Issuu on Google+

Episodes 1 -10 Transcripts

Table of Contents

24th October 2011


7th November 2011


21st November 2011


5th December 2011


19th December 2011


January 23rd 2012


February 6th 2012


February 20th 2012


March 5th 2012



My name is Damian Harris and I am involved in the mechanical power transmission industry in Melbourne, Victoria, Australia. Living in the south-eastern suburbs and working in the northern suburbs (with a one and three quarter hour drive, one way) gives me a lot of time in the car every day. Once I took the role in Melbourne’s north, I tried to keep myself occupied. It didn’t take long for the radio to get tiresome, whilst the CD collection was also pretty stale. My mp3 player came in for a workout, but even with a few thousand songs it soon wore thin as well. I don’t know why, but I downloaded a couple of podcasts. I was immediately hooked. I started out with Learnitalianpod and a whole heap of Formula 1 podcasts, then I looked into business offerings, both ultra-professional and ultra-amateur. I don’t know what it was, but some of the amateur podcasts were more endearing than those from radio stations and I found myself listening to them more than anything else. The more I searched, the more I realised that niche industries are well served by podcasts, but there had been nothing about the industry that I cared about most, so I started the Australian Power Transmission Podcast. The Australian Power Transmission Podcast gives me a chance to research what is happening in my industry and place my editorial slant on it. I record it on Monday evening Melbourne time and keep episodes to under fifteen minutes.


24th October 2011 Timken has been very active in the field of acquisitions of late, expanding its domestic American power transmission presence. After picking up Philadelphia Gear for $200M in June and QM Bearings last year, Timken has added Drives LLC to its Process Industries stable for $92M. This recent activity by the $4.1B company increases its capacity in power transmission as it diversifies from its traditional bearings and steel portfolios. --Former Reserve Bank board member Dick Warburton has been appointed as the first executive chairman of Manufacturing Australia, a new industry group which will act as a voice for the manufacturing industry on issues relating to Australia’s new highly-controversial Carbon Tax. Manufacturing Australia was formed by those companies likely to suffer most from the Carbon Tax, namely Amcor, BlueScope Steel and Boral among others and have a stated aim of deferring any Carbon Tax in Australia until the rest of the world moves first. --Nord Drivesystems Australia held its grand opening on the 6th of October at its Derrimut factory in Melbourne. Flown out for the event were NORD founder Gustav Adolf Kßchenmeister and head of International Sales Gernot Zarp. Nord has been represented in Australia for nearly twenty years, originally using recent Regal-Beloit acquisition CMG as its main distributor before coming in direct to the market at the start of 2010. --The Australian Parliament has just approved the Clean Energy Bill, 2011, which puts a price on carbon. After an aborted attempt by former Prime Minister Kevin Rudd at a cap and trade system


known as the Carbon Pollution Reduction Scheme, a new parliament with a minority government has its own political expediencies. Well, politics aside, what does the Clean Energy Bill, 2011 mean for the Australian manufacturing sector? The scheduled start date is the 1st of July, 2012. Starting at $23 a tonne, raising 2.5% each year to 2015. There will be an Emissions trading scheme taking over from 2015, and 500 of Australia’s biggest polluters will pay. Companies that produce 25,000 tonnes of carbon dioxide per year or more will be penalised 2,000 megawatts of worst power generators to close by 2020 More information about the new tax and how it will affect industry can be found at As you would expect with a new tax of this nature, opposition from the manufacturing industry has been pretty vocal. An ad campaign based on deferring any carbon tax implementation has been seized upon by the opposition who have stated they will repeal it if elected. In order to sweeten the deal for the manufacturing sector, exemptions and assistance packages abound, with over $9B expected to be spent to compensate losses over the short term of the next three years. In addition, this amount again is expected to be spent on investment in new technologies to help reduce CO2 output by local manufacturers. Having perused the 343 page Bill exposure draft, I can also tell you that the Clean Energy Bill is quite complex. The companies affected by it will undoubtedly have to employ resources to ensure compliance and I’m sure we will soon see Carbon Tax compliance specialists popping up, much in the same way that Six Sigma Black Belts seem to be super dooper in every manufacturing firm.


As far as the world of mechanical power transmission is concerned, overall possible new investment in technology such as carbon sequestration may be offset by a reduction in Long Run Aggregate Supply. It really is a Watch This Space. --Trade shows have been around since the year dot, and the mechanical power transmission industry is normally front and centre as exhibitors. In Australia, National Manufacturing Week, AIMEX, Bulkex, Materials Handling Expo, FedEx, oops not FedEx, but you probably get the picture of a wide variety of shows, all with varying visiting demographics and aims. So, what does a company do with so many options and (for most), only a finite marketing resource. To be honest, Australian trade shows are small affairs, when compared with the big ones in Hanover and Shanghai and some in the US as well, but attendance per capita is usually higher and exhibitor lists run long. So my question is... are they getting value for money? Let’s take National Manufacturing Week as our example. NMW is held every year, alternating between Melbourne and Sydney and incorporates the Australian Industrial Engineering Exhibition and Austech (for machine tools and equipment manufacturers). So how do the numbers play out? The smallest stand will set you back three grand for the floor space over four days, while the better spots are about four times this amount. This is only the start of the real spend... Consider everything else that has to be accounted for... The costs of a display such as banners, hardware and special stuff like giant plasma screens is pretty high. Many shows won’t let you use your own big screens, but make you rent them from them for the same price as what you can buy one with. Actually, the whole renting gig also covers tables, chairs and the electronic swipey thing for following up sales leads with.


Getting everything to the exhibition and unpacked also costs a bit. This means renting either a trailer or truck, depending on the size of your display. Servicing the stand will normally take a couple of staff members at a minimum and their costs have to be accounted for. Extra promotional activities, catalogues, entertainment et cetera all adds up pretty quickly and before too long you’re out of pocket at least ten grand, probably closer to twenty if you’re doing it well. So, what are the benefits for this sort of outlay? Well, straight up, a whole heap of existing and potential customers are in the one place and coming to you. The problem is, they are seeing all of your competition at the same time as well. Still, 20,000 odd visitors is definitely a big number and even though only a small percentage will be interested in your product offering, the sheer scale alone will keep the reps on the stand busy. I’ve been to a few trade shows over the years both as an exhibitor and a visitor. One thing that nobody talks about is that there is a certain type of person that goes to them. After a trade show, I’d go around seeing customers in their place of business and ask how they enjoyed it. Less than half would even know it was on, and the half that did know could probably be halved again for actual attendance. I’m not saying it’s a good thing or a bad thing, but it’s a certain type of person that goes in. There are always going to be leads from trade shows, and following them up is where the real benefits are. You can’t expect an immediate sales spike as a result of exhibiting at a trade show, but immediate sales isn’t normally the desired outcome. Companies are mainly trying to look good – put simply. It’s the fourth P of the marketing mix – Promotion. Actually, I’ll take that one step further and call it Promotion through Positioning.


There is no doubt that in Australia, if there is a trade show, SEW-Eurodrive will have the biggest stand of all gearing companies, in the best spot, with the shiniest display. Bonfiglioli, Nord, Sumitomo, and Radicon all normally have a presence, while Queensland firm TEA is a staple for PT consumables. The benefits obviously outweigh the costs for these firms, otherwise they wouldn’t keep rocking up year after year. --The high value of the Australian dollar continues to wreak havoc with the manufacturing sector, as BlueScope Steel, Heinz and SPC – who are both canned food manufacturers – and Ford have shed staff and decided to limit output in the short term. BlueScope has decided to lose 1000 workers across the nation as demand for Australian steel plummets, flying in the face of growing OECD requirements which are being nicely handled by China. Last year, BlueScope recorded a $1B loss and with high fixed costs in the steel manufacturing industry was left with no real option but to mothball its Port Kembla furnace and Hastings Hot Strip Mill. Heinz is trimming its workforce by 20% in a radical shakeup that closes one Victorian plant, reduces production at its Queensland cannery and will see 342 jobs go overall. Most of the production will shift to sister plants in New Zealand, who doesn’t have an astronomical currency to contend with. SPC in Victoria’s Goulburn Valley is also right-sizing to suit current demand, by retrenching 150 across three plants. Imported fruit is the culprit here, along with flagging domestic consumption. SPC parent company Coca-Cola Amatil is looking to lighten the load on individuals retrenched by offering them positions within the company where possible, however the local area will see those positions lost for the foreseeable future.


Ford Australia is also lightening its wage bill to the tune of 240 employees at its Broadmeadows and Geelong plants, as demand for their product also wanes. There is little doubt that the current mining boom in Australia is causing some headaches for Australian manufacturers, especially those who rely on imports for whole or part of their income. Sure enough, the price of imported materials has come down accordingly but it isn’t really enough to offset the pressure that a high currency puts on local product. Tariffs are basically a thing of the past for many Australian industries and paper, steel, textiles and cars are all vulnerable whilst the Australian Dollar sits above parity with the Greenback.


7th November 2011 The New South Wales government has established a Taskforce to develop an action plan for the next ten years to help combat its shrinking manufacturing base. The Manufacturing Industry Action Plan will take 12 months to get ready and will focus on specific sectors that the New South Wales government thinks it can gain an advantage in, namely food, metals, machinery, biomedical, defence and renewables. Not content with having a state lead the way, Australian Prime Minister Julia Gillard will chair a taskforce of her own. Tasked with getting to the bottom of the employment woes in manufacturing on a national basis, this task force will feature 23 individuals, representing manufacturers, unions and the government. Well, Australian states have been at each other’s throats for decades in trying to secure major manufacturing contracts. Whenever defence contracts come up, governments bend over backwards with assistance packages to help get jobs in their jurisdictions. 10 years ago Victoria wouldn’t stump up with some cash to keep Arnotts biscuits in Melbourne so Sydney, Brisbane and Adelaide facilities were expanded and Melbourne was closed. This scenario plays out all the time, so it will be interesting to see how both the New South Wales Action Plan and the federal version will look at generating new business rather than shifting existing business between states. --BHP Billiton has received approval from the Australian Federal Government to expand its Olympic Dam mining operations. Copper, uranium, gold and silver are extracted from Olympic Dam in South Australia, and the expansion will make it the world’s largest open cut mine.


