FARMINGTON, Conn. _ The Otis Elevator Co. is finding it harder
these days to stay on the top floor of the industry it has
dominated for years.
Tough competition and a lull in high-rise building in its
traditional big markets are challenging the world's largest
elevator company to look elsewhere aggressively for new
Otis is hurting at home and in Europe because of recessions
and overbuilding in the 1970s and 1980s.
"During the construction boom we couldn't get enough mechanics
to keep up with the work," said F. Mark Granato, the company's
vice president of communication. "Now (that) the office market is
glutted, we have to reorient the business."
Otis still commands a 21 percent share of the world market _
down from 23 percent in 1991, but more than double that of No. 2
Schindler Holding AG of Switzerland and No. 3 Mitsubishi Electric
Corp. of Japan. And its 1993 sales figure of $4.4 billion was
about 1 times Schindler's.
But Otis has fallen to No. 2 in the new equipment market in
United States behind New York-based Dover Corp. and is facing
difficult times in Europe as high-rise construction lags and
other competitors dominate the low-rise market _ a segment to
which Otis had devoted less attention.
After decades in Japan, the world's biggest and most difficult
market to penetrate, Otis' share is only about 13 percent, and
that's with 30 percent growth in the last five years.
To help increase its business, Otis has vigorously gone after
other underdeveloped and growing foreign markets, especially in
former communist countries and the Asia-Pacific rim. Since 1990,
it has spent $250 million on acquisitions and joint ventures
"I remember the day the Berlin Wall tumbled," Jean-Pierre van
Rooy, Otis president, said in a recent interview. "Our company
was on the next side literally the next day."
Otis, the most global and profitable unit of Hartford-based
conglomerate United Technologies Corp., has reason to keep
looking overseas. Eighty percent of its revenue is from abroad,
up from 10 percent in the early 1900s and 50 percent about 20
years ago. Otis has more than 68,000 workers worldwide and
maintains and sells elevators in almost every country.
So Otis has established 20 joint ventures in former communist
countries, including Russia and Ukraine, where it has committed
$50 million and expects to spend an additional $60 million in the
next few years. …