October • November 2007 • Vol. XXVI No. 1 • An Arnold Publication

Industry  News • Executive Hotline

Executive Hotline

Workholding Shipments Up From 2006 levels

At $64.6 million for second quarter 2007, shipments of workholding equipment for the United States were up 8.2 percent from second quarter 2006 according to the Workholding Product Group (WPG) of AMT - The Association For Manufacturing Technology. Workholding equipment shipments within the United States by the 35 companies participating in the WPG statistical report totaled $56 million while exports amounted to $8.6 million.

Oakland Solar Company Applies to Build Big Power Plant

BrightSource Energy said in September that it has applied to build a series of solar power plants in Southern California.

BrightSource, based in Oakland, said it wants to build three plants totalling 400 megawatts on the California-Nevada border about 50 miles south of Las Vegas. Four hundred megawatts is enough power to run about 300,000 homes in California.

BrightSource said its application is the first request to build a solar power generator filed with the California Energy Commission since 1989.

The site BrightSource has in mind is on federally owned land and the company said it is seeking permission from the Bureau of Land Management to use the land. BrightSource hopes to build two 100 megawatt power plants and one 200 megawatt plant there.

The company said it is negotiating to sell electricity from the plants to California utilities.

Colorado Holds Onto No. 2  For Aerospace Jobs

It is rocket science in Colorado, apparently.

The state boasts of the second highest concentration of aerospace workers in the country, second to California, according to research released in September by Development Research Partners and the Metro Denver Economic Development Corp.

The organizations calculated that last year Colorado had surpassed Texas to climb from third to second. This week’s study verifies the prediction, finding industry employment rose nearly 13 percent in the past year, reaching 26,650.

Economist Patty Silverstein pointed to the arrival of United Launch Alliance workers to the area from Southern California, Lockheed Martin Space Systems winning the $8.2 bilion Orion space capsule contract from NASA and work preceding the Sept. 18 launch of Longmont-based DigitalGlobe’s WorldView-1 imaging satellite as primary drivers of the job growth.

United Launch Alliance is the merged rocket-building operation of Lockheed Martin Corp. and The Boeing Co.

Honeywell Scores $16 Billion Airbus Contract

 Honeywell International Inc. will provide the major mechanical systems for Airbus’ new long-range, wide-body A350 aircraft under a $16 billion contract announced recently.

New Jersey-based Honeywell’s  aerospace business is based in Phoenix. The contract is expected to generate more than $16 billion in revenue, including aftermarket work, over the projected 20- to 25-year life of the program. It is the largest systems and equipment package Airbus has awarded to date on this program.

Honeywell’s work will include auxiliary power units, installation kit and starter generators, which supply pneumatic and electric power for the aircraft while on the ground or in flight. The company also will provide systems to manage air used on the aircraft for environmental control, including cabin heating and cooling, and cabin pressurization.

The A350 extra wide-body family of planes is Airbus’ response to demand for a series of medium-capacity long-range wide-body aircraft.

Aerojet gets $3.5 Million Contract Extension

Aerojet has been awarded $3.5 million by Raytheon Missile Systems to continue building rocket engines for the U.S. missile defense system.

The Rancho Cordova, Ca.-based company, a division of GenCorp., will continue developing a less-toxic propellant than traditional rocket fuels. Aerojet will conduct tests of the propellant in Rancho Cordova and Redmond, Wash.

CPI Signs Defense Contracts Worth up to $13.5M

Communications & Power Industries Inc. — which provides microwave, radio frequency, power and control solutions for defense, communications, medical, scientific and other applications — said recently it received two defense contract awards totaling up to $13.5 million.

The Palo Alto-based subsidiary of CPI International Inc.  said the contracts includes a $9.7 million indefinite-delivery/indefinite-quantity award to support a radar system and a $3.8 million award to support an airborne towed decoy system.

The $9.7 million indefinite-delivery/indefinite-quantity contract award was granted by the U.S. Air Force for the repair and replacement of hybrid traveling wave tube and klystron technology.

The $3.8 million contract award is for the production of traveling wave tubes to be used in the ALE-50 towed decoy system. The contract was awarded by Raytheon Company’s Electronic Warfare Systems organization in Goleta, Ca.

Boeing Says China is a $340B Market

Boeing Co. says that China is the world’s fastest-growing market for new aircraft and the country will need 3,400 new airplanes worth $340 billion in the next 20 years.

China will be the largest market outside of the U.S. for new planes, according to Boeing’s updated annual forecast. After the 2008 Olympic Games in Beijing, the Chinese market will grow fivefold, becoming larger than today’s North American market, Boeing added.

