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We are all aware of the epic zero-to-hero stories that punctuate the evolution of our ether-oriented computer and digital landscape, but what about the sagas of the more down-to-earth businesses such as those stalwarts of industrialisation or, more importantly, the manufacturers of the tools we use to assemble, repair and maintain the vehicles on which we rely for our adventures. Tools of importance that we carry around with us but rarely revere until they are conscripted into action when things have gone awry or when a periodic service is due. I’m no different. The tools on my workshop walls and those stowed in the bag in the back of my Land Rover have accompanied me for decades—faithfully performing tasks sometimes beyond their normal intention, but still getting the job done with stoic dependability.
More than 25 years after I bought the first of these tools, I returned to the factory to meet with one of the heirs and learn, not about the latest innovations, but about the last 100 years since the company was founded in 1924.
The company: ELORA Werkzeugfabrik GmbH
My host: Andreas Rauch, CEO
So, let’s jump into the conversation…
AR: Looking back over the last 100 years, the most significant milestones have been the result of fate rather than foresight. It all began in 1924. My grandfather, Erich Rauch, had just graduated as a toolmaker and set up a micro-production of Stillson pipe wrenches in the confines of his parents’ basement. On his own…just like that. A level of entrepreneurial spirit that is somewhat elusive in the 21st century.
At the time, Germany was recoiling from the hard landing caused by inflation, which peaked in 1923 when a loaf of bread typically commanded a price in excess of one million Papiermark. The consequence: the introduction of the Reichsmark, which signalled the beginning of the recovery period (1924 to 1929). The so-called Golden Twenties. At a time when everything around him was on the rise, my grandfather was swept up in the momentum and sales in Germany began to flourish, with the occasional shipment finding its way to foreign lands.
In fact, there were a few export businesses in Hannover and Hamburg that would buy locally and then distribute the goods overseas. Looking back through the company annals, you’ll see that our oldest export customers were in France and England. A development to be proud of, but one that was rudely interrupted when Adolf marched into Poland and lit the blue touch paper for the Second World War.
Back to humble beginnings. Mind you, the company survived the war insofar as the allies hadn’t morphed the bricks and mortar into a pile of rubble, and the payroll still listed ten employees—others had been claimed by the war. With the mechanics of production pretty much the same as before the outbreak of war, the company’s second breakthrough came with the next currency reform in 1948: the introduction of the D-Mark or Deutschmark, and my grandfather hit the ground running. The growth was nothing short of explosive and still leaves me speechless—it’s probably a good thing I didn’t have to go through it myself. The period must have been exhilarating and frustrating in equal measure, but the strategy was clear: exponential growth with a focus on exports.
Almost from the onset of the second wind, Erich Rauch searched for someone who was willing to explore overseas sales avenues. Today, we are strong in Southeast Asia, the Middle East and parts of South America, the foundations of which were laid in those very early days. There’s no comparison with today. Back then, it was a matter of boarding a ship, crossing the oceans to shores as far away as Japan, finding leads, selling ELORA tools, and returning home some five months later. Determination and perseverance raised our name to stature that has stood the test of time in countries that are now only a few hours away by plane.
Decisions had to be felled. Risks had to be taken. One such risk was investing in the first Pelzer & Ehlers Polymaster 200t forging press, which would allow the company to manufacture sockets faster and more accurately than the competition—one socket every three seconds. An absolute game changer. All of a sudden, the factory was literally spitting out tools like no other.
This giant leap forward coincided with the height of the revolution in Iran and we feared that all ties with the country would be severed, until we were visited by a guard of revolutionaries who, after determined negotiations, bestowed upon us the biggest single contract in ELORA’s history: 15 million marks for sockets, wrenches and other tools. It took us nearly a year, working days and nights, to fulfil the order. That was truly spectacular, and the snowball had barely begun to roll.
MB: ELORA has remained a family business and you, along with your cousin Bettina Rauch, represent the third generation. Continued growth, along with weathering any storms encountered along the way, is more than just management, it’s about building and maintaining relationships—I’m sure you’ve had your fair share of challenges, what has been your approach to dealing with them?
AR: Very true. My father and uncle never really had a choice in the matter. To be honest, I don’t think they ever considered any other path, so it was almost inevitable that they would join ELORA and, after my grandfather’s passing, take on the roles of managing directors. In keeping with tradition, I followed in their footsteps in 2002.
Throughout this time, change has compelled us to adapt and modify our strategies. It’s quite remarkable, really. Here we are, a manufacturing company located in the heart of Germany, employing a sizeable workforce, and doing everything we can to sustain growth as a by-product of survival. Germany has become increasingly inhospitable to the companies that are supposed to drive its economy. The past few years have been utterly catastrophic, and I’m not just referring to the fiercely competitive export market.
