 2007 acquired from the Swiss Dixi Holding Le Locle the company Dixi Machines SA, specialised in high-precision jig borers. On both sides of the world the same movement was being carried out — consolidation of the machine-tool industry into a few global players. The question was who would end up taking over whom. The two largest players in this phase were Gildemeister and Mori Seiki. They were eyeing each other.
IV. The Strategic Alliance — 2009 to 2013
The trigger for the alliance was the financial crisis of 2008/2009. Within a few months the market for machine tools collapsed worldwide — by between 30 and 50 per cent, depending on the segment. The industry had planned with capacities that were suddenly no longer called upon. Those without strong reserves got into existential difficulties. Those with reserves saw their shares slump — and thereby became takeover targets for others.
Mori Seiki was hit particularly hard. The Japanese family company — its sons and daughters still directly invested in the group today — did not see itself able to weather the crisis alone. In March 2009 Mori Seiki concluded a cooperation agreement with Gildemeister AG. The two companies began to take stakes in each other, to build joint sales structures, to share markets.
From the German point of view this was a pact among equals — even with a slight advantage for the Germans. Gildemeister AG was at the time stronger than Mori Seiki in earnings and finances. If anyone could have taken over anyone, Gildemeister could have taken over Mori Seiki — not the other way round. But in a family constellation like that of the Mori family this was an intolerable idea. Japanese ownership structures, the family culture, the understanding of control — all of this stood diametrically opposed to a German takeover of Mori Seiki. The Germans, for their part, saw no reason to launch a hostile takeover — they were content with the alliance.
This mutual restraint was no proof of strength. It was the beginning of a loss. The fact that Gildemeister did not take up the position of strength, that the cooperation was understood as a partnership among equals, made the gradual shift possible. If you see yourself as a partner, you do not control. If you do not control, you are controlled.
In April 2010 the two companies' US sales organisations were merged — DMG/Mori Seiki USA. On 1 October 2013 Mori Seiki in Japan renamed itself DMG Mori Seiki K.K. In the autumn of 2013 the German Gildemeister AG became DMG Mori Seiki AG. The alliance's brand name replaced the German traditional name. With that, the "Gildemeister" brand — a 143-year-old business asset with a reputation of its own — had been formally given up.
The annual reports of these years speak of an "equal partnership". Shareholder advocates later asked sceptical questions. "What led to the change of heart?" asked Thomas Hechtfischer of the Deutsche Schutzvereinigung für Wertpapierbesitz (German Association for the Protection of Securities Holders) at the 2016 annual general meeting — when the domination agreement had already been signed. The answer lay in what had happened between 2013 and 2016.
V. The Change of Control — 2015 to 2018
On 22 January 2015 the Japanese DMG Mori Seiki Co. submitted a takeover offer to the German DMG Mori Seiki AG. Shareholders were initially offered €30.55 per share — the price had been at roughly this level in the preceding days. Because of weak demand, the offer was later improved twice. Only just under twelve per cent of shareholders accepted it.
That in itself was no defeat for the Japanese. They did not buy through the public offer; they bought by other routes. Over weeks and months Mori Seiki acquired blocks of shares on and off the exchange until, as of 2 April 2015, its stake stood at 50.81 per cent — a simple majority. Gildemeister AG was thus de facto in Japanese hands.
In April 2016 the stake was raised to over 75 per cent — the qualified majority required for structural measures under German stock-corporation law. On 6 April 2016 it was announced that a domination and profit-and-loss transfer agreement under §§ 291 ff. of the German Stock Corporation Act (AktG) was to be concluded with DMG Mori AG via the subsidiary DMG Mori GmbH in Bielefeld — a wholly owned subsidiary of the Japanese DMG Mori Co. Ltd.
On the same day — one hour and eight minutes after the ad hoc announcement — the departure of the chief executive, Rüdiger Kapitza, was announced. His successor, Christian Thönes, was appointed the new chief executive on 15 April 2016. The personnel decision was the logical corollary of the structural one.
On 2 June 2016 the agreement was signed. The annual general meeting of DMG Mori AG approved the agreement on 15 July 2016 in the Stadthalle Bielefeld — on the site where the company had had its headquarters for more than a hundred years. With the votes of the Japanese majority owner, the required three-quarters majority was reached. On 24 August 2016 the agreement took effect upon entry in the commercial register.
