1. Is there a slowdown?
My impression is that business for the builders is generally good and getting better. High gas prices do not seem to be deterring the high level of buying. The Swiss lathe importers—Citizen, Star, and Tsugami, are crazy busy. For equipment like Hydromats and multi-spindles, which are heavily focused on automotive, there is a bit of hesitancy.
2. Can the Japanese companies get inventory?
Not enough. Toyota is hurting along with the others. Hyundai is out to claim 10 points of market share. In machinery, the importers tend to order far ahead. Certain sizes are scarce, like 32 mm machines. Tsugami claims to be unaffected. If it is a 1200 machine year for Swisses here, deliveries will be strung-out in some models.
3. Are high prices because of the weak dollar hurting sales?
Yes. I talked to the Tajariols, Andrea and Michi, who own ZPS. The $1.45 euro is hurting North American sales. The 32 mm 8-spindle Euroturn, the crown prince of the mechanical screw machine line, used to sell for $450,000 in 2003. Today it’s $750,000 with bar loader and attachments. It causes sticker shock.
4. Does anybody go to shows except exhibitors and kids in flat brim hats?
Yes, the locals. PMTS this year was a Midwestern—especially Ohio—crowd. Most people drove from a 250-mile radius. But there are a lot of good buyers left in the Big Ten. The kids in flat brims were there and I regret the pejorative tone to the original question. The kids may look stupid to the old guys but they aren’t dumb. I think the tide is turning about everybody going to college. College is starting to look like a bad economic buy for a lot of kids and parents now, so we may be getting a more serious group of flat brims into the machining community. Unfortunately, virtually no people of color or women showed up.
5. Is the Swiss market headed more toward the fewer-frill machines like the “A” Citizen? Yes. The price differential between an “A” model Citizen and an “L” model is $100k. Because of the weak dollar, an “A” costs what an “L” used to cost, and it is a very capable machine.
6. Will the Big Three dominate the Swiss market without a real challenge by an outlier? Yes. There was not much buzz about the smaller brands. Tornos is now an afterthought here. Index wants medical, ZPS left the Manurhin in France, Hanwha needs to spend more money on marketing. Eurotech has an entry but they are using stealth marketing. Nomura no mas.
7. Are the automotive suppliers starting to buy?
Yes, but hesitantly. Business is good now, but 2010 was the year to repair the finances and 2011 is the year to begin buying. Hydromat, Schutte, Index and the Swisses are starting to see the serious inquiries, so the orders should come. But the earthquake and $4 gas seem to be slowing the actual POs.
Question: Do you think the administration really wanted Osama Bin Laden dead the last 10 years?