BUSINESS NEWS | COMING EVENTS | PEOPLE NEWS | MERGERS POSITIVE OUTLOOK FOR GLOBAL INDUSTRIAL MANUFACTURING M&A NEW YORK, NY-A significant increase in merger and acquisition (M&A) volume and value in the first quarter of 2011 signals a positive outlook for global industrial manufacturing deal activity, according to Assembling Value, a quarterly analysis of M&A activity in the global industrial manufacturing industry by PwC US. While smaller deals and deals with undisclosed values remained the drivers of activity, the number of mega, large and middle market deals in the first quarter of 2011 are on track to exceed 2010 levels, according to PwC. In the first quarter of 2011, there were 36 deals worth more than $50 million amounting to $16.6 billion, compared to 14 deals totaling $2.3 billion in the first quarter of 2010, an increase of 157% in volume and 622% in value. According to PwC, a recovery of mega deal activity in the first quarter of 2011 also helped contribute to the rise in average deal value to $500 million from $200 million in the first quarter of 2010. There were four transactions with value of at least $1 billion in the first quarter of 2011, which represented approximately 67% of total deal value, or $11.2 billion, compared with no mega deals in the first quarter of last year and 10 in all of 2010. "Increasing confidence in the continuing global economic recovery combined with stronger balance sheets, improved financial markets and greater credit availability should create favorable conditions for deals and further stimulate industrial manufacturing M&A activity in the coming months," says Barry Misthal, U.S. industrial manufacturing leader for PwC. "We expect to see ongoing global infrastructure spending and an increase in mega deal activity if the global economy continues to recover, capital becomes more accessible and emerging and developing markets experience significant growth." Consistent with levels set in recent quarters, strategic investors led first quarter deal activity with 72% of deal volume for transactions worth more than $50 million, while financial investors contributed approximately 28%. According to PwC, financial investors have become increasingly active in mega deals-contributing half of first quarter 2011 mega deal activity with $6.3 billion-signaling their strong comeback to the M&A scene. Non-U.S. affiliated deals continued to dominate M&A activity as companies looked to gain a presence in emerging and developing markets with higher growth potential. During the first quarter of 2011, deals excluding U.S. targets and/or buyers represented 69% of deal value with 24 deals worth more than $50 million, amounting to $11.5 billion. The majority of deals in the first quarter of 2011 came from the U.K. and Euro zone, and Asia and Oceania regions. Thirty-nine percent of targets and 28% of acquirers were in the UK and Euro zone region while 36% of both targets and acquirers were in Asia and Oceania. "Due to a more favorable regulatory environment and advanced capital markets. K. and Eurozone targets are likely to be a major catalyst of deal activity, while the Asia and Oceania region also continues to be attractive for its high economic growth and lower production costs," adds Mistral. "After a strong increase in 2010, North America has significantly decreased its contribution to deal volume, partly because of slower economic recovery and less attractive market conditions." Globalization has become a major driver for cross-border M&A activity due to increased deregulation, privatization and corporate restructuring, according to PwC. In the first quarter of 2011, cross-border deals represented 50% of total deals valued at more than $50 million with 18 transactions, driven by companies seeking to gain market share in new, more attractive markets. "As the global economy continues to recover, we expect that companies will seek to gain competitive advantage by broadening their international presence and may engage in cross-border transactions to follow customers or gain new ones," continues Mistral."With M&A activity increasing across the globe, executives are facing talent management challenges, including organizational design, integration planning and the cultural blend between acquirer and target. Companies should consider having a disciplined approach to employee integration, which will help them achieve desired synergies, build momentum and instill confidence among stakeholders." The industrial machinery category realized the largest increase in deal volume and represented the primary driver of activity during the first quarter of 2011, accounting for 56% of total deals worth more than $50 million, including two of the four mega deals in the first quarter. The two remaining mega deals of the first quarter of 2011 came from the electronic and electrical equipment sectors. Rubber and plastic products also increased in volume, accounting for 19% of deal activity, compared to 14% of deals in all of 2010. For a copy of Assembling Value, PwC's quarterly analysis of M&A activity in the global industrial manufacturing sector, visit www.pwc.com/us/ industrial products. WORKING RELATIONS IMPROVING AMONG DOMESTIC AUTOMAKERS AND