BUSINESS NEWS | COMING EVENTS | PEOPLE NEWS | MERGERS CMMS: NONCONTACT PROBING TECHNOLOGY TO UPLIFT GLOBAL SALES LONDON, UK—The mature world coordinate measuring machine (CMM) market is slated to grow at a compound annual growth rate (CAGR) of 4.6% from 2010 to 2015, driven by pent-up demand and product introductions during the short and medium terms, says market research and consultation company Frost & Sullivan. New analysis from Frost & Sullivan in the world coordinate measuring machine market finds that the market earned revenues of $1.43 billion in 2010 and estimates this to reach $1.79 billion in 2015. New opportunities have unfolded as built-up demand post-recession is unleashed to energize market prospects. There is a distinct shift in the use of CMMs from quality control to process control. The use of dimensional measurement by vendors to check the process involved has contributed to the growing utilization of CMMs in process control. Manufacturers in this domain are rolling out application-specific products that provide better ROI. These machines are custom built to cater to varying end-user requirements. The upsurge in made-to-order manufacturing has augmented revenues of application-specific machines. Vendors are increasing their focus on temperature compensation, high-speed data-gathering sensor technology and software improvements. “For vendors in this space, the accent is on noncontact probing technology,” says Frost & Sullivan Industry Analyst Prathima Bommakanti. “Laser-based noncontact probes, which have great advantages in the amount of data acquired and the speed with which it is obtained, are highly accepted in the automotive and aerospace industry.” In the aftermath of the recent economic crisis, the CMM market has become highly price-sensitive. Vendors are under pressure to produce dramatic results, often while operating on shoe-string budgets. The low-end and mid-range CMM segments, in particular, are witnessing high price pressure. Major CMM end users such as aerospace, automotive and machine shops have gradually shifted from standardized production processes to custom jobs. The automotive industry too has moved away from producing large quantities of identical engine blocks to a few thousand similar pieces, as the engine designs change every year and the vehicle models in the market have proliferated. Market participants find it challenging to keep in step with changing customer needs. Slow replacement rates also have curbed market progression. Being robust, CMM equipment does not wear out as fast as other industrial products. Although some parts need to be replaced over time, there is often no need to buy a new machine for years. The average replacement rates for CMM can be higher than 10 to 15 years, thus affecting the sale of the new machines. “To survive in this landscape, smaller regional suppliers must enhance awareness levels on their technologies and focus on offering better value propositions,” concludes Bommakanti. “Besides, they must expand their operations in emerging economies such as China and India, either by setting up new facilities or through individual agents.” FORD, HONDA, CHRYSLER LAUNCH BIG RECALLS DEARBORN, MI, AUBURN HILLS, MI and TOKYO—Ford Motor Co., Chrysler Group LLC and Honda Motor Co. Ltd. Each announced widespanning recalls in August. The most recent was Honda with more transmission issues, the company saying it has begun a recall of 1.5 million vehicles in the United States to update automatictransmission software to help prevent damage to a secondary-shaft bearing that could be affected by rapid shifting between forward, neutral and reverse. Honda said the affected vehicles are 2005-2010 Accords with 4-cylinder engines, the 2007-2010 CR-V and 2005-2008 Element. Ford recalled 1.2 million F-Series pickups from various series, in addition to Lincoln-badged versions of the F-150, sold in North America between 1997 and 2003 to replace what might be corroded metal straps that secure the fuel tank to the chassis. Chrysler said it is recalling almost 300,000 2008 Chrysler Town & Country, Voyager and Dodge Grand Caravan minivans that could accidentally deploy the front air bags. FORD AND TOYOTA TO COLLABORATE ON HYBRID TECHNOLOGY DEARBORN, MI and TOYOTA CITY, JAPAN—Ford and Toyota, companies that both developed and marketed vehicles with full hybrid powertrains, both stated that they would collaborate to produce new hybrid systems for light trucks and sport utility vehicles. The companies say they anticipate products in the marketplace before the end of the decade. In addition to hybrid technology, the automakers plan to work together on the development of standards for in-car telematics and Internet-based services. Currently, Ford and Toyota hybrid systems for front-drive vehicles are somewhat similar, so a joint effort seems to be a good fit. Both automakers presently make parallel systems that can operate the electric motor either independent of or in combination with the gasoline engine, while charging the battery pack with a generator fed by the gasoline engine and through regenerative braking. Some news sources reported Ford licensed Toyota patents when it introduced its first hybrid vehicles