Surviving "The Crisis"

During the first week of July, I toured the north of Italy as a guest of the Italian Trade Commission.

Aw 1035 Gmintchell0803
It was not Italian wine I was sampling, but a variety of Italian machinery builders. I was off the plane in Milan at 8:15 a.m. and by 9 a.m., was perched on a chair along with three colleagues in the conference room of the first visit of three that day, and 13 overall.

Italy has been the third-largest exporter of machines to the United States, but it has recently faced severe competition for that spot from China. The country has several areas of unique expertise, and we were treated to a sample of the variety during the tour. We saw huge presses that formed ceramic tiles, huge metal-working presses, small high-speed folding and sorting machines for the printing industry, packaging machines, leather-working machines, pasta-making machines and even a wood-recycling machine.

At every stop except two (there is still a big demand for pasta) the talk was about “the crisis.” The economic downturn we are feeling here in the United States is truly a global event. These companies are surviving, but a few are really hurting. A couple of stops were downright gloomy. But there was another key factor at each stop. These were all entrepreneurial, engineering-driven companies. Of course, they are trying to make a profit. Management in every case was focused on a single idea for survival—innovation.

Rigatoni anyone?

We saw two pasta-machine makers. Each has picked a part of the process on which to focus innovative engineering efforts for competitive advantage. Same thing with the two leather-finishing machine companies—one focused on applying dye; the other on drying. Some are still building on the founders’ innovations, while others have shifted direction to entirely new fields. These are warm, friendly people who are just trying to survive.

Few of the Italians we met were sanguine about the Chinese threat. China is at least the fifth country in my lifetime about which I’ve heard the charge, “They just copy our stuff.” We used to say that about Japan. Then the Japanese said it about Korea. Next was Taiwan, then Southeast Asia. The Italians we met were also prone to talk about the Chinese just copying their machines. The more foresighted people we talked with acknowledged that it is just a matter of time before China takes the next step and begins designing its own machines. It will then be a formidable competitor.

Here in America, we need to remember that we are still a vast market targeted by manufacturers around the world. Last December at another conference in Europe, this time in Monaco, I heard a representative of the Chinese government affiliated with trade groups talk about plans that various Chinese machinery-manufacturing associations had for making and selling machines into the United States.

An unintentionally retired engineer from the United States contacted me after reading my blogs about the trip to Italy. He asked why I went to Italy to write about machines when there are so many in this country. Actually, I went to Italy because of the Italian Trade Commission, which set up the tour and obtained appointments with the companies. I’d love to talk with U.S. machine builders, or ones from other countries, for that matter. There is a thriving machine-builder industry in this country. We just seldom hear about it.

The real point of this is not so much about the state of the machine-building industry, which will rebound when the economy rebounds. Think about the focus on innovation, good engineering, thinking about the product the machine makes and how to make it better. That focus is what separates the winners.

Subscribe to Automation World's RSS Feeds for Columns & Departments

More in Control