This is the NewsDesk feature from the March 2017 issue of Manufacturing Engineering
Ford Motor Co. and Caterpillar Inc. are forecasting tougher financial conditions this year.
The companies issued their forecasts separately in January while reporting fourth-quarter and year-end financial results.
Ford (Dearborn, MI) had a pretax profit of $10.4 billion, down $425 million from 2015. It was still Ford’s second-best pretax profit.
However, the automaker said its 2017 pretax profit won’t match 2016 levels because of softening results in North America and Europe. North America generated $9 billion in pretax profit last year while Europe posted a $1.2 billion pretax profit.
Ford posted a full-year profit of $4.6 billion, or $1.15 a share, down from $7.37 billion, or $1.84 in 2015.
The company posted a fourth-quarter loss of $783 million, which included one-time costs of $3.2 billion. That included almost $3 billion for an accounting change for the way it measures pension obligations and $199 million in costs related to canceling a planned factory in Mexico.
Caterpillar (Peoria, IL), a maker of earth-moving machines and other heavy-duty equipment, had full-year adjusted profit, which excludes some costs of $3.42 a share, down from 2015’s $5.35.
The company forecast 2017’s adjusted profit to slide to about $2.90 a share. Caterpillar also estimates its 2017 revenue will be $36 billion to $39 billion, compared with 2016’s $38.5 billion. Caterpillar has been affected by a strong dollar, which makes US-produced goods more expensive in overseas markets. The company also has felt the impact of weakening markets for mining and construction equipment.
Caterpillar said in a statement there may be “early indications of modest recovery in several of our businesses.” But the company also said “the availability of used equipment” in construction is a drag on its sales.
The company reported an annual loss of $67 million, or 11 cents a share, compared with a 2015 profit of $2.5 billion, or $4.18. Contributing to the loss were various one-time costs Caterpillar incurred as it cut jobs and streamlined operations.
In the fourth quarter alone, Caterpillar’s one-time charges included $985 million for pension accounting changes, $595 million to write down the value of its surface mining and technology unit and $395 million in restructuring costs. The company has been closing plants and paring jobs as it tries to reduce manufacturing expenses. Caterpillar cut 12,300 jobs globally last year to a total of 106,400.
—Senior Editor Bill Koenig
LaserCoil Aligns with Bradbury
LaserCoil Technologies LLC (Napoleon, OH) has entered into an alliance with Bradbury Group (Moundridge, KS), a maker of roll forming and coil processing equipment. Through this agreement both companies will promote turnkey coil-fed laser blanking solutions to Bradbury’s traditional customer base.
“The strength of Bradbury’s sales team, the breadth of its product offering and the precision of its leveler technology makes this relationship an excellent way to expand LaserCoil’s blanking solution into new markets,” Jay Finn, LaserCoil Technologies general manager and chief technical officer, said in a statement.
“Adding laser blanking to our capability is a great extension of our product offering,” Bradbury Vice President of Sales and Marketing Ryan Durst said in the statement.
Robot Market Sets Record in 2016
The Robotic Industries Association (RIA; Ann Arbor, MI) said the North American robotics market set records for orders and shipments in 2016.
During the year, 34,606 robots valued at about $1.9 billion were ordered in North America, representing growth of 10% in units over 2015. Orders in the automotive industry increased 17%, according to the group.
Units shipped to North American customers also rose by 10%, with 30,875 robots valued at $1.8 billion shipped in 2016. Shipments into the automotive market surged 25% relative to 2015.
Orders for robots spiked 61% in assembly applications and increased 24% in spot welding. The food and consumer goods industry increased orders for robots by 32%.
The RIA is a member organization of the Association for Advancing Automation (A3).
“Automation played a vital role in spurring economic growth in Nort
American manufacturing and services industries in 2016,” Jeff Burnstein, president of A3, said in a statement. “We anticipate accelerated growth based on smarter, more connected and more collaborative robots in the coming years.”