and that there may have been cross-licensing of patents over the years. In a joint statement, the automakers said that they had been separately developing rear-wheel-drive hybrid powertrains, but chose to team up to bring new technology to the marketplace sooner, as well as to save development expenses, which would lead to lower costs down the line. J. D. POWER AND ASSOCIATES REPORTS: AUGUST NEW-VEHICLE RETAIL SELLING RATE EDGES UP FROM JULY WESTLAKE VILLAGE, CA—Newvehicle retail sales for August have yet to spark a stronger recovery, but the selling pace continues to increase slowly from its low point in May, according to J.D. Power and Associates, which gathers real-time transaction data from more than 8,900 retail franchisees throughout the United States. August new-vehicle retail sales were projected to come in at 898,000 units, which represents a seasonally adjusted annualized rate (SAAR) of 9.9 million units. The retail selling rate is higher than in July, although volume remains essentially flat. Retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles. “The selling rate in August is expected to be slightly stronger than in July, but without a significant increase in incentive levels or a reversal of the economic woes, there isn’t a compelling reason for those consumers sitting on the fence to return to dealer showrooms and purchase a vehicle,” says Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. “There is little question that a strong level of pent-up demand exists, but economic and financial uncertainty is keeping it from being released.” Total light-vehicle sales in August are expected to come in at 1,074,900 units, which is just 4% higher than in August 2010. Like July, August is normally a low fleet month, with sales of 177,000 units expected—which is 16% of total sales. Sales Outlook Given the recovery stall that continues to persist and lower expectations for growth in the economy, J. D. Power is lowering its forecast for light-vehicle sales in 2011 and 2012, as the slower recovery is expected to extend into next year. Total light-vehicle sales for 2011 are now expected to come in at 12.6 million units. This is still a 9% increase from 2010, but is down from the previous forecast of 12.9 million. Retail light-vehicle sales are now forecasted at 10.2 million units for 2011 (from 10. 5 million). For 2012, the outlook for total lightvehicle sales has been reduced to 14.1 million units (from 14.7 million). Retail light-vehicle sales are now at 11.5 million units (from 12 million). “The economy and automotive industry continue to wrestle with a series of unsettling developments, which are now likely too strong to overcome within 2011,” says John Humphrey, senior vice president of automotive operations at J.D. Power and Associates. “While it is not time to hit the panic button, it is clear that ascending from the recession is proving to be just as bumpy as the decline into it, and a full recovery in vehicle sales is further down the road than previously thought.” North American Production Light-vehicle production in the North American region has increased by 8% through the first seven months of 2011 from the same period in 2010, with volume of 7.3 million units. At the country level, production in Mexico is showing the strongest year-over-year change, rising 16% with the addition of the Fiat 500, Ford Fiesta and new VW Jetta models. The United States follows Mexico with an 8% increase, while volume in Canada is off 1%— hurt by production losses from Honda and Toyota. Vehicle inventory has decreased to a 49 days’ supply at the beginning of August, down from a 54-day level in early July, mainly due to the typical July shutdown at many of the assembly plants. Car inventory was at 40 days, while truck supply was at 58 days— both low for their respective norms. Several manufacturers continue to have limited availability: Hyundai/Kia with a 19-days supply and Honda with a 28-days supply. Production continues to support inventory replenishment, but closer-to-normal industry levels are expected to be reached by October. The 2011 North American production outlook has been trimmed slightly, but it continues to round to 12.9 million units. The decrease is the result of the reduction in the outlook for vehicle sales, but it is not as severe due to the current low level of inventory. Had the sales pace returned to the strength shown at the beginning of 2011, production would have needed to be increased in order to meet the demand and replenish inventory levels by the end of the year. BOEING 787 DREAMLINER RECEIVES FAA, EASA CERTIFICATION EVERETT, WA—Boeing received certification for the all-new 787 Dreamliner from the U.S. Federal Aviation Administration (FAA) and the European Aviation Safety Agency (EASA) during a ceremony at the company’s Everett, WA, facility. FAA Administrator Randy Babbitt presented the U.S. Type Certificate, which verifies that the 787 has been tested and found to be in compliance with all federal regulations, to 787 Chief Pilot Mike Carriker and 787 Vice President and Chief Project Engineer Mike Sinnett, both of whom have worked on the program since the day it began. Babbitt presented the amended Production Certificate 