By the end of 2026, China will have nearly 4,460 airplanes.

Officials at Chicago-based Boeing  said air travel between China and North America will more than double in the next 20 years.

“China domestic frequencies have increased more than sixteen-fold since 1990 while airplane sizes have remained about the same. The Chinese domestic market’s projected average growth is almost 9 percent,” said Randy Tinseth, Boeing Commercial Airplanes vice president, marketing, in a statement.

In the next 20 years, Boeing said, the world demand for new airplanes will be

28,600 new aircraft, costing $2.8 trillion.

Medical Device Maker Emphasys Plans $86.3M IPO In Silicon Valley

Emphasys Medical Inc.in September filed with the Securities and Exchange Commission to raise up to $86.3 million in an initial public offering.

The Redwood City-based medical technology company focuses on therapeutic devices for the treatment of patients with emphysema and other debilitating breathing disorders.

Emphasys said it recently completed a clinical trial for its first product, a bronchial valve, and submitted its application for pre-market approval to the Food and Drug Administration this month.

In the six months ended June 30 the company narrowed its loss to $4.6 million compared to $7.6 million in the same period last year.

The company’s revenue jumped in that same period to $570,000 from $61,000.

$9M in Defense Contracts Awarded in Southern Arizona

Two companies in Southern Arizona each received more than $9 million in contracts from the U.S. Department of Defense.

Raytheon Missile Systems of Tucson was given an additional $9.5 million for its work on the Evolved Seasparrow Missile. Work for the project will be split among facilities in 10 countries, with nearly half of it performed in Tucson.

Raytheon is one of numerous U.S. and international companies involved with the NATO Seasparrow Consortium. Thirteen countries make up the consortium and have used the surface missiles for ship defense for three decades.

The contract, which is for the U.S. Naval Sea Systems Command in Washington, has been extended beyond the current fiscal year. The contract was awarded through the Foreign Military Sales program of the U.S. Defense Department.

Northrop Grumman System Corp.’s Sierra Vista facility was given a $9.7 million contract for rehabilitation, reconstitution, repair, modification and integration of damaged flight equipment. The one-year project will not expire after the current fiscal year.

Tesla Says No Cars This Year

Tesla Motors Inc. said it will deliver its first all-electric sports cars in the first quarter of 2008.

The San Carlos, Ca.-based company had said earlier it hoped to roll the cars out before the end of the year, but late Monday confirmed it will deliver 50 of its $98,000 all-electric Roadsters in the first quarter, and 650 in all during the year.

The company is reportedly still conducting durability and reliability tests.

To get on its waiting list, potential buyers must pay $5,000, with $4,950 refundable if a car isn’t purchased.

Northrop Grumman Awarded $98 Million Defense Contract

Northrop Grumman has landed a five-year contract worth up to $98 million from the Naval Surface Warfare Center for the procurement of about 940 Special Operations Forces Laser Acquisition Marker Special Operations Forces Laser Rangefinder Designators. The SOFLAM SOFLRD is a laser designator and rangefinder that lets Special Operations Forces personnel locate and designate critical enemy targets. The device may also be used for remote firing and for mounting accessories such as pointers and night sights.

Four Valley Operations Split $90M in Defense Contracts

The U.S. Department of Defense doled out more than $90 million in contracts to four Arizona Valley contractors in late September.

The largest went to Alliant Techsystems Inc. of Mesa, which received a $44.6 million contract to build MK 244 Mod 0 20-millimeter armor-piercing cartridges for the M61A1 machine guns mounted on U.S. Navy ships.

Orbital Sciences Corp. was awarded a $37.9 million modification to a previous contract for 13 GQM-163A supersonic sea-skimming vehicles. The rockets will be built primarily at the company’s Chandler facility, which employs more than 1,000 people and accounts for 40 percent of the company’s business.

The sea-skimming rocket replicates aerial threats targeting boats. The land-launched missile ascends to 2,000 feet, then dips back down to fly at Mach 2 about 15 feet above the surface.

In March, Orbital reached an agreement with the French military to build an undisclosed number of GQM-163A target rockets for $9 million. It was the first time Orbital had sold to a foreign government.

Virginia-based Orbital uses its Chandler Arizona plant to build the majority of its rockets, including those used in the Defense Department’s missile defense program and many for NASA’s space satellite program.