It is projected that the expansion will deliver $8B of benefit to the South Australian economy, whilst mining engineering and infrastructure spending also stands to benefit the mechanical power transmission world. Regardless of the philosophical objections to a mine that looks set to exploit around one quarter of the world’s known uranium reserves, there is little doubting the scale of the benefit from the expansion. The uranium bubble of 2007 is long over, where prices peaked at $300 per kilogram. The current price of around $100 per kilogram will still reap major rewards, although the bulk of the revenue will come from copper and gold. Australian smallgoods manufacturer Primo continues its capital investment program in Queensland, spending $131M in consolidating its existing operations and expanding Wacol’s production facilities. This flies in the face of some recent reversals in the food sector and is welcome news for Queensland. --United Dairy Power has bought the Murray Bridge and Jervois cheese-manufacturing assets of Lion and is looking to add milk production to the South Australian production facilities for the local market. --Japanese-owned Lion is consolidating its dairy production with a renewed focus on Tasmania, in light of posting financial reverses resulting from the loss-leading milk war being fought by supermarket oligarchs Coles and Woolworths. The news of the purchase by Victorian-based UDP is a relief for the more than 100 staff at the two plants, who only a few months ago had an uncertain future. --11

Electrical measurement company Fluke is conducting a series of workshops in Brisbane, Melbourne and Perth starting on November 10. The main focus of the workshops will be looking to understand the diagnostic fault process of three phase electric motors. The practical demonstration and troubleshooting sessions are aimed at maintenance staff and will set each attendee back $199.00. Find the link in the show notes to episode two. --Well, from once being the tome of advertising to “I think we have a Yellow Pages but I couldn’t tell you where it is”, Sensis-owned Yellow Pages has been an Australian staple for over 80 years. As business directories go, the Yellow Pages is pretty much synonymous. As you can guess, people still let their fingers do the walking to hunt down what they are looking for, but are moving away from the book to the computer – as well as tablets and mobile phones. The real question now becomes, does Yellow Pages still offer value for Business to Business customers? The power transmission, electric motor and bearings categories have long been numerous pages each in past editions of the Yellow Pages, but each of these now has under one page of listings. The size of the individual advertisements has also decreased. This must surely dent the revenue stream of what once was a very sizeable cash cow. Sensis hasn’t had its head in the sand during this digital evolutionary period. It has increased its value to advertisers by belatedly linking up with Google and going mainstream with their own website and search engine. The Google linkup is with adwords and other Google products such as Google Earth and Streetview. Paid advertisers get premium consideration on Google searches as well, above standard Search Engine Optimisation techniques.


So, what is the definition of value in a B2B context? A medium sized, three-colour advertisement in the Yellow Pages will set you back just over $10,000 per annum for a major market like Sydney or Melbourne. For your money you also get a good presence online. There’s no real way of measuring the effectiveness of the Yellow Pages in hardcopy form, short of asking every new customer that calls how he or she found you. As with all things that require an outlay, the money has to be made on the other side to cover it, so in effect we’re looking at 30 to 40 grand in sales to cover a 10 grand spend. The best known off-line alternatives are trade magazines, trade shows and sponsorships, as well as handling your own Search Engine Optimisation on-line. Each of these cost varying amounts, but none of them are good enough to carry the full weight of a B2B marketing effort on its own. In the power transmission world, any marketing effort is worthless unless it is backed up with a skilled and motivated outside sales and supply team. The technical nature of the problems and products in power transmission require more than what a purchasing officer or engineer can simply type into a search engine. Of course, relationships are the key to understanding the exact details of what is required, but this is a conversation for another day. In answering the question I posed about the Yellow Pages being good value in a B2B environment, I think that the days of the $40,000 annual spend are long gone, but some presence is still a must. It still presents a way to come up pretty high on Google – always on the first page for your product group – which is probably better value than adwords alone. The Yellow Pages is always going to be around to find mechanics, floor sanders, panel shops and adult services. It has not been a force for B2B customers for a few years and will need to keep adapting its product as the digital environment evolves. It’s time for a quick refresher for electric enclosure ingress protection – known in many countries as IP ratings. 13

IP ratings are used to identify how protected electric motors are to the elements, both solids and liquids, and are represented by two numbers. For example, IP54, which has a protection to level 5 solids and level 4 liquids. The solids protection levels are from 0 to 6. 0 is no protection to solids, 1 is to over 50mm, 2 is to over 12.5mm, level 3 is to over 2.5mm, 4 is to over 1mm, 5 is called dust protection and level 6 is called dust tight. This is not to be confused with DIP or dust ignition proof, which is used in grain handling. The liquids protection levels are from 0 to 8. 0 means don’t get it wet, 1 is protection against vertical dripping water, 2 is for vertical with a 15 degree tilt, 3 is against spraying water, 4 is against splashing water, 5 is for water jets, 6 is protection against super water jets, 7 and 8 are for immersion in under 1m and over 1m of water. The US has its own system of ratings which was originally prepared by NEMA or the National Electrical Manufacturers Association. The NEMA ratings are actually more complex than the IEC’s IP ratings and cover additional things such as corrosion protection, giving ratings that are linked to specific environmental applications. Most electric motors in Australia these days are TEFC or totally enclosed fan cooled and have an IP rating of IP54 as standard. WEG has standardised its W22 electric motor range as IP66 and many manufacturers are heading in this direction with their standard offerings. --I thought I’d do a bit of further research on some of the ways businesses can reduce carbon emissions – especially in a manufacturing sense. I was happy to see that Melbourne was hosting Carbon Expo 2011 in early November and was about to register to attend, before finding out that entry to the trade expo portion of the event on its own would set me back $300.00. If I wanted to see a conference during the day, that would be $750.00. 14

I suppose the Carbon Market Institute and the Investor Group on Climate Change would like to keep the riff-raff out of their Expo and make sure only genuine visitors come through the doors. I wonder if they’ll have bouncers as well. I have an interest in finding out ways companies are looking to innovate, especially when it comes to global warming, but I think I’ll be doing my carbon emissions reduction research online.


21st November 2011 Brazilian electric motor giant WEG is in the process of acquiring Austrian gearbox manufacturer Watt Drive Antriebstechnik GmbH, for an as yet undisclosed sum. Watt Drive turns over €30M per year and the purchase represents the first in a series of movements by WEG into the gearing and power transmission business. Watt Drive is represented in Australia by Southern Engineering Services and it will be interesting to see how this purchase will affect existing distribution relationships and agreements. $3.6B WEG has also entered into a joint venture with Brazilian gearing manufacturer Cestari Industrial, with a view to develop and market an entirely new range of complete geared motors. It would appear that WEG’s view to continued growth lies outside its traditional spheres of electricity generation, transmission and control. The linkup with Cestari will probably see WEG coming out with compact modular gear units, much in the same mould as Bonfiglioli’s compact range, SEW and Nord. Australian electric efficiency standards - known as MEPS - make it mandatory for all motors to meet IE3 premium efficiency in 2013, unless the motor is attached to a gearbox and removal would render it inoperable. The WEG / Cestari joint venture could take advantage of this loophole. The Watt Drive acquisition and Cestari joint venture deal are WEG’s first foray into the gearing world and signify a medium-level investment without the need for infrastructure spending. WEG itself might be immune from a retaliatory response from any of the gearing manufacturers that these recent movements challenge, as an entry into the electric motor manufacturing world is far less lucrative. ---


The ink is still drying on a deal which sees Altra Industrial Motion add Bauer Gear Motor to its list of brands. German-based Bauer has been in operation since 1927 and has an impressive list of OEM customers and applications. Bauer joins other Altra gearing brands such as Boston Gear and Nuttall Gear, as well as a comprehensive range of power transmission equipment including Warner and Wichita. Altra Industrial Motion is based in Braintree, Massachusetts, and has a turnover of more the $600M per annum with a staff of 3000. --SEW is in the process of expanding its Melbourne assembly workshop, buying the site next door to their current Tullamarine facility as it gears up for an expected increase in demand from the mining sector. The $10M capital investment by the geared motor goliath will be gobbled up quickly, with the purchase of a 50 tonne crane and the implementation of a new painting facility. --Gear Expo 2011 was held in early November in Cincinnati, Ohio. 4600 attendees filtered past 180 gearing-related exhibitors, with visitors hailing from 28 countries. Reviews of the event have been mostly positive, and the 2013 Gear Expo is planned to be held in Indianapolis in September 2013. After both New South Wales and Australian governments announced new innovation taskforces to help source manufacturing opportunities, the South Australian government has formed a whole department. The departments of Primary Industry and Trade have been merged to form the Department of Manufacturing, Innovation, Trade, Resources and Energy and putting the word Manufacturing’ first is an indication of the department’s primary function. --17

I received a tweet after episode two of the Australian PT Podcast from the Australian Carbon Expo, advising me that entry to the trade show was $300.00 for three days, but only $100.00 for a single day entry. Sorry about that, I said that it was $300.00 to get in. It looks like the Melbourne event was a success, coming fresh off the heels of Australia’s new Carbon Tax legislation passing through parliament and being attended by some major players, both in politics and industry. --It has been called many things; from reverse engineering to outright knock off. The geared motor industry is in the midst of a rush of cheap imported product, where the designs are passed off as those of major brands. A significant portion of the knock offs are coming to western shores on capital machinery imported from China, utilising geared motors sourced domestically. Issues are found when a premature equipment failure hits the end user and when replacement time comes, sizing and fitment problems come to the fore. It is usually only then that the copy is identified. Pass offs are an issue for many manufacturers, with the main victim of choice being SEW because they have the most easily-recognisable product range. SEWs R series of in-line helical gearboxes comes in for the biggest hiding. Motovario’s range of wormboxes also seems to be a copier’s favourite, as are Var-Spe, Flender and Sumitomo. Even though a lot of the SEW product in the world is actually manufactured in China, the SEW hierarchy is quick to point out that this is to an exacting standard that doesn’t do anything to lessen their brand. Clean room design is a useful defence against charges of copyright infringement, but these offending articles aren’t even concerned about defending themselves. Clean room design is a reference to enough components of a reverse engineered article being different enough from the item it is copied from to be considered a new design. 18

