A Year Later, Same Pace

June 1, 2004
This issue kicks off our second year of publishing Automation World. The first issue went into the mail in June 2003. That was preceded by four months of planning, arguing, cajoling, traveling and writing.

The frantic pace has not slackened. I’m still on the road discussing the industry with readers and suppliers. Last month was more of the same. First was a trip to Minneapolis to attend a conference discussing regulatory problems facing manufacturing firms as they compete in a global economy. Then it was on to Atlanta for user conferences of Indus International and ABB. Following was Boston and the Vision East trade show.

The Minneapolis forum was political, but speakers recognized and addressed a number of structural concerns that U.S. manufacturers face when competing with international trading partners. These include health care costs, tort “reform” to reduce what is seen as exorbitant liability awards, revisions in the tax code to encourage innovation, raising the skill level of the workforce and “leveling the playing field” for American manufacturers relative to trading partners. Waiting for favorable political action can seem like “Waiting for Godot,” but at least there is recognition.

The economic news at my other stops was considerably more optimistic. Indus International had reported a profitable quarter for the first time in years, and the atmosphere at ABB was almost giddy. That company has a reputation for good management overall, but it has been struggling to rein in costs to offset reduced sales over the last slowdown. It looks like the company has turned a corner. Most vendor companies at the Vision show reported signs of optimism among their customers.

ABB U.S. President Dinesh Paliwal provided insightful as well as thought-provoking comments during a private interview. He is upbeat on the current state of the economy for his customers—who are primarily in the pulp and paper, metals, and chemicals sectors.

When I asked him what it would take for automation suppliers to survive in the coming years, he pointed to two things: size and industry expertise. “Those that have skill and process competence will have a lot to gain,” he stated. “What is more important for customers putting up new plants now is size. They want to know if you will be around, if you will continue to invest in research and development.”

Another interview was with Bill Zadrozny, president and chief executive officer of Siemens Financial Services, a unit of Siemens AG with offices in New York City. That company provides lending and leasing financing for manufacturers, so Zadrozny is in a position to talk with the top financial officers of many manufacturing companies.

“Over the last six months, we saw an increasingly bullish situation for manufacturing investment in automation and other factory equipment. The first reaction of most manufacturers right now is to apply automation to increase capacity and reduce production costs,” Zadrozny stated.

There are still media outlets spinning a tale of doom and gloom about manufacturing in America. Obviously, all is not rosy, but every indication is that business is picking up. Those challenges that reside in the land of government and regulation are being addressed, albeit slowly. The important thing to keep in mind is to measure the critical metrics.

Check out www.automationworld.com for a full report on the Minneapolis conference and my interview with Paliwal. You can find them by searching on the words, “Manufacturers Search for Answers” and “Paliwal Upbeat” respectively. Then search out all the other cool stuff there. This year has been a whirlwind. We’ve tried to publish a product that provides useful new information in an innovative package. I enjoy feedback and welcome all suggestions that can make Automation World a better resource for you. Thanks for helping make our first year a success.