1. Tim Shinbara | VP, Technology
The State of the US Machine Tool Industry with Respect to Economic Health
Tim Shinbara | VP, Technology

2. From Oxford Economics…
Strong growth for MT orders on 2.8% economic growth
Strong fundamentals supporting consumer spending and business investment
Large aerospace backorders
7.3% business investment (CapEx) expected in 2018 (all manufacturing sectors)

3. Business Risk Housing market imbalance
Political and policy disruptions
Global growth and trade

4. From recent workshops…
Supporting EO “Assessing and Strengthening the Manufacturing and Defense Industrial Base and Supply Chain Resiliency of the United States”
Georgia Tech (1/25)
Cincinnati (1/26)
Key takeaways
Critical components having significant negative impact on deliveries
U.S. still has global significance in gear cutting, grinding, AM/3DP
Lack of talent throughout the pipeline
Perception is reality…manufacturing still not perceived well
Export control process still insufficient in timeliness
From recent workshops…

5. U.S. has… Gear cutting, grinding, optics (metrology)
Early development in M&P
SW-based solutions
Advantages in
Controller technology (as a % of market share)
Domestic access to key materials (e.g. carbon composites)
Robust manufacturing infrastructure for sustainability
Disadvantages in
Islands of excellence & existing point-solutions
U.S. has…

6. US builders likely to miss opportunities
Impacts to Delivery…
Q1 2018…
Build-to-demand have ~2 – 3 month lead- time
2018 – 2019…
Build-to-order (or add’l demand) ~6 months (1st time since 1980’s)
Critical path of key components
Linear guides (~6 months – 1 year)
Electronic components (2 – 3 months)
E.g. Controls and drives
Machine bases (weeks to months)
2018 demand estimated to be ~7% – 12% over a very strong 2017
US builders likely to miss opportunities

7. Status: Consumption, Employees, & CapEx
Year
Production
Imports
Exports
Consumption
# of Empl
Total Capital Expenditures
% of Consump.
2012
$5,604,539,000
$5,823,724,471
$2,156,508,383
$9,271,755,088
38,575
$145,656,000
15.7%
2013
$5,811,664,000
$5,212,262,677
$2,238,948,084
$8,784,978,593
38,650
$148,725,000
16.9%
2014
$6,171,134,000
$5,260,491,759
$2,154,162,212
$9,277,463,547
39,616
$231,914,000
24.9%
2015
$5,902,923,000
$4,919,027,720
$1,961,905,229
$8,860,045,491
40,933
$204,969,000
23.1%
2016
$5,181,487,000
$4,426,397,645
$1,660,136,823
$7,947,747,822
40,033
$166,032,000
20.8%
Primary NAICS code: (Machine Tools)
Source: Census Bureau, Bureau of Labor and Statistics, AMT – Association For Manufacturing Technology

8. Current Status: R&D as % of Revenues
R&D: ~$266M
R&D: ~$322M
Source: Census Bureau, AMT – Association For Manufacturing Technology

9. US Locations of MT Companies
11 States have only 1 or no MT businesses 15 14 22 38 35
US Locations of MT Companies
150 49 7 95 96 33
155 20 15 17 10 7 12 44 20
Source: County Business Patterns (DSAT for MSFT, GeoNames, NavTeq)

10. Tim Shinbara