Union-wide policy gives Kone a lift

Date: 06/06/1996

By Tim Jones

BUSINESSMEN are usually keen to talk about European policy on the grand scale, the need to keep competitive and complete the single market.

But not many of them can talk about how the EU has affected their industry in specific and profound ways. Eric Maziol, head of European marketing for Kone International, is one of a rare breed that can do just that.

A Frenchman working for a Finnish company in Brussels, Maziol has a unique insight into the workings of the single market and the problems caused by currency fluctuations within it.

That is because last year, the Lifts Directive - which will have a significant impact on the industry - was published, taking effect from 1997 at the earliest and with mandatory force from 1999.

The single currency is also of more than academic interest to Kone, since its two main production bases are located in countries whose currencies have been highly volatile over the past four years - Finland and Italy. Since the company's balance sheet is accounted in Finland, this has had a significant effect.

While the business community often complains about too much EU red tape, Kone - which ranks number three in the world's lift-making and maintenance league table behind Otis and Schindler - actually welcomes the new lift directive, even though the industry will have to make changes to comply with it.

“By harmonising the legislation in 1999 for all the countries of the European Union, the benefits that can be achieved are obvious,” says Maziol.

“We are trying to be more pan-European and it helps to have legislation which harmonises technical aspects of the product because today we still have particularities from country to country.”

The directive demands a number of safety requirements for all lifts manufactured for installation in the EU.

“The legislation takes the most stringent laws that exist today, plus a number of essential safety requirements which do not exist at all - such as protection against free-fall-up, as we call it in the jargon,” says Maziol's colleague who specialises in EU legislative matters, Pierre Bianchini.

In a standard lift, a rupture in the suspension can cause the car to fall, and legislation exists to ensure that a special safety gear and decelerator are installed to prevent the car crashing to the ground. Until the directive comes into force, no similar safety measures are required to cover 'free-fall-up' in traction lifts.

“It's not common but it happens and when the directive takes force, that will also be covered as well as a number of other things.”

Maziol confesses that the new legislation will not be all good news, but insists the benefits outweigh the extra burdens it will place on lift manufacturers.

“At the beginning, costs will increase because there are a number of additional safety requirements to take care of,” he admits. “But the benefits will be visible in the long run because of the harmonisation of the product. This means that the engineering will be done just once,” he says.

“At the moment, even if the European standard is more or less followed, the majority of countries have cultural habits and so on which mean that, in our engineering offices, we have to come up with a German option or an Italian option et cetera. This means that every time we develop a new product, we have to take this into account. In the future, it will be much simpler.”

As its price for accepting the Lifts Directive, the European Parliament last year demanded a recommendation from the Commission on extra safety measures. Since 60&percent; of Kone's business is in the maintenance and modernisation of equipment, this too is likely to have an impact on its bottom line.

The recommendation calls on member states to make sure that ten safety measures are incorporated into lifts which have already been installed, including a requirement for all lift cabins to have doors as well as cages.

“It's a strong incentive for the member states to do something in a given period,” says Bianchini. “It is evident that a number of items on lifts in certain member states are not only dangerous, but that this has been declared publicly.”

For instance in Belgium, lifts can still be installed without doors.

“If Belgium continues for a long time with that policy, and if there is an accident, how would they look?” he asks.

Kone is also keeping a close eye on the debate over whether the EU can meet the January 1999 deadline for the move to economic and monetary union.

“We believe it would be much easier to work under one single currency,” says Maziol. “Obviously today, we have to face continuous variations in currencies which certainly affect our decisions. Indeed, the revaluation of the Finnish markka has certainly had a negative impact on our balance sheet.”