The essential provisions: DMG Mori AG placed its management under the instructions of DMG Mori GmbH (that is, of the Japanese parent). DMG Mori AG undertook to transfer its entire profits to the parent from the 2016 financial year onwards. In return, DMG Mori GmbH undertook to absorb any losses of DMG Mori AG. The outside shareholders — those who did not want to give up their shares — became entitled to an annual guaranteed dividend of €1.17 gross per share. Those who wanted to exit received €37.35 per share as cash compensation — well above the enterprise value of €25.14 per share determined by an expert valuation, but below the share price of €42.76 at the time of the general meeting.
Shareholder advocates criticised the undervaluation. In the appraisal proceedings before the Dortmund Regional Court, the court-appointed third-party expert Wolf Achim Tönnes found in 2021 that the guaranteed dividend should have been set higher — €1.44 instead of €1.17 gross. The amount of the cash compensation was confirmed as appropriate. But even this confirmed value lay well below what an independent DMG Mori AG with its global growth opportunities would have been worth — had it still been able to act independently.
On 19 December 2016 DMG Mori AG left the MDAX. On 21 December 2020 it also dropped out of the SDAX. A joint-stock company without any significant free float — the Japanese parent today (as of 2024) holds about 88 per cent of the shares — is, strictly speaking, no longer a public company. It is a subsidiary with a residual stock-market listing.
VI. Today's Structure — Who Decides, Where, About What
The group that today trades as "DMG Mori" is a dual structure with two headquarters — Tokyo and Nara in Japan, and Bielefeld in Germany — and a clear hierarchy between them.
At the top stands DMG Mori Co. Ltd., headquartered in Tokyo (Shiomi, Koto-ku, global headquarters) and Nara City. It is headed by President Dr Masahiko Mori — son of the founding family, born in Nara in 1961, studied engineering at Kyoto University, then Itochu Corporation, at Mori Seiki from 1993, president since 1999, doctorate from the University of Tokyo in 2003. In 2022 DMG Mori Co. Ltd. generated revenue of €3.418 billion and employs 12,626 people internationally.
The shareholder structure of the Japanese parent is a mix of institutional investors and the founding family. Baillie Gifford & Co. holds 10.0 per cent. Global Alpha Capital Management Ltd. 7.5 per cent. Sumitomo Mitsui Trust Asset Management 3.7 per cent. DMG Mori Seiki Employee Stock Ownership Plan 3.6 per cent. Nomura Asset Management 3.2 per cent. Mori Masahiko/Mori Seiki directly 2.8 per cent. Mori Manufacturing Research & Technology Foundation 2.7 per cent. BlackRock Fund Advisors 2.7 per cent. The Vanguard Group 2.1 per cent. Norges Bank Investment Management 1.6 per cent. Overall, then, institutional investors in the majority, a notable family share, an employee shareholding — the typical structure of a mature Japanese group.
DMG Mori Co. Ltd. holds 87.37 per cent (some sources say 88 per cent, depending on the reference date) of the shares in DMG Mori AG in Bielefeld. DMG Mori AG is therefore no longer an independent holding company but a German subsidiary of a Japanese group.
The chief executive of the German DMG Mori AG since 25 May 2023 has been Alfred Geißler. He has belonged to the DMG Mori group for about forty years and was most recently — since 2005 — managing director of Deckel Maho Pfronten GmbH. Geißler replaced Christian Thönes, who in the view of the Japanese majority owner "had placed too much emphasis on digitalisation, which did not bring short-term profit". The personnel decision is revealing in the light of business policy. Who determines the board in Bielefeld, who replaces it, who sets which strategic priorities — that is decided in Tokyo. Thönes had raised group revenue to €2.5 billion; that did not save him.
The group's production sites are today distributed as follows. In Japan: Nara Campus, Iga Campus, Taiyo Koki and Magnescale. In Germany: Pfronten (1,600 employees, 149,000 m², competence centre for milling, including DMG Mori Ultrasonic Lasertec GmbH); Seebach (Deckel Maho); Bielefeld (Gildemeister Drehmaschinen); Stipshausen (Sauer). In Italy: Bergamo and Tortona (Graziano). In Poland: Pleszew (FAMOT, about 700 employees, 50,000 m², strategic component supplier). In the USA: Davis (Digital Technology Laboratory).
