December 2006 •  January 2007 • Vol. XXV No. 2 • An Arnold Publication

Industry  News • Executive Hotline

Executive Hotline

U.S. Economy Fared Better Than Originally Thought In Third Quarter

The third-quarter economic slowdown in the U.S. wasn’t as severe as initially reported, the government said.

The Commerce Department said revised gross domestic product - the total output of goods and services - increased at an annual rate of 2.2 percent in the quarter, compared with the advance estimate of 1.6 percent. (In the second quarter, GDP expanded at a 2.6 percent clip.)

Commerce said the increase in GDP primarily reflected positive contributions from personal consumption expenditures (PCE), exports, equipment and software, nonresidential structures.

Northrop Grumman Wins Part of $9B Army Logistics Support Contract

Northrop Grumman Corp. is one of 15 companies selected to provide logistical support services for the Field and Installation Readiness Support Team program.

The indefinite delivery, indefinite quantity contracts, awarded by the U.S. Army’s Southern Region Contracting Center, have a potential value of more than $9 billion collectively. The contract is for five years with two one-year options.

Northrop will provide logistics support including program management and operations, information technology, transportation and supply, field and depot repairs, and Army command-wide enterprise systems program support. The work will be conducted worldwide.

West Coast companies involved in the contract include Vose Technical Systems of Santa Barbara, Calif. and Native American Technology of Coos Bay, Ore.

Long Term Growth Forecast in Aerospace and Defense Industrys.

Although the Democrats gained a majority in Congress this past Election Day, it’s unlikely that will impact the future of the aerospace and defense industry, as the industry is currently facing other long-term issues, according to a Standard & Poor’s semi-annual report, Aerospace & Defense: Industry Survey.

Standard & Poor’s Equity Research identified several factors which can lead to sustained, long-term growth in the aerospace and defense industry.

These factors include the need to upgrade military equipment following extended tours in Iraq and under-investment during the late 1990s and the early part of this century, continued spending on homeland defense and anti-terrorism systems, and the absence of a well-defined plan for early U.S. troop withdrawals from Iraq.

For the aerospace industry expect the commercial and business jet markets to remain strong, fueled by economic growth globally, and forecasts a return to growth for the regional jet market, as the health of U.S. carriers improves.

Boeing Identifies KLM Order for Six Boeing Next-Generation 737s  KLM Exercises Model Substitution Rights on 777s

The Boeing Company confirmed that KLM Royal Dutch Airlines, part of the Air France/KLM Group, placed several orders this year for a total of six Boeing Next-Generation 737s. These orders have been accounted for on Boeing’s Orders and Deliveries Web site under the unidentified customer category. The order is valued at approximately $423 million at list prices.

KLM converted six options for Boeing Next-Generation 737-800s to be delivered before mid-2008. The airplanes, which are equipped with fuel-efficient, emissions-reducing Blended Winglets, will replace several Classic 737s in KLM’s fleet and allow for further growth.

Reinhold Industries Announces Third Quarter 2006 Financial Results

Reinhold Industries, Inc. of Santa Fe Springs, California, announced financial results for the third quarter 2006. Third quarter 2006 revenues were $8.8 million, up $0.5 million (6%) from third quarter 2005. Sales in the Aerospace business unit decreased by $0.2 million (4%) to $5.9 million due primarily to lower sales of rocket nozzles related to the Ballistic Missile Defense System. Sales in the Seating Products business unit increased by $0.6 million (42%) to $1.4 billion. Sales in the Commercial business unit increased by $0.1 million (17%).

San Jose— SIA Forecast:

Microchip Industry Will Reach $321 Billion in 2009

The Semiconductor Industry Association (SIA) recently released its annual forecast of global semiconductor sales, projecting that the industry will continue to ride a strong wave of consumer demand for electronic products, driving sales to $321 billion in 2009. The SIA forecast projects a compound annual growth rate of 9 percent for the forecast period, 2006-2009. Total worldwide microchip sales in 2005 amounted to $227.5 billion.

The new forecast projects that sales will reach $248.8 billion in 2006, an increase of 9.4 percent, followed by increases of 10 percent to $273.8 billion in 2007, 10.8 percent to $303.4 billion in 2008, and 5.8 percent to $321 billion in 2009.

Redmond  WA. Circuit Board Maker Bucking Asian Trend

Anyone who thinks all electronics manufacturing is moving to China might be surprised by the 25 percent growth this year of circuit board manufacturer TTM Technologies, Redmond Washington.