Last year we had one of these copies apart in our workshop after it had failed after less than three months in action. In addition to none of the gears being hardened or ground, a spacer for the output gear was hand cut by a hacksaw from a piece of water pipe. Whoever assembled it actually had two goes at cutting this bit of pipe as it had an extra slice in it, not square of course. The real victim of counterfeit gearboxes entering the marketplace is unquestionably the end user, who may or may not be suspecting to get a cheap copy of a name brand. I’m positive that anyone who knowingly buys a knock-off with a view to saving money on an application will not be replacing it with another knock-off when replacement time comes, normally within 24 months. Does this unfettered counterfeit behaviour signify the start of something bigger between Chinese manufacturers and the companies whose products are being copied? Many gearing companies have at one stage or another had dalliances with outsourcing components to other countries; it would seem that many are only now starting to see some hidden costs that don’t come up on the profit and loss statement. Just as an aside, probably the most famous reverse engineered product in recent history was the Soviet Tupolev TU-4 strategic bomber, which was ripped straight from some commandeered American Boeing B29s immediately after the Second World War. If nothing else, at least the Soviets had the good sense to change everything from imperial to metric! --Nord have released a range of bevel-helical geared motors aimed at the washdown market – primarily food manufacturing. The range features a die-cast aluminium housing that has open sections to aid cleaning, and a torque output range of 90 to 660Nm across five sizes. In my opinion, the openings around the bevel output make the gearboxes look spinely and a little out of place. I suppose the goal is to make them look very different to the SEW profile, which is nearly ubiquitous in food manufacturing. Time will tell how popular they become. 19

--The big news as we put the last episode of the Australian Power Transmission Podcast to bed was that car manufacturer Holden was looking to ship the design of the iconic Commodore offshore and close the local design facility, a claim that was vehemently denied by the Holden top brass. Australia has three car manufacturers; Holden, Ford and Toyota, all subsidiaries of overseas parent companies and who have all received government funding to keep their doors open at one time or another. Toyota used its assistance package to begin local production of the Hybrid Camry, while Ford and Holden have both used the money to get their latest product offerings to market. Even so, retrenchments abound. The federal government originally planned to fund automotive innovation until 2020 but cut it short when the money was needed to rebuild Queensland after natural disasters in 2010. Domestic car production has basically halved in the last six years, to now be under 200,000 cars per year. This slump has had a major impact in the outlook of not only the auto manufacturers themselves, but also the significant Australian automotive component industry. It is this component industry that stands to lose the most if the number of vehicles produced falls below the viable critical mass. Already, the Commodore sports a number of imported components and this is only going to keep increasing with each new model, the same goes with new Fords and Toyotas. It goes against all sound economic theory to have either any tariff or any subsidy for industries in which an economy is not globally competitive. The problem is, the car industry in Australia does not stand alone; it supports the component industry which serves them but also does a fair bit of the rest of manufacturing in Australia. Car manufacturing processes utilise a lot of power transmission equipment, both in consumables and new projects. If one of the three manufacturers were to pull up stumps and become a sole-


importer a la Mitsubishi and Nissan, there will be a significant reduction in PT requirements right across the manufacturing base. There is no denying that costs in Australia are high, across the board. Car manufacturers have implemented automation processes where possible to reduce the labour content of each product in an attempt to limit variable costs, but there is only so much that can be done. Design, engineering, production: three very important, high level skill sets that we are told repeatedly are important to Australia’s manufacturing future.


5th December 2011 The Power Transmission Distributors Association (PTDA) elected its 2012 Board of Directors and Manufacturer Council in Washington, DC in October at their Industry Summit. Mitch Bouchard of General Bearing Service succeeds David Mayer of Kaman Industrial Technologies. The balance of the board comprises Christopher Bursack from Industrial Supply Co, Ken Miko from BDI and Keith Nowak of NPT Drives. The Directorship is made up of Harold Dunaway of Motion Industries, LeRoy Burcroff of Bearing Service, Rick White of Flexco, Carlton Harvey of Jamaica Bearings, Ajay Bajaj of Rotator Products Limited and Thomas Clawser of Brown Transmission and Bearing Co. George Rizza – who is the President of Rossi Gearmotor Division, Habasit America – takes over from Pamela Kan of Bishop-Wisecarver as PTDA Manufacturer Council chair. The male-domination of the industry in general is directly reflected by the make-up the both the board of the PTDA and the Manufacturer Council. Representing 178 power transmission distributors across 11 countries, the Power Transmission Distributors Association has a stated mission of advancing distribution and strengthening members to be successful, profitable and competitive in a changing market environment.’ --Chief Executive of the Australian Industry Group – Heather Ridout – addressed the National Press Club in Canberra on November 30th. Titled ‘Taking Charge of Our Future’, Ms. Ridout acknowledged the high-cost and multi-speed economy as being burdensome to local manufacturing, before offering some ideas for possible restructuring in the sector. After teeing off on some of the federal government’s recent workplace relations decisions which she feels to be too heavily slanted to


favour unions, the biggest takeaway point was probably the support Ms. Ridout gave to the government’s mining tax. --The Canadian Manufacturing Technology Show 2011 was held in Toronto at the end of October, proving to be a moderate success if the Twitter stream is anything to go by. Manufacturing accounts for 13% of Canada’s GDP (Australian manufacturing represents 10% of GDP) and the two economies are very similar, in that there is a large reliance on natural resources. For the show itself, SEW-Eurodrive dominated power transmission proceedings and over six and a half thousand people filtered through the Direct Energy Centre over four days. --Brazil continues to offer a very attractive home for power transmission capital investment, with Japan’s Sumitomo Heavy Industries investing $73M in a new gear reducer manufacturing plant. Opened late November, the plant joins similar SHI facilities situated in developing economies – a stated growth strategy of the organisation. Brazil has been economically unstoppable for the past few years and I think we are going to see even more announcements like this one from Sumitomo. --The Victorian Minister for the Aviation Industry was front and centre for the recent announcement that Melbourne would provide Boeing GoldCare maintenance services to the Asia-Pacific region. Boeing chose John Holland Aviation Services to look after its B737NG fleet as well as the 787 Dreamliner.


John Holland is the new name of the former Ansett Engineering and although aviation engineering is a specialist field, power transmission equipment features heavily throughout the maintenance process. --The Prime Minister’s Manufacturing Taskforce held its first meeting in late November. Tasked with securing a working future for over one million Australian manufacturing workers, the Taskforce concluded that there are many serious issues facing manufacturers and that something should be done to help them. In all seriousness, the Taskforce concluded that existing state and federal policies need to be better co-ordinated and leveraged, science and technology were going to be the leading forces and management of the entire process was critical. --As reported in episode two of the Australian Power Transmission Podcast, BHP-Billiton was given the green light to expand its Olympic Dam mining operations. Controversially, Olympic Dam sits atop significant reserves of uranium. It comes as little surprise that only weeks after the go ahead was given to exploit Olympic Dam, the leader of the ruling Australian Labour Party and current Prime Minister, Julia Gillard, has announced her intention to overturn the ALP’s 30-year ban on selling uranium to India. --Said to account for 30% of electricity consumption in Australia, electric motors are the mainstay of the industrial sector, performing every task from mixing and conveying to pumping and crushing. For the most part, these motors have done their job with an efficiency in the 80-90% range, but


governments the world over are seeing what benefits are on offer by increasing this efficiency percentage into the mid 90s. Minimum Energy Performance Standards were introduced at the turn of the century by the Australian and New Zealand governments for a wide range of electrical equipment. For electric motors, a rating of MEPS 1 came into effect in October 2001, whilst the higher efficiency MEPS 2 superseded MEPS 1 in 2006. All three phase electric motors that are either made in or imported into Australia must comply with the minimum efficiencies as set out by the MEPS ratings. When I say all motors, the sizes covered range from 0.73kW to 185kW in 2, 4, 6 and 8 pole configuration, which for all intents and purposes may as well be all motors. There are some exceptions to the MEPS rule. MEPS doesn’t apply to submersible motors, integral motor-gear systems – like those available from Bonfiglioli, SEW and Nord – variable and multi-speed motors or motors rated less than continuous duty. Motors that have been rewound are also not required to comply with MEPS. Motor manufacturers have not shied away from the responsibilities of meeting efficiency standards around the world. The standard measure for increasing efficiency has been to use larger, lowerresistance winding wire and higher quality steel for laminations. When coupled with total motor redesigns, the efficiency standards have been able to be met on a consistent basis. One of the benefits of the new, high-efficiency motor range is that they also have improved performance at part load, making them extremely suitable for variable speed drive service. Many major manufacturers are taking advantage of this fact by matching motors and drives in their product offerings.


There have been many sets of figures bandied around by different groups – all with an agenda and all relating to the savings from the introduction of MEPS. Regardless of the source, common wisdom points to an overall cost / benefit ratio of 1.8. California led the way with minimum efficiency standards, empowering the Californian Energy Commission to regulate electric equipment over 30 years ago. Since this time, the US has led the world in electrical energy efficiency and looks to continue in the same vain for a long time. This is in stark contrast to the common assessment of American cars, colloquially labelled Gas Guzzlers and Yank Tanks. Further developments in efficiency standards for electric motors are always on the agenda and will continue to keep manufacturers on their toes. --For all of the tribologists out there, here’s a quick overview of lubrication in the geared motor industry. The lubrication industry is probably worthy of its own fortnightly podcast. A lot is spent on research and development and competition is fierce among the major players in the industry. Lubrication in enclosed gear drives is a very explicit niche of lubrication, where four specific parameters must be met, namely; gear wear protection, water separability, corrosion protection and foaming resistance. Geared motor manufacturers are continually pushing the envelope with their designs, trying to get the highest input power and largest output shaft into the most compact unit possible. All of which places greater demands on the lubrication used.