In addition there is a large number of sales and service locations — about 124 as of 2024, already 128 in 45 countries as of mid-2025, of which 17 (2024) and 18 (2025) respectively are production plants. Since December 2014 the central European sales organisation has been based in Winterthur, Switzerland — that is, no longer in Bielefeld.
In 2024 DMG Mori AG (the German subsidiary) had a total of 7,498 employees, including 265 apprentices. In the DMG Mori group worldwide (Global One Company) there are about 13,500. The German employees thus make up about 56 per cent. In 2024 the German subsidiary generated revenue of about €1.8 billion — group revenue was about €2.7 billion. The German subsidiary is therefore still the backbone of the group. But it is a backbone that is lifted in Tokyo.
VII. Russia — the Uncomfortable Story within the Group
One episode within the process deserves mention in its own right, because it shows how a group strategy carries on even under geopolitical strain once the structures are established.
A year after Russia's invasion of Crimea in breach of international law, DMG Mori opened a plant in Ulyanovsk, Russia, in 2015. Investment volume: around €70 million. Site area 330,000 square metres, production area 3,300 square metres. ECOLINE machines were to be manufactured there for the Russian market — CTX 310 ecoline, DMU 50 ecoline, DMC 635 V ecoline and DMC 1035 V ecoline. The German federal government had previously issued an investment guarantee, which insures German direct investment abroad against political risks.
In March 2022 — after the start of Russia's war of aggression against Ukraine — DMG Mori announced its withdrawal from Russia. All deliveries, spare parts, components, services and production in Ulyanovsk had been stopped on 24 February 2022, it said, and IT connections cut.
In the autumn of 2023 the weekly newspaper "Die Zeit" reported, on the basis of its own investigations, that the Russian plant had continued to operate despite the announced closure. Machine tools from DMG Mori production were said to have been used in Russian arms production — in the manufacture of Kalashnikovs, of the Mil Mi-8 military helicopter, and at the aircraft maker Sukhoi for the Su-57 fighter jets. DMG Mori rejected the allegations. Machines that had been in production before 24 February 2022 had possibly been sold "without the knowledge or consent of the responsible management".
In April 2024 the Kremlin expropriated the plant in Ulyanovsk. With that, the Russian episode was formally over for DMG Mori too — the plant now belongs to a Russian trustee body. Because of the investment guarantee, the federal government may be obliged to pay compensation; the amount is open. From the group's point of view, the Russia episode is a loss, which can be read off the 2024 annual report as a deconsolidation-related EAT result from discontinued operations of minus €91.9 million.
The episode is relevant to our subject because it shows that a global group structure develops an inertia of its own that cannot be stopped at once even by clear geopolitical ruptures. What was in production before the war reportedly carried on afterwards, possibly not out of ill will but out of operational inertia. An independent Gildemeister AG in Bielefeld would probably not have built a plant in Ulyanovsk in 2015. The global DMG Mori Co. built it — because, seen from Tokyo, the growth potential looked attractive for the group strategy. The local strategic compass pointed elsewhere.
VIII. The Five Layers — a Retrospective Accounting
In What Is Still German Today? we described the five layers of industrial substance. In the DMG Mori case we can go through the layers retrospectively — and see what changed when.
The legal layer. DMG Mori Aktiengesellschaft, headquartered in Bielefeld, still exists as a German joint-stock company. It is entered in the commercial register at the Bielefeld local court. It has a supervisory board under German stock-corporation law. It publishes its annual reports in German. The legal layer is therefore intact. What has changed: the AG is no longer the top of the group but the subsidiary of a Japanese holding company. Legally, however, it remains a German AG. This layer is the most durable — it changes least and most slowly.
The financial layer. Here lies the most dramatic and fastest change. Until 2009 Gildemeister was independently financed, with a broad free float among German and international small shareholders. From 2009 the cross-shareholding with Mori Seiki began. From 2015 the majority belonged to the Japanese Mori Seiki. From 2016 the profits — the entire profit — went to the Japanese parent. Today DMG Mori Co. Ltd. holds 87 to 88 per cent of the shares. The financial layer passed from German to Japanese in a single step in 2015/16 — and is thus the second fastest of the five.