Tucked away just east of Redmond’s Marymoor Park, TTM Technologies Redmond is one of the largest manufacturers of circuit boards in the Puget Sound area. And with parent company TTM Technologies Inc.’s acquisition of former competitor Tyco Printed Circuit Board Group on Oct. 2, TTM executives expect more growth here.

“It could benefit Redmond. There are some new customers, partly military customers, that Tyco brings,” said TTM Technologies Chief Financial Officer Steve Richards.

Fitch Predicts Moderate 2007 Aerospace And Defense Growth

The aerospace and defense industry is expected to maintain stable, but moderate, growth, according to a report from Fitch Ratings released early December.

Fitch said most commercial aerospace segments remain in a strong upturn, and better-than-expected orders in 2006 suggest that peak deliveries in the current cycle for most segments lies beyond 2007.

Large acquisitions are not expected in 2007, but there should be moderately sized transactions as the large A&D players look to round out portfolios and diversify into service businesses.

Commercial Aerospace

As expected, most segments of the commercial aerospace industry were strong in 2006, and this strength should continue in 2007, although Fitch expects that growth rates will likely be moderate. Orders in 2006 were stronger than expected, and Fitch now projects that most parts of the commercial aerospace industry will not reach a delivery peak until at least 2008.

Large Commercial Aircraft

Fitch expects large commercial aircraft deliveries from Boeing and Airbus to rise to approximately 900 aircraft, an increase of nine percent in 2007. Deliveries in 2007 should be split nearly equally between the two manufacturers, and there is some upside to the delivery estimate depending on production rate decisions.

The business jet market should continue to be strong in 2007, with expected deliveries up approximately 12 percent. Aircraft delivered in 2007 could reach 1,000 units, coming off a stronger than expected 2006 in which deliveries should increase 19 to 20 percent.

Defense

The Democrats’ victory in the recent elections and the pending change at the top of the Department of Defense have added some uncertainty to the U.S. defense credit outlook, but Fitch does not expect these changes will materially affect defense spending in the next several years. The FY2007 defense budget has already been enacted, and the formulation of the FY2008 budget request is well under way. There have been reports that the Democrats could push for an increase in defense spending in January to rebuild the capabilities of U.S. ground forces, which could benefit suppliers to the Army and Marine Corps in the next 12-24 months. 

200 People Attend Fadal Open House

The chips were flying as Fadal (Chatsworth, CA) fired up its vertical machining centers and opened its doors on Thursday, November 16 (2006), attracting approximately 200 people during the 5-hour event.

A total of six machines were demonstrated. The new VMC 3016FX was putting its 8,000 rpm spindle and its Fadal GE Fanuc control to work chomping through Rapid Steel at 125 cubic inches per minute (ipm). In recent years, Fadal has focused on essential features, controls capability and standardization, and machine rigidity…all within an advantageous price-to-value package. The FX series is a prime example. It got high praise from Fadal distributors, many of whom were seeing it in action for the first time.

The VMC 6535-50, built with a 50-taper, 7,500 rpm spindle was doing some cutting of 1018 steel. More like large shavings than “chips,” the metal being removed by this demo impressed many. Meanwhile, aerospace and automotive aftermarket enthusiasts and practitioners watched titanium productively being cut on a VMC-4020.

Component producers appreciated Fadal’s Profit Shop setup, where another 4020 had “soft material” duty.  “Our metalworking customers got a kick out of seeing wood being cut like butter (64 cubic ipm) on a 4020 to make Taylor guitar necks,” said Jerry McCarty, Vice President-Worldwide Sales. “Besides our strongholds in die and mold, contract part production, and aerospace… supplying CNC machines to the guitar industry is one of our interesting niche markets.”

A VMC-6030 Wing Spar operation and a VMC-4525 4th-axis demo rounded out the exhibited equipment.  Free mini-seminars during the event on high-speed and titanium machining, tips for aerospace suppliers, and other topics were offered to attendees. “All in all, the mood was very upbeat, and the turnout exceeded our expectations,” added Ron Bruno, Global Marketing Director.

Representatives from GE Fanuc, Iscar and Steinmeyer Inc. (ball screws) were also on hand to answer questions about controls, tooling, and slide positioning.

Kathleen Johnson Named SETCO’s Western Regional Manager

Kathleen Johnson was named Western Regional Sales Manager out of the West Coast facility for SETCO, the Cincinnati-based manufacturer of precision spindles, slides and rebuild services.  In her new position, Johnson is responsible for sales and product support for Southern California, Utah, Arizona, New Mexico, and North-West Mexico. 

