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As the electric vehicle market expands, it is useful to hear from someone with a goal of creating a significant position in that market. Schaltbau Group is one of those companies. In fact, one might say because of its string position in the rail marketplace, the company has been dealing in EVs for years. I sat down recently with Jim Tullo, president of Schaltbau’s North American operations, to talk about their current and future business. I strongly advise you to dig into this one.
Dan Beaulieu: Thank for doing this interview. Schaltbau is an interesting company and I want to learn more about it. What can you tell me?
Jim Tullo: Schaltbau is a German company with headquarters in Munich. The company started in 1929 making heaters and switches for the rail industry. We are actually a part of Schaltbau Holding. Our division is the “components division” and is referred to as Schaltbau-GmbH. Our focus is DC contactors, safety critical snap action switches, connectors, and various rail driver cab components.
Other divisions in the Schaltbau Holding Group are: Schaltbau Bode ($310m), manufacture rail and bus door systems; Schaltbau Pintsch ($90m), manufacture signal systems for rail Infrastructure; SBRS ($35m), refurbishment of rail electrical systems as well as design and manufacturing of charging infrastructure for buses.
Beaulieu: Jim, what is your position? What do you do?
Tullo: I currently lead the North American operations of the Schaltbau-GmbH division. I am the president of this division.
Beaulieu: What is your background? How did you come to Schaltbau?
Tullo: I graduated from SUNY Buffalo in 1988 with a BS in chemical engineering, I started my career as a process engineer for Photocircuits, one of the largest PCB manufactures in the U.S. until 2006. In my roughly 10 years as process engineer for many of the chemical processes, I spent a lot of time on process and product control plans, FMEAs, plant design, and equipment specifications as we expanded and “automated.” I then transitioned to business unit management running our Prototype, QTA, and the start of our military business. After leaving Phototcircuts in 2005, I spent a good amount of time in China and Taiwan initially as a consultant and eventually as global account manager for key customers in the server and storage markets (IBM, EMC). I started working for Schaltbau as VP of engineering and technical sales in 2011, and took on my current role as president in June 2020.
Beaulieu: What are your responsibilities as president of this division?
Tullo: I am responsible for all aspects of running our North American rail projects—assembly, wiring, complete testing of cab components as well as some design on those components—with our sister company outside Milan Italy; stocking distribution and some assembly on other Schaltbau products mentioned previously. We are an $11 million a year company, with about 75% rail-project related.” Our goal is to grow to $18 million by 2024 and become about 50/50 rail and new generation energy (electric trucks, buses, cars, factory robots, fork lifts, charging and energy storage infrastructure) while maintaining or slightly growing.
Beaulieu: Good. Please describe some of your products.
Tullo: The products for our division are DC contactors and various DC disconnect switching devices; safety critical snap action switches; components for railcar drivers cab (master controllers, operator displays, footrests); low, medium, and high voltage DC connectors.
Beaulieu: What makes your company special?
Tullo: We have excellent technical expertise, with good local customer support and a sense of urgency. We stand out because we have a complete understanding of how to control DC signals/current/arcs in a safe, reliable manner. We really want to understand customer requirements and work with them to provide the best (sometime customized) solutions to keep the system operating safely.
Beaulieu: Who are your customers?
Tullo: We have a very viable set of customers from rail car builders, rail car electrical system providers (HVAC, auxiliary power, air compressor), rail transit authorities/operators, forklift manufacturers and spare parts suppliers, cable/harness manufacturers, heavy mining equipment manufacturers, and their electro-mechanical system suppliers.
Beaulieu: Why do you believe they prefer to use your products?
Tullo: Because we meet the technical requirements; we are very well known and proven in rail. We need to grow this to the mentioned non-rail markets.
Beaulieu: Jim, would you detail your various products and what they do?
Tullo: Sure, I will be happy to.
- Contactors are sometimes referred to as relays. Typically, relays would be about 10–15 amp limit and about 250-volt limit with contactors handling currents from 20 to thousands of amps and voltages in the thousands (there are a lot of lower voltage, higher current contactor applications like golf carts and forklifts). Both relays and contacts basically perform the same functions—when they are closed, current can flow; when they are open, current cannot flow. They are “remotely coil controlled” typically by a low voltage signal that energizes the coil and causes the contactor to either open or close. Our strength is in DC contactors and handling of the arc. Typical applications of our contactors: propulsion systems for trains, electric vehicles, forklifts, AGVs/factory robots), golf carts, heavy mining equipment, various charging and battery equipment systems, mobile HVAC, and mobile auxiliary power systems.
