TRIGEMA CEO Wolfgang Grupp manages his textile company in the legal form e.K. Previously, until 2011, he had still preferred the legal form GmbH & Co. KG. Was the change of shape accompanied by a tax optimization? Or were there other reasons that Wolfgang Grupp favored the legal form e.K. for TRIGEMA? We address these questions in this article. In doing so, we encounter an astonishing, morally influenced intention of an entrepreneur and an at least equally provocative demand for a change in the taxation of entrepreneurs.

1st TRIGEMA Inh. W. Grupp e.K. – Introduction

One of the most media-savvy entrepreneurs in Germany is certainly the head of the Swabian sports and leisure clothing manufacturer TRIGEMA, Wolfgang Grupp. An opinion-strong character, who also likes to underline one or the other cliché of the Swabian in word and deed, he has met us in many TV shows, live performances and various social media formats. The fact that many remember him is due on the one hand to his eloquent, sometimes provocative statements, but on the other hand to a monkey who for a time in a television ridicule advertised TRIGEMA.

Apart from that, Wolfgang Grupp also has some other aspects that make him appear an interesting personality. So he announced some time ago that he was ready to give his company to his children, the plural here is actually incorrect. Wolfgang Grupp said that only one of his two children, his daughter or his son, should take over the company. Both are already working in the paternal company. But he wants to leave the decision to his wife. He justifies his intention that only one of the two children should follow in his footsteps, with the fact that a company should have only one boss. In addition, it is still completely uncertain where the life paths of his children would lead. Because in a marriage-related move, the company would lose the leadership.

This may sound quite conservative, but fits perfectly with many other opinions, which Mr. Grupp freely gave to the best. However, one would be very one-sided if one ignored his social commitment to his employees. Equally remarkable is his advertisement for the preservation of Germany as a business location. As one of the last remaining textile manufacturers in Germany, he knows what he is talking about in this regard.

But why does Wolfgang Grupp run his company TRIGEMA in the legal form e.K.? And what does that teach us?

2. The history of TRIGEMA and Wolfgang Grupp

2.1. Establishment of the company TRIGEMA

In 1919 the brothers Josef and Egon Mayer bought a closed factory in Burladingen near Stuttgart. After a few years, Egon Mayer left the joint venture, but received part of the operation. The other part was led by Josef Mayer under the name Mechanische Trikotwarenfabriken Gebr. Mayer KG continued. And with success, because at the beginning of the 1930s the company already had about 800 employees.

2.2 TRIGEMA – second generation family business

A few years later, the lawyer Franz Grupp married the daughter of Josef Mayer. He also joined the company and later, from the 1950s, continued as managing director and shareholder. During this time, various new and branch start-ups are included. The company is expanding. In the following decade, this meant that the company also diversified, but it needed external capital. As a result, the company gradually got into financial difficulties – debt increased, while sales stagnated.

2.3 Wolfgang Grupp puts TRIGEMA on course for success

Still fresh from his business studies – and actually doing a doctoral thesis – Sohnemann Wolfgang Grupp took over the management from his father in 1969. He is said to have told his doctoral supervisor in spe that he prefers a company without a doctorate than a doctor without a company. This dedication to the family business was already indicative of Wolfgang Grupp’s ambition at an early stage.

In any case, Wolfgang Grupp remembered the strategy of his grandfather Josef Mayer and handled the new start-ups established by his father. He also focused on the core business, but also introduced his own innovations. So he recognized the potential that the then just emerging jeans fashion was in itself. All this was successful: within six years, sales increased to DM 28.1 million. This gives Grupp the opportunity to repay all existing debts, but also to invest in new production facilities.

Over the years, the company that Wolfgang Grupp now managed under TRIGEMA GmbH & Co. KG increased its turnover (TRIGEMA is an acronym for Trikotwarenfabrik Gebrüder Mayer). According to the company, it amounted to EUR 83.3 million in 2008. This is anything but a matter of course. At the same time, many German textile producers had to either migrate abroad or even give up altogether.

2.4 Wolfgang Grupp’s social commitment to his employees

TRIGEMA has since been one of the last remaining companies in this industry in Germany. However, there is another occasion that Wolfgang Grupp proudly sees as his success. In this way, he was always able to protect his employees from short-time work or even company-related redundancies. Even when the Corona pandemic turned people’s lives around the world upside down, Wolfgang Grupp managed to maintain production. At the same time, Wolfgang Grupp always paid his employees wages and salaries above minimum wage levels. But he also expects corresponding services. Even more amazing: he guarantees the children of his employees a job in his company.