Therefore, it was all the more significant that, during our 100th anniversary celebration, over 50 people flew in from abroad to join us and show their support. Simply put, our ties remain as strong as ever. We were all thrilled that they made the effort to be with us, which highlights how vitally important personal relationships still are in this day and age.
a convenient wall cabinet
Here’s the interesting part: I’m talking about long-standing customers. Some, like Draper Tools, have remained loyal for over seventy years, and our business continues to thrive. These relationships span three generations. We don’t just think of them as customers; they are more like members of the ELORA family. When I visit them, it’s like “Uncle Andreas is coming.” These bonds are incredibly close, having endured through the generations, and they go much deeper than mere commercial exchanges.
In difficult times, such as the current situation in Germany, we know that our customers stand by us and are willing to help us navigate these challenges. I can’t fully articulate how that feels, but it certainly helps to keep the fun in the business.
Compared to the early days, something else has changed in Germany—government-imposed restrictions have inadvertently limited our ability to mass produce. Our strategy has been to specialise and significantly diversify our product range. Two years ago, for example, we acquired Tracht-Odenthal. Founded in 1920, the company is known for its unique niche pliers, including those used for ringing and de-ringing birds.
We also produce specialised pliers for specific tasks performed by electricians. These aren’t the kind of tools that be can manufactured in batches of 5,000; they’re more likely to be made in batches of 1,000 or sometimes just 500. Fortunately, these small production runs are unattractive to companies that need to churn out tens of thousands of identical items, which gives us an advantage. We are more flexible. This is a major benefit of being a small business, and we have recently invested in additional machinery to increase our efficiency in small series production.
MB: The change in business strategy, from mass producing sockets at a rate of one every three seconds to small batches of 500 or 1,000 tools, must have had an effect on the factory manpower without whom your continued success would be unthinkable. How strong was the workforce at its peak, and how has it evolved?
AR: At our peak, we employed around 280 people in the 60s and 70s, a period when we simply couldn’t find enough workers. In fact, as my grandfather had difficulty recruiting, he established a branch factory in the Eifel region to attract people who had previously missed out on the benefits of the industrial boom. We also recruited foreign workers, mainly from Italy, to deal with labour shortages. One of them retired last year, after 50 years of dedicated service. He started working here as a fifteen-year-old lad and remained with us throughout his career.
MB: That’s impressive and not something you hear every day. Do your employees generally stay on board for such a long time?
AR: Our very first employee, Max Böttger, joined us in 1928 and remained with the company for fifty years, only retiring when he was well into his seventies. We’ve had several employees reach the 40- and 50-year milestones, and it’s not uncommon for staff to stay with us for more than 25 years. Our team remains fairly stable; once someone joins ELORA and settles in, they become part of a larger team that collaborates closely.
Those working for a large conglomerate might not grasp this dynamic. Here, we truly support one another, for better or for worse. If someone faces a problem, they can approach us, and we’ll work together to find a solution. ELORA is a family business, and everyone here is part of one big family. When we recruit new staff, we pay close attention to their overall compatibility with the team. Being highly skilled doesn’t guarantee harmony with your colleagues and, ultimately, that’s what really matters.
MB: That’s right. You really can’t afford to have any bad apples in such a close-knit team.
AR: Exactly. For our 100th anniversary celebration, we invited all our staff and their families. The festivities outside this building felt akin to a street festival, complete with a bouncy castle and activities for the kids. Our neighbours joined in too, and we provided a shuttle to the factory so that visitors could gain a deeper understanding of who we are and what we do. Unfortunately, a small team had to keep the machines running, but the day was a success for everyone.
In the evening, we continued the celebrations at a local restaurant, where everything had been arranged for us. There was even a Rally Cross car on display, which we sponsor. It was one big family gathering, including the 50 guests who flew in from overseas, as I mentioned earlier.
MB: Let me roll back to the beginning again. The company was founded by your grandfather in his parents’ basement in the 1920s. From what you’ve told me so far, it hasn’t been plain sailing all the way. Then, there was the one big order from Iran. But ELORA isn’t, and wasn’t, the only tools manufacturer. What is the secret of your success?
AR: I can’t say for certain what inspired my grandfather to start manufacturing hand tools. The Roaring Twenties certainly played a role, but it was the end of the 1940s and the introduction of the D-Mark that provided the greatest impetus. At that time, demand was phenomenal, and ELORA was among the fortunate German suppliers able to capitalise on the upswing, thanks to our technological advancement over foreign competitors. Much has changed since then, and we can no longer compete on price alone.
Let’s face it: that’s why so many companies in Germany, not just in the tools industry, have relocated. For instance, the textile industry once thrived here, with dye houses lining the banks of the River Wupper. Chemical pollution led to the river’s decline. Eventually, the whole industry vanished, with much of it now sourced from abroad. Then there was the steel industry, for which Germany was internationally renowned. We set the standard, and the “Made in Germany” label not only represented reliable quality, but also guaranteed the highest standards. Of course, there were also many toolmakers.
In Remscheid, we benefited from numerous small subcontractors who supplied larger brands, including ELORA. However, that landscape has changed dramatically. Many small businesses have either disappeared entirely, or have specialised without the support of their own brand.
