December 2007 • January 2008 • Vol. XXVI No. 2 • An Arnold Publication

Industry  News • Executive Hotline

Executive Hotline

Denver Industrial Vacancy Rate Falls

Industrial space in Denver is becoming harder to find as the vacancy rate tightens, according to a report released in November.

Real estate company Colliers International said the vacancy rate fell to 6.8 percent in the third quarter from 7.1 percent in the second.

Nationally, the vacancy rate stood at 8.01 percent in the third quarter, down from 8.09 percent in the second.

Of the industrial markets Colliers studied, space was most plentiful in Boston, where the vacancy rate was 20.1 percent, and hardest to find in Bakersfield, Calif., where the rate is 2.7 percent.

Boeing, LAN Airlines Complete Deal for 32 787s and Four 777 Freighters

 The Boeing Company announced that Chile’s LAN Airlines will receive 32 787 Dreamliners, marking the largest 787 acquisition to date for Latin America. The Santiago-based carrier has ordered 26 airplanes from Boeing, and will lease an additional six 787-9s from International Lease Finance Corp.

In addition to the Dreamliner order, Boeing said LAN also has committed to acquiring four 777 Freighters — two from Boeing and two to be leased from GE Commercial Aviation Services (GECAS).

The order for 26 Dreamliners, consisting of a mix of 787-8s and 787-9s, is worth approximately $ 4.5 billion at published list prices. The two 777 Freighters are similarly valued at approximately $ 500 million.

SoloPower to Move HQ to San Jose Silicon Valley

SoloPower Inc., which focuses on thin-film solar photovoltaic cells and modules, will move its manufacturing and research and development operations to San Jose.

As part of the agreement, the San Jose Redevelopment Agency will provide $715,000 to SoloPower for the purchase of manufacturing equipment for its new headquarters.

In addition, San Jose’s Office of Economic Development and Work2future — which provides comprehensive resources to job seekers and employers in San Jose and Santa Clara County — is working with SoloPower to secure $100,000 in state Employment Training Panel Funds to help support training needs for 100 to 150 employees over the next two years.

“Clean and green technology will play a key role in the next wave of Silicon Valley success. I am delighted that SoloPower will be locating its headquarters in San Jose, providing 150 jobs in manufacturing and research and development in the emerging solar industry,” said Mayor Chuck Reed. “San Jose’s Green Vision sets a goal of creating 25,000 Clean Tech jobs in the next 15 years, and companies like SoloPower will help move us closer to this goal.”

Founded in November 2005, the privately held company was formerly based in Milpitas.

Cathay Pacific Orders 17 Boeing Planes Worth $5.2B

Cathay Pacific Airways has ordered 10 Boeing 747-8 freighters and seven 777-300 extended-range airplanes worth a total of $5.2 billion at list prices.

Both planes are built in Everett, Washington.

Cathay Pacific already has ordered 19 777-300 extended-range planes and plans to lease four others. The Hong Kong airline will eventually operate 30 of the 777 planes, Boeing said.

Energy Industry Reps Discuss “Smart Grid” in Albuquerque

Representatives from some 200 electric utilities and technology companies nationwide met in Albuquerque in November to discuss a “smart” electric grid.

The Grid InterOp Forum Nov. 7-9 at the Albuquerque Convention Center marks the first venue for technology firms and electric utilities to jointly analyze smart-grid business opportunities, said Jack McGowan, president of Albuquerque-based Energy Control Inc. and chairman of the U.S. Department of Energy’s GridWise Architectural Council, which convened the forum.

“The DOE projects a $100 billion marketplace nationally for products and services that can improve energy efficiency and help build a smart electric grid,” McGowan said. “There are real opportunities out there.”

Formed in 2003, the GridWise Council aims to draw government and industry together to create an “intelligent” national grid that can broker energy supply and demand based on price and availability, McGowan said.

