June •  July 2006 • Vol. XXIV No. 5 • An Arnold Publication

Industry  News • Executive Hotline

Executive Hotline

Bush Signs Tax Reconciliation Bill

President George Bush signed into law a $70 billion package worth of tax policy extensions on May 17 in a Rose Garden ceremony. The measure, the Tax Increase Prevention and Reconciliation Act of 2005, includes a two-year extension of the 15 percent top tax rates on capital gains and dividend income, an AMT hold harmless provision, and extends the increased limitation for small business expensing under tax code Section 179, as well as business tax policies under Subpart F. The NTMA priority issue small business expensing provision was included in the final tax bill and will extend the 2003 enhanced provision of $100,000 through the end of 2009.

The business community has turned its attention to a second tax bill which will be comprised of priorities pushed out of the central bill due to revenue limitations. Lawmakers are considering including the following expiring tax provisions in a second tax bill: the R&D tax credit - another NTMA priority issue, a deduction for state and local sales taxes, and a college tuition tax credit, among others.

Lockheed Martin Receives $28 Million Contract for Missile Upgrade 

Lockheed Martin announced it has received a $28 million contract from Northrop Grumman Corp. to provide hardware components for the production phase of the Minuteman III Intercontinental Ballistic Missile (ICBM) Safety Enhanced Reentry Vehicle (SERV) program.

In an industry release, the Bethesda, MD-based technology company said the entire force of Minuteman III missiles is slated to be upgraded with the SERV modifications by 2011. With options, the total value of this contract over six years will be approximately $104 million. Northrop Grumman is the prime ICBM integration contractor for the U.S. Air Force.

First Quarter 2006 Manufacturing Technology Consumption up 22.2%

March U.S. manufacturing technology consumption totaled $351.65 million, according to AMTDA, the American Machine Tool Distributors’ Association and AMT - The Association For Manufacturing Technology. This total, as reported by companies participating in the USMTC program, was up 27.8% from February and up 28.1% from the total of $274.57 million reported for March 2005. With a year-to-date total of $846.09 million, 2006 was up 22.2% compared with 2005.

These numbers and all data in this report are based on the totals of actual data reported by companies participating in the USMTC program.

“U.S. manufacturing companies continue to invest in new machine tool technology to further improve their manufacturing productivity to keep pace with economic growth,” said John J. Healy, AMTDA President. “The Western and Central regions of the U.S. showed particularly strong growth spurred by aerospace, defense, medical and energy manufacturing activity, while parts of the Midwest continue to experience the struggles of the automotive industry.”

EDO Receives Contract for Navy Antennas

EDO Corporation has been awarded a five-year contract to provide the U.S. Navy with signal-intelligence-gathering antennas. The $10 million indefinite-delivery/indefinite-quantity contract is for the procurement of up to 273 antennas and related engineering services.

This receive-only CA-3138-1 antenna was developed in cooperation with the U.S. Navy Radio Frequency and Antenna Branch at Space and Naval Warfare Systems Command, Calif. It is to be utilized on a number of Navy ships, including the Arleigh Burke (DDG 51) class destroyers.

EDO designs and manufactures a diverse range of products for defense, intelligence, and commercial markets, and provides related engineering and professional services.

Silicon Valley Backs Wireless Broadband Plan

Three Silicon Valley venture capital firms are backing a project to grab a slice of valuable U.S. wireless airwaves to offer nationwide high-speed Internet service, according to a recent regulatory filing.

Kleiner Perkins Caufield & Byers, Charles River Ventures and Redpoint Ventures, each with more than $1.5 billion under management, are financing a firm called M2Z Networks Inc. to launch the project.

Most wireless spectrum is auctioned to the highest bidder but M2Z has offered to pay the U.S. Treasury 5 percent of its gross revenues from the premium broadband service it plans to offer alongside free, but slower, internet access.

M2Z is trying to capitalize on President Bush’s call to have universal access to high-speed Internet, known as broadband, by 2007. The United States recently fell to 16th in world rankings for broadband penetration.