Johnson brings a broad range of industrial sales experience to SETCO- 16 years selling to diverse industries, including manufacturing, machine shops and aerospace companies.  A native to Southern California, Johnson worked at Industrial Distribution Group (IDG) in La Palma, California selling industrial tooling.  She has also sold industrial equipment for Airgas, Safety West, and MSC Industrial Supply.

Johnson’s 16 years of industrial equipment sales will allow her to work closely with customers to provide the best sales and customer support possible.

Dynomax Appoints New Sales Representative for Southwestern United States

Dynomax, Inc. has appointed Industrial Workholding as the new sales representative firm for California, Arizona, Nevada and New Mexico. Industrial Workholding will be responsible for expanding the Dynomax brand in the metal cutting manufacturing plants in Southwestern U.S..

Industrial Workholding Corp., formerly E&L Associated Sales, has been in business for more than 25 years providing tooling, workholding and automation products to the metalworking industry in the western region. Collectively the team principals have more than 50 years experience in sales and management within the machine tool industry, working for companies such as Bridgeport Machine Co., TRW and Haas Automation.

“Industrial Workholding’s knowledge of the industry coupled with their customer service driven business model will be a tremendous asset to Dynomax’s expansion efforts,”says Kathy McGlynn, Dynomax Sales Director.

Cerritos College 3-D Technology Education has lift-off

The newly remodeled 3-D technology ME2 facility at Cerritos College  has completed phase one. The new 30 seat software lab is complemented and configured as a “smart-classroom”, allowing the senior instructor to manage the entire space from one location; lights, sound, overhead projection and software instruction. The facility is complete with 3 ancillary labs; Lab 1 for clay modeling, Lab 2 for digitizing and Lab 3 for subtractive machining respectively.

Basic to advanced students will learn the process and model their projects in Clay, Digitize it, CAD-ize it, CAM-ize it and subtractive Mill-it for the finished projects.

“Teach the concepts,” CMM Microscribes and Roland mini-milling machines are being used initially for students to learn the basics. CMM Vendors are encouraged to support the program with hardware and software. The vendors are discovering this first of its kind program is a tool for sales and a source for clients to locate new employees to operate their equipment. A number of hardware vendors have expressed strong interest in supporting the program.

Rhino software has been installed in ME2 lab. One college credit class is taking place on Tuesday nights from 6 to 10 pm (MTT70) and one high school / ROP class is taking place twice a week from 4 to 6 pm (year long class).

 Advanced PowerInspect software by DELCAM is used for advanced instruction, this advanced software is complete with model based definition inspection routines.   For the entry level students, 5 each Microscribe CMM’s are in lab 2, although they are not very precise, they allow   to teach the principle of software assisted inspection. Plenty of other equipment is compatible with this software once other software and hardware manufacturers become involved.

Agie Charmilles Corporation Unifies Sales, Service And Support

On  November 1, 2006, Agie Charmilles Corporation merged  the sales and service departments of Agie, Charmilles and Mikron in North America. This action followed the previous unification of the back-office and logistics departments of the companies and provides customers with a comprehensive source for all of their EDM and high-speed and high-performance milling requirements. All three brands will continue to be sold and fully supported during and following the transition.

By bringing the Agie, Charmilles and Mikron brands into a single sales channel, Agie Charmilles Corp. will be able to streamline service and application support, achieving higher levels of availability, efficiency and cost savings.

To guarantee a smooth and successful transition, Agie Charmilles Corp. has carefully selected a group of the nation’s most respected and experienced dealers to represent Agie, Charmilles and Mikron products.

Agie Charmilles will cross-train more than 100 service engineers in more than   30 states across North America, allowing more customers to benefit from local service.  All three brands will be represented at seven demo centers across the country.

Andy Pennington Named National Sales and Marketing Manager for Campat Machine Tool, Inc.

Andy Pennington has been named the new sales and marketing manager for Campat Machine Tools Inc., a machine tool dealer and importer headquartered in Plano Texas.

Mr. Pennington now has the responsibility for expanding sales, as well as the dealer network throughout North America and Canada for the Leadwell product lines. Leadwell produces, vertical machining centers, CNC turning centers, CNC bridge mills, and drill and tap centers. Campat recently expanded its role as importer of the Leadwell line to include the U.S. and Canada, with sales rights to the marketplace in Mexico. Pennington will also develop the Sun Firm lathe product line as well as sales of the line of Golden Sun rotary tables.