Gear wear protection is the primary function of lubricants in gearboxes, but the same oil must also lubricate the bearings and rolling elements. This presents something of a compromise to some of the properties of the lubricant and which additives can be added. Extreme Pressure (or EP) additives are introduced when gearbox loads may overcome the viscosity of standard oil and cause higher than normal gear and bearing wear. These additives create a film on the metal surfaces to prevent direct contact and can be used in conjunction with solids such as molybdenum disulphide to create a physical metal-to-metal contact barrier. Water separability or demulsibility is a major requirement of gearbox lubricant, where liquids such as coolant and condensation come into contact with the gearbox oil and must be easily removable. Demilsifiers are added to ensure that water cannot emulsify with the gearbox oil, using some pretty impressive chemistry in the process. Corrosion protection is important in gearbox lubricant, due to the fact that many gear units utilise yellow metals such as copper and brass as well as cast iron. This creates something of a problem, as many features of rust protection for cast iron are chemically-aggressive to the softer yellow metals. The ability to resist foaming is also extremely important in gear oils. Foaming results from the natural movement of gears and is especially prevalent in high speed applications. Polymers are added to change to surface tension of the lubricant, killing bubbles as they form. Different loads and temperature effects require differing types of oil. For low load applications in standard temperatures, a straight mineral oil is adequate. When the load increases, a mineral oil with EP additives might be required.

As the conditions become more demanding, synthetic

lubricants come into their own. Once again, there are different types of synthetic lubricants for differing applications. Polyglycol synthetic lubricants with EP additives such as Shell Tivella are a general synthetic lubricant for


wormboxes. Most off the shelf wormboxes like the Bonfiglioli W series run this type of lubricant and are basically sealed for life in applications where running conditions are less than 40 degrees Celsius above ambient. Polyalphaolefin synthetic lubricants with EP additives like the very popular Shell Omala will give approximately four times the working life of mineral oil in the same application. These are normally specified in bevel-helical and in-line helical gearboxes. Other things to be considered when specifying gearbox oils are whether there will be food contact or bio-degradable qualities required. All of these properties are specified by the major manufacturers to aid comparison. I won’t go into too much more detail about oils and lubrication because it is a massive subject and I want to do it justice by going further in a future episode. ---


19th December 2011 The Italian Bonfiglioli Group is looking to end 2011 with strength, recording net revenues of 680 million Euros across all strategic business units. There has been a major shift in sales distribution, with sales from European markets dropping from 458 to 400 million Euros, while emerging markets helped Bonfiglioli post a 13% sales jump from 2010. Bonfiglioli has identified consistent Research and Development – even during the European financial downturn – as being a major factor in the turnaround. Strong demand in the wind energy sector has been beneficial to overall sales, as well as heavy machinery and agricultural equipment – two traditional stalwarts of Bonfiglioli revenue. --Dwarfing Bonfiglioli’s sales is the result by ZF Friedrichschafen AG, the German gearing engineering and manufacturing firm that specialises in the automotive sector. ZF Group recently acquired Hansen Transmissions of Belgium on its way to an overall result of 15.5 billion Euros for 2011. ZF joins its major competition in identifying wind turbines, electric hybrid technology and an increase in production capacity in developing nations as strategic growth initiatives. ZF should also be commended for reaping the rewards of consistent investment in R&D. --The Australian government has had a cabinet reshuffle, with a few portfolios playing switcheroo. Former Minister for Innovation Senator Kim Carr has been removed from this central role, to be put in charge of the new Ministry for Manufacturing. Innovation now becomes part of a super ministry, officially titled the Department of Industry, Innovation, Science, Research and Tertiary Education – somehow implying all of these are linked. The large ministry will be handled jointly by Greg Combet


MP and Senator Chris Evans, while Mark Dreyfus MP will be appointed Parliamentary Secretary for Industry and Innovation, supporting Minister Combet. Various Australian state governments have ministers for manufacturing, which are normally lumped in with innovation and trade. As a separate ministry, I’m not sure how Senator Carr is going to make manufacturing his own. I’m certain that the Minister will have a significant role in the Prime Minister’s newly-created taskforce on keeping the manufacturing sector employed, as well as a bit of ribbon cutting, but a Minister of Manufacturing and a Minister of Industry will surely have too much crossover to work effectively. Already, Senator Carr has organised meetings in the US to see the bosses at GM and Ford to tee up funding for the local subsidiaries. Both manufacturers are in a difficult position in Australia and will probably require Senator Carr to turn up with an open wallet when he visits next month, and not vice versa. --Only a short time has elapsed since the announcement that Altra Industrial Motion had purchased Bauer Gear Motor, but that hasn’t stopped the powers that be in Braintree from searching out possible synergies with existing brands and technologies. Altra announced the 2000 series of helical bevel gearboxes and integral gear motors, utilising experience and knowledge from both Bauer and Boston Gear. The 2000 series looks to be pitched at the food manufacturing industry, with many of its features assisting washdown and corrosion resistance. Utilising both IEC and NEMA motor frames is a smart move and should allow universal acceptance on both sides of the Atlantic. It isn’t clear if Australia will be a recipient. I am a little disconcerted that one of the key promotional points that Altra has chosen to run with is the fact that the 2000 series is a direct ‘drop-in’ replacement for the SEW-Eurodrive KA series of 30

gearboxes. Some of Altra’s promotional material states that in designing the 2000 series, product specialists asked customers what they wanted in a geared motor design. The answer was obviously they wanted the KA series by SEW! --South Australian Harley-Davidson subsidiary New Castalloy has been given an 18 month death sentence by its Milwaukee parent, as the motorcycle giant closes the plant in favour of having its wheels made in the US and Japan. 212 staff will go from the North Plympton manufacturing facility and although profitable, the usual issue of exchange rates has been put forward as a contributing factor for the close, as well as the ending of a financial agreement between Harley-Davidson and the South Australian government. Harley-Davidson had pretty much rescued Castalloy in 2006 when it was on the verge of going broke and has had the bulk of its wheels produced there since. --The Chief Executive of the Australian Industry Group – Heather Ridout – is soon to be the former Chief Executive of the Australian Industry Group as she resigns her post in favour of a position on the board of the Reserve Bank of Australia. The Australian Industry Group represents all areas of Australian business, with a focus on manufacturing and industry. The role that Ms. Ridout has played in Canberra cannot be underestimated as the chief lobbyist for the manufacturing sector and it will be interesting to see if her successor will come from within the ranks of the 300 staff currently employed at AI Group or if someone from outside will be headhunted. ---


As announced in the inaugural Australian Power Transmission Podcast, BlueScope Steel had decided to reduce production in line with flagging demand at both Port Kembla and Hastings, laying off 1000 workers in the process. The same episode also had details of Australia’s new carbon tax, and how it was going to affect business. Well, combine the two and you get the next news item. BlueScope has applied to the federal government for $100M of industry assistance, under the Steel Transformation Plan, which is aimed at helping to offset the carbon bills as they roll in but is in effect a way to keep the doors open at a major employment source in disparate areas of the country. --The Thompson Coupling is the brainchild of Glenn Thompson, an Australian from rural New South Wales who has rethought the constant velocity joint and invented a shorter and more efficient way of joining high-misalignment shafts together. To be more correct with Thompson’s invention, there are two products that his company markets from its Orange, New South Wales premises; namely the Thompson Constant Velocity Joint and the Alignment Eliminator pump coupling range. The Thompson Constant Velocity Joint would appear to be the backbone of the design’s future, being used in high-torque applications for rail infrastructure and miscellaneous industrial functions, whilst the Alignment Eliminator is an off-the-shelf offering for high-misalignment pump applications up to 73kW. The Alignment Eliminator is more in keeping with the purview of the Australian PT Podcast so I will focus my attention on it. The Alignment Eliminator will handle up to six degrees of misalignment in axial, offset and angular configuration and there are four sizes in the range, handling from up to 10kW through to up to 75kW. Like many gear couplings, the Alignment Eliminator must not be perfectly aligned and requires some misalignment to function correctly.

The fact that it can cope with higher

misalignment means that it can be fitted and set up in a much shorter time than couplings requiring proper aligning with lasers.


The smart design of the Alignment Eliminator has patents on the go all across the world, and Thompson is currently looking at licence agreements for manufacture and distribution, to supplement what is produced locally. I know that this segment sounds like an advertisement for the Thompson Coupling but I’m really impressed with what it can do. I’m not the only one, as Boeing has signed a long-term development contract as they look for ongoing applications. In Australia, the distributor of the Alignment Eliminator is Southern Engineering Services out of Wollongong, New South Wales. --As I say at the top and bottom of every show, you can contact the Australian Power Transmission Podcast on twitter as well as through comments on the website or via email. It got me to thinking how popular twitter is with marketers, so I thought I’d do a bit of research into its reach for the Business to Business audience. Twitter (and social media in general) is something of an unknown quantity in the B2B world, whilst being almost invisible in the field of mechanical power transmission. There are a few bearing retailers and electric motor rewinders who have a twitter profile and are fairly active, but none of the world’s gearing manufacturers have bothered with the medium. Taking the next step in the social media landscape, Facebook has business pages that offer a way for consumers to deal directly with businesses and vice versa. In mechanical power transmission, it’s almost a ghost town. SEW, WEG, Baldor, Sumitomo and Altra have pages, but the content is simply a direct rip from their corresponding Wikipedia page. There are no site administrators for any of these pages, by the looks of it, and there isn’t really a way to contact them. From my investigation, no one else has put anything on their Facebook page, making searching for them nigh on impossible and leaving a gaping hole of a marketing opportunity. I know I’m sort of preaching to the converted because you are listening to this podcast and are probably aware of 33

everything to do with twitter, Facebook, Google+, YouTube and a myriad of other social media platforms and even how they can be used for B2B dealings. It’s just funny that some of the big multinationals will spend megabucks on advertising campaigns, tradeshows, classy websites and more, yet social media – and its’ relatively little cost, sails through to the keeper. Of all manufacturers using social media, Bishop-Wisecarver does one of the better jobs of engaging with its community. The Pittsburg, California manufacturer of linear motion guide wheels is all over twitter with close to 6000 tweets, has an active YouTube channel and of course actually has a Facebook page. I wouldn’t call linear motion guide wheels the sexiest technology to be in, yet these guys do a fantastic job that I’m sure creates more in sales than it costs per annum. Business to Business customers aren’t looking at retail type social media marketing efforts, but I think that the scope exists for manufacturers to at least get involved.