SUPPLIERS DETROIT-According to the 11th annual study of working relations between the six North American automakers and their suppliers, the U.S. Big Three automakers: Ford, Chrysler and General Motors-continue to show steady improvement, and the Big Three Japanese automakers: Honda, Toyota and Nissan-continue to slip. The 2011 North American OEM Tier One Supplier Working Relations Study, conducted annually by Planning Perspectives (Birmingham, MI), tracks supplier perceptions of working relations with automaker customers in which OEMs are ranked across the six major purchasing groups broken down into 14 commodity areas. The results of the study are used to calculate the Working Relations Index (WRI) based on 17 working relations variables. This year, 451 suppliers participated, representing 63% of the six automakers' annual buy. Ford continues to lead the U.S. automakers in having the best relations with its suppliers staying in third place overall, while GM and Chrysler continue to improve. Chrysler, while remaining in last place, has had its second straight year of significant improvement. Among the Japanese automakers, Honda, which was in first place overall for the past two years, has continued to drop and has slipped to second place behind Toyota, which appears to have bottomed out, while Nissan remains stuck in neutral in fourth place. Comparing the six U.S. and Japanese automakers overall, Toyota is in first place, followed by Honda, Ford, Nissan, GM and Chrysler. This year, 540 sales persons from 415 Tier 1 suppliers-representing 1,984 buying situations and 63% of the OEMs' annual buy-responded to the survey. Demographically, the supplier respondents represent 37 of the Top 50 North American suppliers, 63 of the Top 100 and 80 of the Top 150 North American suppliers. The study culminates in the Working Relations Index (WRI) which is a quantitative ranking by suppliers of their working relations with each of the six OEMs. PRATT & WHITNEY AWARDED $1.13B CONTRACT FOR F135 ENGINE PRODUCTION EAST HARTFORD, CT-The U.S. Department of Defense has awarded Pratt & Whitney a $1.13 billion contract for F135 production engines to power the F-35 Lightning II. Pratt & Whitney and the DoD have reached an agreement on price and terms for the LRIP 4 contract, originally awarded in July 2010, which contains fixed-price and cost-plus incentive fee elements. This low rate initial production (LRIP) contract includes production, spare parts, sustainment and delivery of the fourth lot of F135 engines. Pratt & Whitney is a United Technologies Corp. company. "This contract provides our customer with a 15% savings on the conventional takeoff and landing/ carrier variant, compared to LRIP 3, and demonstrates our commitment toward meeting aggressive cost reduction goals for the F135 engine," says Bennett Croswell, president of Military Engines, Pratt & Whitney."It also speaks to the maturity of our engine, which builds on the proven technology of our F119 engine. The F135 engine has powered all 868 F-35 flights, including 100 vertical landings in the short takeoff/vertical-landing (STOVL) configuration." The fourth lot of F135 engines includes 18 conventional take-off and landing (CTOL) and 19 STOVL engines. Deliveries for this lot are slated to begin in the fourth quarter of 2011. The engines delivered in LRIP 4 will support the U.S. Services, the United Kingdom and the Netherlands. Pratt & Whitney has designed, developed and tested the F135 to deliver the most advanced fifth-generation fighter engine for the United States and its allies around the world. GE OPENS SUSTAINABLE MANUFACTURING CENTER IN SAUDI ARABIA DAMMAM, SAUDI ARABIA- GE celebrated the grand opening of the GE Energy Manufacturing Technology Center. The 32,000 square-foot center in Dammam, Saudi Arabia, includes a manufacturing facility for high technology equipment for the power, water and oil and gas industries; a service and repair center for advanced turbine equipment; and a training center to empower Saudi college students. As part of the launch, GE announced an additional $150 million investment in the project, bringing the company's total commitment to $250 million. The end-to-end goal of the center is key. GE can repair advanced technology gas turbine-related parts locally, for instance, rather than send them out of the country, to save time and cost. The facility will create 2,000 new jobs, supporting goals outlined in Saudi Vision 2020, the Kingdom's plan for economic development over the next decade. "As Saudi Arabia forges ahead with its ambitious development plans," GE vice chairman John Krenicki said at the opening, "the center underscores GE's commitment to be closer to our customers who trust us to deliver the latest technologies and services across the energy landscape." GE currently supports roughly half of the Kingdom's electricity with more than 500 turbines installed throughout Saudi Arabia. VISTEON Receives 2011 TOYOTA GLOBAL TECHNOLOGY AND DEVELOPMENT AWARD YOKOHAMA, JAPAN-Visteon Corp. received the Technology and Development Award from Toyota at its recent 2011 Suppliers Convention in Nagoya, Japan. The award recognizes noisereduction technology as applied to a low-cost fuel