Phoenix-based Goodrich Corp. received a $7.4 million contract for building aircraft ejection-seat catapults through the U.S. Naval Warfare Center’s Cartridge-Actuated Propellant-Actuated Devices program.  The work will be conducted in Phoenix and is expected to continue through November 2008.

Naval Air Systems also tapped McDonnell Douglas Corp. of St. Louis to convert eight FA-18F aircraft into A-18G aircraft. A small percentage of that work will be conducted at the company’s Mesa Arizona facility. The project is expected to be completed in September 2009.

August  Semiconductor Sales up 4.5%

Worldwide sales of semiconductors rose sharply in August over the same period last year, growing to $21.6 billion, according to a October 1 report.

The trade group Semiconductor Industry Association said sales of NAND flash memory devices led the growth as supplies tightened and prices firmed.

NAND flash sales were up by 48 percent compared to August 2006 and up by 19 percent from July of this year.

LedEngin Raises $11M in 2nd round

LedEngin Inc., a supplier of components and light source modules for high power light emitting diodes, said Monday it raised $11 million in a third round of funding.

Santa Clara-based LedEngin said the round was led by Partech International, which has an office in San Francisco.

Also participating were previous investors that included Taiwan-based WK Technology Fund.

The company will use the funding to expand sales channels and manufacturing capacity, and develop additional products for ultra bright lighting applications traditionally served by halogen and incandescent bulbs

Industry News

Hennig Hires Business Unit Manager for Conveyor/Filtration Group

Hennig, Inc., has appointed Matt Sopchyk as the business unit manager for the conveyor/filtration products group. Sopchyk will be responsible for the coordination, function and overall performance of the group.

He most recently was the director of sales and marketing for a Chicago area-based custom manufacturer. He began his career in 1990 in custom manufacturing as the national sales manager for an Illinois-based company. His focus was on strategic sales and marketing in custom retail display creation and development.

Hennig, Inc., designs and produces custom machine protection and chip/coolant management products for state-of-the-art machine tools.

200,000 NC Controls from Heidenhain

In June 2007, Heidenhain shipped its 200,000th NC control and celebrated a new record in its 30-year history of success. With more than 30,000 units, the current iTNC 530 has succeeded the TNC 426 as Heidenhain’s most successful of more than 50 models.  More than 10,000 units of this model are expected to ship from Traunreut, Germany in 2007—numbers that speak for its great acceptance in the NC control market.

These NC controls have their roots in the workshop, where they banished machinist’s reluctance toward the new technology. Today, their user-friendly dialog guidance ensures Heidenhain a high market share in applications that require shop-floor programming. 

AMT Unveils  IMTS 2008 Logo and Theme

 AMT, the Association For Manufacturing Technology, has  announced a new theme and logo for IMTS 2008. The theme, “Connecting Global Technology,” is meaningful as IMTS brings together the worldwide manufacturing community to showcase the latest innovative technologies in metalworking equipment and services. The logo, which features a subtle image of a globe with a spark on the horizon, communicates freshness and new ideas.

“Spring-boarding off a tremendously successful IMTS 2006, this new theme and logo will set the tone for an even more exciting IMTS 2008,” said John Krisko, AMT Director–Exhibitions. “IMTS is truly a global event during which buyers and sellers  from over 100 countries exchange business and technical knowledge. The logo’s symbolic contemporary globe image recognizes science and global presence. It is a futuristic, yet timeless design.”

IMTS 2008 is the 27th edition of the premier manufacturing technology show in North America. IMTS 2008 is a six-day event opening Monday, September 8 and running through Saturday, September 13, 2008. More than 1,000 exhibiting companies will occupy 1.2 million net square feet of exhibit space at the McCormick Place complex in Chicago, Illinois.

\Ellison Technologies’ Announces New Business Manager

 Ellison Technologies  has announced the newest addition to its sales team, Ms Audrey Villalon.  Villalon will work in the Southern California’s Orange and Riverside counties.

Audrey has been with Ellison since 2000, working as senior customer advocate for their sales staff.   Her experience from working closely with the customers for the past 7 years made her an ideal candidate for outside sales.  Audrey has been in the machine tool industry for 10 years, having worked at SMW Systems (now ATS Systems) before joining Ellison.

Zoller Inc. Celebrates 10th Anniversary

Zoller, Inc., started 10 years ago with three people in a small office in Ann Arbor, MI mainly to provide customer support for the tool presetting and measuring systems it had sold to the auto industry. The firm has come a long way since then.