January 23rd 2012 The ongoing European economic downturn has hurt demand in the windpower industry, to the point where Finnish drives manufacturer Vacon is looking to shed staff. Vacon also produces a full range of electronic variable speed drives for industrial applications but it is the softening of the wind industry that is the major contributor to the decision, likely to see 60 front office workers go and a re-think in hours for production staff. With a global turnover of more than 330 million Euros annually, Vacon has various distributors in Australia for its VSD range and there is not expected to be a change in the supply situation locally. --After purchasing Baldor Electric Company at the end of 2010 for $4.2 billion, it was only a matter of time that ABB looked at how it could reap rewards from the knowledge of the Arkansas-based manufacturer. The ABB acquisition of Baldor was considered to be at a premium at the time and invited speculation as to how its new US business would be structured. Back in October 2011, ABB and Baldor merged its sales force for the US market, looking to benefit from Baldor’s existing extensive sales network. The main stated goal of merging sales networks is to match the premium efficiency end of both businesses, however the two units offer competing products in motors, drives and peripherals so it is inevitable that some will become casualties. The future of ABB and Baldor sales and distribution thinking in Australia is yet to pan out, but is possibly going to mirror that of the US. --Hannover Messe is coming up at the end of April 2012, with many manufacturers in a supposed buoyant mood and talking up their exhibiting plans. The Industrial Supply part of Hannover averages


around 65,000 visitors and is without doubt the major industrial trade fair internationally. Motion, Drives and Automation will next feature at Hannover in 2013. April will also see the Drives & Controls Show being held at the Birmingham NEC, with the European Power Transmission Distributors Association looking to set up an away version of its Hannover stand. Co-located with six other events, the Drives & Controls Show is staged every two years and is normally populated by motor and drive manufacturers, lubrication firms and the bearing game. Check out for all of the information on this one. --I did a feature about the Australian car manufacturing industry back in episode three of the Oz PT Podcast, examining the critical mass of demand required for the industry to survive. Well, the Holden Commodore has just lost its title as Australia's top-selling new car, being knocked off by the Mazda 3 in 2011. It is the first time in a LONG time that a fully-imported car has been the biggest seller in Australia, as the shift away from large cars continues. 40,000 Commodores were sold in 2011, whilst Ford could only shift 20,000 Falcons and the Toyota Aurion is an afterthought. Although feeling the brunt of the imported challenge, the locals are looking at hybrids and diesels in small and medium-sized cars as the best way to face the onslaught. For the sake of the Australian automotive component industry (and by extension the PT industry in general), let’s hope they can create some genuine competitors. Ford has picked up some backing from the Victorian and Australian governments in something labelled as a co-investment to help pursue other production possibilities. Senator Carr – newlyappointed manufacturing minister – has managed to squeeze a little more cash from the auto giant


in the transaction that will help Ford investigate ways the Falcon can continue to meet emission standards. GM’s hand is out for Holden, who after investing $1 billion to get the VE to market is threatening to shut the doors on manufacturing in Australia. I’m sure they’ll get the cash to keep it going for another couple of years, although the federal liberal-national coalition opposition is butting heads with the coalition governments in automaking states over the issue. Opposition leader Tony Abbott and shadow treasurer Joe Hockey have both backed their policy of slashing support to the Australian auto industry by $500M from $3.4B, which is diametrically opposed to the views of the state Premiers of Victoria and South Australia. Creative destruction is loved by the economists, but on this scale is maybe a little too much for the industry to handle. Opposed to the opposition’s auto policy are opposition parliamentarians Ian MacFarlane and Bruce Bilson, whilst spokesperson on the issue – Sophie Mirabella, it non-committal. --Although it is outside the usual purview of the Australian Power Transmission Podcast, I would like to spend some time talking about gearing in the new series of electric cars that are coming through from manufacturers. Governments right across the developed world are looking to non-traditional energy sources for personal transport and electric cars are high on the agenda for most of them. There are a couple of major manufacturers who have pushed internal-combustion / electric hybrids to the point where they are a realistic option for everyday travel. Toyota’s Prius is obviously the most well-known hybrid on the market and is the benchmark in the industry, yet Toyota has not rested on its laurels, conducting further research in the field with a plug-in version. The Prius utilises Toyota’s Hybrid Synergy Drive for its transmissions, achieving something akin to a constantly variable transmission. It’s not really what I’m examining in this feature. Likewise, the


Chevy Volt runs a Prius-clone power-split hybrid design hooked up to a single reduction gear, but I’m more interested in the pure electric vehicles. One of the more well-known electric car manufacturers is California-based Tesla.

Since its

introduction in 2008, Tesla has moved a couple of thousand Roadster Ss, which features a 185kW, four pole AC electric motor. The story of its transmission is a little more detailed. Tesla tried X-Trac for the original Roadster transmission. X-Trac is renowned as suppliers of transmissions and transaxles for many motor racing applications. From all reports, the X-Trac design was capable, but Tesla specced it out as they were looking for more flexibility. Tesla then got onto Magna International to see what they could come up with. Issues with Tesla wanting a dual-clutch operated two speed transmission proved too much for the relationship – leading to a couple of court cases and much acrimony. Magna is not a small concern, with 2011 revenue expected to be around $29 billion, but that all looks to be sorted now. The first Roadsters to come out featured the Magna two speed, locked in second gear. Eventually, BorgWarner was commissioned to design and supply a single speed fixed gear transaxle, which they did, opting for an 8.27:1 ratio. These units were retrofitted to the earlier models and are standard on all new cars. Nissan’s Leaf is a genuine all-electric with an 80kW motor and an in-house transmission featuring a single speed reduction gear with a final drive ratio of 7.93. There have been a myriad of niggling technical issues with the introduction of the Leaf, but none of them have been with the transmission which looks to be able to handle the 280Nm torque demand with no problem. Mitsubishi’s i-MiEV features a 47kW permanent magnet synchronous motor, hooked onto the rear axle and running through a single speed reduction gear.


Tesla’s lawyers were active again, disputing the Fisker Karma, which shares a lot with the new Tesla Model S. The transmission employed is known as a ‘Series Hybrid’, where individual motors drive individual rear wheels, running through a 4:1 final drive. Oerlikon Graziano provides gearing for the Norwegian Th!nk, a small runaround with a 34kW induction motor. More famous for their seven speed gearboxes in both the new McLaren MP4-12C and Lamborghini Aventador, Oerlikon Graziano has looked at the efficiency side of the ledger rather than outright capacity for the Th!nk. Th!nk goes broke every couple of years, but some new investors think they can make a go of it in a market where the right product offering could be just around the corner. UK-based Antonov has been at work on a three speed transmission, aimed at keeping motor RPM in the high-efficiency range. Antonov have been working with Smith Electric Vehicles who have a range of commercial vehicles, and although the motor power is nowhere near that of the Tesla, the multi-ratio flexibility looks like something that may take hold. The baby REVAi isn’t really a car – more an enclosed scooter – featuring a 13kW AC motor From an industrial gearing perspective, some manufacturers have entered into joint ventures with automotive specialists as they search out brave new worlds in the ballooning sector. SEW-Eurodrive linked up in February last year with Brose Fahrzeugteile and set up a jointlymanaged partnership with a view to designing, marketing and manufacturing drives for electric and hybrid cars. Based in SEW’s home town of Bruchsal, Germany, and split 50/50, the partnership sees SEW provide Dr. Jochen Mahlein as Chief Technology Officer and Brosen’s Eckhard Seibold as the Chief Financial Officer. Brose specialise in automotive mechatronics and already has an established network of customers in the industry, whilst SEW is primed to fuse both existing gearing knowledge with researched ideas.


Not to be left behind, Bonfiglioli has partnered with Italian FIAT subsidiary Magneti Marelli’s powertrain division to design a hybrid drive for agricultural equipment. The Magneti Marelli motor and Bonfiglioli drive is integrated into an application-specific hub unit - normally the domain of hydraulics – and features a Kinetic Energy Recovery System. There is little doubt that scaled versions of this drive could be used in the automotive sector. In nearly every case, manufacturers have chosen to run the drive through the electric motor and send it through an offset single reduction, much in the same way as industrial single reduction gearboxes. The three speed Antonov design is a little more traditional in the automotive sense, as are some designs that haven’t got any traction yet. The electric car sector is primed to explode in the next five years. The major auto players can look after themselves on the manufacturing side, but will search out component suppliers with either offthe-shelf offerings or potential partnerships.