Manufacturers Focus on Boosting Efficiency and Reliablility Levels of Gas Turbines

Huge investments and a long payback period for gas turbines are compelling manufacturers to direct their efforts toward ensuring greater competency in their turbines in terms of efficiency and reliability. While fuel and operating flexibility, durability, cost, and other value-enhanced features are important, end users base their purchase decisions on three crucial parameters collectively known as RAM — reliability, availability, and maintanability. 

Arizona Manufacturing Ranks 3rd in U.S. Gains

Arizona gained 364 manufacturing plants (6.3%) in 2005, ranking it 3rd in the nation in plant gains over 1 year, according to the 2006 Arizona Manufacturers Directory, an industrial guide published annually by Manufacturers’ News, Inc. 

MNI reports Arizona is now home to 6,178 companies employing 246,321 workers.

Arizona manufacturing jobs are also on the upswing, according to MNI’s five-year study. Arizona’s industrial employment dropped by 3% from 2001 to 2004. 2005 brought a gain of 1,899 jobs, ranking the Grand Canyon state 18th in the nation by percentage of jobs gained over 1 year.

 U.S. Industrial Production Up in April

U.S. industrial production rose in April, according to government figures released recently. The Federal Reserve said the month’s 0.8% percent rise in production at factories, mines and utilities followed March’s 0.6% gain. The proportion of industrial capacity in use rose also rose, to 81.9%, the highest since July 2000. Economists told Bloomberg News they had expected industrial production to rise only 0.5% for the month. They also said that increased demand for new technology will help keep the economy growing as consumer spending slows.

Boeing to Deliver First 787-9 to Air New Zealand

The Boeing Company will deliver the first 787-9 Dreamliner to Air New Zealand in December 2010. Boeing and ANZ, along with engine-maker Rolls-Royce, held a ceremonial signing  in which ANZ converted its original order for four 787-8 airplanes to four 787-9 airplanes.

“Being the first airline to introduce the 787-9 aircraft will enable Air New Zealand to provide a superior, first-to-market experience for our customers and is a most desirable position for us to be in given the unprecedented sales success of the Boeing 787 model,” said Air New Zealand Chief Executive Officer Rob Fyfe.

The 787-9 is capable of carrying 250-290 passengers on routes of 8,600 to 8,800 nautical miles. ANZ selected the Rolls-Royce Trent 1000 engine to power its 787-9s.

Regal-Beloit Sells Cutting Tools Unit

Regal-Beloit Corp. said Monday that it has sold its Regal Cutting Tools business to a Korean company for an undisclosed amount.

The sale of the South Beloit, Ill., business, which produces drills, taps, end mills and other products will reduce Beloit-based Regal-Beloit's annual revenue by about $17 million. Earnings are not expected to be affected by the deal.

The buyer, YG-1 Co. Ltd., based in Incheon City, Korea, is a manufacturer of metal cutting tools, including end mills, taps, drills and other tooling in high speed steel and carbide. It sells products in 70 countries and has grown to more than $100 million in annual sales. It has facilities in Asia, Europe, Australia and the United States.

Google to Bundle Some Software on Dell Personal Computers

Google on recently confirmed a long-rumored deal that will bundle some of its software on Dell Inc.’s personal computers, providing the online search engine leader with another potentially potent weapon in its fierce rivalry with Microsoft Corp.

The partnership means potentially millions of Dell computers will leave the factories with Google software already installed, an advantage that could widen the usage of the products and provide another boost to Google’s already rapidly growing profits.

Powered by its dominant Windows operating system and leading Web browser, Microsoft has long been the guiding force for most people’s computing experiences.

But Google has emerged as a serious threat during the past two years as it has rolled out an array of popular new products for doing everything from finding files on computer hard drives to keeping track of upcoming events.

