Walter Fust: Engineering on the brain, business in the blood
Dipl. Ing. Fust: a household name in Switzerland – the place to go for discount domestic appliances. What very few people know, however, is that the man behind it all is an entrepreneur in the tool engineering sector.
His father would have preferred his son to become an electrician. When he persuaded his parents to let him go to grammar school, however, he already knew that he wanted to study at ETH Zurich one day. Even as a 16-year-old school boy from a modest background, he earned decent pocket money selling second-hand mopeds. He gained his first taste of the stock market and bought his first shares at the age of 19 – “Perhaps not always successfully, but mostly”, explains Walter Fust. “Business is in my blood”, says the now 73-year-old, “but I’ve always been an engineer, too.”
The businessman
He founded the company Fust, which would eventually become Dipl. Ing. Fust AG, in 1966 as a dynamic young entrepreneur fresh out of university. He completed a degree in mechanical engineering at ETH Zurich as quickly as possible, not because it didn’t interest him – “I studied mechanical engineering at ETH Zurich because I was convinced it was my calling”, he says – but because he had to finance his own degree. How did he do it? By selling mail-order electrical domestic appliances alongside his studies. He spent one day a week importing lower-priced appliances from Germany, which he would sell in Switzerland via classified ads in the newspaper. “I didn’t make a bad living from it, either”, affirms Fust with a grin. “Those were the days!” He even managed to afford a fancy car, which he would park right outside ETH Zurich’s mechanical engineering lab: “You’d be lucky to even leave your bike there these days.” The experience he gained from his little mail-order sideline during his time at ETH Zurich came in extremely handy when he eventually started his own business. Even in the company’s first year, 1967, it recorded a turnover of 1.5 million Swiss francs. From that point on, the company kept growing. Fust didn’t exactly make many friends with the large-scale development of his discounter business. The response from the electrical appliance trade, which was virtually run like a cartel in Switzerland in those days, ranged from shock to spite. “The electrician and plumber associations controlled everything”, recalls Fust. “I was a pricecutter and some suppliers boycotted me completely.” He carried on building his discount business regardless, even taking over rival firms. Thanks to his entrepreneurial flair, branches soon sprang up all over the country. A map of Switzerland covering the entire wall still hangs in his modest office, which you eventually reach by weaving your way through the labyrinth of fridges, vacuum cleaners and bathroom accessories at the two-storey Fust headquarters in Niederwangen in the Canton of Berne. Colourful pins still mark the spot for Fust projects past and present. “That map’s 30 years old – I don’t get involved in Fust AG anymore”, says the company founder.
"I studied mechanical engineering at ETH Zurich because I was convinced it was my calling."Walter Fust
The real estate mogul
This assertion is hard to believe, especially if one continues to look back on the company’s history. Fust AG broadened its range of products to include small appliances, kitchen accessories and, in 1989, even consumer electronics. He began to do a roaring trade in real estate, too. “The retail business always means having locations, too. We already bought key strategic property or built it ourselves from very early on”, explains Fust. Then, much to the surprise of some people, the company was sold to Jelmoli in 1994. “By that stage, I’d realised that the company was too small to break into the European market”, says Fust, justifying the decision. Besides, none of his three children had any interest in the business. Fust became Jelmoli’s second-biggest shareholder. However, the company was in trouble and Fust offered to buy back Dipl. Ing. Fust AG two years later: “This time, the boot was on the other foot: I bought the entire block of Jelmoli shares from the majority shareholder UTC and actually became the majority shareholder in the Jelmoli Group.” With Fust at the helm, the department store chain was converted into a real estate group. During this period, for instance, the large shopping centres near Servette FC football stadium in Geneva and the St. Gallen stadium were constructed with Walter Fust as the building contractor – projects he recalls fondly. Dipl. Ing. Fust AG was eventually sold to Coop in 2007 in the course of the reorganisation of Jelmoli Holding.
"If left to their own devices, engineers can sometimes be dangerous people."Walter Fust
The engineer
By then, Walter Fust had turned his attention to other interests because his passion for mechanical engineering was as strong as ever. “I’d always been interested in the mechanical engineering industry and made sure I kept myself in the loop”, stresses the ETH Zurich graduate. He had already begun to buy shares in the company Starrag back in the 1970s and even gave a presentation on the global producer of so-called copy milling machines while he was still at school. “I’ve still got the notes for that presentation”, says Fust as he lays a yellowed sheet of paper covered in neat handwriting and technical drawings on the table. Fust became Chairman of Starrag’s Board of Directors in 1988, at a time when the company wasn’t doing particularly well. “Actually, I used my block of shares to muscle my way in”, he reflects. He couldn’t just sit back and watch: “They were running the place into the ground.” The company, which had employed more than 1,000 people in its heyday, only had 200 employees by that stage. According to Fust’s analysis, his predecessors made decisions that were geared too much towards engineers and lacked business acumen. He is going change all this. With him in charge, one thing is clear from now on: “We can’t afford to play games.” The entrepreneur is also providing a sound capital base and succeeding in giving the company a new lease of life. A few years after the reunification of Germany, he took over the Chemnitz-based company Heckert, which was also in the mechanical engineering sector and had a good, traditional reputation. Nevertheless, it was in a desperate situation and teetering on the brink of bankruptcy. “A carefully considered gamble”, says Fust. By doing so, he paved the way for today’s Starrag AG with a global outlook. Further expansion often takes place according to a well-rehearsed model. Fust observes well-reputed companies on a longterm basis and takes over as a controlling shareholder if they fare badly. This includes SIP, another traditional machine tool manufacturer, which first came to Fust’s attention during his ETH Zurich years. “Eventually, I just had to say that they weren’t doing a good job: nice companies, good reputations and there they are mismanaging it all – I simply had to step in.” His philosophy: you need to invest blood, sweat and tears, have a grasp of engineering – and a healthy dose of business acumen. “If left to their own devices, engineers can sometimes be dangerous people”, says Fust. Not enough business sense. On the other hand, he appreciates solid technical knowhow, which, in his opinion, isn’t taught enough in schools these days. He is glad that mechanical engineering once again enjoys a high profile at ETH Zurich. He is in regular contact with talented young ETH Zurich students and their ideas as the sponsor of the Pioneer Fellowships and co-founder of Inspire, the Technology Transfer Centre founded on the initiative of ETH Zurich and Swiss industry. “There are a few people in our development department who we got to know this way”, says Fust.
ABOUT
Walter Fust
- Born in 1941
- Grew up in Uzwil (Canton of St. Gallen)
- Studied mechanical engineering at ETH Zurich from 1960 –1964
- Founded the company Fust in 1966
- Stepped up his activity in the mechanical engineering industry from the 1980s
- Established the Starrag Group and invested in other companies such as Tornos