February 6th 2012 Hot on the heels of picking up Baldor Dodge Reliance 12 months ago for $4.2B, ABB has added to its US asset base with the $3.9B acquisition of Thomas & Betts. T&B is a major player in low voltage products and has a distributor network of over 6,000 locations, making it very attractive to ABB who is looking at penetrate the US market in a big way in a short time. Thomas & Betts will combine with the existing ABB North America business and be headquartered out of existing T&B premises in Memphis, Tennessee. 9,400 employees will be absorbed into the new strategic business unit, and although ABB has claimed that they expect to see $200M in savings from synergies by 2016, no announcement of the full business structure has been released yet. --SEW-Eurodrive is pushing for the high-efficiency end of the smart motor market with its DRC integrated motor. Unveiled at the recent Drives show in Germany, the IE4 premium-efficiency offering comes hooked up with an integral drive as standard and the option of either IP65 or IP66 protection. There are two sizes in the range; 0.55kW and 1.5kW, and a brake option aims the DRC at the incline conveyor market. Proving that this motor series and mechatronics in general is a priority for SEW, is the fact that both IEC compatible and SEW-fitment variants are on offer. With advertising from SEW heralding the introduction of the “electronic motor�, time will tell how popular the DRC will be and who knows how long they will have this market segment to themselves. Another unveiling at the Drives show in Germany was by Siemens and their rebranded motor products. All motors will now be known by the title Simotics, which standardises with the rest of the Siemens range of drives and servomotors.


Power Conversion is the new name of GE Energy purchase Converteam. Acquired last year for $3.2B, Power Conversion will aim for a perfect fit within GE’s existing Industrial Solutions business. Claiming that Power Conversion will be capable of using its sheer scale to reduce time to market for new technology, CEO Joe Mastrangelo says that this technology will help improve motor-drive efficiencies by 30%, helping it penetrate what it thinks is a $30B global market. --In overall business news, over 9000 Australian businesses failed in 2011, an all-time record. In a newly-released report from the Australian Securities and Investment Commission, it has been revealed that the Australian Tax Office had been lenient on businesses in the aftermath of the Global Financial Crisis but with the GFC easing has asked for what it is owed. In many cases, this has been too big a burden, causing businesses to close. Most of the business failures were small enterprises in the service sector, but by the same token some manufacturing firms have also been caught up in the dilemma. --Australian manufacturing overall is said to have expanded for two straight months, according to the Australian Industry Group who released data to that effect in their Performance of Manufacturing Index. Although the gains were modest, and there were serious reversals in textiles, chemicals and metals, the food and beverage sector had major gains to cause an overall expansion. --Toyota Australia has made 350 workers redundant at its Altona manufacturing plant, citing numerous factors, chiefly the strength of the Australian dollar, for its decision. The staff reduction represents 7% of the total workforce at a plant where Camrys and Camry Hybrids are manufactured.


Toyota exports 60,000 of the 95,000 cars made at Altona, and although a new model is expected later in the year, Toyota hierarchy was not willing to maintain existing staffing until then. If you have listened to my podcast for a while, you will know where I stand on not only auto manufacturing but the components industry as well. Toyota has close to 2,000 local suppliers who contribute to nearly the entire finished article. Former Victorian Premier Jeff Kennett has weighed in on the debate, suggesting that Australia could very well be down to a single car manufacturer in the next two to three years. In my opinion, we will have either three, two or zero manufacturers, as there is simply not enough viability for one manufacturer and its component suppliers unless it picks up the sales of the other two combined. --Reckitt Benckiser has closed its Australian manufacturing plant in West Ryde, New South Wales, leaving 200 mainly production and maintenance workers looking for work. The Slough, UK-based company has pledged to honour all entitlements and has offered redundancies. The plant manufactured Australian staples Mortein fly spray and Dettol antiseptic, which mum used to put on your knees and elbows when you came off your bike and stings like nothing else. The usual culprits of minimal domestic consumption and geographic isolation have been cited as the major causes for this closure. --There are many ways that businesses can promote themselves in a B2B environment, but getting value for money out of an advertising spend is the difficult thing. In previous episodes I’ve discussed traditional advertising avenues such as exhibiting at trade shows and buying space in the Yellow Pages.


I was reading a Nord Drivesystems press release about how they backed one of the competitors at the World Solar Car Challenge, and although the writing was a little clumsy, it reminded me that many companies involved in power transmission have used sports sponsorship to both promote and position themselves in the past. Motor racing is probably the best fit for the PT game, and the list of past and current sponsors runs long in nearly all series. One of the longest and most famous sponsorships is the SKF / Scuderia Ferrari linkup in Formula One. SKF has been involved with Ferrari since the World Championship began in 1950, supplying bearings, bushings and rod ends for the entire car, which now includes new demands from the Kinetic Energy Recovery System employed on the 150th Italia and its successor. It’s not all beer and skittles when entering into a technical partnership on such a high profile platform. I remember when Michael Schumacher’s Ferrari suffered a bearing failure in the late 90s when leading in the British Grand Prix. The footage was replayed a lot, in slow motion, with the SKF logo right next to the smoke resulting from the failure. SKF also has partnerships with Ducati Corse in MotoGP and Superbikes and Richard Childress Racing in NASCAR. Actually, NASCAR has had a few PT sponsors and technical partners in its history. The one I’m most familiar with is the #20 Mike Bliss entry in the old Busch Series, now the Nationwide Cup. This car was entered by Joe Gibbs Racing and backed by Rockwell Automation, who promoted AllenBradley alongside Rockwell. 2007 was their last season, with new driver Denny Hamlin taking a couple of wins along the way. I remember when I was a sales rep at a company that supplied Baldor – then a division of Rockwell trying my hardest to meet a sales target and pick up a Rockwell Racing jacket. Didn’t get it... but did


get a Rockwell Racing hat as a consolation prize. Pretty lame, I know, but it’s funny how hard you’ll push when there’s a trophy at stake. Formula One is the big glamour sport that most of the bearing companies want to be involved with. NTN backed the Honda team a couple of years ago with its myearthdream paint job with the world on the engine cover. SNR Bearings were backers of the Pescarolo Le Mans cars, as well as the Citroen World Rally Cars, while NSK has also supported numerous teams throughout the years. As technical partnerships go, there perhaps isn’t too much that can be gained from an electric motor or industrial gearbox manufacturer in the racing world. In gearing, the speeds are much higher than those experienced in commercial applications, whilst electric motors are well established. I suppose that the new world of KERS has opened some doors and I would have thought there may have been some announcements by motor people, but the industry as a whole looks to be in no position to make any serious investment in motor racing. Back on a personal note again, I remember being a guest of Loctite at the Melbourne Grand Prix many years ago. We sold a fair bit of Loctite and one of the bosses couldn’t go in so I took a Friday off work and had one of the best days of my life. It absolutely spoilt me for attending motor racing thereafter. I thought you might like to know that. In Australia, SEW-Eurodrive has spread its cash around fairly liberally on the sponsorship front, backing everything from harness racing to V8Supercars. The horse racing includes the famous Miracle Mile in Sydney as well as a whole host of Victorian events. Football saw SEW as major sponsors, backing the Sandringham Australian rules football club in the second-tier Victorian Football League, whilst Collingwood in the AFL and Parramatta in the NRL Rugby League also received support.


In V8Supercars, SEW support went to the now defunct Victorian Tasman Motorsports team which was based in Preston. Although not a major sponsorship by any means, it was probably the highest profile backing by a PT company in the highest profile motor racing category in the country. One quasi-sporting category that I think should receive a lot more attention from the power transmission industry is Formula SAE, where engineering students in universities around the world design, manufacture and compete in their own cars. In one place is gathered the future of engineering knowledge as they learn their trade, and what better time to fill their heads with propaganda about your particular brand. It is something that I think is too often overlooked by the big manufacturers. I am a big believer that in a world with many competitors, it really is a case of promote or perish. Sponsorship can be made to work if supported and leveraged properly and is somewhat of an untapped field in the power transmission game. Many times, it costs less than you might think.


February 20th 2012 Regal Beloit has acquired Milwaukee Gear Company for $80 million in cash. Milwaukee Gear was foundered at the end of the First World War, expanding through continuous reinvestment to now recording revenues of over $60 million. Specialising in bespoke gearing fabrication in niche markets such as oil and gas, Milwaukee Gear fits into the Mechanical segment of Regal Beloit alongside Hub City and numerous other brands. The Mechanical segment represents around 10% of Regal Beloit’s total business. Still on Regal Beloit, they have posted their result for the full year 2011. Sales were $2.8 billion, a 25 percent increase over 2010 and a direct result of an aggressive acquisition strategic policy. Net income was also up, growing 1.9 percent to $152.3 million, although profit as a percentage of sales was down, from 24.5% to 23.7%. --The Australian Industry Group has ended speculation as to Reserve Bank of Australia-appointed Heather Ridout’s successor as Chief Executive, awarding insider Innes Willox the position. Willox is an existing Ai Group heavyweight, serving as the current Director, International and Government Relations, which really is the backbone of the Australian Industry Group’s function. The outgoing Ms. Ridout had been with the Ai Group for over 30 years, the last eight as Chief Executive, and whilst her departure will leave a big dent in the tacit knowledge of the manufacturing lobby group, Ai Group National President Lucio Di Bartolomeo is convinced that Willox will grow the organisation in coming years. As manufacturing continues to slide in the wake of Australia’s unstoppable resources boom, Mr. Willox will have his work cut out for him. ---