Industry News

Makino Names Guitrau  Western Regional Manager For EDM Group

E. Bud Guitrau has joined the growing staff of Makino as Western Regional Sales Manager for the EDM Group.

Guitrau began his manufacturing engineering career with a four-year apprenticeship when he was a teenager. He then spent 20 years on the bench as a journeyman tool, die and mold maker before moving into business and management.

Guitrau is a technical writer, and has authored “The EDM Handbook” and the EDM section of “Machinery’s Handbook.” He is the recipient of numerous education and engineering awards, and is an elected Fellow and Life Member of the prestigious Institute for the Advancement of Engineering.

Well-known on the speaking circuit and for his technical articles in EDM Today magazine, Guitrau is a welcome addition to Makino’s EDM team. 

 LMC Workholding Celebrates its 90th  Anniversary

 LMC Workholding celebrates its 90th anniversary in 2006. Formed as Logansport Machine Company in 1916, LMC remains privately held and engineers and manufactures high-quality chucks and workholding equipment. LMC produces or supplies a wide range of  workholding devices including international style power chucks and cylinders, wheel chucks, Neidlein face drivers and centers and Atling steady rests among other products.

LMC Workholding continually works to maintain a repuation for designing and building high quality chucks and workholding cylinders here in the United States. LMC is a U.S. manufacturing partnership.

In 1989, to expand its product offering, LMC became associated with Matsumoto Machine Company (MMK), a leader in ISO-certified power chucks, rotary tables and other workholding devices. In 1993, the company formed an alliance with Neidlein Spannzeuge GmbH to sell Neidlein face drivers and live centers in the United States and Canada. In 2000 LMC expanded its U.S. manufacturing capabilities and capacity for a new line of LMC wheel chucks.

 New Marketing Manager For all Divisions of MC Machinery Systems, Inc.

MC Machinery Systems, Inc. has hired a marketing manager to lead marketing efforts for all of MC’s product divisions and provide better support to the entire sales team. Patrick Simon has been named the company’s new marketing manager.

Simon earned a marketing degree from Elmhurst College and comes from LoSasso Advertising where he was vp  business-to-business accounts. He served as account executive of the MC Machinery Systems account for eight years. His extensive background and knowledge of the company and industry made him an excellent candidate for the position.

“Pat has the knowledge to establish a marketing platform that can have a direct impact on our company’s success,” comments vp sales/marketing, Bill Isaac. “His history with our company allows him to come in with a firm understanding of how we operate, and lend fresh perspective and expertise from a marketing standpoint.”

MC Machinery Systems, Inc. manufactures and sells products from Mitsubishi EDM, Mitsubishi Laser, Roku-Roku, Toyokoki Press Brake, Waterjet, Consumable Products Group and Encore.

Universal Engineering and Devlieg Microbore Products Are Back In Production

Universal Engineering tool holders, DeVlieg Microbore boring tool products and the Microset tool presetter product lines are available and in-production again under a new company called Universal/DeVlieg Microbore LLC. The announcement came from Lee Flick, the newly-named general manager.

“After the New DeVlieg Bullard II filed for bankruptcy in 2005, the Mistequay Group of Companies, headquartered in Saginaw, Michigan, purchased the intellectual property and the $4 million inventory of the former Tooling Systems Division of DeVlieg Bullard, Inc.,” Flick says. “This included all the Universal Engineering products including all the Kwik-Switch® spindle and tool holder shank designs, as well as all the Acura-Flex®, Acura-Grip®, Acura-Mill® and Acura-Tap® collet style tool holder systems. The purchase also included all of the Gear Adjust Microbore®, Twinbore®, and Tribore® rough and finish boring tools as well as the Mod-Flex™ system of interchangeable modular tooling.”

“In addition,” Flick says, “The sales and service agreement that the Tooling Systems Division originally performed, for the DMG Microset GmbH line of manual and CNC presetters and tool-management systems, has been re-established at Universal/DeVlieg Microbore. Currently, all of the standard and special tool holder products are in inventory, or in-production for inventory, and should be complete by the end of April, 2006. New Universal/DeVlieg Microbore catalogs, price lists and data sheets will be available too.”      

