A few months ago, Rolf Najork took over the reins at Bosch Rexroth as chairman of the executive board. I had the opportunity to sit down and speak with him while in Germany recently, and we covered a wide range of topics.

It’s hard to talk to any industrial manufacturer today without touching on the IoT, the cloud, and the related sensing topics. Most every company is delving into this area, but Bosch Rexroth has somewhat of an advantage, Najork said, due to being part of Bosch.

“Bosch has a big R&D sector, more than 55,000 people working on R&D on a number of products, not only in automotive, but in all aspects of daily life,” he said. “Historically, we haven’t benefitted too much from it, because we hadn’t been looking for synergies. And there are some very good synergies. Not only that Bosch plants are good customers of ours, but also in the automotive field, there’s a lot going on at the moment that is very nicely applicable to the industrial environment.”

Take for example this whole topic of autonomous driving, Najork said.

“It will introduce a whole new set of sensor technology into cars—particularly in the field of visual sensors, cameras, 3D views, radar control, sonic control, etc. And that will help us get better and cheaper access to automation, particularly when it gets to high-level sensing like cameras and software evaluation of visual information,” Najork said. “That is something we want to make use of as much as we want to make use of the whole connectivity strategy in the company and the use of the Bosch cloud.”

A lot of design engineers, however, are concerned about data security in the cloud. Najork said he feels that a lot of them understand that in the long run, that if you generate large amounts of data, they will not be able to store it on the premises of their company.

“I think people are searching for safe cloud solutions, and that is where Bosch steps in to offer a European cloud with very high safety standards. Is there an absolute safe cloud in the world? Ask the CIA, they can tell you! But I think there are clouds that are safer than others,” he said, noting that offering a solution that offers the very conservative German approach on security is probably a good bet.

Najork also discussed the mobile hydraulics business and whether, in light of some manufacturers shuttering hydraulic component manufacturing facilities around the world, Bosch Rexroth was committed to the market.

“We think there’s still a good future for hydraulics, but I would tend to agree with what they are saying at Eaton that hydraulics is probably not growing faster than GDP,” he said. “I don’t see a gloomy outlook for hydraulics, but I also definitely don’t see it growing faster than GDP.”

He said that the oil, the mining, the steel industries are one with hydraulic-heavy solutions. “In these fields, we cannot expect a lot of bandwidth in the years to come, and we have to deal with it—and that gives us an out-of-proportion exposure … In this industry, we have to adjust our capacities [to match] the situation.”

Some other thoughts from Najork:

On Tier IV: “I think generally that Tier IV regulations are not only a challenge, but are an opportunity for those who are technology leading—and we consider ourselves as one of those companies.”

On the IoT: “I think the people who call the IoT hype really don’t understand what it means. What you can clearly see is there is so much disruptive potential for our businesses, that without knowing exactly where the final benefit will be, it’s how to quantify it? The change will be massive. And it’s not just making our plants leaner and more efficient, it allows for individualized optimization of the part and it will allow disruptive business models. With what we have seen so far in other industries—take the example of the taxi business versus Uber—I think we are at a point where the industry needs to utilize its data to make a business out of it.”

On 3D printing: “Personally, I’m a big fan of 3D printing, because it will allow us to make totally different parts … when you go for a lot size of one in a hydraulic component, you don’t want to cast it, you want to print it.”

On industrial safety regulations: “It’s ridiculous that we have different safety standards on either side of the Atlantic, it’s absolutely a business inhibitor, it creates a lot of extra costs. There should be a desire to find [common] standards.”

On future acquisitions: “At the moment, we are in a restructuring process, and we are currently focused on running our business well. That means growth needs to come from internal innovation. I think once we’re back in good shape and we’ve proven to our shareholders that we are in good condition and are growing again, I think in this case we will look for M&A opportunities—but not before.”

On investing in the Americas: “In recent times, most of the investment money has been allocated to China. Now, with the market weakness that is there, I don’t see a big reason to invest in China at this point in time. What we would eventually do in China is invest more in R&D in Asia. It’s probably likely that we would rather invest in North America, because North America still is, and probably will be form a while, the biggest world market. We may be somewhat underrepresented in this market. The likelihood we will invest in North America is high—first of all, we have to use our existing capacity, but definitely what we will want to consider is whether we will do more R&D in North America—when we talk about IoT topics, I think the trendsetting country for the Internet and its applications is the U.S.”

On the local for local manufacturing concept: “I’m a total fan of local for local. I think one reason is that if you want a robust business, you need to stay out of the currency exchange rate business. That drives you into a local for local concept worldwide. I think if you see well-managed companies, they know how to do it. I think our footprint in the market should always be a reflection of the market space. So if you manage to grow the business in the U.S., you should produce it in the U.S.”