A smart grid would allow consumers to purchase electricity when they decide the price is right. Utilities, in turn, could strategically reduce the delivery of electricity or conduct targeted shutdowns when the grid is overloaded, McGowan said.

Alaska Airlines Adding Blended Winglets to 737-900s

Alaska Airlines will be the first airline to use blended winglet technology on Boeing’s 737-900 airplane.

The winglets are the additions seen at the end of a plane’s wings that are designed to reduce fuel consumption by 3 percent. Other carriers that will add the winglets to Boeing’s 737-900 planes include Continental Airlines and KLM Royal Dutch Airlines.

Alaska plans to add the winglets to nine of its 12 model 737-900 airplanes by later next year. The winglets cost $850,000 to buy; installation costs are extra. They are made by Seattle-based Aviation Partners Boeing, which is a joint venture between Chicago-based Boeing Co.   and Aviation Partners Inc., of Seattle.

Officials at Alaska Airlines, a subsidiary of Alaska Air Group Inc. of Seattle, said by the end of next year, 74 of its 116-plane fleet will be equipped with the blended winglet technology.

Honeywell Phoenix Units Score $1B AirTran Deal

Honeywell International Inc. signed a $1 billion contract with AirTran Airways to supply avionics on new aircraft and provide maintenance on AirTran’s entire fleet through the year 2030.

New Jersey-based Honeywell’s aerospace business is based in Phoenix.

Under the agreement, Honeywell will supply AirTran with its avionics portfolio for up to 150 Boeing 737s. In addition, Honeywell will provide maintenance services for all Honeywell equipment on AirTran’s entire fleet — up to 250 aircraft — including avionics, lighting, mechanical components, auxiliary power units, wheels and brakes.

Third Quarter Workholding Shipment Up 20.8 Percent  From 2006 Level

 At $67.9 million for third quarter 2007, shipments of workholding equipment from the U.S. were up 20.8 percent from third quarter 2006 according to the Workholding Product Group (WPG) of AMT - The Association For Manufacturing Technology. Workholding equipment shipments within the U.S. by the 35 companies participating in the WPG statistical report totaled $55.1 million while exports amounted to $12.8 million.

Machine Tool Company Donates $4M to UC Davis

One of the world’s largest manufacturers of University of California Davis over the next five years to support research on machine tools controlled by computers, university officials announced in early December.

The funding from Mori Seiki Co. in Nara, Japan will support research by professor Kazu Yamazaki in the Dept. of Mechanical and Aeronautical Engineering. The company began supporting Yamazaki’s research in the mid-1990s and in 2002 became the principal sponsor of his laboratory with a donation of $3 million over five years.

Mori Seiki opened Digital Technical Laboratory Corp. in West Sacramento in 2000 to provide research and development services for the parent company and recently broke ground on a new facility for DTL in Davis.

Unmanned Aircraft Maker Insitu Taises $25M

Insitu Inc.,of Bingen Washington which makes unmanned aerial vehicles, has raised $25 million in new venture capital, the company’s CEO said.

Battery Ventures of Boston and Silicon Valley led the new financing. Other investors in the round are Second Avenue Partners of Seattle, Pteranodon Ventures of Las Vegas, and angel investors, CEO Steve Sliwa said. All are existing investors in the company.

The new funding puts Insitu’s total venture capital at $55 million.

Insitu, based in Bingen, Wash., makes small robotic aircraft for reconnaissance and surveillance. The company’s customers include The Boeing Co., the U.S. Marines, and the U.S. Navy.

Industry News

Chiron’s FZ12K S Swivelhead to be Displayed at MD&M West 2008

Chiron has teamed up with Miller Machinery Sales & Service (MMS) and Spinetti Machinery to exhibit Chiron’s FZ12K S tilt machine at MD&M West, January 29-31, 2008, in Hall E, Booth #867.