Campat president Joe Tomalonis states, “Andy has the unique qualifications and personal drive to aggressively expand our imported product lines into areas of the marketplace that we do not currently reach.”

Mr. Pennington, 41, most recently served as the national sales manager for Edge Technologies, a productivity solutions provider to the precision metal cutting marketplace. After graduating from Iowa State University in 1988 with a Bachelor Degree in Industrial Technology, Pennington joined Hydromat Inc. as a Sales Engineer.

Charles Rasbach Promoted to Management of RAM Optical Instrumentation

Quality Vision International, Inc. (QVI®), announced promotion of Charles (Chuck) Rasbach to vp sales and marketing for its RAM Optical Instrumentation company. In this role Mr. Rasbach will manage ROI’s professional North American distribution channel and coordinate the company’s advertising, tradeshow, and related marketing activities.

According to R. Stephen Flynn, Sr. vp sales and marketing for Quality Vision International, “Chuck has proven himself as an applications engineer and regional sales manager over the past 14 years in our organization. He brings valuable hands-on experience in video inspection and measurement, and sales management.”

ROI is a leading provider, high-quality optical inspection and measurement systems. In recent months ROI has introduced several innovative new measurement systems and its unique eBx™ metrology software. Mr. Rasbach takes over from Mark Glowacky who will assume other duties within Quality Vision International.

Amera Seiki Corporation  Announces  the Winner of the $35,000 Custom Chopper Giveaway

Amera Seiki Corporation, Cedar Rapids, Iowa,  recently announced the winner of  the $35,000 Custom Chopper Giveaway during IMTS 2006.

The winner was Allen Aldrich, Tool Room Manager for PTA Corporation in Connecticut. The chopper was presented recently at a special ceremony at the new Amera Seiki US headquarters located in Cedar Rapids, Iowa and presented by Amera-Seiki founder and president Rick Welsh.

Kennametal Partners with Hagemeyer North America

Kennametal Inc has selected Hagemeyer North America as a strategic partner to promote the Cle-Line® brand of maintenance, repair, and operations (MRO) cutting tools in North America. This decision provides customers in every major market in the United States, Canada, and Mexico with access to the Cle-Line brand.

Cle-Line-brand cutting tools, which include high-quality drills, taps, and dies, are manufactured to meet the specific needs of a variety of MRO applications and are sold exclusively through industrial distributors. The Cle-Line brand is owned by Kennametal Inc.

Veridiam Completes Acquisition of Advanced EDM Automation

Veridiam, a leading provider of welded and drawn tubing; metal and tubular components;  announced  that it has completed the acquisition of Advanced EDM Automation, Inc. of Poway, California. Advanced EDM Automation provides precision metal fabrication and electrical discharge machining (EDM) capabilities.

The move unites two of the industry’s most innovative and technologically advanced providers offering precision highly specialized metal tube and EDM/CNC machining capabilities.

Both companies are integrating their operations, networks and customer care
organizations to ensure a smooth transition and provide immediate value for
their customers.

Cubic Machinery Now Sells VTL’S

Cubic Machinery of Chino, CA has announced an agreement with Yu Shine Precision Machine Co., Ltd, a major vertical turning lathe manufacturer in Taiwan to distribute and support the company’s line of CNC vertical turning lathes .

VTLs are ideal for turning of large diameter parts. The part sits directly on a large work table. Without the need to suspend a heavy part in mid air to align it with the spindle center, Cubic claims, part loading and unloading on VTLs is simpler than horizontal lathes. The capability to hold large, irregular shaped parts is another unique attraction of VTLs: As long as the part can make direct contact with the table surface, it is a simple matter to build jigs and hold an irregular shaped part for turning operation.

The Yu Shine VTL line has 9 different models. VL130R and VL220R use linear guides. VL600HR and above use hardened and ground boxways. The smaller models start with 15", 18" or 24" power chucks and come with 8-station tool turret. The larger models range from 39" to 79" in table diameter and come with automatic tool changer (ATC).

FANUC 0i-TC control and FANUC spindle drive are standard on CUBIC’s line of VTLs. ZF gearbox is an available option. Other optional equipment include C-axis and live tool capability, linear scales, tool and part probes and robotic loading systems. Cubic Machinery will provide all training, technical support and field service in North America.