GlaxoSmithKline has announced it will invest $60 million to expand its Boronia, Victoria site, creating 58 new positions in manufacturing and drug development. GSK’s investment has been welcomed by the Victorian government, praising the increase in production and the ability for the firm to contract-manufacture. Australia is fairly rich with pharmaceutical manufacturers, including Bristol-Myers Squibb, Sigma, Phizer and CSL, supplying a domestic market where sales surpass $11 billion annually. --One of the Heinz plants that was shut down at the start of the year, Girgarre, has had a committee of former employees make offers to take over the establishment and run it as a going concern. Although it could be considered a bold move and central to keeping the town of under 700 alive, it would look as though the equipment is more valuable to Heinz in its New Zealand operations as they have already started gutting the plant. Boilers and evaporators are already on their way across the Tasman, making any employee takeover worth much less as the plant is now merely a shell. --SKF has picked up General Bearings in a deal of around $125 million. Although headquartered in New York state, General manufactures its range of ball, tapers and sphericals in China and the purchase would appear to be nothing more than a big fish swallowing a smaller fish, as SKF plans to maintain the General and Hyatt brands. SKF had a turnover of $8.5 billion last year and has embraced manufacturing in both China and India, opening its own plants in both countries. --Also on the mergers and acquisitions front, David Brown has purchased Canadian gear manufacturer Unigear Industries as it looks to expand into what it deems strategically-important markets. All of 48

the key personnel of the hitherto privately-owned firm are staying on with the new enterprise, which is an obvious nod to David Brown’s North American expansion efforts. David Brown already owns Cone Drive, the Michigan-based manufacturer that specialises in worm gearboxes right up to 50,000 Nm output, utilising the double-enveloping wormgear design. Unigear has a full manufacturing workshop and the capacity to make some pretty big gearing, making it the perfect platform for David Brown’s Canadian operations. --In the mid 1980s, Eastman Kodak had 145,000 workers and was the clearly dominant player in the world of photography. For all the kids out there, cameras used to take photos on film and you would get them developed and printed on photo paper. Obviously, it’s a thing of the past, and it comes as little surprise that a company that does this for a living is not going to survive. In fact, Kodak has resorted to litigation in support of its many patents as another source of income. Business reality has caught up with Kodak internationally, causing it to file for bankruptcy protection at the end of 2011 as it looks to significantly change the business that it does. Strategic planning requires more than simply doing things right, it means doing the right things. They have been given a financial lifeline to start doing the right things by this time next year. Kodak has closed its camera manufacturing business, as well as over 130,000 printing kiosks, although it still maintains 100,000 printing kiosks throughout the world. With the closure of its camera business, these kiosks now represent over ¾ of its new business model. It expects to continue making money from its range of home printers, commercial printers and Business Process Management software. Kodak shut its manufacturing doors in Australia back in 2004, when it closed the film production plant in Coburg that employed 600. The plant itself was reasonably technologically advanced but it simply produced something that nobody wanted anymore. 49

The main problem for supplier businesses in situations where a major manufacturing customer shuts its doors is that business ends, normally pretty abruptly. Kodak had scaled back its Australian operations prior to closing so the impact to suppliers was not as harsh, but was still felt nonetheless. Component and raw materials suppliers would have no doubt been made aware of Kodak’s intentions prior to the closure announcement, but indirect suppliers such as bearing, power transmission, air handling and compressor companies are all normally the last to find out. --Electric motors available for operation in hazardous areas have to comply with different levels of certification, dependent on where they are used. In Australia, local standards were developed and used both here and in New Zealand from the 1960s, but as the world gets smaller, it also looks to standardise. The IEC has set up a system for certification to standards relating to equipment for use in explosive atmospheres, called IECEx. IECEx has developed a Conformity Assessment System to ensure that equipment from IEC member countries meets strict guidelines, allowing a reduction in compliance costs, improved safety and instant verification. ATEX is an existing European set of standards which seeks to achieve the same outcome as the IEC in European Union countries. The IEC’s standards and ATEX are similar but not the same. Primarily, hazardous or explosive areas are straightforward and predictable, such as oil and gas refineries, chemical processing plants, coal mining and fuel distribution. There are some industries, however, that are just as hazardous but less straightforward. Consider printing, textiles, grain handling, woodworking, sugar refining, metal grinding and even water treatment. Many have chemicals or dusts that are explosive but not considered so and can get under the radar. In order to deal with the various differences in interpretation of what constitutes a hazardous area, the IEC has standardised the following classifications... 50

Gases, vapours and mists are referred to as Class 1, whilst dusts are known as Class 2. Gases are further defined, with methane in coal mining called Group 1 and other gases called Group 2. Group 2 gases are subdivided even further, dependent upon the temperature of ignition. The probability of explosive gases being present in the atmosphere that the motor is operating in is dealt with by a zonal classification, of which there are three... Zone 0 refers to an area where explosive gases are or as good as continuously present. Zone 1 is an area where explosive gases can be expected in normal operating conditions. Zone 2 refers to an area where explosive gases are not likely to appear and if they do, will not be around for long. The major and most common rating for motors in hazardous areas is known as EX’d, which is a certification commonly known as flameproof and mainly used in explosive gas or dust applications with a Zone 1, Class 1 requirement. EX’d motors are designed to contain explosions, so that they are not transmitted to atmosphere. Its design includes a flamepath, which is a route for exploding gas to escape through, whilst cooling. They are certified, and any repairs or rewinds must also be performed by certified rewinders. EX’e motors are used in scenarios requiring increased safety, using special windings to help alleviate temperature rise, backed with some other features that help prevent sparks and arcs. EX’n motors are known as non-sparking variants, normally suitable for Zone 2 operations. Nonsparking characteristics are achieved by basic design features, alongside the optional use of thermistors and thermal overloads which prevent overheating. DIP motors are Dust Ignition Proof, used primarily in grain handling but also available for operation in wood, chemicals and plastics industries. DIP motors sport a metal or other non-static producing material cooling fan and carry different ratings for different ignition temperatures.


Motors used in variable speed drive situations also require special consideration; normally the manufacturer of both is matched and certified. Heat rise is always a factor, as is the instance of bearing currents which cause sparks. Not all motor manufacturers have got involved with hazardous area motors, and not all have got involved with matched VSDs to their motors. Any situation where there is even the remotest possibility of explosive gases being present requires the utmost diligence from the engineering staff and sales people involved.

As evidenced again and again, getting it wrong can be costly.


March 5th 2012 Gear Motions of Syracuse New York has acquired Pro-Gear Company of Buffalo, also New York. The two companies specialise in gearing, with Pro-Gear specifically handling gear grinding and finishing, which will add value to the total Gear Motions business. Pro-Gear’s addition to the Gear Motions stable sees it join Oliver Gear and Nixon Gear as engineering brands, who are already sited in Buffalo and Syracuse respectively. Pro-Gear will merge with the Oliver Gear facilities. --Nachi Fujikoshi is establishing a new production site in China’s Jiangsu Province, which will become the basis of its Chinese operations. Spending $18 million on the new plant, the bearing manufacturer has identified growth opportunities in the Chinese automotive market for both its hydraulic components and machine tools divisions. Foundered in 1928 as a tool manufacturer, the Japanese company’s divisions include machining, materials, components and engineering, with all divisions intrinsically linked. ---

Onesteel has figured out that making steel in Australia is not a profitable exercise, as it shifts focus to mining and mining consumables, with steel becoming an also ran. The Australian former subsidiary of BHP has already let 470 staff go in the last six months, with plans for another 430 redundancies from a staff of 11,000 to happen before the end of the financial year. Onesteel Chief Executive Geoff Plummer stated when announcing the job cuts how mining and mining consumables has now jumped to 40% of Onesteel’s total revenue, representing the bulk of the company’s planned profitability. As a result, 450 positions will be created at an expansion in activities at the Peculiar Knob iron ore mine.


Burra Foods in Korumburra has invested $54 million in a plant expansion that will see expected revenues rise from $55 million in 2011 to $200 million in 2012. Wow, I wish I could identify opportunities that delivered a 250% revenue increase in one year! That’s amazing. Burra got out of dairy commodities and has a strict focus on value added dairy products for a growing international market. So much so, the business operates a branch office in Tokyo. Longwarry Food Park has had an explosion that caused approximately $3 million damage on first assessment, after milk powder dust ignited. Later estimates have reduced the damage bill to around one-tenth of this figure. The milk powder that ignited is dried at a reasonably high temperature and is actually quite volatile, as I discussed in episode eight of the Australian Power Transmission Podcast. Dust Ignition Proof motors are a must in handling this stuff, although the cause of the explosion is as yet undetermined. Bega Cheese has upped its investment at its Tatura cream cheese manufacturing plant, spending around $8 million in the process. Output will rise from 15,000 tonnes per annum to 22,000 tonnes per annum, ensuring that dips and cheesecakes the world over will be readily available. --Fresh from being a case study for Australian economics students in the field of game theory thanks to their recent collusion with Visy Packaging, Amcor is looking to swallow up another rival – Aperio. The planned takeover has not been without opposition, however, as numerous groups including the Australian Manufacturing Workers Union have expressed concern that the move would significantly reduce competition. Aperio Group has six plants in Australia, four in New Zealand and one in Thailand, mainly handling food and beverage packaging and pioneering many advancements in plastic flexibles. The addition of Aperio would see Amcor control over 40% of the Australian packaging market.


Rockwell Automation is splashing the cash on its ‘Rockwell Automation on the Move’ free seminar series, which kicks off on March 6th at the Melbourne Park Function Centre. Invited guest Greg Combet – Federal Minister for Industry and Innovation, Climate Change and Energy Efficiency as well as manufacturing – will be participating over the course of the two day event. Rockwell has similar events across the world and they operate as a travelling show. In Australia, Sydney and Brisbane will receive a visit in May, with Perth playing host in early June. --As the previous story suggests, Greg Combet has taken over the manufacturing portfolio from Senator Kim Carr, who backed Kevin Rudd in a failed putsch and now finds himself Minister for Human Services. I remember thinking that multiple ministries for manufacturing and industry would turn out to be a bit clumsy, but politics managed to intervene before we got to see any results. --The International Electrotechnical Commission uses nine duty cycle designations to describe the operating conditions of electric motors. The best way to describe them is to quote the IEC rating and the short précis they give for each one. The number of actual duty cycle types is theoretically infinite, yet the IEC arrived at the following nine types to aid design and specification. S1 is called Continuous duty. The motor works at a constant load for enough time to reach temperature equilibrium. Most commercially-available electric motors are S1. S2 refers to Short-time duty. The motor works at a constant load, but not long enough to reach temperature equilibrium.

The rest periods are long enough for the motor to reach ambient

temperature. Compared to the S1 duty rating, the S2 can deliver more power during load periods.