Today, more than 40 are employed at Zoller in Ann Arbor and more than 1000 Zoller tool presetting and measuring systems have been successfully installed in North America. The company recently opened branch offices in Mississauga, Ontario and Torrance, CA, to provide even better sales, service and customer support on a local basis.

One of the company’s goals is to be represented in key regions of North America directly with showroom, service, spare parts and sales support.

“The manufacturing environment is changing radically now,” Alexander Zoller, head of the North American operations since 2004, said. “Companies must run very cost-effectively and efficiently and cost per part must go down. One of the major ways Zoller helps with this is to enable its customers to accurately set their cutting tools before putting them into the machine. That way, machine time can be dedicated to producing parts only, not to getting ready to produce parts. A presetter is a cost-saver for smart shops,” Alexander said.

Andre Ey Joins Makino as Vice President

Makino recently  announced the addition of Andre Ey to the Die Mold Technologies Group. Ey brings a wealth of experience in the machine tool industry and will serve to strengthen Makino’s role as a Die Mold process leader.

“Andre’s position will focus on both the business execution and the strategic goals of our Die Mold Group,” said Don Lane, CEO of Makino. “His experience and abilities will serve Makino well.”

Andre Ey has 18 years experience as a senior executive at global manufacturers, both in management and marketing. His leadership has shown an ability to create and execute strategic plans, drive business growth, and boost revenues and profitability.

Ey earned his MBA from Michigan State University in 1996, and holds a Bachelor in Mechanical and Manufacturing engineering from Fachhochschule of Dortmond, Germany.

Okuma and Partners in THINC Celebrate Grand Opening

The official grand opening of Partners in THINC in Charlotte, North Carolina came on the heels of a private open house event that drew nearly 600 customers from North, South and Central America in September. Forty-two machines were on display between the new facility and the completely updated Okuma America showroom. Several combinations of Partners in THINC applications, seminars and demonstrations were an inspiration to attendees. 

In addition to local politicians and corporate principals visiting from across the country, Okuma Corporation President and CEO, Dean Hanaki, attended from Oguchi, Japan.  As a firm supporter of Okuma’s global initiative as a world leader in machine tool manufacturing and solutions, Hanaki was impressed with the payoff of years of hard work.

“The acknowledgement of this facility and what it stands for is a testament to the 109 years of manufacturing dedication Okuma Corporation possesses and our determination to help American manufacturing,” said Hanaki.  “Partners in THINC is one of many firsts for Okuma, but is a major milestone in creating a single stop for customers to advance their manufacturing to a whole new level.”

The catalyst for Partners in THINC was the development of the new THINC-OSP control that offers many benefits beyond the current Okuma Computer Numeric Control (CNC) user. The open architecture of the control allows for the seamless integration of the product with the 27 industry-leading systems.

Anca Appoints New CEO

Australia-based CNC grinder manufacturer Anca has appointed Jeroen Schmits as its new CEO. He will be responsible to Anca’s Board of Directors for all global business operations and will relocate from the United States to Anca’s head office in Melbourne, Australia. Schmits will be starting in his new role on 1 November 2007.

With an extensive track record in international business management, Schmits has had a long career in managing capital equipment companies; most recently he was president of Universal Instruments in Binghamton, New York, where he focused on sustainable growth based on technology development and world class quality performance.

Previous positions have direct relevance to Anca’s products and markets. 

Anca is a leader in CNC precision grinding equipment and CNC control systems and has its main manufacturing and design facilities in Melbourne, Australia.

Makino Die Mold Expo a Success

Makino’s fifth bi-annual Die Mold Expo, held at Makino’s Die Mold Technology Center in Auburn Hills, Michigan was a resounding success September 25 – 27, 2007. Leaders of the die/mold industry were in attendance to learn about cutting-edge technologies and techniques.

“By bringing together sought-after business speakers, Makino’s machining experts, new technology demonstrations, and some of the world’s best die/mold manufacturers, we are arming North American shops with tools to compete against overseas competition,” said Andre Ey, Makino’s Vice President of Die Mold Technologies. EMO 2007, Haas Automation Europe’s Most Successful Show Ever

HAE’s presence at this year’s show was even more impressive than at the last EMO, two years earlier. In 2005, visitors were given demonstrations on 30 Haas machines. This year, there were 41 on display, with another 13 on partner booths around the fair. Two years ago the company’s booth was 1300 sq. meters. At EMO ’07, it was 1650 sq. meters, manned across the six days by more than 160 staff from 38 European Haas Factory Outlets (HFOs). The additional space and manpower were needed to show off the 12 new Haas machine models introduced since EMO 2005, including the compact Office Lathe and Office Mill, the highly-productive EC-400PP pallet-pool horizontal machining center, the TL-4 Toolroom Lathe and the SL-20L and SL-30L long-bed turning centers.

