Dräger's oxygen apparatus has become a generic concept - By Hannes Koch

The Lübeck-based company - famous for its innovative medical and safety products - may soon find itself in intensive care. Critics say it lacks a firm hand at the tiller.

Put the key in the ignition and turn - and the car ought to start. But it doesn't. Before the driver can get going, he has to blow into an instrument on the dashboard which measures the alcohol content of his breath. If the sensor - connected to the ignition - detects any trace of beer, wine or whiskey, the motor will not turn on.

The Interlock breathalyzer for cars is one of the few products made by Dräger that is commonly recognized. It has been used in Texas to keep checks on convicted drunk drivers - and not only there. Still, most Dräger products are more for extreme situations such as Evita - a personal favorite of Dräger CEO Stefan Dräger.

Evita is a respirator that provides oxygen to patients in intensive care. "It responds very precisely to the airflow, even to the patient's slightest cough," said Dräger, 46, an engineer. He represents the fifth generation of the family to run the company, which was founded in 1889. His face reminds one a bit of Robert De Niro. And his dark eyes shine when he talks about the fine details of the complex valves in his apparatus.

Some of Dräger's products are the best of their kind. In English-speaking countries, such as the US, the company name has become a generic concept - paramedics with oxygen apparatus who rescue people from collapsed mines and burning buildings are known as "Draegermen." In the late 19th century, company founder Johann Heinrich Dräger developed a new kind of valve which allowed the precise regulation of concentrated gas flow - useful in medicine and other fields.

In both of its main areas - Dräger Safety and Dräger Medical - the company offers a broad spectrum of products, from gas sensors to gas masks, to incubators for premature babies. Dräger's motto, Technology for Life, seems a bit stretched when you consider that its products also include air filters used for military vehicles such as tanks. These also serve to protect human life, the company says - although only that of the soldiers in the tank.

In 2008, Dräger made sales of nearly ?2 billion in 190 countries. The company is based in the northern German Hanseatic city of Lübeck - home of the late Nobel Literature Prize laureate Thomas Mann. Earlier generations of company leaders set out their philosophy in large letters on the historical factory not far from the Old Town: "Lever Schaden als Schimp" (Damage before shame). Or in other words: We would rather suffer in our business dealings than compromise our principles.

It's a noble goal that cannot always be met in everyday business life. Although the firm places a lot of emphasis on having an acceptable relationship with its roughly 10,000 employees worldwide, the usual conflicts are regularly played out when it comes to the distribution of profit and loss. And because of the current financial and economic crisis, collapsing sales in some areas and falling revenues, the company has put pressure on its workers, saying if push comes to shove, they will have to take pay cuts. The union and the workers' council - which represents employees - are not pleased. Still, Stefan Dräger and union secretary Daniel Friedrich signed a joint declaration in December, outlining a compromise on this matter - another indication of a corporate culture that makes workers' welfare a high priority, despite the many tensions.

Stefan Dräger is currently getting some bad press in Germany. Business journalists and anonymous sources have said that the CEO - who holds nearly all shares with voting rights in the company - does not have the company under control, and is making bad decisions. His critics point out, among other things, that profits are down and share prices have fallen to half its 2007 levels.

But there is another side to the story. The workers' council believes that Stefan Dräger is providing leadership to the company. Dräger aims to buy Siemens' 25 percent stake in their joint medical technologies operation - a deal that at the time of writing appeared certain to go ahead. He also wants to incorporate the previously separate areas of medicine and safety technology into one structure to save costs. That means some top jobs will have to go. Stefan Dräger is not making any friends with this plan.

And the company does have serious problems in a number of markets. "Medical technology sales in the US fell this year in line with a shrinking market by 40 percent," said Dräger. Several years ago, he described the US market - Dräger's most important - as "saturated."

What can a company do when there can be no more growth in a key market? It can move on. Dräger is seeking to expand its business in the fast-growing markets of Brazil, India and China - thereby compensating in the long term for current losses. But there are still two fundamental questions. How long can companies keep finding expanding markets that will make it possible for them to keep growing - as it appears they have to do? And do economically efficient companies really need constant growth?

"Technologies for improving well-being will always be necessary as long as there are human beings," responds Dräger. He thinks the assumption that worldwide demand will not rise in the foreseeable future is unrealistic. "Even in 100 years, for instance, the African market will not be saturated."

Stefan Dräger says that, for his company to maintain its position, "it has to grow at least as fast as demand in the most important regions and fields of business." Otherwise, it will lose market share, yields and investment capital compared with its competitors - and that would prevent it from developing new products. That would set off a downward spiral that would ultimately cost the company its independence and livelihood. But that does not mean that the company has to consistently raise its overall sales, he adds, but for its core business, growth is needed.