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In Praise of Manufacturing and Machine Tools

Albert B. Albrecht









 By Albert B. Albrecht
Albrecht Associates
Author, The American Machine Tool Industry

The American machine tool industry is vital to the well-being of our economy and national defense. It is an industry that affects all of us and has a long historical background. Its beginning dates back to the early arsenals of the 19th century, when machine tools were developed for the production of muskets and rifles. Yet it is an industry that rarely gets the attention it deserves.

The machine tool industry is small—$5.0 billion in good economic times, less than many large corporations. It is capital intensive, faces strong foreign competition and involves a high level of engineering and technology. It employs a highly skilled workforce of design, mechanical, sales and service engineers, as well as technicians and assembly workers. These skilled individuals are undoubtedly the industry’s most important asset and retaining them during low periods when new machine tool orders are scarce is a great challenge.

The machine tool industry has changed dramatically since its “Golden Years” during the 20th century (1948–1998). That’s when companies such as Warner Swasey, Cincinnati Milling Machine, Brown & Sharpe, Pratt & Whitney, Jones & Lamson, Monarch Machine Tool Co., to name a few, were giants with respected product lines. Many of these companies were family owned with pride of ownership that disappeared when they were taken over by large holding companies.
The American Machine Tool Industry
But through it all, the industry has shown resilience and recovered after each downturn.

Today, although smaller, the industry is healthy and growing. Its structure, however, has changed with new names and startup companies. A few of the of the old line companies are still in business, but many of the names have been changed as a result of mergers, plant closings, foreign ownership, consolidation, and the restructuring of the industry that took place at the end of the 20th century, a period when US manufacturing was in a decline.

The industry continues to face challenges in a global market that is extremely competitive and often turns out to be not as free as people think. Machine tool imports in 2014 were 66% of total US machine tool consumption accounting for a negative trade deficit of $3.0 billion—the largest of any industrial nation outside of China. Simply stated, as the world leading industrial nation, this needs to be reversed.

On the positive side, US exports of machine tools have been slowly on the rise as US builders look outside the US to fill their order books. The US industry has fewer large international builders with sales of over $1.0 billion, as is the case in Japan and Germany. However, since 2010 the US has steadily moved from eighth place to sixth in world production as a result of increase in exports, and the output of foreign owned machine tool transplants in the United States.

The industry is highly diversified in terms of the number of metalworking industries it serves and types and models of machine tools and production systems it builds. US machine tool consumption in 2014 was $10.4 billion, second only to China, representing an attractive 14.9% of the world’s machine tool consumption—which accounts for the large number of domestic and foreign machine tool builders actively seeking a share of the US market.

Looking ahead, the industry will continue to change. We can expect to see additional investments in US manufacturing sites by foreign manufacturers, new startup companies, and greater advancements in intelligent machine tool controls. Would anyone have believed during the 20th century that Mazak would be building machines at less cost in the US and exporting them to Japan?

Albert B. Albrecht is author of the book The American Machine Tool Industry, an area in which he has been active in for the past 65 years. Copies of the book can be obtained by writing to him at 3190 Toddsbury Lane; Richmond, IN 47374. The cover price is $32.00 plus $7.50 shipping priority mail.


This article was first published in the April 2016 edition of Manufacturing Engineering magazine. Read "In Praise of Manufacturing and Machine Tools" as a PDF.

Published Date : 4/1/2016

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