Gibbs And Associates Open Sales Office In Seattle

Gibbs and Associates, developer of GibbsCam®, software for programming CNC machine tools, announced the opening of an office in Seattle, Washington.  This office provides both direct sales and technical support to GibbsCam customers and prospects in the Pacific Northwest.

“Having a strong local presence, either through a  reseller or a Gibbs office, is absolutely key to providing quality service to GibbsCam customers,” comments Bill Gibbs, president and founder of Gibbs and Associates. “The opening of this sales office clearly demonstrates our commitment to this region.  Customers and prospects have already started to benefit from having a Gibbs office right in their backyard.”   

Thomas F. Dierks Become Regional Sales Director at Hartwig, Inc.

Thomas F. Dierks, formerly president of Tornos Technologies U.S. Corporation in Brookfield, Connecticut has joined Hartwig, Inc., a leading Midwestern machine tool distributor, as Regional Sales Director. In his new position, he is primarily responsible for growing Okuma’s customer base in Illinois and Iowa.

“We are delighted that Tom is on board with us,” says Gary Hartwig. “His professional demeanor, integrity, machine tool knowledge, and warm customer relations are just what we look for when we get to add a significant team member. Really, there is no one better in this industry than Tom Dierks. Our customers will benefit greatly from his 30-plus years of experience.”

Prior to joining Tornos in 1993, Dierks was vp at Okuma. He started with Okuma in 1982. Before serving Okuma, he was a sales engineer with Ellison Machinery, starting there in 1976. He began his career in Belvedere, Illinois at Sundstrand Machine Tool Company in 1969. Dierks holds a BS in Machine Design from Bradley University in Peoria, Illinois, specializing in Manufacturing Engineering. He is an active member of the AMTDA and the PMPA.

New Dynomax Facility to Support Dynomax Operation

Dynomax, provider of precision machine spindles and equipment, announced the grand opening of it’s new Buffalo Grove facility.

News of the second Chicagoland location “is just one portion of our continued commitment to growing our company within the United States. Dynomax is simply arming itself to be the leading supplier of precision products as the demand for quality engineered and manufactured products rises,” says project manager Libby Bradley.

The new facility, dedicated to supplementing Dynomax’s existing Mundelein operations, is currently undergoing renovations to support the controlled environment necessary for precision manufacturing and assembly.

Ellison Technologies New Business Manager for Orange County

 Ellison Technologies  announces the newest addition to its sales team, Mr. Bob Nugent. Bob joined Ellison to cover the Orange County area when his predecessor, Patrick Urian, was promoted to Vice President of Sales. Bob, a USC graduate, comes to Ellison with great experience and knowledge, having worked in the machine tool industry since 1987.

When asked why he chose Ellison, “First, the reputation of Ellison Technologies is outstanding. Second, I felt I needed a new challenge and with all the technologies Ellison offers and with our ever changing global market place, I felt Ellison is best positioned to respond to the customers needs,” Bob replied.

Lyndex-Nikken Mourns Loss of Vice-Chairman Gen Irie

Gen Irie, the vice-chairman of Lyndex-Nikken, died Dec. 4, 2006 of an apparent heart attack near his Schaumburg, Ill. home at the age of 59, according to company officials.

“It is hard to put into words how important he was to our company,” said Jun Hayashi, Lyndex-Nikken President.

“Through his strong leadership, focus on providing a quality product, marketing know-how and organizational skills, he built Lyndex-Nikken into the company that it is today,” Hayashi said.

Born in Osaka, Japan, Irie emigrated to the United States shortly after turning 18 years old and began his lifelong career in the manufacturing industry as a warehouse employee at Yamazen, Inc. He quickly ascended through several positions in the company to become one of Yamazen, Inc.’s top salesmen. While serving as district sales manager, Irie was credited with pioneering Yamazen, Inc.’s West Coast distribution network for its Mori Seiki product line.

In 1978, Irie left Yamazen, Inc. to start his own machine tool distribution company, Machinex Corporation. Built from the ground up, Irie turned the small company into the world’s top selling distributor of Hitachi Seiki machine tools before selling the company in early 2002.

After a brief retirement, Irie moved from California to Illinois to take on the role of president of Lyndex-Nikken, Inc. As the company’s head, he helped complete the U.S. tool holder distributor’s merger with Japanese tool manufacturing giant Nikken Kosakusho Works, Ltd. Over a four year period, he more than doubled Lyndex-Nikken, Inc. sales.

On Dec. 1, 2006, Irie assumed the role of company vice-chairman, handing over responsibilities of president to Jun Hayashi.