Executive Briefings

Foreign Robots Invade American Factory Floors

Vickers Engineering Inc. embodies the potential of American manufacturing. The New Troy, Mich., machining company supplies precision parts to clients including Toyota Motor Corp. and Volkswagen AG , and exports to Mexico and Canada. Its staff has risen fivefold and average pay has doubled over the past decade, says Chief Executive Matt Tyler.

What's helping to power Vickers's made-in-America success? Advanced Japanese and German factory equipment. When Vickers first bought industrial robots in 2006, it chose between only European and Japanese models, says Mr. Tyler, and has been adding Japanese robots ever since. "We were not aware of any American-made option."

America is losing the battle to supply the kind of cutting-edge production machinery that is powering the new automated factory floor, from digital machine tools to complex packaging systems and robotic arms.

Commerce Department data show the U.S. last year ran a trade deficit of $4.1bn in advanced "flexible manufacturing" goods with Japan, the European Union and Switzerland, which lead the industry. That is double the 2003 deficit. It was down from $7bn in 2001, but much of the decline came from foreign equipment suppliers expanding in the U.S., not from an American comeback.

U.S. firms are also losing market share at home, according to Germany's VDMA industrial-machinery trade group. In 1995, they satisfied 81 percent of domestic demand for factory equipment. In 2015, the most-recent data, that had slipped to 63 percent.

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What's helping to power Vickers's made-in-America success? Advanced Japanese and German factory equipment. When Vickers first bought industrial robots in 2006, it chose between only European and Japanese models, says Mr. Tyler, and has been adding Japanese robots ever since. "We were not aware of any American-made option."

America is losing the battle to supply the kind of cutting-edge production machinery that is powering the new automated factory floor, from digital machine tools to complex packaging systems and robotic arms.

Commerce Department data show the U.S. last year ran a trade deficit of $4.1bn in advanced "flexible manufacturing" goods with Japan, the European Union and Switzerland, which lead the industry. That is double the 2003 deficit. It was down from $7bn in 2001, but much of the decline came from foreign equipment suppliers expanding in the U.S., not from an American comeback.

U.S. firms are also losing market share at home, according to Germany's VDMA industrial-machinery trade group. In 1995, they satisfied 81 percent of domestic demand for factory equipment. In 2015, the most-recent data, that had slipped to 63 percent.

Read Full Article