This machine incorporates a swivelhead spindle for single setup machining of complex parts. It has a swiveling range of -10º to +115º and it only takes 0.5 second to swivel from 0º to 90º. This machining center, coupled with an optional bar feeder, offers maximum versatility for applications such as larger implants, bone plates, hip sockets and surgical instruments made of special plastics, titanium and steel.

MMS is Chiron’s distributor in Southern California and Spinetti Machinery is Chiron’s distributor in Northern California and Nevada.

AXYZ Automation Group of Companies Grows Again

AXYZ Automation International (Burlington, Canada) and Cam Tech International (Calgary, Canada)  announce the merger of the two organizations. AXYZ Automation is a global leader in CNC router systems and has been involved in the manufacture and distribution of routers since 1990. Cam Tech is the innovator of the utility cnc router, having built machines for a wide range of industries for more than 25 years.

In addition to the AXYZ Series and Pacer line of router tables, the AXYZ Group will now offer the Cam Tech Z10 and Spacemaker® routers, as well as the Cam Tech line of LaserMaster laser etching and cutting systems through their global sales organization. The principals of AXYZ and Cam Tech have had a long-time relationship. When both companies were still emerging, they worked in partnership to develop and market CNC so it could become available to companies of any size and means.

Mori Seiki Breaks Ground On New Facility In Davis, CA

Mori Seiki recently began construction on a new facility to house Digital Technology Laboratory Corporation (DTL), a subsidiary of the company dedicated to developing manufacturing innovations. Details of the new facility were revealed at an official ground breaking ceremony that took place October 10 in Davis, California. DTL president Adam Hansel presided over the event.

The company has grown by more than 200% over the past year and currently employs over 50 of the brightest minds in manufacturing from all over the world. The new, state-of-the-art facility will contain 45,000 sq. ft, with over 10,000 sq ft of showroom/R&D space. The building will also feature a dedicated thermal isolation test chamber, vibration dampening floors, solar power solutions, and space to house over 100 engineers.

DTL, a rapidly growing company, creates high performance and low cost solutions for Mori Seiki and its customers by providing innovative analysis methodologies, advanced mechanical design techniques, and high performance software solutions. DTL develops processes and systems by utilizing the latest information technologies to reduce machine tool development time, to improve product quality and to develop software solutions to fully utilize Mori Seiki machine tools. 

The new DTL facility is currently scheduled to open in October 2008.

Maier Expands In North America

Methods Machine Tools has recently ratcheted up efforts to market Maier, a leading German manufacturer of precision Swiss-type turning centers, throughout North America via an expanded, innovative product offering, new sales management and dedicated application support. Maier Machines are exclusively imported and distributed by Methods Machine Tools, a leading machine tool / technology source headquartered in Sudbury, MA with locations throughout the U.S. and Canada.

Although a relatively new brand to the industry, in less than a decade, Maier has established an innovative machine design that has been well received in Europe and beyond. The cornerstone feature of Maier’s precise, versatile machines is a unique, 8,500-lb solid polymer concrete base which eliminates vibration and ensures accuracy of 0.0001”. The comprehensive Maier Swiss turning line ranges from machines with 4 axes and 11 tool stations for processing simple parts to machines with 15 axes and 38 tool stations for complex production work. 

The MLK Linear Automatic series of machines, designed for superior speed / acceleration and accuracy in a compact footprint, was recently introduced to complement the extensive Maier line.

Spearheading the sales team in a newly created position established in July 2007, is 17-year Swiss turning veteran Mr. James Kucharski, Methods National Sales Manager for the Maier line.  Mr. Kucharski and an extensive network of application experts, have already increased Maier machine sales with a flurry of new orders. 

Sandvik Coromant Names New Industry Specialist for Aerospace Industry

Sandvik Coromant has announced the appointment of Sean Holt to the position of  industry specialist for aerospace engines. Mr. Holt will provide support to key aerospace customers in the United States, boosting productivity and coordinating projects to develop sales. He will also identify and analyze  market requirements, as well as develop a network that delivers effective solutions for the aerospace industry.