pump controller (FPC).Co-developed with Toyota, the technology is considered a breakthrough in the global automobile industry and is currently patent pending. The Technology & Development Award recognizes suppliers who have greatly contributed to boosting the product appeal of Toyota vehicles by developing world-leading new technologies and products. After strict evaluation, the prestigious award is presented to a select number of suppliers every year. "We are extremely pleased to be recognized by Toyota as a top innovator and technology leader," says Donald J. Stebbins, Visteon chairman, CEO and president. "We continue to focus on partnering with our customers to create exceptional value." FPC is an electronic module that controls the speed of the fuel pump according to the driving situation, to ultimately improve the fuel efficiency of the vehicle. By utilizing a proprietary printed wire board topology with a high-frequency direct current-direct current converter circuit, Visteon is able to significantly reduce the radiated electromagnetic noise of the FPC. This innovation also results in reduced weight, size and design complexity, and contributes to fuel economy through cost-effective application of the FPC for improved efficiency of the fuel pump system.The core technology can be applied to virtually all types of motor control systems, including those in electric/ hybrid vehicles. The high-quality FPC using this innovative noise reduction technology has been launched on Toyota's multiple vehicle models in the Japan and U. S. markets. MANUFACTURING CONFIDENCE IN U.S. ECONOMY DROPS CHICAGO-U.S. manufacturing leaders have turned pessimistic regarding the U.S. economy, according to Grant Thornton LLP's most recent Business Optimism Index, a quarterly survey of U.S. manufacturing business leaders. Only 40% believe the U.S. economy will improve in the next six months, down from 60% three months earlier. At the same time, 26% believe the U.S. economy will get worse, up from 3%. "There are many factors causing concern amongst U.S. manufacturing leaders," says Wally Gruenes, manufacturing practice leader at Grant Thornton LLP. "Soaring energy and raw material costs and Japanese manufacturing supply chain disruptions are weighing heavily, as are unresolved U.S. debt reduction issues and a corporate tax rate that still puts the U.S. at a global competitive disadvantage. ASSOCIATION NEWS Twenty-nine engineers and scientists from industry and academia now have the prestigious SAE INTERNATIONAL (SAE, Warrendale, PA) status of SAE Fellow. SAE Fellowship status is the highest grade of membership bestowed by SAE International.It recognizes outstanding engineering and scientific accomplishments by an individual that have resulted in meaningful advances in automotive, aerospace and commercial-vehicle technology. The program, established in 1975, recognizes an average of 20 worldwide recipients for this honor each year. The 2011 recipients, listed in alphabetical order, include: Dr. Ewa A. Bardasz, technical fellow, Lubrizol Corp. Dr. Bryan L. Dodson, executive engineer, Continuous Improvement/ Six Sigma, SKF, USA Michael C. Dudzik, vice president, Science & Technology, Washington Operations/Corporate, Lockheed Martin Corp. Dr. Wayne A. Eckerle, vice president, Research & Technology, Cummins Inc. Horacio Aragonez Forjaz, executive vice president, Corporate Affairs, Embraer (Empresa Brasileira de Aeronautica S.A.) Dr. Jaal B. Ghandhi, Grainger professor of Sustainable Engineering, Mechanical Engineering, University of Wisconsin-Madison Dr. Mircea Gradu, director, Transmission and Driveline Engineering, Head of Virtual Analysis, Chrysler Group LLC Greg W. Henderson, director, Product Lifecycle Management, retired, Lockheed Martin Aeronautics Co. Keith Jackson, chief technology officer, Electrical Power and Control Systems, Rolls-Royce PLC Dr. Linos J. Jacovides, director, retired, Delphi Research Labs Badih A. Jawad, Ph.D., professor and chairman, A. Leon Department of Mechanical Engineering, Lawrence Technological University Richard E. Kleine, vice president of Quality and Business Enterprise, Mid Range Engine Business, Cummins Inc., and the 2011 president of SAE International Dr. Ming-Chia Daniel Lai, professor, Mechanical Engineering, Wayne State University Patrick Leteinturier, senior principal, Automotive Systems, Infineon Technologies AG Paul A. Machiele, center director, Assessment and Standards Division, U.S. Environmental Protection Agency (EPA) Dr. Jeffrey D. Naber, director, Advanced Power Systems Research Center and Associate Professor, Department of Mechanical Engineering- Engineering Mechanics, Michigan Technological University Marc Parent, president and chief executive officer, CAE Inc. Dr. Charles E. Roberts, Jr., Institute Engineer, Engines, Emissions and Vehicle Research Division, Southwest Research Institute Gary W. Rogers, PE, president and CEO, FEV Inc. Dr. Pradeep K. Rohatgi, distinguished professor and director, Composites and Advanced Materials Manufacture Centers and Tribology Laboratories, University of Wisconsin-Milwaukee Dr. Prakash T. Sathe, senior vice president, Engineering & Business Development, Rapid Global Business Solutions