Hurco retools.

• Author: Lutholtz, M. William
• Position: Hurco Companies Inc. - Profile

Things haven't always looked as good as they do now for Hurco Companies, Inc., a 20-year-old Indianapolis-based manufacturer of computer numerical-controlled machine-tool devices. From 1982 through 1986, Hurco lost money as the bottom fell out of the U.S. machine-tool industry. In four of those years, it lost $22 million.

A major reorganization plan, enormous cost-cutting measures and development of a new product line, however, have turned Hurco's fortunes around. That, coupled with the rising value of the Japanese yen compared with the U.S. dollar, has helped make Hurco's products more competitive abroad. At home the Voluntary Restraint Agreements with Japan and Taiwan (signed in December 1986) have helped improve the company's share of the domestic machine-tool market.

Now, Brian D. McLaughlin, the company's new president and chief executive officer, says the company has a strategy for dealing with the future shifts in the market. And, while the company is competitive today, McLaughlin says it can't stop to rest on its laurels.

"The Japanese are coming. There are three new Japanese machine-tool plants being built in the United States. Followed by that will be (the arrival of the component suppliers," says McLaughlin. "In three or four years, the Japanese will be back into our market segment. We need to be thinking through our strategies to compete with that. But we're in a position now where we have proactive control to develop those strategies."

Hurco was founded in June 1968 by Gerald V. Roch and Edward L. Humston. (Hurco is an acronym for HUmston, Roch and COmpany.) It became a public corporation in 1971. From its inception, Hurco's target market has been the short-run segment of the metalworking industry. Hurco has built its reputation on its CNC control devices. Each year, Hurco sells 3,000 to 4,000 of these controllers to the roughly 300,000 machine-tool users in the United States. The machine tools, in turn, are used to make just about anything that can be made in metal forms. A few examples of the applications include: automotive parts, construction materials, electronics and defense equipment.

Hurco accounts for about 11 percent of th CNC sales to the machine-tool industry in the United States. The huge Japanese firm, Fanuc, controls about 57 percent of the U.S. market.

McLaughlin believes that with the changes that Hurco has made in the last few years, his company stands ready to seize a bigger chunk of the market. One way he...