Fraunhofer Society is a conglomerate of various research institutions. A lot of research in Germany is being done not at universities but at dedicated institutions like the Fraunhofer Society, the Max Planck Society, and many more.

The Fraunhofer CEO probably meant that the research part of German universities is bad, which is their main "competitor". This is still a ridiculous take and I attribute this to the general arrogance that was already mentioned by GP.