ECTA President Markus Horn explains why entrepreneurs now have to make strategical decisions for the success of their companies in the future. Additionally, he gives some information about the economic situation of the precision tools manufacturers in Europe.
The saying that fits the current situation, " Eyes shut and go for it!" has a significant weakness: Even in business management, one should never fly blind in fear, but have a strategy and keep one's eyes open in order to be able to react to changes promptly.
But let's first talk about the economic situation of the cutting tool manufacturers in Europe; this is characterized by two overlapping crises and the further darkening of the overall trade policy situation. The change in the automotive industry not only has a direct impact on our business, but also indirectly. Other customer sectors such as mechanical engineering are also affected by this sales crisis and require fewer tools. As a result, the situation for all manufacturers in Europe is further aggravated. In addition, the corona pandemic hit the industry in March 2020. The effects on the countries vary in severity. Compared to the same period in the previous year, machine production in Italy fell by 24% from January to April, followed by the UK (- 23%), France and Austria (- 22% each).
In the metalworking sector, companies are used to dealing with economic cycles. However, an economic crisis of this magnitude could not be foreseen. The economic stimulus program launched by the German federal government has a strong focus on environmental protection and small companies. As a result, some quite sensible measures, such as securing training places, do not apply to medium-sized and larger companies. However, almost 30% of trainees are trained in companies with more than 250 employees. Other measures, such as the temporary reduction of VAT, cause additional costs and do not generate benefits in the B2B business. A next step should be the extension of the expiring short-time work regulation. Our export-oriented European economy is also impatiently awaiting the possibility of visiting customers abroad again soon. The lack of travel opportunities to key markets is inhibiting the resumption of global supply chains.
"Companies are doing everything they can to develop further." Through the VDMA and ECTA, there is a lively exchange with many colleagues at home and abroad. The central corona page on the VDMA's Internet portal, which has bundled all political decisions, country and travel information or operational topics and made them available in a bundled form, was very helpful. Early on, successful measures were taken to protect employee health. Production and services could be maintained in many places. Working time accounts were reduced and short-time working increased more and more. In May, short-time work temporarily even reached the 100 % mark according to the VDMA survey in the precision tool industry. For most companies, the greatest short-term challenge is to secure their liquidity and the financing of new projects.
Many companies have learned from the last economic crisis. Therefore, it is not only the medium-sized owner-managed companies that are doing their utmost to advance - also in order to develop new perspectives for the next generation. They are preparing for the recovery by training their employees, optimizing processes and continuing investment projects. Even if digital offerings "pop up like mushrooms", they cannot sufficiently compensate the physical contacts with trade visitors at trade fairs. I therefore support initiatives such as the AMB Forum in Stuttgart in September, which is designed as a face-to-face event.
At the moment (July 2020), the decline in new infections in most European countries gives hope, as do the ifo business expectations for the next six months in the area of tool, metal and plastic goods manufacturing. Nonetheless, the crisis is challenging the companies quite significantly and has not yet come to an end; the strategy must therefore be repeatedly adapted to the unexpected turns of the situation. This is why my advice to the tool industry is "Keep your eyes open and go for it!”.
Source: VDI-Z (https://www.ingenieur.de/fachmedien/vdi-z/)
“Based on the reduced demand in key markets, we expect that the production of European manufacturers of cutting tools and clamping technology has fallen by a single-digit percentage in 2019”, said Markus Horn, ECTA President, on Wednesday, 15 January, in Frankfurt.
For cutting tool manufacturers in Europe, the overall customer spectrum and the economic environment are not fundamentally different from those of German suppliers (Press Conference VDMA Precision Tools: pwz.vdma.org). Accordingly, exports from the EU-28 countries also show a slightly negative development. European companies were also able to record growth in the American market, while business in China declined significantly.
Horn: “Two thirds of the cross-border deliveries of cutting tools and clamping technology are exchanged between the member states of the European Union. Overall, we recorded a slight decline in this region.” Only 5 percent of these deliveries went to the United Kingdom. Thus, the Brexit, which is now probably imminent in real terms, has only a limited influence on the industry. But the situation is different for companies with own production facilities on the British Isles. This also affects the corresponding exchange of semi-finished products in the European production network. “Here, we expect appropriate solutions to be found in the process of shaping future relations between the UK and the EU in order to maintain production at the UK sites”, added Horn.
In the first nine months of 2019 the largest non-European market USA showed a positive trend and was up 5 percent. In the US, light vehicles production remained fairly stable and investments in new tools ensured growth here.
On the other hand, sales to the third biggest market China declined significantly and were down 16 percent. In 2019, the automotive industry developed very weakly there. For the year as a whole, Chinese passenger car production is also likely to have fallen by double-digit percentages. In addition to consumer spending, which has been dampened in particular by the trade conflict, declining subsidies are also reducing sales there. And this in turn diminished the demand for tools.
In other important regions, such as India, car production was also down significantly, which meant that global production of cars was also in the red in 2019. Since the second most important customer sector, mechanical engineering, also failed to generate any growth stimuli worldwide, demand for tools fell last year.
Overall, European cutting tool manufacturers are therefore likely to have recorded a single-digit percentage decline in 2019. The ECTA members will deal with last year's detailed analysis at the conference in Bordeaux, France, at the end of June. Horn: “I look forward to welcoming many of my colleagues there to discuss the situation and prospects of the industry with them.”