- Safety critical snap action switches. Similar to relay but there is no coil control. These are mechanically operated by the system they are incorporated into (train door system, for instance). Most of our switches come with a normally open and a normally closed contact to them. When the switch activation plunger is activated, the normally open contacts will become closed and the normally closed become open. The customer can then use either or both of these signals to indicate whether the door is open or closed and send a signal to the train accordingly. Our switches are all self-cleaning/wiping, and most of them have a positive opening function which will mechanically prevent contacts from welding closed.
- Connectors. Schaltbau has a full lineup of connectors, but the two most common are fast charging connectors for forklifts—our euro style that can handle up to 500 amps. The key for success in these connectors is our focus on engineering of the main contact pins and the type of crimp used to connect our connector to our customer cable. That crimp plays a significant role in performance and reduced heat generated in the system (excessive heat is not good). Our other connectors are low voltage and low current signal connectors primarily for food processing and food packing equipment.
Beaulieu: I know you are heavy in the rail industry. Please elaborate on that.
Tullo: Our safety critical snap action switches are on >80% of the train door systems in the world, our master controllers and or key components on the master controllers are on >80% major new train projects in the United States over the last 20 years (Washington, D.C., NYC, Boston, Chicago, Los Angeles, San Francisco).
Beaulieu: I am very interested, as are many others, in electric vehicles. How do you fit into that marketplace?
Tullo: We feel that our DC contactor expertise, with focus on providing fully bidirectional switching that does not run the risk of catastrophic failure during faults, will be key to our success, along with the ability and willingness to customize.
Beaulieu: From my own research, I would expect that you have a bright future in this space, right?
Tullo: Absolutely. It is on the cusp of really exploding.
Beaulieu: Where would you say the company is positioned in the marketplace?
Tullo: Our goal is to become well-known. Once we engage, I am confident potential customers will be impressed. Our goal is to get in front of those customer as quickly and effectively as possible.
Beaulieu: Why do you say that? Explain how and why they will be impressed?
Tullo: For many reasons, especially technical know-how when it comes to DC current and the ability to customize. We are building a dedicated “carbon neutral” factory outside Munich to handle the expected surge in business from the NGE and automotive markets. We are gearing up for the EV business and willing to invest whatever it takes to assume a significant role in that market.
Beaulieu: Where do you see your company in three to five years?
Tullo: I see us as a “known” player in the electrification effort that is underway for trucks, buses, cars, factory support vehicles (forklifts and robots), as well as the associated charging and energy storage infrastructure. One of our strengths is new product development. This has become a strength in the last three to four years as we have started to expand beyond rail, with the realization that the same old rail products trying to be shoehorned into non-rail applications (from size and cost perspectives) has helped a lot. We do have some nice innovations relative to the rail market, but most has been focused on the non-rail business and its potential. We are ready, willing, and able to work with customers on customized designs to help meet technical and space related requirements. Our technical know-how, when it comes to managing DC switching safely and reliably, is very impressive and becomes apparent once we engage.
Beaulieu: Excellent. I really can appreciate that. What about customer service? What do you consider good service?
Tullo: I see it as happy customers that you can develop personal relationships with and who keep coming back to you. Customers are always looking for good and reliable communication; competitive pricing and strong technical competence are givens. We have a commitment to answering customers regardless of the news being good or bad. Always answer phone (emails and web calls these days).
Beaulieu: How have you done during the pandemic?
Tullo: We have hung in there; we have seen about a 15–20% drop off but given the COVID impact on the rail industry and reduced ridership levels, we have held our own with some reorganization.
Beaulieu: How do you see the industry doing now that we are nearly post-COVID?
Tullo: We think the rail transportation market will continue to struggle for the next few years. At the risk of being master of the obvious, electrification of vehicles and associated infrastructure across the board will ramp significantly and we want to grab our small share to start.
Beaulieu: Jim thanks for this talk. I truly appreciate it.
Tullo: Thank you for giving me the opportunity to talk about our company.