700 to John Cornish, vice president of 787 final assembly and delivery, and Barb O’Dell, vice president of quality for the 787 program. The production certificate adds the 787 to the list of Boeing Commercial Airplane production systems that have been found to be compliant with all federal regulations. “Certification is a milestone that validates what we have promised the world since we started talking about this airplane,” says Boeing Commercial Airplanes President and CEO Jim Albaugh. “This airplane embodies the hopes and dreams of everyone fortunate enough to work on it. Their dreams are now coming true.” Patrick Goudou, executive director of EASA, presented Dan Mooney, vice president of 787-8 development, and Terry Beezhold, former leader of the 787 Airplane Level Integration Team, with the European Type Certificate for the 787. Scott Fancher, vice president and general manager of the 787 program for Boeing, wrapped up the event addressing the broad team of those who worked on the program. “This is truly a great airplane,” Fancher says. “From the advanced materials and innovative technologies to the improved passenger experience and unbeatable economics, the 787 really is a game-changing airplane.” FIRST LABORATORY FOR LARGE GEAR MEASUREMENT OPENS IN GERMANY BREMEN, GERMANY—The Bremen Institute for Metrology, Automation and Quality Science (BIMAQ) at the University of Bremen opened the Laboratory for Large Gear Measurement on August 5, 2011. The facility is Germany’s first university laboratory for the inspection of large gear wheels. The Bremen researchers can now measure toothed gear components from wind turbines. They also can investigate the interrelationships between design, manufacture, quality and functional characteristics of large gears and their effects on aspects such as wear, service life, types of defect and noise. The aim is to extend the life of large gearboxes in wind turbines. PWC: GLOBAL INDUSTRIAL MANUFACTURING M&A VALUE INCREASES 70% IN SECOND QUARTER OF 2011 NEW YORK, NY–Merger and acquisition (M&A) value increased 70% in the industrial manufacturing sector during the second quarter of 2011, according to Assembling Value, a quarterly analysis of M&A activity in the global industrial manufacturing industry by PwC US. In the second quarter of 2011, there were 46 deals that were worth more than $50 million with a total deal value of $18.6 billion, compared to 33 deals and $9.8 billion in the second quarter of 2010. Average deal value was relatively flat at $400 million in the second quarter of 2011 compared to the prior quarter and up from $300 million in the same period of 2010. In the first six months of 2011, both deal volume and value were up with 86 deals—worth more than $50 million— and a total value of $35.9 billion, an 83% increase in volume and 197% increase in value when compared to the 47 deals worth $12.1 billion in the first six months of 2010. “The maturity of the industry, a fairly high market concentration and favorable deal valuations were factors that drove and will continue to drive deal activity in the industrial manufacturing industry,” says Barry Misthal, global industrial manufacturing leader for PwC. “In the near-term, continuous global economic growth, fueled by emerging markets, greater capital availability and more cash on balance sheets should continue to aid strong deal activity in the industrial manufacturing sector. “In fact, a recent survey we conducted with executives at large, multinational U. S. industrial manufacturing companies found that while a number of global factors contributed to the uncertainty about the world economy of late, U.S.-based industrial manufacturers continued to grow international sales last quarter and remain bullish on overseas revenues,” says Misthal. “In spite of the recent market volatility, PwC believes that the outlook for deals in the space is encouraging.” In the second quarter of 2011, U.S.- affiliated transactions dominated M&A activity for deals worth more than $50 million, making up 41% of total deal volume and 66% of total deal value, with 19 deals with a total deal value of $12.3 billion. Strategic investors continued to drive deal activity in the second quarter of 2011 with approximately 80% involved in deals worth more than $50 million, compared to nearly 20% from financial investors. In the first half of 2011, nearly 78% of strategic investors were involved in deals worth more than $50 million, already exceeding the involvement of strategic investors for all of 2010 with approximately 76%. “The mature and saturated nature of the industry is driving companies to seek growth opportunities through further consolidations within the industrial manufacturing sector,” Misthal says. “Even though financial and credit conditions have improved, financial investors have not yet made a strong return to this sector, and the slowdown that began during the second quarter of the year has negatively impacted financial investors’ interest.” According to PwC, mega deal activity, or transactions worth $1 billion or more, was entirely driven by strategic investors in the second quarter of 2011, confirming the strong desire of these companies to realize growth through