Could Europe and in the middle of the continent, Germany, be the isle of the blessed? And in these stormy weathers now, where we are encountering such a dilemma as the dramatically rising relation between the euro, the pound and the US dollar, and high energy costs which are making every piece manufactured within Europe even more costly. And not to be forgotten: the serious global troubles in the finance markets and systems. Will the party soon be over?
And what outcome might the continuing price wars of Asian companies (as manufacturers and as customers) have in the areas of devices, systems and equipment? Some European companies with a backlog of probably more than three months tell you at Productronica – off the record – that they are facing critical situations such as “Our profit margin has completely disappeared”. Invoicing in dollars according to the price which was initially agreed doesn’t leave much money on the table now, if any. And at the same time competition from abroad can work and deliver based on all the benefits of the weak dollar.
Well, this picture is just one side of the coin and the situation demands even more awareness. It can be used as an injection of even more energy into the European hemisphere’s businesses in order to carefully take on these huge challenges. Over here we have an industrial workforce of well-trained and skilled experts, there is also a comprehensive understanding of application tasks and their successful solutions, and there is still a kind of entrepreneurship which sees a bit further than just the end of the day or the next quarter. Look to the east and you will not see such fundamental stability.
European industry has to use its skills in the best possible way – now and not in the so-called future, which, by the way, doesn’t really exist. Productronica in Munich, the world’s leading event in the electronics manufacturing community, has been a good starting point for new ideas, for the regrouping of concepts and businesses and for a fresh beginning built on proven foundations. It is interesting to note in this context that the trade show seems to be in an upsurge in regard to the numbers of international visitors, rising to 45% in total. This is a notable signal for the Productronica organizers and exhibitors alike that they are on the right track. Germany, indeed the entire European Community, have become too small or too limited respectively for the electronics manufacturing business. It’s now a true global movement overcoming traditional concepts. Looking briefly at the result of the Productronica Executive Round Table discussion and personal experience, I dare say that not only manufacturing capacity is on the road to the east but also R&D capability. Since the solutions providers have to follow their customers, regardless of were they are located, research and design have to trail there too. However, it seems like a paradox or a catch-22 situation: How much expertise must be revealed in Asia to perform excellently and how much should be hidden in order not to expose all critical company confidentiality? If there are really high standards in manufacturing, respect for intellectual property and preservation of the environment throughout all Asian countries, I have to admit my deep doubts.
Though the PRC, mainland China, has introduced a similar law construct to the European RoHS Directive, we can hear from Chinese managers that almost everything can be discussed (with local administration and party leaders). To be frank, this would create even more uncertainty and confusion and would not help people and environment. A sensitivity to the protection of intellectual property and trademark rights and environment may then so far be regarded as just an individual case, not a widely accepted business standard. The lack of democracy, and solid law standards built on controlling the administration and public institutions are obvious, even we are hearing fantastic stories of a new dawn. Appeasement for the sake of potentially bad business? This attitude then would be a sort of NIMBY (Not In My Back Yard), but in others it seems possible.
From my point of view India has in the long-term at least the same or more potential for a sustainable business climate in the region, despite the current clumsy and obsolete administrative and social caste system. And we should not forget all the other smaller Asian countries (the Tigers) who are keen on developing their economy further and who do not tightly cling to one party’s defending concept of how people should live.
Since the turning of the tide in Eastern Europe we have seen continuous development of strategies and investments in modern industrial production systems, as well as the change in peoples’ minds. We saw the first results of this already at Productronica very early at the beginning of the 90s, and until today the offerings have become more refined and sophisticated, clearly meeting so-called Western standards. And these countries are moving even closer to “old” Europe. Boundaries have been removed (and more will be released), income per capita is rising and many of them are eager to join the euro currency club soon. However, in periods when there is so much imbalance between the main currency zones as today, these “fresh men” will more or less suffer from the unfavorable parity effect as the other members do in their outside-Europe business. For the “newcomers”, lower costs, a similar cultural understanding, high quality standards and proximity to the Western and Central European markets are just one significant part in the mosaic; they also need to be in the Asian business.
A concluding word on the overflow of certain equipment at the show ground may be allowed. There is now a rising number of companies designing and building additional machines and adding them to their established equipment portfolio. Take for example the territory of paste printing machines which we can now get from even more and more sources. I remember there was a time, not really long ago, where users wanted to have the best-in-class solution. So they not longer invested in complete lines from the same source (provided especially by Japanese competitors in the past), but began careful machine picking in order to have their best possible solution on the shop floor.
Well, this turn in tendency is thought-provoking: are the machines now performing so excellently that you can have them from many sources, regardless of manufacturer, or were the traditional suppliers just snoring? The third way of estimating this scenario lies in the assumption that not everyone needs the high-performance, best-in-class equipment and is looking whether the supplier of the other assembly machines can also offer printers that match production requirements? Since the demand for this particular piece of equipment will not rise to the same degree as the offerings on the market apparently do, further cannibalization can be expected – and at the end of the day a consolidation. The same procedure as a couple of years ago?
(Gerhard B. Wolski)
EPP Europe 407
Share:
