Machine tool builders expand reach--finally.

Author:Modic, Stan
Position:Straight talk

The United States had been No. 1 in machine tool creation and production since the start of the Industrial Revolution. No more!

It lost its role as No. 1 producer during 1979-1980, when it peaked as a $6 billion industry, according to Patrick McGibbon, vice president and chief statistical guru for the AMT-The Association for Manufacturing Technology. By 2006 it slipped to No. 7, producing $3.6 billion worth of metal-cutting and forming machines, according to Joe Jablonowski's figuring. He tracks world machine tool output and consumption in his Metalworking Insiders 'Report newsletter. Japan is No. 1.

Fortunately, although the machine tool industry has shrunk some because of bankruptcies, mergers, and imports taking a big share of the domestic U.S. market, it is finally globalizing itself. Leadership in machine tool building is an important cog in our industrial base. Metalworking machine tools, as small an industrial base as it is, are necessary in the creation of all the other machines that make up our industrial infrastructure. There is also the issue of military preparedness.

Missed the boat

There are many reasons why the U.S. industry slipped in its world ranking; a major one was that the industry, to a large extent, missed the globalization boat that really started in the 1970s. At the time, the builders were fat and profitable, serving the giant U.S. market. Why bother with the harder-to-sell foreign markets?

It's not that they didn't have adequate warning. I recall Jim Grey, executive director of the National Machine Tool Builders' Association (now AMT-The Association for Manufacturing Technology) used every opportunity to convince his members to explore foreign markets. To his frustration, most ignored his warning even as competitively priced imports started to gain acceptance in the lucrative U.S. market.

Al Moore, then AMT president, a decade ago took up the same drumbeat. He told his annual-meeting audience: "If you are not already [in the Asian/Pacific market] find a way to be there as the market for machine tools is already 67 percent larger than the U.S. market."

Finally, spurred by the recession that hit the industry, the emergence of giant markets opening in China and India and the help of AMT, the machine tool builders started to see the light. Admittedly some, such as Jim Gleason of Gleason Works, saw the writing on the wall early. Through the cultivation of foreign markets and acquisitions, Gleason's gear-making machines...

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