Berkshire Hathaway to Acquire Iscar Metalworking Companies

 Berkshire Hathaway Inc.and Iscar, Ltd.  announced that Berkshire Hathaway has agreed to acquire 80% of the Iscar Metalworking Companies (IMC) in a transaction that values IMC at US $5 billion.

The Iscar Metalworking Companies is a privately held group, with operations worldwide,and is an industry leader in the metal cutting tools business through its Iscar, TaeguTec, Ingersoll and other IMC group companies. Upon completion of the transaction, Berkshire will own 80% of the business and the Wertheimer family, IMC’s current shareholders, will own the remaining 20%. The transaction remains subject to customary closing conditions, including regulatory approvals.

After becoming a part of the Berkshire family of businesses, IMC will continue to be managed by its current management team, including chairman Eitan Wertheimer and president and CEO Jacob Harpaz, as well as the rest of its current worldwide management team. IMC will remain headquartered in Tefen, Israel, and its worldwide business operations will continue as usual.

Frost Elected AMTDA Director

The members of the American Machine Tool Distributors’ Association elected Garry W. Frost, president, Machinery Sales Company, in City of Industry, CA, to the board of directors as a director for a three-year term. The election took place at the association’s 81st annual meeting held at the Don CeSar Beach Resort, St. Pete Beach, FL, April 9-12.         

Frost, originally from Australia, attended Sydney Technical College where he completed a tool and die apprenticeship in 1968. He graduated from New South Wals Engineering School with a degree in mechanical engineering in 1972.

Frost began his machine-tool career in Australia as a tool and die maker before immigrating to Canada in 1974. In 1976, when he moved to the U.S., he joined Machinery Sales as an outside sales engineer. In 1994, he accepted a position to open a Machinery Sales office in Utah. Later, in 1996, he moved back to Los Angeles  to become sales manager, and in 2001 was named president.

Frost has been an active member of AMTDA since 1993. His professional memberships also include membership in the Society of Manufacturing Engineers (SME).

CNC Software’s  Educational Competition Successful

CNC Software Inc., manufacturer of Mastercam CAD/CAM software, just completed its first national competition aimed at exciting students about the manufacturing industry. CNC Software’s Educational Division launched the “Innovator of the Future” (IOF) competition last year with the help of some industry heavy hitters and the competition was a great success.

The IOF contest will focus on selecting a judge from the motor sport industry. The contest gives one lucky student an opportunity of a lifetime, and helps introduce students to real-world manufacturing by asking them to produce a specific part that will be judged by a special guest from the manufacturing industry. CNC Software is excited to bring experienced manufacturers in as judges.

The first guest for the 2005 competition was Boyd Coddington, of Discovery Channel’s “American Hot Rod,” the legendary hot-rod builder and designer. The theme for that year’s contest was a Hot Rod wheel ¼ scale size: 17 x 9.5 with back spacing of 4.5, and Boyd was the honorary judge to jump-start the contest.

Rules for the 2006 IOF contest are currently being worked on and will be available soon.

DoAll Expands In Houston Market With Acquisition Of Groves Industrial Supply

DGI Supply, a DoAll Company, recently completed the acquisition of Groves Industrial Supply Corporation of Houston, Texas. Groves is a $35 million, full-line industrial distribution organization that focuses on providing MRO products to the Houston market.

DGI Supply’s senior vp Dave Crawford said, “We hope to use this acquisition to expand our reach in the Houston market and strengthen our MRO supply capabilities throughout our global distribution network”.

Groves will continue to operate under its current name and management, Jeff Waller will remain the general manger for Groves.