Aside from the launch of the company’s new products, the big news at this year’s show was undoubtedly the official introduction of the Haas Technical Education Centre (HTEC) program for Europe. Already a  success in the USA and Canada, the Haas Automation Europe HTEC program aims to create long-term alliances with European vocational training and technical colleges, universities and other manufacturing technology learning institutions. The goals: to make the latest manufacturing technology accessible to a very wide range of educational establishments, and provide students with hands-on experience in a real-world manufacturing environment.

Flow Ranked in  Fast 50 Program for  Washington State

Flow International Corporation  has been named to Deloitte’s prestigious Technology Fast 50 Program for Washington State, a ranking of the 50 fastest growing technology, media, telecommunications, and life sciences companies in the region by Deloitte & Touche USA LLP, one of the nation’s leading professional services organizations.  Rankings are based on the percentage revenue growth over five years from 2002–2006.

Flow’s CEO Charley Brown credits increasing acceptance of ultrahigh-pressure waterjet cutting technology, demand for waterjet cutting of composites in the aerospace industry, and Flow’s leadership and technological expertise in bringing 87,000 psi waterjet cutting to market.

To qualify for the Technology Fast 50, companies must have had operating revenues of at least $50,000 in 2002 and $5,000,000 in 2006, be headquartered in North America, and be a company that owns proprietary technology or proprietary intellectual property that contributes to a significant portion of the company’s operating revenues; or devotes a significant proportion of revenues to the research and development of technology.  Using other companies’ technology or intellectual property in a unique way does not qualify.

Employee Buys HR Machinery

 Jim Fahey of HR Machinery in northern California has bought the company from Mitutoyo America Corp. He will keep the well known HR Machinery name in order to maintain the continuity of over 100 years of tradition. HR Machinery will continue to represent quality machine tool products like Makino, Absolute and Mitutoyo in northern California.

The change necessitated the termination of the southern California Gardena office and its three employees. All employees quickly found new employment.

Chris Lukis and Norma Hansen will continue to provide administrative support and Dennis McGuire will continue to provide service with the assistance for the time being of some key outside support. Angelo Montesano has retired to work on his house but did imply a part time return in the future. Armand Flemate and Mr. Fahey will still be involved with the sales effort.

MachineMate, Inc. Hires Vice President of Sales

MachineMate, Inc. announces hiring Mr. Hans Platt as Vice President of Sales on July 2, 2007. This move is to further aid in the increased success level seen in providing superior, cost effective CNC controls for the OEM industrial cutting machine tool market.  Besides cutting machines, MachineMate continues to provide cost effective retrofits for the standard machine tool lathe and machining center markets.

Mr. Platt has extensive experience with CNC machine tools. He spent five years with Fidia CNCs and more than five years with MDSI CNC controls before going into his own Systems Integration business as a factory trained MachineMate Systems Integrator.

Previously Nyles Priest, President and CEO of MachineMate, Inc. announced that MachineMate will increase support for its OEM customer base by streamlining the retrofit/rebuild segment of its market. Streamlining will be done by increased utilization of key Systems Integrators in MachineMate’s network of more than 50 factory trained Systems integrators. Selected Systems Integrators have already been very successful helping to support cutting machine OEMs and will be utilized to bring new OEMs on board.

Absolute Machine Tools Expands Product Line Up with Ecoca CNC Lathes

Absolute Machine Tools, Inc.,recently announced its partnership with Ecoca Industrial Co., Ltd., Taichung, Taiwan. Absolute will sell Ecoca’s CNC lathes through its North American distribution network encompassing the U.S., Canada, and Mexico.

Absolute adds the Ecoca line to its other Taiwanese machine tool offerings, including the highly productive Johnford machining and turning centers, the Hi-Net line of precision high speed machining centers, Argo Seiki high-production drill/tap centers, and robust and flexible You Ji vertical turning centers.

The Ecoca line of CNC turning centers includes the SJ-20, a 45 degree slant bed lathe. This  turning center is ideal for high production and job shop operations. The machine features linear ways for fast feedrates. In addition, the compact machine conserves valuable floor space. 

Absolute will also offer the MT Series of 30 degree true slant bed box way lathes. Turning centers range from the sturdy MT-208, with a maximum turning diameter of 13.77 in., to the robust MT-415, with a maximum turning diameter of approximately 20 in.