The German metrology developer Jenoptik is shifting “from focusing on metrology and laser processing standalone equipment to integrated automation solutions for the automotive industry and other new applications, including aerospace,” so it recently bought Prodomax Automation in Barrie, Ontario, and Five Lakes Automation, here in Michigan, Prodomax Co-CEO Carolyn Garvey said.
She and Co-CEO Don Leslie will manage Five Lakes under the Jenoptik brand.
Prodomax employs about 200 people. Five Lakes employs about 50. Used to being saddled by “small R&D capabilities,” the joined companies will no longer have to wait for a commercial project to ignite some R&D in order to advance their tech portfolios, Garvey said, because “Jenoptik has formal R&D capabilities” that include separate R&D teams.
That is important in the automotive industry, she added, because as companies like Ford go to fewer models, within the vehicle offerings they maintain there will be many more options—including cars that handle parallel parking, headlights that move in the direction one is driving, battery electric vehicles, trucks with cabs and beds of various sizes and lengths and plug-in hybrid electric vehicles. “And all of those different configurations, plus the use of different materials, will require more complex automation.”
“The use of composite materials, new joining technologies and flexible automation to handle multiple car model variations provides a real challenge for our manufacturing customers,” Garvey said.
Jenoptik has devised a four-year strategic plan that includes more innovation, she said. “They’re going to devote even more R&D funds to the innovation piece.”
Jenoptik also wants to “not just provide, let’s say, the metrology equipment or the laser equipment but actually imbed it into a system that provides a solution to the customer,” Garvey said.
Jenoptik North America President Albert Miranda chimed in: “We have available to us in automotive metrology and laser processing applications and knowhow and knowledge. They are sometimes baked into a standard product, and sometimes they are not (it’s just simply knowhow). When a customer wants to develop a line to do a specific task, standard products in and of themselves don’t do that.”
Jenoptik developed a laser material process for an automotive company in cutting and welding metal parts—to conquer a metal alloy on which conventional lasers or cutting and welding methods would not work, he added.
And Jenoptik wants to become more global.
“They want to expand its global footprint to include North America and China and India—in conjunction with more vertical integration and being closer to customers,” Garvey said.
Jenoptik’s establishing an automation hub here in Michigan plays into the fact that “OEMs—the Fords, the GMs, the BMWs—are consolidating their suppliers,” she said. “They want to reduce complexity in their businesses, and if they work with fewer suppliers that helps. They are producing more vehicles per platform, because they are also reducing platforms. And that equates to larger-scale automation. So instead of building $2 million machines, they might build $5 million machines that can produce more parts. That provides opportunities for global automation companies.”
Prodomax, pumped up by Jenoptik’s R&D capabilities, can now think about engineering “one automation line that is shipped to Canada, to the U.S., to Mexico, to Europe and to China,” Garvey said. “We have done Canada, the U.S., Mexico and Europe. We just haven’t done the one to China yet.”
That move, to be sure, is on the drawing board, and, she said, “it will be nice to have somebody who can open the door for us in China” to adroitly deal with local regulations.
Jenoptik’s global presence already opened doors for Prodomax when it shipped a project to the Czech Republic in November, Garvey said. “Some new contacts helped make sure it went very smoothly in terms of European safety standards and work visas for our employees.”
Prodomax has been building up what she calls its “engineer-one-and-build duplicates” capability over the last three years—the same time in which the company’s automation business has almost doubled in size, she said.
“Magna, out of Canada, doesn’t want to have to go to Europe and find an automation company that will engineer and build automation for a plant in Europe and then go to U.S. and source an automation company,” Garvey said. “If they can find one that can engineer it once and ship that one and four duplicates to different parts of the world, then it is more cost-effective.”
The locations of Prodomax and Five Lakes will serve Jenoptik well.
Barrie has fewer than 200,000 people “but we have several automation companies, and the city brands itself as an automation hub, which is good for attracting engineering talent to the city,” she said. “And our local university has a new engineering school that opened last year. We have hired about 30% of our workforce from that school.”
Ontario itself, is “an automotive hub because we have five auto assemblers, 700 parts suppliers, 500 tool and die and mold makers,” Garvey said, noting that the province was responsible for 15% of North America’s light vehicle production over the last five years.
Here in Rochester Hills, Five Lakes represents “the largest automation-automotive knowledge hub in the world,” Garvey asserted. Five Lakes has a laser application center that its customers can use to test new materials and new processes.
Jenoptik in 2017 invested $16 million in a new North American technology campus here. It is focused on the industrial metrology and laser processing systems used primarily by its automotive
OEM and Tier One customers.
The campus perfectly complements the purchases of Prodomax and Five Lakes, Miranda said.
“In the metrology business and in the laser processing material business, we were typically selling to integrators (and to automotive companies),” he said. “But what that means is we were sort of one step removed from the customer. Having Prodomax and Five Lakes brings us in direct contact with the customers we want for those products—so we get immediate customer feedback.”
Executives at Jenoptik North America feel they now have “all the pieces of the puzzle that we want for our overall strategy in automotive,” Miranda said. “It’s now just a matter of expanding our capabilities and industries.”