The operational layer. This is the layer in which the German substance is most visible today. In Pfronten 1,600 people work. More in Bielefeld — DMG Mori AG has 7,498 employees, most of them in Germany. The machines of the Gildemeister, Deckel, Maho and Sauer lines continue to be made in Germany. The Pfronten monoBLOCK Excellence Factory was reopened in 2020 with highly automated flow assembly — a massive investment. German operations have not eroded; on the contrary, they have been further expanded under Japanese leadership. But the strategic investment decisions — where which plant is built, what is made where — are taken in Tokyo. The operational layer is physically still German, structurally already Japanese.
The cultural layer. Here the observation is at its subtlest and perhaps most important. The engineering culture in Pfronten, Bielefeld, Seebach and Stipshausen is German. The employees speak German. Vocational training follows German standards (DMG Mori still had 265 apprentices in 2024). The supplier relationships are rooted in the German industrial landscape. Co-determination practice follows German law. But the language of communication with group management is English. The strategic discussions take place in Tokyo. The yardsticks of performance are set in a vocabulary that is becoming increasingly Japanese-Anglophone — "Machining Transformation" as a strategy term, "Global One Company" as an umbrella term. The cultural layer erodes slowly and unevenly. Whoever starts as an apprentice in Pfronten in 2026 will no longer experience the old engineering cultures of Deckel and MAHO in their own right — he will get to know them through the filter of today's group culture.
The strategic layer. Since the domination agreement of 2016 this layer has been entirely in Tokyo. Which markets are opened up, which products are developed, which plants are built, which subsidiaries are integrated, which lines are abandoned, which alliances are concluded — all these decisions fall under the leadership of Dr Masahiko Mori. Abandoning the "ECOLINE" product line — a consequence of the Russian deconsolidation — was decided in Tokyo. The build-up in Pinghu in China (construction began at the end of 2021) was decided in Tokyo. The strategic layer passed from German into Japanese hands in a single act — the domination agreement of 2016.
If we read the five layers in a single summary: the strategic layer was lost in 2016. The financial one too. The operational one is physically preserved, but structurally bound in a way that allows no return. The cultural one erodes over decades. The legal one remains — it is the longest-lasting shell.
IX. What Is Different about DMG Mori Compared with the China Cases
In the What-Is-Still-German paper we referred to the KUKA lesson. The KUKA lesson says: guarantees of continued existence expire, relocation begins, German substance erodes. In the DMG Mori case the picture is more nuanced. The Japanese have invested heavily in the German plants. The monoBLOCK Excellence Factory in Pfronten is not a model being phased out but a modernised production facility. The "Deckel Maho Pfronten" brand is cultivated. The German workforce has been stable to slightly growing since the takeover.
Why this difference? Several reasons.
First, Japan has no industrial-policy strategy of localisation like China's. There is no Japanese five-year plan that prescribes moving value chains to Japan. DMG Mori Co. operates as a global group in a market environment wider than the state industrial policy of any single economy. What it buys, it tends to keep where it works.
Second, German engineering culture is operationally indispensable to the machine-tool industry. A milling machine from Pfronten cannot be made in the same quality in a Japanese plant — not because the Japanese are worse, but because the associated supply chains, the designers' experience, the specialist knowledge accumulated since the MAHO days are embedded in the region. Relocation would be a loss for the group itself. With KUKA robots this tie to the location was less pronounced — robots are technically easier to standardise.
Third, the Mori family. An ownership structure in which the founding family is still directly involved — Dr Mori personally holds 2.8 per cent, the Mori Manufacturing Research & Technology Foundation a further 2.7 per cent — thinks differently about investment than a pure financial investor or a state-driven group. It thinks in generations, not quarters. That is the other side of the Schmidheiny observation from our change-of-course paper: patriarchal owners with a generational perspective are rare today, but where they still exist they are a factor of stability — even when they take ownership out of the original country.
Fourth, the overall economic environment. DMG Mori Co. is held by institutional investors who think long-term (Baillie Gifford, Sumitomo Mitsui Trust). It has no activist hedge fund pushing for a break-up. The shareholder structure allows a more stable strategy.
For these reasons DMG Mori is in many respects the gentle case. But — and this is the important observation — even the gentle case has affected all five layers. Even in the gentle case strategic sovereignty is lost. Even in the gentle case the profits are transferred away. Even in the gentle case the central decisions are taken outside Germany. What erodes faster with a Chinese buyer erodes more slowly with a Japanese buyer — but the direction is the same.
