ON THE FLY brigkAIR Podcast - Episode 3 Dirk Hoke Voith Gruppe

Very interesting. I studied mechanical engineering in Braunschweig, but not with a focus on aviation, but with a focus on production engineering. I would have liked to join the aviation sports group. That didn't work because if you don't have money, you have to invest a lot of time, and I had to pay for my studies myself. So I worked a lot and couldn't do that. But later, when I was at Airbus nearby, I got my pilot's license, the PPL. Much later. I would have liked to do it as a student, but no. Aviation is absolutely fascinating. And when I got the opportunity, even though I thought I would retire at Siemens, I went to Airbus and became a board member. I was glad that I could also get my pilot's license on the side and of course be in that environment every day, seeing fascinating technologies, but at the same time confronted with probably the most conservative development imaginable, because there's always the killer argument: it's the safest industry, so we can only change incrementally very slowly. That's also good, but you have to make a compromise.

And that's why, just as an idea, it's a relatively simple aircraft, it's not rocket science, everything is designed to be certifiable, and it still takes years. But we have, for example, it looks a bit like a helicopter, although it's definitely not a helicopter, we have components derived from helicopters because the authorities feel comfortable using already certified components. So we could simply fly everything with a joystick, but single source of failure, so we have a backup control stick. If that breaks, we could control everything including altitude via the joystick, just like in a computer game. That works very well. No, we have a collective pitch control to regulate altitude. These are topics you could argue about for years and prove that it can be done differently. Or you ultimately align with the authorities and say, okay, we take this step, first to get type certification and prove it works. Then we go incremental in faster development and show that there are alternatives that are just as safe. The goal is to always maintain a safety level of 10^-9. That means one critical failure per billion operating hours, and we will never question that. It's the highest safety level, also required for an Airbus A320, and we say we will never discuss that. Everything that must be done to ensure that will always be in the company's DNA.

Yes. I studied there for ten semesters, that was the minimum, and I was completely there with everything that goes with it, including partying and sleeping until noon as a student. Yes, back then, those were good times, you could sleep a bit more. My sleep after graduation dropped to an average of 4 hours. Okay. And now after Covid, it's gone up to 5 hours 20 minutes. You have these nice gadgets that show the annual average.

At Airbus, it was a very interesting story because our children were the last to find out that I was leaving Siemens. They were Siemens children and thought Dad would stay at Siemens forever. When we wanted to tell them, I was lucky that there was a Mission Impossible movie in theaters with Tom Cruise, just featuring the A400M. Kurt knows the subject well. Tom Cruise is hanging on the outside of the A400M, and we watched the movie together. When Tom Cruise hangs on the plane, I said, 'That's what I'm going to do in the future.' Not hanging on the plane, but the A400M. And that the A400M gave me many gray hairs shortly after, because I started in 2016 and two weeks later we had a gearbox failure over Gibraltar, and from then on we were heavily in crisis management to fix the problem. But no, that's how I taught my children about Airbus. Now they are adults, and when I went to Volocopter, because the decision was pending, the children were very involved. I was actually about to become CEO of a large automotive company, had the contract on the table, and at the last second I pushed it aside and signed for Volocopter. My daughter made a cool comment: 'Dad, you can run big companies, you've earned enough money. Do something cool.' I like hearing that, sort of startup lobby. Have your children already booked a ticket for Paris or Rome? No, the children would love to fly. The only one in my family who immediately said she wouldn't fly with it is my mother, but she's turning 80, and she couldn't even operate a VCR at 35. So she's not very tech-savvy. Everyone else in the family is much more optimistic.

Yes, when I met my wife, I told her that if we stay together, we will probably never live in Germany. And that took a bit longer, but she also said she wouldn't go abroad anymore once the children are in school. And then it came quickly. Our children were one and a half and three and a half when we went to China, to Beijing. I was responsible for railways, high-speed trains and airports, and that was very successful. We built all the high-speed lines, integrated the trains there. The family's goal was to stay in Beijing for six years, but as always, the call came sooner. After three and a half years, I became the first Siemens CEO for all of Africa, first half of Africa, then all of Africa. We moved to Casablanca, were supposed to move to Johannesburg, but my wife refused after six months. But we, as I said, with the family twice in Beijing and Casablanca. I have moved at least 40 times. I have lived and worked on five continents. So the family is international. The children's first language is English because I said I wouldn't send them to a German school. Because if we move on, the chance of a German school everywhere is not as great as an international school. So their first language is English and second language is German.

Yes, it helped me at Airbus, I speak all Airbus languages fluently. And that makes a difference when you go to the plant and can speak to the workers in their local language. That's always easier. Otherwise at Volocopter, we have almost 60 nations with the underlying complexity. We have now introduced intercultural relationship workshops because we keep having problems with the different groups who think they all speak English, but the communication is diametrically wrong. We realize that we really need to sensitize people that the background they grew up with means that when you focus on the words, the same thing isn't always meant. We have now conducted various courses and slowly it clicks that people see that it is very important to be very fine and sensitive. I always use a saying: 'always good intent', because people react very quickly when they feel attacked, which is often not the case because it's just a different way of communication. And we are working on that, we have to bridge that, and the more you have lived abroad, the more empathetic antenna you have for it.

Still not. No, that was years ago, I just started at Airbus in 2016 and that interview was then. My children still don't reply to emails. So I have to tell them in other ways that there is an email they need to read. Usually the best way is Snapchat, Instagram, TikTok not so much, but those two are the main communication, or WhatsApp call. I don't know why they have a phone because you can actually make calls with it. But no, that's a different kind of communication, but they naturally take up these technologies much faster. And every software, when I see how my children edit photos and videos on the iPhone at incredible speed. And that's normal; children have to adapt to technologies. I think I'm still quite fit with the devices, but it's nice to see that they are a bit better at it and are even better prepared for what's next. So, technologies are there, communication forms change, we see it, and I think that's also the difficulty in large companies right now. You have to cover everything from Millennials to Baby Boomers and try to take everyone along, but it's complex.

I think when I came, many called me and said how crazy I was to go to Airbus and then to Airbus Defense and Space, because it doesn't get more boring. And I think we radically transformed it back then. People really took a long time when I said I wanted to be addressed with 'du'. That was in Ottobrunn and also here in Manching for many. I said I offer it, and everyone I see shows respect, but I prefer to be addressed with 'du'. It took years until a larger majority really adopted it. But we also changed a lot. We introduced value-based leadership and showed that even if you are in a conservative business like defense or space, that doesn't mean we have to be conservative in our communication or collaboration.

At the moment we lack the time because we have a few deadlines that were set long before my time and the buffers were already used up when I started. So it's a very difficult and very exciting time, because the startup was good in the prototype phase. In the final phase of certification, you have to work very disciplined and make sure you deliver what you promised. And that's where we are currently feeling the crunch, because our people are used to, 'If we don't make it today, we'll make it tomorrow, because we give our best.' The problem is that the runway is not being extended for us. Other customers also have fixed events behind them. So there is a crunch. We have still introduced the topic of values when I started, because I always believe that the many regulations and company rules that exist in every company, including startups, I have to make accessible to someone who is new to the company and have a kind of compass that works without reading 4000 or 10,000 pages. That's why I believe that the value system, once you agree on the basic values that define our collaboration and communication, set together from bottom up, not top down, and also described them. Values are nothing but words. Only when I describe behavioral patterns that I expect under this value do I create a living structure and ultimately a compass for the team.

No, I have to say, if we had the event in Germany, it would already be in the newspaper that we are not flying. For months already. France is much more pragmatic, up to the president. If I had the opportunity to enable two passengers for the Olympics, the president would get on board, even though we are not fully certified at that time. In Germany, no one would consider it. We will fly there with a so-called permit to fly, which is a reduced certification that allows us to conduct test flights in public. If everything goes well, we will get a special permit that goes far beyond what we have had so far, because Paris has a no-fly zone and actually it would have been an exception if we flew in that zone with full certification. Now we will also get permission to fly in this no-fly zone with this permit to fly. What will it look like? Unfortunately, it won't yet be what we would have liked. Last year we defined five routes in Paris because our partner Aéroports de Paris built five vertiports: Charles de Gaulle, Le Bourget, the pontoon on the Seine at Gare d'Austerlitz, an existing heliport where a vertiport was installed, and one at Versailles. Those are the five vertiports. Our partner invested a double-digit million sum. Those were supposed to be the routes. But due to security reasons during the Olympics, that won't happen. There is naturally high security traffic at Charles de Gaulle and Le Bourget, additionally significantly increased flight traffic. So it will probably result in us doing reduced flights. The goal is to have two flights in parallel, which we have never done before, two aircraft at two locations. That will probably be around Versailles and in the city. But exactly how it will look is discussed in weekly meetings. It will also be aligned with the progress we are making in certification. I think we will only know exactly how it will look shortly before the end of July.

That's a difficult topic, because we come from a phase where we very intensively negotiated with the government about support in this phase. I have to say, there are many politicians who want to support us and still try to support us, but unfortunately there are also individuals who do not. And we noticed that our political system is very complex, which is also good, but in my view it sometimes prevents topics where I think with relatively little effort we could have a chance at something bigger. That it's not completely risk-free is clear, but those were, I would say, sometimes not reasonable fact-based discussions, where it was more about politics and positioning of individual people. That makes it difficult, because I am a fact-based discussion. If someone says, 'We analyzed it, it's too risky for us,' or is it a discussion where we ultimately have opinions about the positioning of the party or the individuals? That's difficult, and we experienced that in Baden-Württemberg and in Bavaria. We have now solved it differently. But in my view, it would have been a nice signal. First of all, it would not have been a gift; it would have been a loan with high interest, 14% interest. But the signal alone would have been very good for other investors to say, okay, the government believes in the company, and now we can take the next step and put together the last pre-IPO financing and ultimately become an independent company.