Corporate management: What are Wolfgang Grupp’s views?

We have already got to know some characteristics of Wolfgang Grupp. In fact, he has revealed some other facets in his public statements regarding politics and economics. He repeatedly criticized a lack of responsibility in leading positions. In particular, he criticized corporate managers for the fact that they would always maximize profits, even if at the same time there is the risk of a bankruptcy. It also calls for more innovation and less unrestrained growth. This also means that companies should become significantly more adaptable. This is only possible if managers and other leaders appear as role models.

The consequence of this perspective is that Wolfgang Grupp regards insolvencies as a failure of corporate management. Of course, he has his own entrepreneurial successes in mind and as a counterexample the course his father took before he took the helm himself. Wolfgang Grupp also considers the general effects that corporate bankruptcies cause. Apart from the employees of an insolvent company, creditors also bear the burden. In extreme cases, even taxpayers pay for faulty management (keyword bank bailout). In contrast, shareholders of corporations only pay for their mistakes with their deposits. Taking the private risk at the expense of the general public is reprehensible.

Why Wolfgang Grupp chose the legal form e.K. for TRIGEMA

This brings us right to the heart of this article. Wolfgang Grupp considers himself a responsible corporate leader. Until 2011, he led his company in the legal form of GmbH & Co. KG. He benefited from the many advantages of this legal form, including the private liability shield, which he enjoyed as a limited partner. After all: his limited partnership contribution was EUR 100,000. But he knew that this contradicted his ideal of taking responsibility in principle. Therefore, he decided at that time to change the legal form. Since then, his company has been known as TRIGEMA Inh. W. Grupp e.K. and thus a registered merchant.

Since then, Wolfgang Grupp has propagated the demand for the promotion of the legal form e.K. in his numerous public appearances in order to establish more responsibility in German companies. He suggests that sole proprietors like him should pay 50% less tax. In his eyes, this is a promising incentive to attract entrepreneurs to this generally rarely used legal form. And whoever then manages his company as a sole proprietor will act more responsibly in the future – for the benefit of the company instead of quick profit. Otherwise, there could even be a threat of private insolvency.

Wolfgang Grupp and his company TRIGEMA in the legal form e.K. – Conclusion

5.1 Especially young companies need protection against private liability

As exemplary as Mr. Wolfgang Grupp’s request with regard to corporate management may be and as logical as his decision to choose the legal form e.K. is, this still hides some aspects. Especially for young companies, especially startups, it is quite important and right that they can try their hand at the free market. There must be the possibility that you can avoid a private insolvency due to a company bankruptcy – whether in debt or not. Only in this way can young entrepreneurship be promoted, in other words precisely the kind that is often particularly innovative. Wolfgang Grupp should also acknowledge this in his criticism, because he himself calls for more entrepreneurial innovation in order to strengthen Germany as a business location.

5.2. Responsibility is not a guarantee for right decisions

Furthermore, Wolfgang Grupp takes the view that the avoidance of private liability, on which one can rely for example at the legal form GmbH, leads to short-sighted decisions. In his understanding, blind profit maximization is often a consequence of this. After all, relatively high profits can be achieved with relatively low risk, regardless of the risk of insolvency. However, if entrepreneurs’ own private assets were to be put at risk, Wolfgang Grupp concludes, then entrepreneurs would probably make their decisions differently. This would lead companies more sustainably because they are focused on preservation.

This argument is undoubtedly anchored in reality. But private liability is no guarantee for error-free corporate management. There are countless factors that determine whether a company is successful or doomed. Even Jeff Bezos, the founder of Amazon, once shocked his employees by saying that Amazon would go down – albeit only one distant day. Perhaps TRIGEMA under the leadership of Wolfgang Grupp has so far only had a decisive quantum more luck than their competition. Because to claim that a decision made today on a logical basis for the benefit of the company also proves to be positive in the long term is a view that refuses the ever changing reality.

5.3 Adaptability in corporate management – essential, but not a guarantee

We have had to experience how volatile our global network can be often enough in recent years. Of course, Wolfgang Grupp is also right here when he calls for adaptability. But some adaptation takes time and money, among other things. If only one of both is missing, no salvation can be expected from the previously practiced responsibility.