Our advantages have always been twofold: our brand and our quality, and quality is my number one priority. If someone raises a concern about our products, we have to respond and correct it. That becomes my focus. As a German manufacturer, we simply don’t have the luxury of letting things slide, and we must go the extra mile if we want to be successful.
As I mentioned earlier, there used to be a lot of toolmakers here—plenty of small ones, some large ones, and ELORA, which my grandfather positioned in the middle. While the bigger companies built their success by concentrating on domestic and nearby markets, my grandfather took a risk by hiring people who were willing to travel to new territories. In those days, Singapore felt like the other side of the world, and it took months of sea travel to get there. Similarly, trading in the bazaars of Saudi Arabia posed significant challenges. ELORA thrived because it ventured into the Orient—a strategy that many found improbable.
MB: The world was indeed a bigger place then.
AR: My grandfather’s strategy of focusing on exports was our strength then, and it continues to serve us well today. While we may not be as well known at home, we have certainly made a name for ourselves in England, for example, thanks in part to our partnership with Draper Tools. Of course, there have been developments over the decades, and products from the Far East have influenced our business. Times are tough—really tough. However, we remain committed to supporting our partners and maintaining our distribution network.
We lack the infrastructure to manage direct sales to consumers. Occasionally, we receive enquiries for specific products, but we refer these customers to one of our partners. Sure, we could sell a 10 mm spanner to an individual customer, but imagine if a thousand orders came in for a single product—it would create a logistical nightmare. That’s why we now work with a select group of online dealers, linked directly to our website, who can accommodate small orders.
Export is where our strength lies. We have established a strong presence in markets like Chile and Singapore, and we anticipate growth in the UAE next year. The days of building a solid business in Germany are, for now, behind us. The conditions we face have deteriorated significantly over the past three years, affecting our pricing strategy.
For example, I recently had an extensive discussion with our steel supplier. While global prices are decreasing, prices in Germany have remained stagnant. In other words, the hype we experienced in recent years has persisted. My supplier has informed me that to achieve better pricing, we would need to import from China, as European steel manufacturers are constrained by legislation and strict environmental policies. To remain competitive, they have to invest in their facilities, and those costs are passed down to us, the customers—a cost factor that does not exist elsewhere.
Another important factor is the rising cost of energy. With the ongoing war, energy prices are climbing. As mandated by legislation, we need to install solar panels to cover part of our electricity needs, which adds further to our cost structure. This winter, our heating gas expenses have surged from around €40,000 to €80,000. All of these costs must be partially factored into our selling prices.
To address your question about the key to our success: part of it undoubtedly stems from my grandfather’s decision to focus on exports. More recently, it has been our ability to diversify and perfect the small series production of specialist pliers, which we also supply to OEM partners.
Our current catalogue lists over 4,500 products, but even that doesn’t encompass everything we manufacture.
MB: With such a wide range, does your product development take place in-house?
AR: Indeed. I have an engineer who’s responsibility it is to improve existing products and create new developments. We create 3D models before going into prototype production, as opposed to making a prototype before going to the drawing board.
MB: 100 years is a huge milestone. How do you foresee the next ten?
AR: We’ve witnessed numerous competitors disappear in recent years. While this is certainly a reflection of the current climate, it also presents opportunities. Throughout our history, we’ve thrived by taking a different approach, diversifying, and specialising in niche products. As more companies go out of business, we evaluate which products we can produce efficiently, based on our small series strategy, and then we step in to supply those products to companies in need. Interestingly, we find it easier to work with customers based in places like Italy than with local clients, which may be attributed to ELORA’s export mentality.
Our overseas sales forecasts are quite predictable. Germany and Europe, on the other hand, are a cause for concern. Domestic sales are weak, and a sudden upturn seems unlikely because we cater to an industry that is currently struggling in Germany. One can only hope for a revival of the powerhouse that once made us a great nation. We’re observing similar trends in other parts of Europe as well, where consumers are reluctant to buy non-essentials. For instance, if a fan belt snaps, a new one will be bought, but when it comes to the tools needed to replace it, many seem to opt for old tools and makeshift solutions.
In answer to your question about the next ten years, I’m confident that things will improve and that ELORA will prosper, despite the challenges that lie ahead and cast a gloomy perspective on the overall situation. However, this is not the time to aim too high. Instead, we must focus on doing our homework and continuously improving our efficiency.
SUMMING UP
ELORA is a 100-year-old company that has risen like a phoenix—not once, but twice—from the ashes of Germany. The company’s growth can largely be attributed to Erich Rauch’s vision for success in overseas markets while the competition focused on domestic sales, as well as his understanding of risk management.
Ironically, the strategy behind the small manufacturing operation that he established in his parents’ basement still holds true today, albeit on a larger scale. In addition to popular hand tools, ELORA excels at producing small runs of first-class quality tools for niche markets.
Two and a half decades later, I am still using my ELORA tools. For niche items, such as Whitworth spanners—and I’m speaking to those who work on British classics—finding a better quality product than ELORA in the 21st century is a challenge.
Photography: ELORA and Tristan Brailey