I am extremely rational. I am a mechanical engineer; I believe that everything can be calculated. I am a very fact-based person. But I have also learned that you have to combine it with a gut feeling. In the last decades, in decisions where I didn't have enough time to analyze precisely enough, I ultimately relied on my gut feeling, and that has worked out well. Of course, it would be nice if you always had enough time, but reality often catches up. Under stress, under high pressure, you have to make decisions, and then you need a good mix of reasoning, experience, and ultimately gut feeling. And I think I have that.

I think the so-called real-world labs or labs are extremely important, and you can see that the government, the current government, is fortunately placing more and more focus on them. We can do much more there. I think you are a great example. TUM is a good example with entrepreneurship. We have too little of it. There is currently a study that exactly aims to prepare a report for the Chancellor that we are extremely good at innovation. We are still a country of inventors and innovation. We are extremely bad the further we go through the phases of company founding and late scale towards commercialization. That is a catastrophe. Research and development is still very strong. Fraunhofer, Max Planck Institute, many universities. We are still world-class in many things, but not everywhere. When it comes to spin-offs, it becomes significantly less, and in the various phases of company development, it's a catastrophe.

What we still wish for is the final certification, because that is the basis for the last financing before the IPO. I think that we also have a hard time because there are many companies that are already listed but are still very far from certification, and every quarter they report on all the wonderful things they are doing and what contracts they are signing. But ultimately, they can only earn money when they are certified. And those who have invested have seen that the market cap has fallen, in the best case by 50%, in other cases by 99%. That certainly doesn't create trust in the industry, and that's what we are now confronted with. That's why we have remained private, because we say an IPO only makes sense if I have a stable and sustainable development concept for generating revenue growth and then break-even and profitable growth. If I don't have that and only talk about what contracts I sign, it will be very difficult. And with that environment, we are confronted, and it is extremely difficult since Covid and the Ukraine crisis, where tech has suffered brutally, to raise money in that environment.

In my whole life, I have never had an idol. I always believe that everyone has to find their own way. I try to learn from many and read a lot. When I was young, there weren't all these books, but I read a lot. I believe that everyone has to find their own path. I'm not a big fan of idols. I think you have to keep your eyes and ears open, but everyone has their own way, and it will always be different from everyone else's. And I also had to learn that being different is good, because when I was younger, I just wanted to be the same. Then I learned, no, it's quite cool to be different, and once you've learned and understood that, you can build on it and develop further. But I think always being ready to learn, keeping your eyes open, is much more important than looking up to someone and saying, 'He is my messiah, and I will follow him.' That doesn't work very well.

Of course I read comics. Batman, Superman, Donald Duck. So, naturally. Yes.

Listen to your gut feeling and do what you enjoy, because I believe you are best at the things you have fun doing. And if someone says, 'I'm good with wood,' then why should he study and become a CEO if he might be a great carpenter or architect or whatever? I told my children, 'I don't care what you become, but choose something you are passionate about.' If you had asked me three years ago what my children would be, I would have said anything but engineers. Now they are becoming engineers. But because I also told them, 'You can go anywhere, you can do anything, you'll get all the support.' But as I said, I believe you always have to choose what you enjoy most. And then you will make a few more decisions in life that will lead you completely differently than you planned. I would never have seen my career turning out the way it did, but if I had planned it, it certainly wouldn't have turned out that way.

And maybe here, it says 'Make, make, make' in big letters. That's also something that doesn't work well internationally. But you can still explain it to people well, because it means 'do' and simply implement. Good luck for the future. We'll see and hear each other again soon. All the best for Paris. And if you need a test pilot or someone who is risk-seeking, there are probably many here. Then I learned that unfortunately it's not that simple. I have a PPL, but currently only test pilots are allowed to fly, and you need a special test license. In the next step, which might be interesting, we will fly with pilots who are essentially allowed to fly an A320. So we need commercial pilots, and they then need an additional rating and training simulation. So we will fly with very expensive pilots in Paris, maybe 20 times a day, and we need two or three because no one can fly 11, 12, 13 hours a day. That's not feasible for the model. That means we will also work in the next years on creating a new profile for an eVTOL pilot, which will essentially be a qualified taxi driver training, because it's so trivial to fly these things, and then they will do it 10, 20, 30, 40, 50 km, and then 10, 20 times a day. But that also means that someone who lives in Paris and maybe has children in school, in the morning when the children are at school, they fly eVTOL for 5 hours, and then come home when the children come home.