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"The fact that 200 top decision-makers from the world's most important manufacturers followed our invitation to Germany to spend three days exchanging views on the economic, political and technical challenges was really fantastic and a great pleasure for us," says Markus Heseding, Managing Director of the VDMA Präzisionswerkzeuge, summing up the WCTC - World Cutting Tools Conference 2019. A total of around 240 participants travelled to the World Conference, which was hosted by the German ECTA member VDMA Precision Tools at Tegernsee.
Tools create values! was the motto of this year's World Conference. Prof. Gabriel Felbermayr, Director of the Kiel Institute for the World Economy, gave a keynote speech on international trade which was particularly well received in the run-up to the G20 summit in Osaka. After detailed insights into the economic situation of the most important metalworking markets by the representatives of the national associations, Prof. Thomas Koch from KCT in Karlsruhe informed about the future opportunities of the combustion engine in addition to electric mobility. According to Koch, all emission questions concerning the combustion engine have been solved: By using climate-neutral fuels, the combustion engine could also play an important role in future mobility strategies.
Highlight of the event was the presentations of two guest speakers. First, Jan Sibbersen described in the "Story about luck" his inspiring way to becoming the swimming record holder of the Ironman in Hawaii in 2018. And then the stage was set for the well-known physicist and comedian Vince Ebert, whose messages were also very well received by the international guests.
The program also included a visit to MTU Aero Engines in Munich, a global manufacturer and maintainer of aero engines. There, the latest production facilities for the automated machining of blisks on machine tools were on display.
On the occasion of WCTC 2019, Markus Horn, Managing Director of Paul Horn GmbH, was elected ECTA President. He succeeds Marc Schuler, Dixi Polyool SA from Switzerland, who has held the presidency since 2014. Besides Germany, Japan, Switzerland and the USA also used the WCTC 2019 to hold national meetings.
The next WCTC will take place in Japan in 2022. Taking place every three years alternating between the USA, Asia and Europe, the WCTC - World Cutting Tool Conference provides the global forum and networking event for manufacturers of cutting tools and clamping technology. Strategic challenges are discussed and global networking and cooperation in the industry is strengthened. The WCTC is the most important event of the European Association of Metal Cutting Tools and Toolholding ECTA. In the two years between the World Conferences, events on a European level are organised by ECTA.
Frankfurt, 28 June 2019 - "Let's work together to shape our future", said Markus Horn, new President of the European Cutting Tools Association (ECTA) on Thursday. Horn is Managing Director of Paul Horn GmbH in Tübingen and was elected ECTA President on the occasion of the World Cutting Tools Conference 2019 at Tegernsee. In his inaugural speech, he thanked all ECTA members for the trust they had placed in him and his predecessor Marc Schuler from the Swiss company Dixi Polytool SA for his commitment.
Horn: "ECTA offers our industry many opportunities to shape the future as well as to promote our industry in Europe and around the world. And that's exactly what I'm going to do during my tenure."
About 100 participants from all over the world met for a packed lecture program and networking at Lake Maggiore.
From 3 to 5 May 2018, the manufacturers of cutting and clamping tools were guests of the Italian Association UCIMU in Stresa on Lake Maggiore. Some guests even came from China and the US to take advantage of the networking opportunity offered by the European Metal Cutting Tool Association ECTA. And this despite the fact that it was not a world conference this year. The topic "Future perspectives" was a golden thread throughout the entire event.
In his welcoming speech, ECTA President Marc Schuler gave a positive assessment of the current situation of the industry. Explaining the economic situation of the European metal cutting tool industry in detail, Peter Meier of USP Consulting completed the European perspective. The economists Marco Fortis from the Edison Foundation and Marco Taisch, Politecnico di Milano, then gave an overview of the global economic situation and future technological aspects. They both agreed that company organization must be constantly adapted to market requirements. In the afternoon, following two presentations by sponsors, it was Gianluigi Zanovello's turn to speak. The former commander of the Italian aerobatic team "Frecce Tricolori" showed how outstanding results can be achieved through the interaction of exceptional individual performance and precisely coordinated teamwork. After this, Thomas Lüdiger of FEV Consulting informed the participants about the findings of the VDMA study "Antrieb im Wandel ". The expected effects of the electrification of the powertrain on the metal processing industries subsequently gave rise to a great deal of controversy.
Lothar Horn, Chairman of VDMA Precision Tools, closed the lecture block with an outlook on the challenges of the near future. The German association will host ECTA World Conference (WCTC), which will take place from 26 to 29 June 2019 at Tegernsee in Upper Bavaria.
The 2017 European Cutting Tool Association Conference attracted 60 delegates and partners from 7 countries.
Organized by the AFM Advanced Manufacturing Technologies, AFM the conference programme foocused on the strategic strategic challenges facing this industry sector.
Keynote presentations on the global economy, management challenges and key customer views rounded off the event.
The 2016 World Cutting Tool Conference on the Big Island of Hawaii attracted over 180 delegates and partners from 9 countries worldwide.
Organized by the US Cutting Tool Institute, USCTI, the conference programme focused on the strategic challenges facing this industry sector.
Keynote presentations on the global economy, management challenges and key customer views rounded off the event.