If we set the negotiations currently under way over Chinese takeovers of German Mittelstand firms (medium-sized, often family-owned companies) against the DMG Mori process: in the China cases the faster erosion will very probably set in — state-steered localisation, Made-in-China status for the value chain, relocation over ten to fifteen years. In the DMG Mori case the erosion is slower and less visible — but it has the same end point.
X. The Lesson of the Megamachine
What does the process show about the Megamachine? We take several observations.
First, nobody wanted the erosion of German machine-tool sovereignty. Friedrich Gildemeister did not want it when he opened his locksmith's workshop in 1870. Friedrich Deckel did not want it when he founded the workshop in Munich with Bruns in 1903. The five Pfronten precision mechanics did not want it when they set up their small workshop in 1920. The supervisory boards and executive boards of the 1990s who had to deal with the bankruptcies of Deckel and MAHO did not want it. The shareholders who rejected the Japanese takeover offer in 2015 did not want it. Nor did the Japanese side primarily want the shift of substance — it wanted a large, stable, globally competitive group, and the structural realities of its family company made the takeover appear the only stable constellation.
Nobody wanted the result. The result is there all the same. That is the Megamachine in its pure form. It produces results that nobody explicitly decided, out of the sum of decisions that were each rational on their own.
Second, the consolidation logic of the machine-tool industry was a global movement that no single country could have stopped on its own. Whoever remained isolated as a medium-sized firm in the 1990s went under — Deckel and MAHO are the witnesses. Whoever consolidated grew big enough to survive — and thus big enough to become a takeover target. That is a trap from which there was no easy way out. The consolidation logic did not make the takeover inevitable, but it made it probable.
Third, German politics did not watch the process — or, more precisely, not to the extent that it could have intervened. There was no BAFA procedure that could have stopped the takeover (Japan is not a third country within the meaning of the Foreign Trade and Payments Act). There was no industrial-policy response that would have organised a German or European alternative buyer for Gildemeister. On the contrary: German economic policy celebrated the globalisation of German companies and tended to regard the takeover as a technical solution to an economic question. What has emerged since 2015/2016 — the growing sensitivity towards Chinese takeovers, the tightening of the Foreign Trade and Payments Act — is a reaction to what was still waved through without difficulty in the DMG Mori phase.
Fourth, the machine-tool industry follows a logic in which markets are global and economies of scale massive. Whoever does not operate on the scale of two billion euros in annual revenue cannot shoulder the research and development investment needed to stay competitive. This scale required consolidation. The consolidation was not wrong. The only question is whose hand ends up holding the consolidated group.
The Megamachine does not defeat its substances by force. It integrates them. What came into being over a hundred and fifty years can be rededicated in a single legal act — without a single machine having to be moved, a single workforce dismissed, a single brand given up. The shell remains. The substance migrates.
XI. What Could Have Been Different
It is idle to run history backwards. But for the diagnosis it is useful to ask at which points a different course would have been structurally possible.
First point: the economic crisis of the 1980s could have been cushioned with a different industrial policy. A policy that had recognised Deckel and MAHO as systemically important medium-sized firms could have given them bridging finance — analogous to what later became a matter of course for banks or carmakers. It could have prevented both from breaking apart in the crisis and being rescuable only by Gildemeister.
Second point: the alliance of 2009 could have been structured as an equal partnership — with cross-holding restrictions, majority clauses and co-determination structures that would have made a later takeover more difficult. That is not trivial, because international alliances are legally complicated. But in 2009 it was not out of the question. The German side had little incentive to demand such structures, because it believed itself to be in the stronger position. That was a mistake. Whoever is in the stronger position should, precisely then, see to structural safeguards.
Third point: the takeover of 2015 could have been answered with a German or European counter-offer. There was not a single German competitor of the necessary size — Trumpf in Ditzingen, an independent family holding, had and has a profile of its own. A Trumpf+Gildemeister consolidation in 2015 would have created a European machine-tool heavyweight on an equal footing with Mori Seiki. That did not happen. There was no initiative from Berlin or Brussels to organise such a constellation.
Fourth point: even after the takeover a structure would have been possible that left the German subsidiary more independence. For example, a clause in the articles binding the domination agreement to conditions — minimum investment, site guarantees with hard sanctions. In this specific case that was improved a little through the appraisal proceedings, but not in a structurally effective form.