acquisitions. During the second quarter of 2011, there were three mega deals with a total value of $7.7 billion, compared to three mega deals worth $4.4 billion in the second quarter of 2010. “Small and undisclosed value deals continued to dominate deal activity in the second quarter of 2011 as strategic and financial investors are approaching prospective transactions with increased caution. Although globalization remains relevant, companies are shifting their focus toward deals that can provide new strategic opportunities and synergistic growth,” Misthal continues. “Going forward, mega deal activity is expected to continue to be restrained by companies and financial investors’ conservatism in pursuing large transactions along with the growing uncertainty of the industrial manufacturing sector. However, despite the improving macro-economic conditions, companies are likely to continue to deleverage and invest in smaller, bolt-on acquisitions.” For deals worth $50 million or more, the industrial machinery category was the primary driver of deal activity with 61% and one of the three mega deals in the second quarter of 2011. The number of fabricated metal products deals increased to 20% during the second quarter of 2011 from 12% in the same period of 2010. The pace of global domestic market transactions has already exceeded all of 2010, which represented approximately 58% of deals worth more than $50 million, compared to nearly 72% during the second quarter of 2011 and nearly 61% in the first half of 2011. According to PwC, companies are pursuing more local consolidations as growth tools, as both the emerging and some developed markets have already taken steps to restrain unsustainable growth in order to control inflationary pressures. “As firms within the emerging markets grow and become financially stronger, they are likely to pursue opportunities within their local economies, since there is less risk in local transactions. Their economies’ growth is expected to surpass the growth in the developed world,” Misthal adds. Global domestic deals across all regions led deal activity with North America contributing 13 deals and both Asia and Oceania and Europe contributing 10 deals. Interestingly, Asia and Oceania’s stake in total transactions decreased both in terms of volume and value during the second quarter of 2011 with 30%—or 14 deals worth more than $50 million, compared to 41%—or 11 out of 27 deals during the second quarter of 2010. AMERICAN INDIAN COLLEGE FUND RECEIVES $85,000 GRANT FROM NISSAN NORTH DENVER—In support of American Indian higher education, Nissan North America Inc. (NNA) granted $85,000 to the American Indian College Fund to continue the Nissan Corporate Scholars Program. The program has provided scholarships to Native scholars attending tribal colleges and mainstream universities for more than a decade. The renewed grant will support 10 tribal scholarships of $3,000 each per year and five mainstream scholarships of $5,000 each per year. Students must be enrolled in college full-time, have a 2.5 cumulative grade point average, and demonstrate leadership and commitment to the Native community to be eligible. Preference is given to renewing Nissan scholars. Nissan also is a $20,000 sponsor of the Fund’s annual Flame of Hope Fundraising Gala on October 20, 2011. The event raises both awareness and funds to help students in Indian Country achieve their educational and career goals. “The Nissan Foundation aims to build community through valuing cultural diversity,” says Scott Becker, chairman of the Nissan Foundation. “By encouraging Native American students to continue their education, our hope is that they, in turn, will strengthen and bring greater value to their communities.” NANO RESEARCH CENTER OPENS AT UNIVERSITY OF ROCHESTER ROCHESTER, NY—The University of Rochester, joined by U.S. Representative Louise Slaughter, opened the Integrated Nanosystems Center (URnano) on campus. The center will be used for nanoscale physics, optics, chemistry, biomedicine and bioengineering research on commercialization of fuel cells, biosensors and other high-tech devices. Urnano comprises a 1,000-square-foot metrology facility and a 2,000-square-foot cleanroom for fabrication. Slaughter helped bring the “impressive, state-of-the-art facility” to the Rochester campus, says University President Joel Seligman. Slaughter secured a total of $4.4 million in federal money across three funding cycles to make the project possible. The work started in 2007, recalled Slaughter, who championed the lab for its job- and company-creation potential. It will “train the next generation of scientists and engineers in nanotechnology,” she adds. IN MEMORIAM Frank Koch, president and founder of DeFelsko Corp. died peacefully in hospital on August 8, 2011, at the age of 77 with his loved ones by his side. Born and raised in Germany, Koch was formally trained as a tool and die maker before emigrating in 1956. In the 1960s, Frank’s entrepreneurial spirit led him to Ogdensburg, NY, where he started several successful businesses including DeFelsko Corp. It was his involvement with coating thickness and test instruments that most defined his career. Koch began importing and selling