S3 is Intermittent periodic duty. Sequential, identical run and rest cycles with constant load. Temperature equilibrium is never reached. Starting current has little effect on temperature rise. S4 is Intermittent periodic duty with starting. Sequential, identical start, run and rest cycles with constant load. Temperature equilibrium is not reached, but starting current affects temperature rise. As a result, there is a reduction in power output when compared to S1. S5 is known as Intermittent periodic duty with electric braking. Sequential, identical cycles of starting, running at constant load and running with no load. There are no rest periods. S5 is similar to S4 but can include either plug braking or regenerative braking and also features a power reduction when compared to S1. S6. Continuous operation with intermittent load. Sequential, identical cycles of running with constant load and running with no load. No rest periods. S7. Continuous operation with electric braking. Sequential identical cycles of starting, running at constant load and electric braking. No rest periods. S8. Continuous operation with periodic changes in load and speed. Sequential, identical duty cycles run at constant load and given speed, then run at other constant loads and speeds. No rest periods. S8 is quite complex and has the motor doing a fair bit of work. S9 is similar to S8, where there is Continuous operation but with non-periodic changes in load and speed. This is also very complex and the rating can be lower, the same or even higher than S1. Specifying the right motor for the job is important during the design stage. --Aluminium production and usage is continuously trending upward the world over, as is aluminium recycling, yet Australia is having trouble employing any economies of scale to its advantage.


Australia is in a unique position when it comes to Aluminium production, as we have major reserves of the bauxite which becomes alumina which becomes aluminium. State governments have seen the benefit in employment that manufacturing aluminium can bring, as well as export income, but increasingly questions are being asked about the future viability of the venture. Making aluminium from alumina uses a lot of energy. Victoria’s two aluminium smelters are said to represent around one quarter of the state’s electricity consumption, in a state of five and a million people. The aluminium industry is dominated by continuous base load electricity demand – in 2009 the Australian aluminium smelting industry consumed 29,250 GWh of electricity. Additionally, the amount of water used throughout the process is extremely high and with Australia only now coming out of an extended country-wide drought, questions are continuously asked as to how the precious resource is best utilised. To give an idea of the raw numbers, estimated bauxite production in Australia was 65 million tonnes in 2009. In the same year, China produced approximately 40 million tonnes and Brazil 28 million tonnes. This contrasts markedly with actual aluminium production, with China well out on its own with 17 million tonnes, then Russia and Canada on 4 and 3 million tonnes, with Australia lagging on 2 million tonnes. In Australia, the aluminium industry directly employs 17,000 and brings in over $8 billion of export income per annum. This is mostly in alumina or crystalline form, which is the best way to extract value from the resource. Bauxite miners and alumina miners on the Australian continent are BHP Billiton, Rio Tinto Alcan and Alcoa of Australia. Aluminium is smeltered by Rio Tinto Alcan, Alcoa of Australia and Hydro Aluminium. Local manufacturers who are downstream from mining and smelting include companies involved in with rolled products and extrusions, such as Capral, Extrusions Australia and Ullrich.


Almost 1,000 jobs look like they will be going soon at Alcoa’s Geelong aluminium smelter, which has not received any capital expenditure for many years and is only operating thanks to a favourable electricity deal with the state’s electricity providers. This deal is ending within two years. The Australian dollar is sky-high thanks to mining, which makes any of our value-adding efforts very difficult to export at inflated prices. All of the major power transmission players recognise the shift in the landscape also, and have invested in supplying conveyor equipment and drilling consumables. In closing this section, I will read an excerpt from the Australian Aluminium Council... “Australia’s world-class alumina and aluminium operations will continue to add value to Australia’s vast bauxite reserves and to underpin regional economies around Australia — provided that the international competitiveness of our industry is maintained, particularly in relation to the impact of government policy.” That is a pretty big proviso...


March 19th 2012 Business has been up and down across the globe in the power transmission sector over the last three months, with different economies experiencing various levels of performance. In North America, the Power Transmission Distributors Association has reported that the final quarter of 2011 saw its members experiencing the seventh straight period of growth. The PTDA continues to monitor the economy and manufacturing demand – primarily in North America - and reports its findings regularly. You can check out the information on their website at One of the major customers of individual PTDA members is Procter & Gamble, which is famous for manufacturing an extensive range of consumer products. P&G has just delivered the news that they are looking to trim $10 billion in total expenditure by the end of 2016, by various means. Various means always refers to job cuts across the board and usually severe cutbacks to production maintenance. The jobs cuts have been put forward already, with a 10% reduction in non-manufacturing staff numbers, as well as cheapening packaging materials. Anyone who supplies firms like Procter & Gamble knows that there will be a hold put on preventative maintenance measures – or at least a severe slowdown put in place. This will always have an adverse affect on the PTDA member businesses, both in revenues earned and stress levels raised when machinery inevitably fails and keeping it running becomes a breakdown situation. --Timken is primed to invest $42 million into its Ohio infrastructure, manufacturing a new corporate facility for its Bearing and Power Transmission divisions. Getting involved in power transmission has become one of The Timken Group’s key growth strategies, so an investment of this nature which will


see engineering, R&D, sales, customer service and marketing brought into the one facility is an obvious development. Whilst I’m on Timken, they have also announced a 10% increase in the L10 life of its tapered roller bearing range.

Timken attribute the performance increase to the prolonged continuous

improvement efforts of design, manufacturing and material technology. All for a type of bearing that was first designed in 1898. --Proving that all market segments except mining are having a real struggle in Australia at the moment, Murray Goulburn Co-operative will end milk drying operations at its Rochester, Victoria plant at a cost of 64 net jobs, whilst Mars Confectionery is planning to reduce its workforce by 38 staff at its Ballarat facility. The pricing squeeze from Australia’s supermarket goliaths has been cited as playing a part in the latest round of rightsizing. Obviously, the high value of the Australian dollar is also having an impact on demand when exports are considered, putting a further negative tinge on the food manufacturing outlook. Australia’s south-eastern states of New South Wales and Victoria have experienced heavy rain and flood conditions, with regional centres Wagga Wagga and Griffith suffering the most. Griffith is renowned for both wine and rice production, with both industries remaining open but suffering losses. Rice growers were coming under fire for the high amount of water used during the cultivation of the crop, however with the eventual breaking of the drought, these fears have now been supplanted with concerns of too much water. ---


SEW-Eurodrive is once again promoting its Drive Academy, which will take place across Australia throughout 2012. As the complexity and functionality of variable speed drives continue to increase, so too the need for drive manufacturers to support their products with training and support. SEW has set up training in modules that support their range, conducted at its in-house training centres in all mainland Australia state capitals. --The Chevy / Holden Volt, which got a guernsey in episode six of the Australian PT Podcast, has suffered from disappointing sales in the US, forcing GM to idle its plant in Detroit for a month, starting today. The Volt suffered from highly-publicised fires during crash tests and these have no-doubt hurt sales. The fires were later linked to leaking coolant coming into contact with the batteries. GM isn’t saying how elastic the demand curve is for electric cars, but at $41,000 in the US, the Volt is quite an expensive undertaking. They thought they could sell 10,000 a year, but are running at about 70% of this figure. --Fresh from a round of right-sizing, Vacon has released an update to the NXP range of drives. The Finnish manufacturer has spent time and money in redesigning the top-of-the-line offering, which covers 0.55kW to 5.3MW, utilising both air-cooled and liquid-cooled technology. Vacon’s new strategy appears to be to focus on the NXP, which is a high-end, fully-featured drive. They have opted to conformally coat their circuit boards in an effort to reduce dust and moisture ingress, whilst trading in some of the components for improved temperature stability. ---


Also on the drive front, Nord Drivesystems has added an 11 to 22kW version to its SK200E sensorless vector range. Although aimed at the price-sensitive end of the market, Nord is quick to point out that the SK200E is fully-featured and rivals many higher-priced offerings. --QANTAS unions have banded together in an attempt to keep heavy maintenance work done in Australia on both the Airbus A380 and Boeing 787. The airline that “still calls Australia home” is looking to consolidate existing maintenance facilities across the country, which will result in over 800 jobs going by the wayside, prompting three unions to join forces on the issue. The Australian Workers Union, the Electrical Trades Union and the Australian Manufacturing Workers Union hope that a united front will assist in negotiations with QANTAS, whose safety record is claimed by the unions to be in part to maintenance operations being conducted in Australia. QANTAS recently culled some catering staff in an effort to arrest a dramatic profit slide and we can’t be certain where the job losses will end. Airlines simply don’t make money, and the new generation of planes coming on tap are touted as requiring even less maintenance than those in the air now. Even more highly-skilled Australian workers are losing positions. --Manufacturing flexibility has for decades been acknowledged as being one of the most important attributes a firm can have. Whilst manufacturing quality has occupied the front of the minds of scholars, with the development of six sigma, LEAN and other continuous improvement methodologies, the real skill has been in understanding market forces as they are happening, and the changes in demand they bring. As the strategic landscape keeps changing and whole industries come to an end, it is important for firms to keep on the front foot and seek alternative income streams. Most manufacturing firms


have a fully-skilled staff base that in most cases can make and market anything that is asked of them. The real issue in flexibility becomes the manufacturing infrastructure; can the machinery be turned to other things? A story that came through from Associated Press on this issue refers to the efforts of Sappi Fine Paper, a paper mill in Cloquet, Minnesota. The writing is on the wall for many paper producers as the reach of the digital age broadens and the written word comes through in 1080p instead of on 80gsm. Sappi Fine Paper will still take advantage of the forests in its geographic vicinity and process wood products at its mill, but the final product will not be pulp for paper manufacturers. Instead, the company is spending $170 million to convert its existing capital equipment to be able to turn out fibre products for export to textile manufacturers around the globe. Currently employing 760, Sappi can see the change in demand and has acted pre-emptively to secure a financially-stable future. Strictly speaking, the company has changed focus, more than merely being a flexible manufacturer. This level of flexibility is known as a strategic approach and applies across the entire organisation. It is no secret that manufacturing firms in western countries have a real struggle on their hands, due to a variety of reasons, with imports from low wage countries chiefly among them. Governments and business leaders have maintained the same mantra for a little while, suggesting firms work smarter and focus on high-end final products and services. I think that a renewed focus on flexibility is also important.


Australian Power Transmission Podcast Transcripts