What all these "could have been different" points have in common: they would have required political will to create particular structures — against the trend of globalisation, against the convenience of the market, against the short-term logic of individual actors. This political will did not exist. What happened followed from that.
XII. Conclusion — What DMG Mori Teaches Today
The story of DMG Mori is not finished in May 2026 — groups do not end, they go on changing. The next ten years will bring further shifts. The Pinghu facility in China, whose construction began at the end of 2021, will go into full operation in 2026/27 — it will take over parts of the manufacturing that today takes place in Pfronten or Bielefeld. The GEMAS facility in Cairo (together with AOI), opened in 2024, is a further relocation. Group revenue will become still more global; the German share will tend to decline. The German plants will continue to be modernised, but within a group architecture whose centre of gravity is shifting to Asia.
What remains is the lesson. We can sum it up in four points.
First, the legal shell is the most durable. The brands Gildemeister, Deckel and Maho will still be emblazoned on machines decades from now, long after the substance they stood for has become something else, is somewhere else, is decided by others. Whoever does not distinguish between shell and substance will not notice the change. Whoever does distinguish them sees it early.
A small observation on this: before Gildemeister, Deckel and Maho there was Max Müller. Before Mori Seiki there were Hitachi Seiki and Taiyo Koki. Before DMG Mori in America there was Charles DeVlieg. Before DMG Mori in Switzerland there was Dixi. These names have been absorbed into the group. Most employees of a DMG Mori plant today could not say offhand which substances are contained in their employer. That is the normal consequence of industrial consolidation. But it is also the point at which loss of memory begins — and with it the inability to judge future consolidations with a clear eye. Whoever does not know what has been lost before cannot gauge what is being lost right now.
Second, the loss of strategic sovereignty is a process that can happen in a single act — the domination and profit-and-loss transfer agreement of 2016 was not a gesture but a structural decision. Before this act, sovereignty lay in Bielefeld; afterwards in Tokyo. Such acts are rarely recognised in the daily press for what they are. They appear as technical procedures but are structural shifts.
Third, the machine-tool sector is not the only one in which this pattern is running. We see the same pattern in chemicals (BASF relocating to China), in steel (Thyssen-Krupp with the Indian Tata plan), in robotics (KUKA), in the tool industry (ongoing negotiations between China and German Mittelstand firms), in semiconductor lithography (ever more dependent on the Dutch ASML, which is itself globally intertwined). DMG Mori is not an isolated case. It is a pattern.
Fourth, the process is not primarily to be described as decline for the German industrial landscape. The German DMG Mori plants are more modern today than ten years ago. Employment is stable. The products are cutting-edge technology. What is lost is not the substance — it is sovereignty over the substance. The country that built up the substance no longer decides what happens to it. That is a different kind of loss from what statistics usually capture.
If one wants to draw a political consequence from the DMG Mori case, it is this: it is not enough to protect German plants and German workforces. What must be protected is strategic sovereignty — that is, the ability to decide for oneself about the product portfolio, the investment decisions, the global set-up. This sovereignty is a different quantity from employment or revenue. It cannot be seen if one looks at the five-hundred-employee threshold. But it is the quantity that will determine in twenty years whether the plants still stand in Germany or in Egypt, China or India.
In What Is Still German Today? we asked the question: what will things be like in ten years? In the DMG Mori case we can answer the question retrospectively. In ten years the German subsidiary will still exist, the brands will still exist, the plants will still be producing — but the strategic layer will be entirely in Tokyo, and with every year a little more of the operational substance will have migrated to Pinghu, Cairo or wherever the group considers it most profitable. That is no tragedy. Nor is it success. It is displacement — and it became irreversible at the moment strategic sovereignty was lost.
That moment was 24 August 2016, when the domination agreement was entered in the Bielefeld commercial register. Most people did not notice at the time. The plants carried on, the workforce kept working, the machines were delivered. But the constellation had changed. Whoever did not see it then has it before their eyes today, ten years later.
Other German Mittelstand firms — which today face the same process — will have their own stories in twenty years. These stories will not be identical to the DMG Mori story, because the buyers will be different, the industries different, the speeds different. But they will be tellable in the same language. The five layers erode in every case, at every pace. The shell lasts longest. The substance migrates.