inspection instruments from Germany in the early 1960s and soon moved into manufacturing beginning with the PosiTest mechanical pulloff gage and continuing with the ever-expanding PosiTector series of inspection instruments. His ability to understand the needs of the inspection community and to make instruments that were rugged and easy to use set Koch apart from his peers. Under his leadership, DeFelsko pioneered many technologies including hand-held ultrasonic coating thickness gages, auto switching ferrous/nonferrous coating thickness gages and unique self-aligning adhesion testers. Through his vision and the team he inspired, his company evolved from a one-man operation to a world leader in the design and production of quality, handheld test equipment. Today, the company he started employs more than 50 people at their facility in Ogdensburg, NY, and houses research, manufacturing, sales, shipping and service departments. PEOPLE NEWS TÜV SÜD America Inc. (Peabody, MA), a global testing, inspection and certification services firm, has appointed IAN NICOL to the role of president and CEO for Americas operations, including TÜV SÜD Canada, TÜV SÜD América de México and TÜV SÜD America do Brasil. Originally from Motherwell, Scotland, Nicol has served in numerous senior management roles in certification, inspection and testing industries worldwide. Bunting Magnetics Co. (Newton, KS) has added three new design engineers to its technical services department. MATTHEW MASON, CORY DREILING and BRANDON BOUSQUET, all recent graduates of Wichita State University, will initially concentrate on the company’s material handling product line. Sick Ltd. (Minneapolis, MN), a producer of sensors and sensor solutions for industrial applications and a factory, logistics and process automation company, has appointed CRAIG S. SMITH president of Sick Ltd. In Canada. Smith is senior leader with proven sales, marketing and operations experience in both the manufacturing and industrial automation business. BUSINESS NEWS GLOBAL TEST SUPPLY (Wilmington, NC) announced it received a ranking of No. 1715 on the fifth annual INC. 5,000 list of America’s fastest-growing companies. For the second consecutive year, the company has earned recognition on this list of the nation’s fastest-growing private companies. Global Test Supply’s strong growth trajectory continued upward with a 60% increase in sales over the preceding year, and a three-year sales growth of 156%. The B2B Web-and-mortar business has achieved success through its innovative business management technology, aggressive SEO strategies and emphasis on customer service. MECMESIN CORP. (Sterling, VA), a supplier of tensile, compression, material and torque testing machines for quality control and product testing, has launched a new Web site specifically for North American customers. The site, www.mecmesincorp.com, features a fresh new look and navigation, enabling customers to easily search Mecmesin’s extensive range of test equipment by test application, product category or industry. AGILENT TECHNOLOGIES (Santa Clara, CA) and LOCKHEED MARTIN (Bethesda, MD) officials in the United States are teaming to offer a new service: calibration of test and measurement equipment. Agilent and Lockheed Martin now provide on-site services covering a full range of test and measurement equipment, from torque wrenches to spectrum analyzers. Agilent and Lockheed Martin personnel can calibrate instruments from nearly all manufacturers, either while on site or returning the instruments in less than 24 hours. SGS (Geneva, Switzerland) announces the acquisition of ACUMAX LTD. Headquartered in Gauteng, South Africa. Acumax specializes in nondestructive testing, rope access services and ultrasonic inspections. Acumax serves the industrial, oil and gas and offshore industry in South Africa and the coast of Africa. HEXAGON METROLOGY (Wadgassen, Germany) delivered its 100th DEA Global 7.10.7 coordinate measuring machine, made in Turin, Italy, to HIRSCHVOGEL UMFORMTECHNIK GMBH (Denklingen, Germany). The Hirschvogel Automotive Group is a manufacturer of forged steel and aluminum parts. More than 3,000 employees worldwide produce components for the automotive industry and its system suppliers. SPECTRIS PLC (Egham, England), the instrumentation and controls company, has signed an agreement to acquire the Omega Engineering business. Omega is a supplier of process measurement and control instrumentation for automation, wireless, test and measurement, process control, power monitoring, environmental and lab equipment. ASSOCIATION NEWS Edmund Optics (Barrington, NJ), leading supplier of optical components, is proud to announce the recent election of Robert Edmund, CEO and chairman of the board of Edmund Optics, to the INTERNATIONAL SOCIETY OF OPTICS AND PHOTONICS (SPIE) senior member. SPIE senior members are members of distinction who are honored for their professional experience; their active involvement with the optics community and SPIE; and their significant performance that sets them apart from their peers. Two hundred twelve SPIE members have received this promotion since the senior member distinction.
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