SME-EF and PLTW Offer Co-Ed Pre-Engineering California Camp                                             

 The Society of Manufacturing Engineers Education Foundation (SME-EF) and Project Lead The Way® (PLTW), a not-for-profit organization that promotes pre-engineering courses  for middle and high school students, will launch a pilot program for the Science, Technology &  Engineering Preview Summer (STEPS) Academy this summer at the Cajon Valley Middle School and Emerald Middle School in El Cajon, Calif., and the Pittsford Middle School in Pittsford, N.Y.

At each STEPS Academy, middle school instructors certified to teach PLTW  courses will provide expert instruction in small group settings. The co-ed program allows campers to work together in a fun, exciting environment using leading-edge technologies to sample disciplines such as robotics, aeronautics, and biotechnology. They’ll brainstorm ideas, solve problems, and build bridges, race cars, and other working models.

Renishaw and Delcam  Combine for Verification

Delcam, developer of  PowerInspect inspection software, and Renishaw, one of the world’s leading metrology companies, have joined forces to offer on-machine verification technology to all companies seeking to increase the productivity of their machine tools.

The most obvious advantages of this technology are for those companies that do not have existing inspection capabilities. However, it is also beneficial for subcontractors that need to machine bigger components, such as those used in the aerospace or oil and gas industry, and for toolmakers that produce larger press tools, patterns or moulds.

Most modern machine tools either come with, or can be retrofitted with, probing capabilities to assist in the setup of the job.

With on-machine verification, this same equipment can now be used for initial quality checks at little extra cost.

Data for the process can be collected using Renishaw’s high accuracy spindle probes, such as the established MP 700 or the soon to be released compact OMP 400.

Neither of these probes needs to be calibrated in all the vectors in which they are to be used, so reducing the number of points required to measure a given part and, therefore, giving shorter verification cycle times.

PowerInspect can use the data both to check surface accuracy or to measure features, such as circles, cylinders, cones, spheres and planes, to a high level of precision.

Bystronic Inc.  Names Product Manager for Waterjet Cutting Systems

Bystronic Inc. has appointed Jeffrey Day as product manager of waterjet cutting systems. Day will be responsible for all marketing and product management activities in the United States, Canada and Mexico relating to Bystronic’s expanding waterjet product line. “Bystronic is firmly committed to the service and support of our waterjet customers in North America, and Mr. Day is uniquely qualified to manage this high growth market segment,” commented Michael Zakrzewski, Executive VP and General Manager of Bystronic Inc.

Bystronic Inc. provides customers with quality laser cutting, waterjet cutting and press brake systems, training and customer support.

Tornquist Machinery to Hold Unmanned Swiss Machining Experience

Tornquist Machinery of Brea, California is holding an unmanned Swiss machining experience on July 19 and 20. There will be seminars each day as Tornquist wants this to be an educational experience. The focus will be on unmanned Swiss machining and how to increase Swiss productivity.

On both days in staggered hours there will be seminars by Wayne Smith on unmanned Swiss machining along with tax seminars, software seminars, tooling and other various disciplines in Swiss machining.

In addition there will be experts on hand to answer any of your questions about Swiss machining. Some of the experts come from  such well known companies such as Star CNC, LNS, IEMCA, ATAM Systems, Kennametal, Edge Technologies, Partmaker and others.

Tornquist who celebrated its 60th anniversary this year claims this event is an industry first.  It  will be an educational experience solely for Swiss machining.

Gosiger Opens Office in Seattle

Gosiger Corporation a leading distributor in the machine tool industry has opened an office in Seattle, Washington. The name for this office is Gosiger Northwest. Gosiger West is the name of their distributorship in southern California and Northern California. The California offices are run by Andy Dukes from the Fullerton, California office.

Product lines that will be sold and serviced from the northwest office include Okuma, CNC milling and turning, Wasino,Nomura Swiss Automatics and Accutex EDM.

Pat Ofenloch is the new division president at Gosiger Northwest. Ofenloch has a long distinguished history in the machine tool industry. Before being promoted to president he worked for Gosiger from their Engineered Service Division. Previously he worked at Okuma, Hitachi Seiki and DMG.