Manufacturing USA Is ‘Valid Approach,’ Report Says
The Manufacturing USA network of public-private institutes “is a valid approach” that “attracts significant and meaningful participation from industry…academia, and local, state, and federal government,” a consulting company commissioned by Manufacturing USA said in a report.
“Institute members have made substantial joint investments in collaborative approaches to R&D and commercialization of cutting-edge advanced manufacturing technologies,” Deloitte Consulting LLP said in the executive summary of the 76-page report. “Institutes are laying the groundwork for building the American manufacturing workforce’s skills to meet the needs of 21st century employers.”
Deloitte was commissioned by Manufacturing USA “to conduct a third-party review and evaluation of the program,” according to the executive summary. “The study emphasized the overall program, not the detailed operations of any individual institute.”
The consulting company began its study in August when Manufacturing USA had eight institutes. Additional institutes were announced after that, bringing the total to 14. Deloitte interviewed officials at the first eight institutes, federal agencies involved in sponsoring the program and outside experts. Work on the study concluded in January.
Deloitte also gathered and analyzed institute documents and data, according to the report.
“Advanced manufacturing is a critical investment area for the broader domestic economy,” according to the report. Support “is needed to reverse slowing productivity growth and the trade imbalance.
“Manufacturing USA’s institutes help R&D innovation and commercialization and prepare the 21st century workforce,” Deloitte said. “Institutes encourage mutually beneficial collaboration to catalyze R&D investment and overcome barriers to innovation.”
Allied Machine & Engineering Purchases Superion Inc.
Allied Machine & Engineering (Dover, OH), a manufacturer of holemaking and finishing tooling systems, announced it has purchased Superion Inc (Xenia, OH).
Superion manufactures special solid carbide and PCD tipped rotary cutting tools such as end mills, reamers, drills, and step tools. It is well known for developing customized solutions in specialty tooling.
“By acquiring Superion, Allied has added a wealth of over 50 years of experience in special tool manufacturing. Their highly-skilled associates operate CNC equipment and utilize sophisticated quality control systems to ensure the highest standards of quality,” Bill Stokey president and CEO of Allied Machine & Engineering, said in a statement. “Their product expertise will provide tremendous opportunities for the growth of Allied products.”
Customer sales and support will continue to be provided by both Allied and Superion.
US Manufacturing Reaches Two-Year High in January
US manufacturing started 2017 by expanding in January, reaching its strongest level in more than two years, according to the Institute for Supply Management (ISM; Tempe, AZ).
The group said its PMI, which measures economic activity in manufacturing, was 56% in January. It was an improvement from 54.5% in December and the highest since November 2014. It was also the fifth consecutive month the PMI has increased.
“It’s a continuation of the momentum that was building toward the end of last year,” Bradley J. Holcomb, chair of ISM’s Manufacturing Business Survey Committee, said on a conference call with reporters. “There were lots of positives with lots of industries.”
The ISM report is based on a survey of 350 purchasing and supply executives in 18 industries. A reading above 50% indicates expansion and below 50% contraction.
Twelve of the 18 industries reported growth for January. Among them were plastics and rubber products, miscellaneous manufacturing, transportation equipment, petroleum and coal products, primary metals and fabricated metal products. Five industries reported contraction, including non-metallic mineral products and furniture.
The report’s Employment Index surged to 56.1% in January from 52.8% in December. January was the highest level for that index since August 2014. Ten industries reported adding jobs, including textiles, machinery, miscellaneous manufacturing and transportation equipment. Five industries reported job losses, including petroleum and coal products, primary metals and fabricated metal products.
ISM’s New Orders Index edged up to 60.4% from 60.3%. Twelve industries reported an increase in orders. They included plastics and rubber products, miscellaneous manufacturing, transportation equipment, primary metals and fabricated metal products. Five industries reported a decline in orders, including non-metallic mineral products and furniture.
The Production Index increased to 61.4% from 59.4% in December. The 10 industries with output increases included miscellaneous manufacturing, petroleum and coal products, transportation equipment and machinery. Five industries reported a decline in production, including non-metallic mineral products and furniture.
—Senior Editor Bill Koenig