Mr. Holt brings more than seventeen years of aerospace engineering and sales experience to this position, having joined Sandvik Coromant in 2000 as the Area Sales Engineer for aerospace-related companies in the Midlands region of the United Kingdom. In 2004, Mr. Holt was promoted to Application Development Specialist, where he developed new processes for aerospace components through the use of exotic titanium and Heat Resistant Super Alloy material grades. Mr. Holt also provided training to key aerospace customers and research center personnel on the effective use of Sandvik Coromant products, surface integrity studies and application techniques.

Doosan To Open Aerospace Tech Center

Doosan Infracore, builder of horizontal and vertical machining centers and turning centers, announces plans to open an aerospace technical service center in Orange County, CA. The facility will work with Doosan customers and prospective customers to develop efficient ways to produce parts from titanium, composites, and alloys.  Although emphasis will be on the aerospace industry, the tech center is available to help companies from any industry in any part of the country that work with space-age materials.

Applications engineers at the center will advise persons on all aspects of machining, including the most appropriate machine tools for the job, as well as optimal work holding and tool holding systems, tool grades and geometries, and preferred speeds, feeds and other operating conditions that combine to maximize economy and productivity.  A representative selection of premium Doosan machine tools will be housed at the Tech Center, allowing testing and hands-on training for machine shop management and employees.

The Aerospace Tech Center measures 6,000 sq ft with 4,200 sq ft serving as a showroom.  It joins Doosan’s Oil/Petroleum/Energy Tech Center in Houston Texas, Automotive Tech Center in Detroit, and a soon-to-open Medical/Surgical Tech Center in Memphis, TN, enabling the company to provide advanced procedures to key sectors of the metalworking industry.

Carr Lane Roemheld Hires Power Workholding Engineering Manager

Max Saunders, general manager of Carr Lane Roemheld Mfg. Co., has
announced the hiring of George Campbell as manager of Power Workholding  Engineering for the company. This is a new position with the company, and Campbell will be working closely with the sales department to promote Swiftsure sales, along with the engineering staff to provide technical assistance.  Campbell has extensive experience in tooling and fixturing.

Milltronics Unveils New Products, New Look

Milltronics has announced new product developments and a new corporate graphic identity.

The 30-year-old Minnesota company will change its identity from “Milltronics Manufacturing” to “Milltronics CNC Machines” as a way to immediately convey the company’s core business to the marketplace.

“Our new look and clearer name is our way of telling people exactly who we are,” said Tim Rashleger, Milltronics chief product officer. “We’re known for our quality machines and exceptional service, and this new look will help us tell the world about the changes taking place here.

GF AgieCharmilles Appoints New Head of Milling

GF AgieCharmilles announces the appointment of York Franke to the newly created role of Head of Milling. Mr. Franke joins Agie Charmilles after seven years as president of DMG used machine division North America.

“York brings with him a wealth of technical expertise and industry knowledge that will be essential to developing effective sales and marketing strategies for the Mikron high performance and high speed milling lines,” noted Glynn Fletcher,  president of Agie Charmilles. “We are confident in his ability to not only promote the successful application of Mikron technology but also to provide leadership in area sales management.”

Delcam’s FeatureCAM CAM System certified by SolidWorks

Delcam announces that Delcam FeatureCAM has been awarded “Certified CAM Product” status by the SolidWorks Partner Program.  This follows an extensive evaluation by SolidWorks Corporation, including user reviews to confirm that the combination of FeatureCAM and SolidWorks is already working successfully in a variety of industries.

Approval under the SolidWorks Certified CAM Products Program assures companies using SolidWorks for design can select Delcam FeatureCAM for their manufacturing with complete confidence because it offers best-in-class functionality and interoperability.

