The Precision Parts Market

On a recent visit to Korea, we sat down with James H. Sung, general manager/
overseas sales team, Hanwha Machinery, to hear his views on the Swiss-type machine tool market.

Production Machining: How do you see the state of precision parts manufacturing, globally and in the U.S. market?

Mr. Sung: We divide the developed and underdeveloped countries. The main developed markets, such as the United States and Europe, are experiencing rapid growth in medical parts production (implants and bone screws), but the automotive parts industry continues to be the strongest and most stable for Swiss turning. Until recently, in underdeveloped countries, such as the eastern Asian countries, the parts were cheaper and more mass produced using older technology such as cam-type lathes. Now they are starting to upgrade technology. In the United States and countries in Europe, the customers have more complex precision parts and more diversified materials such as steel and titanium so it is difficult for the machinery manufacturers to satisfy the demands from all of our customers, but they will see growth in areas with more complex parts and exotic materials like medical and automotive.

PM: What level of acceptance have you seen in the United States for new technology versus other important markets?

Mr. Sung: The American market is very conservative when it comes to change or accepting new technologies. Europe has traditionally been much faster to adopt and implement new technology.

PM: Are there positive trends that you have identified that make you feel good about the future of manufacturing in the United States?

Mr. Sung: In the United States, manufacturing businesses can no longer compete in the area of labor cost. So, big corporations are building new facilities in Asia to take advantage of the very large low-cost labor market. Looking to the future, technology is still the most important factor because one important advanced technology can change everything. Manufacturing in the United States, in general, has been in a weak position, but this has forced the market to recognize the importance of making the investment in technology. We have seen many companies change over from less complex parts on conventional machinery to more accurate and complex parts using Swiss-type technology to gain a competitive edge.

PM: What are your feelings on the U.S. automotive industry?

Mr. Sung: Regarding automotive work in the United States, the manufacture of delicate parts will stay in the United States or other developed countries such as Germany and Italy. But, simple parts, such as shafts, will migrate to Asian countries with cheaper labor rates and cheaper technology. So, the amount of automotive parts produced in the United States will decrease, but the high-tech, more complicated work will stay there.

An important trend that we see for Hanwha is the success of the Korean auto makers and other foreign manufacturers in the United States. As they continue to invest in building new manufacturing facilities in the United States, they will need to invest in new machinery. This will also bring with it opportunity for new supplier relationships because they will need new suppliers near these new locations. This causes a second wave of investment in new facilities and new machinery.

PM: What important technological advances do you see in Swiss-type machine tools?

Mr. Sung: I see a growing trend toward multi-manufacturing systems, for example, the Star machine, which can machine in three directions at one time. These days, the customer needs short cycle times, complex shapes and good accuracies as well as tool and control systems with various advanced technologies in Swiss types.

PM: Do you see a trend toward larger-diameter work on a Swiss type?

Mr. Sung: We have to do precision work with our machines, so the largest size is 35-mm to 40-mm diameter. Beyond that, it is difficult to maintain accuracy.

PM: Do you see a trend toward sliding headstock machines without guide bushings?

Mr. Sung: The non-guide-bush-type was developed to reduce the length of the material in the case of expensive materials like titanium, for example. The customer wants to reduce the remnant material. The demand for this type of machine is growing.

We have many competitors that are trying to catch us, so we try to take advantage of our technology to stay ahead in the market. To do this, we are investing a lot in research and development to continue to improve our Swiss technology. The other reason for this commitment to technology advancement is our customers. Today, our customer is being forced to advance even faster to satisfy their customer needs. All of these factors are causing great changes in the market. In the next 10 years, you will find a lot of new Swiss-type lathe manufacturers in the world, especially in China and Asia. At this time, you will see a sort of re-establishment in the market. Some manufacturers will survive and others will not. The next 10 years will be very important for the Swiss-turning lathe market. It should be a very exciting time.