Inc. (RGBSI) Victor E. Saucedo, senior manager (retired), F-117 Program, Lockheed Martin Aeronautics Co. Dr. Myoungho Sunwoo, professor, Automotive Engineering, Hanyang University Dr. Galina M. Susova, head, Quality Management System Department, National Institute of the Aviation Technologies Dr. Tau Tyan, Safety CAE Engineer, Safety Methods Development, Ford Motor Co. Dr. Patrick B. Usoro, technical fellow, Vehicle Development Research Lab, General Motors Research & Development Dr. Bryan D. Willson, professor of Mechanical Engineering and director of the Engines & Energy Conversion Laboratory, Colorado State University Dr. Jianwen James Yi, technical leader, Powertrain Research and Advanced Engineering, Ford Motor Co. Dr. Jianwei Zhang, vice president, China Automotive Technology and Research Center (CATRC) AMERICAN SOCIETY FOR QUALITY (ASQ, Milwaukee, WI) announced the following slate of officers for the 2012 term, which includes newly created titles as part of ASQ's governance improvements plan: Past Chair-E. David Spong, Boeing Co. (retired), Rancho Palos Verdes, CA Chair-James J. Rooney, ABSG Consulting, Knoxville, TN Chair-Elect-John Timmerman, Marriott International Inc., Sterling, VA Treasurer-William B. (Bo) McBee, Hewlett- Packard Co., Houston, TX; Newly Elected Board Member-Joanne D. Mayo, Nortel, Cary, NC and Newly Elected Board Member-Kathleen Goonan, Mongan Institute for Health Policy, Boylston, MA. The model works to define the responsibility, accountability and authority of the executive director, the president, the chairman, the office of the president, the board and the office of the president structure, job titles and job descriptions. The ASQ membership approved changes to the current body of governance. Effective immediately, the new titles are: The office of the president becomes the executive council. The president-elect becomes chair-elect. The president becomes chair. When the president fulfills his term, he then becomes past chair. Executive director becomes chief executive officer. PRODUCTIVITY QUALITY INC. (Plymouth, MN) and GDO PRECISION TECHNOLOGY (Eygelshoven, Netherlands) have signed an agreement that names PQI as importer and exclusive North American distributor of GDO's Nuremberg Stent Inspection-7 system. The NSI-7 system is the result of three years of research and development in close collaboration with stent manufacturers. NSF INTERNATIONAL STRATEGIC REGISTRATIONS LTD. (Ann Arbor, MI) , a management systems registration company, has acquired accredited registration company AQA INTERNATIONAL LLC (Columbia, SC) and AQA's current international operations. As a result, NSF-ISR and AQA-certified companies will benefit from a wider global footprint in China, Korea, India, Turkey and Malaysia; a larger North American presence and a broader array of service offerings. LABSPHERE INC. (North Sutton, NH) has been named company of the year by its parent company, UK-based Halma p.l.c. The annual award recognizes the company with the best all-around performance of the 40 Halma group companies worldwide. While one of the criteria is significant growth in sales and profits, the award also takes into account good governance and overall management of engineering and manufacturing. Metrology equipment supplier NANOMETRICS (Milpitas, CA) opened a Singapore advanced metrology center to support its customer base in Asia. The center should give dedicated support throughout Asia for customers requiring advanced modeling of complex structures and recipe development. It also will act as a training center for regional customers and Nanometrics' branch offices. DOUGLAS DYNAMICS INC. (Milwaukee, WI), a designer, manufacturer and seller of snow and ice control equipment for light trucks, announced it was recently ranked No. 3 on MILWAUKEE JOURNAL SENTINEL'S Top 100 Workplaces List in the Top Mid-Size Workplace category. This is Douglas' second consecutive year on the list, an annual ranking of the top 100 workplaces in Southeastern Wisconsin based on input from employees and workplace attributes.In 2010, Douglas Dynamics was ranked No. 7 in the top mid-size workplace category. ACU-GAGE SYSTEMS (Hudson, NH), a manufacturer of one, two-and three-axis noncontact video and laser measuring machines, has been awarded a contract from the U.S. Treasury Department's Bureau of Engraving and Printing (BEP) for up to nine measuring systems. Acu- Gage Systems will supply three-axis measuring systems, which will be used to inspect the registration and alignment of all United States' paper currency. The systems will be installed in Washington, DC, and in Fort Worth, TX. Global metal cutting and composites processing technology company MAG (Erlanger, KY) has acquired FOREST LINÉ INDUSTRIES GROUP (FLI, Paris, France). Forest Liné specializes in manufacturing systems for aerospace applications, dies/molds, large parts, titanium and composites processing. The company is a technology leader in composite wing and wing box applications, and operates sites in France, Germany, China and Canada, employing about 300. Jean Bertrand Prot will continue as president and CEO of FLI and join the MAG Executive board.
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