Machine-tool industry recovering from recession

Local machine-tool manufacturers are seeing a revival in business that may signal the end of a particularly nasty recession in that industry.

"The two-year machinetool industry recession appears to be slowly easing, and we believe that we have seen market conditions bottom out in the fourth quarter of 1999," says Robert E. Agan, chairman and CEO of Hardinge, Inc., the machinetool maker in Elmira.

At Cortland's Monarch Machine Tool Company, President Wayne W. Hanna says, "What we've seen of late is a steadiness in the business." In recent years, Hanna says, sales would be fine for a couple of months, then drop off. "Now, he says, "we aren't seeing the dips."

"In 2000, things are definitely trending upward," says Robert W. Gardner, vice president of the Association for Manufacturing Technology (AMT), a national trade group with headquarters outside Washington. Gardner explains that the "Asia crisis knocked the pins out" from under the industry in 1997, but that in late 1999 and in 2000, the Industry has improved as Asia's economies have gotten "back in pretty good shape."Agan, when announcing strong secondquarter revenues, noted the ATM statistics, including a 4-percent rise in overall order rates for machine tools. "We cannot," he said, "be certain exactly how this growth trend will continue, but, given our position as a preeminent global supplier of advanced technology solutions to manufacturing industries, we feel confident about Hardinge's prospects in the marketplace."

Hanna and Agan both note the impact of the upcoming International Manufacturing Technology Show (IMTS) in September. Agan noted that promotional expenses for the show cut into cost-cutting efforts the company has undertaken.

For Hanna, the every -other-year Chicago trade show is a sign of how the market has improved. In 1998, orders to Monarch dropped to zero in the month before the show. Hanna remembers it well; he says, "I started that month."

That year, 11 percent of the company's orders came in the month following the September show. But this year, says Hanna, Monarch is not seeing delays. "This August looks to be pretty good," he says, and the company had a good July,

Hanna, part of management that bought the company from previous owner, Genesis Worldwide, credits a portion of the company's rebound to new equipment it did not offer before. New "gantry-style machines," which can machine very large pieces, have been bought by Lockheed Martin and Electric Boat and can cost $1 million a piece. Looking to the upcoming IMTS, Hanna notes that the new machines are "something we did not have in 1998 to show off."

New product is at the forefront of Hardinge's plan. "One of Hardinge's business objectives is to have products less than two years old account for at least 35 percent of each year's revenues. During the quarter, we continued to prepare for our product introduction and marketing efforts," Agan says.