Internationalization begins
KONE’s breakthrough occurred in 1968 with the acquisition of ASEA’s elevator business. The Swedish business unit, with its Norwegian and Danish subsidiaries, was bigger than KONE. In one leap, KONE went from an endangered single-market company with some export activity to the market leader of Northern Europe.
There rapidly followed acquisitions in Spain (Eguren, 1969), Austria (Sowitsch, 1970), France (Falconi’s French subsidiary, 1971), Germany (Hävemeier & Sander, 1973) and England (Whitbread, 1974). Although some of these were small, managing the transition process stretched KONE’s tiny and inexperienced team to its limits. Nevertheless, they turned ASEA’s operations around in just a few years and paid off the debts incurred in its acquisition.
Within six years, KONE had transformed itself from a national company to one that had production, sales and service operations in nine countries. To manage the information overload that was building up, the company established an Information Technology team and bought its first computers. Management development programs were started with leading international experts brought in to teach.
In 1974, Pekka Herlin and his team took another gigantic leap forward with the acquisition of Westinghouse’s European elevator business. Westinghouse had been a market leader in both France and Belgium, and its elevator business there was larger than KONE’s entire international elevator operations and included high-rise expertise, which KONE lacked. By turning Westinghouse’s highly unprofitable business around in less than four years, KONE established itself as a major international player and worthy competitor for companies such as Otis, Schindler and Thyssen.