“Successful integration and interoperability between CAD and CAM are essential for our users to gain the maximum benefit from SolidWorks,” explained Chris Salmers, partner technical marketing manager at SolidWorks Corporation.  “As a Certified CAM Product, FeatureCAM can read native SolidWorks geometry, which eliminates unnecessary data translation issues and so lowers costs.”

Hwacheon Machinery America Appoints new National Sales Manager

Hwacheon Machinery America, a manufacturer of diverse and durable CNC lathes and machining centers, announces the appointment of Mark A. Leeser as national sales manager.

With a 11 year history in the machine tool industry, Mark is probably most widely known for his 8 years as Regional Sales Manager at Murata Machinery USA. During his tenure at Murata Machinery, he grew sales in the IL and WI states from a $3.5 million to $8.5 million. As Murata Machinery grew, Mark developed automated twin spindle turning cells, which reduced labor and customer part cost, for high volume chucker turning applications and kept Murata in the forefront as a leader of unattended twin spindle turning.

Clancy Machine Tool named Makino distributor for northern California, Nevada

 Makino has named Clancy Machine Tool its equipment distributor for northern California and Nevada. The company will carry Makino’s full line of vertical and horizontal machine tools, as well as wire and Ram EDM machines.

“Clancy Machine Tool was awarded this opportunity because we feel they will represent the Makino brand well,” said Don Lane, president of Makino. “They have a clear track record of business integrity and process expertise.”

“The addition of Makino will enable us to better serve our customers growing needs,” said Joe Clancy, president of Clancy Machine Tool. “From aerospace to medical, energy, recreational and semiconductor components, Makino has a solution and the organization to back it up.”

Flow Signs Option Agreement to Acquire OMAX Corporation

Flow International Corporation   announced that it has signed an exclusive option agreement to negotiate the acquisition of OMAX Corporation.  OMAX is a Kent, WA-based privately held provider of precision-engineered, computer-controlled, abrasive waterjet systems.  Under the terms of the agreement, Flow and OMAX will work to negotiate a definitive agreement for Flow to acquire OMAX.  Upon closing, Flow would pay approximately $109 million in cash and stock (including the amounts paid for the option agreement) with the potential for a contingent earn-out in two years of up to $26 million in either stock or cash at Flow’s option.  A transaction to combine the two companies is subject to completion of all due diligence, execution of a definitive agreement, Hart-Scott-Rodino anti-trust clearance, and customary closing conditions.

“We believe a combination of the two companies presents a unique opportunity to enhance the global growth of waterjet solutions, which represent a relatively small but rapidly growing part of the overall market for cutting solutions,” said Charley Brown, Flow’s President and Chief Executive Officer.  “While there are many synergies that make this merger a natural fit between waterjet pioneers, each company brings a unique set of intellectual property, engineering strength, and market focus, including OMAX’s unique distribution channels worldwide, that makes this accretive combination so financially compelling and operationally attractive.”

Assuming that a definitive agreement is reached and regulatory approval is received, the transaction would be expected to close in approximately six months.  Upon closing, all litigation between Flow and OMAX would be settled.

40% Growth Wins Vizion Sales Partner Award

California-based Vizion Technologies has been presented with Delcam’s North America Sales Partner of the year award after producing 40% sales growth during 2006.

“Vizion performed remarkably well last year,” commented Delcam’s managing director Hugh Humphreys. “To record such exceptional growth would be extraordinary at any time. To do it at such a challenging time for the North American Manufacturing industry is a real achievement.”

Vizion’s success has been an important part of Delcam’s general expansion in North America. Business for the company has grown by around 65% in the region over the past three years. “North American companies are now aware that they must improve their productivity in order to prosper in the face of international competition,” commented Mr. Humphreys.

Vizion was founded in 1988 by Jerry Sanders as a full-service support organization to provide state-of-the-art manufacturing software solutions and ensure customer success with the products. The company remains committed to optimizing manufacturing processes by supplying the best software products and customizing these tools to its customer’s applications.