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Home / 2013 State of the Industry: Don Lane, Makino

2013 State of the Industry: Don Lane, Makino

Don Lane is the president and chief executive officer of Makino, Inc., which designs and manufactures horizontal and vertical machining centers, electrical discharge machines and production systems for the die/mold, aerospace and automotive industries in North and South America.

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Don Lane is the president and chief executive officer of Makino, Inc., which designs and manufactures horizontal and vertical machining centers, electrical discharge machines and production systems for the die/mold, aerospace and automotive industries in North and South America.

CURRENT STATE OF BUSINESS
As we begin 2013, there are clear long-term trends in place that are expected to positively impact the machine tool market in North America. We anticipate that a number of market and structural factors are going to drive machine tool markets strongly through mid-decade.

Demand for U.S. manufactured cars and trucks continue to climb from previously weak numbers. Simultaneously, automotive OEMs are proceeding with necessary retooling for technical product advancements.

The commercial aircraft market is predicted to maintain steady growth with robust production rates from North American OEMs, as well as a push by Airbus (Toulouse, France) to source more components in North America. New turbine engine technologies are forecast to drive further production volumes and additional investments in production equipment.

From a global perspective, recent “reshoring” of production is anticipated to continue as supply lines shrink and the competitiveness of North American manufacturing is understood and used more fully. In addition, demand for U.S. energy self-sufficiency is likely to stimulate drilling and pipeline production.

Based on these factors, we see the strong possibility of a broad-based investment in manufacturing capacity and capabilities in North America over the midterm that is going to cross several geographies and consuming markets. The demand is expected not only for increased production volumes but also different manufacturing processes of emerging metals and materials.

MAJOR TRENDS
Manufacturers looking to meet growing demand for product are facing several unique needs, including trained manpower, process engineering capability, automated technologies and reliable unattended machine operation. To meet these needs, there is a growing trend toward investments in services and support beyond the initial machine tool investment. We expect to see some of the following trends develop in the coming year:

  • An increased demand for application engineering services is likely to occur as manufacturers seek support in gaining the process knowledge and expertise needed for efficient processing of new materials.
  • To address shortages in trained manpower, manufacturers are projected to outsource several engineering roles to machine suppliers, relying on these partners for a greater share of machine monitoring, maintenance and repair.
  • Integration of automated systems is predicted to continue to expand not only in large companies, but also in smaller, geographically dispersed companies. This expansion is going to lead to increased flexibility, productivity and capacity, all while eliminating the need for additional manpower.

We think these services are going to be essential for North American manufacturers to overcome current constraints and maintain a competitive stance in the global market.

CRITICAL ISSUES
In the near term, we expect to see some hesitation caused by a number of national and global uncertainties, resulting in more cautious investments. These uncertainties are well documented:

  • Are there going to be changes to tax and spending policies emerging from the U.S. government as we go forward?
  • What is the cost of new medical policies in the United States expected to be?
  • What is the new administration’s position going to be on oil and gas exploration in the United States?
  • How deep are the recessions projected to be in Europe? Is the European currency union likely to survive?
  • Are we likely to see a hard landing from the slowdown in China?

The North American market is currently witnessing the effect of these contingencies as growth rates have slowed. However, we forecast that these headwinds will begin to clear up in the first part of 2013, revealing a healthier economy.

PERSONAL INSIGHTS
While initial market conditions are forecast to remain hesitant, our outlook for the North American market is quite bullish in the midterm, as we expect manufacturing is going to make a strong comeback. We are gearing up to support this comeback by getting ready to supply not only the machines but also the services and support necessary to optimize productivity.

Makino, Inc., 7680 Innovation Way, Mason, OH 45040-8003, 888-625-4664, Fax: 513-673-0962, www.makino.com.

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