Finishing the year on an upswing

A little bird arrived at the feeder this morning, trilling that it was officially the first day of winter, a fact I already knew as the first snowflakes of a passing ocean storm covered the ground. It’s three days until Christmas, and a resolute band of sentimentalists, each humming the old Bing Crosby chestnut “White Christmas,” have their collective fingers crossed that the dusting will last until Christmas morning.

Another clue that the holiday is coming is the spate of e-mail holiday greetings I have been receiving for a few days now. I still receive old-fashioned mailed cards, which I especially appreciate as these are among the nicest greeting cards received.

The other clue is the buildup of e-mail messages advising that this or that company will stay closed through the coming week to “allow their employees to celebrate the holiday season,” an admirable gesture. Actually, I fall in this category, taking vacation between Christmas and New Year. So don’t look for a blog from me next week.

I always despise the end-of-year editorial musings that are beginning to appear, which is funny because I am an historian of sorts, but not an instant historian, I guess. Thus, I refrain from viewing and/or reading all the retrospectives that will permeate the Web, television news, and newspapers.

Since I will be on vacation next week, I’ll give you my annual review now. 2010 was a better year than 2009: the recession ended, officially, and the laser industry, for the most part, turned the corner and finished up the year with good financials and backlogs that presage a better 2011.

The laser industry breathed a big sigh of relief that the corner had been turned and then patted itself on the back that some had set revenue and backlog records and that most see a strong first half in 2011. On that note, what can I say? Finishing the year on the upswing is a nice feeling, and the immediate future certainly looks bright for the industrial laser community.

So a very happy holiday to all, a special happy New Year, and hopes for a more profitable year.

Oh, by the way, the sun just came out and melted all the snow, so we, here in this part of New England, will probably have a green Christmas. Sorry, Bing.

Tis the season

This is a particularly distracting time of the year. Even if we took the Christmas Holiday out of the month, many of us would still be feeling the end of the year pressures which have more importance for those whose fiscal year ends on December 31st. Many companies have shifted their fiscal year closing to coincide with the federal and state governments if they do business with those entities. But for many others, the end of the year is also the end of their fiscal year.

For them, trying to cope with all the pressures of the holiday season compounded by the need to close the company books on a positive note can prove to be a difficult one-two punch.

When I had a manufacturing company, we were always increasing employee’s overtime to get that one last shipment out the door so that the sales book looked as good as possible. I can recall resorting to all kinds of accounting magic to get shipments on the books even if it was to a local warehouse where the equipment was turned around on January 1st to be “modified” prior to shipment to the customer. The brief stay in the warehouse qualified it as shipped in the current year.

I thought about all these pressures the other night as I attended a performance of Charles Dickens’s A Christmas Carol. It must have been the umpteenth time I have sat through this classic, but for the first time I had some sympathy for the “villain” of the piece, Ebenezer Scrooge. Why did this rendering make me empathize with the poor put-upon business man - hounded by charity requests, beset by employee problems and so overwhelmed that he planned to work on Christmas day?

I think it was the intent of the show’s director to have Scrooge become less of an ogre and more of an addled businessman trying to cope with the end of the year and the holiday at the same time. Mind you I am not condoning his practices, but when those charity workers arrived and asked for a donation and Scrooge recited one of the classic speeches in Dickens’s work, a diatribe on the injustices faced by the poor business owner, I almost found myself nodding my head. Good directing and good acting made a sympathizer out of me, at least for that scene in the play.

Discussing this later with my guests, I decided, erroneously, that Scrooge was a candidate for the Tea Party, at least the smaller government part. At the close of the play when Scrooge relents and turns into a fuzzy darling, I almost called him a traitor to his cause. I’m not certain that, in those Victorian times, he would have had some public way to express his outrage, as we do with the Internet, but the poor man, I told my guests, may just have been looking for a forum to speak his piece.

One of my guests, my sister, opined that I had had too much wine before we went to the play and that my thinking was muddled. I chalked her reasoning up to holiday fever, where she along with others has “visions of sugar plums dancing in their heads.”

The next issue of ILS is ready for printing a week before Christmas. The publisher closes the third quarter a week later, but the end of the fiscal year is still three months away. So all I have to do is get the editorial finalized and I, too, can enjoy the December refrain, Happy Holidays to all.

Homestretch perspectives

It’s hard to believe but we are in the homestretch of 2010, with the end of the year just a few short weeks away. The speed with which the year passed may be attributable to the increase in business for most aspects of industrial laser material processing. It started in San Francisco last January where the buzz at Photonics West was the turnaround in the markets. At LASYS in Stuttgart, halfway through the year, industry recovery was being openly talked about, with fingers crossed, as reality set in. At EuroBlech in Hannover and Fabtech in Atlanta this fall, the end of the recession was obvious as exhibitors were once again finding strong quoting action from show attendees.

There is no question that the expansive activity in the semiconductor, microprocessing, energy and medical device markets spurred record sales at solid-state and fiber laser manufacturers. Revenue growth was almost enough to offset the laggard fabricated metal product markets for high power CO2 lasers. The introduction of new fiber laser powered sheet metal cutters helped to generate lost revenue in that market as this cutting technology was finding new customers.

At EuroBlech, a half dozen new fiber laser cutter suppliers showed products, bringing the total of product suppliers to more than 25. Does this market need this many equipment suppliers? Fair question, except one must remember that there are more than 75 companies offering CO2 powered metal cutting systems globally. And most of the fiber laser cutter suppliers sell CO2 systems also.

Looked at from a different perspective, one could speculate that for the most part fiber laser cutter equipment is basically another product in the sales catalog of CO2 sales people, so to them a sale is just a sale. Concerning the laser makers, less than a handful manufacture only one laser type, with most now offering a choice to system integrators.

Considering this, one might ask why there is competition between CO2 and fiber lasers for sheet metal cutting. There seems to be sufficient business to satisfy most everyone. It will be interesting to see how this shakes out in 2011.

Speaking of 2011, business prospects look good for a continuation of the growth pattern set in 2010. The great unknown is the economic situation in Europe and the fall out from this impacting North America and Asia. This situation has the makings of a market buster, but at this time we do not have a reason to adjust our very positive forecast that will appear in the January /February issue of ILS.

Celebrating Thanksgiving

Here in the United States we celebrate Thanksgiving Day as a national holiday to give thanks for the good things that have happened since the last celebration. It’s a feast day in every meaning of the word: a time for overindulgence in food and drink and, for some, for unending doses of football, both live and on television.

In my family we treat this as a family holiday; an opportunity to gather as many as possible to enjoy a sumptuous meal and each other's company. I like this holiday because there is no pressure to find gifts as will be the case at Christmas.

This year, I as the host, will make brief remarks about the celebration. What I won’t be saying to the family is a comment about the relief I have that the economy has turned, especially in the industrial laser markets, and the pleasure I have with the remarkable recovery and return to profitability this industry has experienced.

Two years ago, on Thanksgiving, we were on the cusp of what was to be the worst recession in laser history, only we did not know it at the time. A year ago the first glimmers of the end of the recession were appearing, even though we were to experience a few more months of uncertainty, and at Thanksgiving I could have included this optimism in my remarks at the feast.

Having said this, I rail at those who, for some undisclosed reason, are trying to dampen the pleasure of the recovery by dire predictions that what we are enjoying is ephemeral at best. The ugly words “double dip” have reared their head again. All the indicators we use to measure the health of the manufacturing economy have been positive about recovery and growth. And yet the naysayers interpret this same information negatively, choosing to find flaws in the reasoning and "debunk" market indicators.

So as I ponder on this, after a magnificent dinner, my satisfaction level is not quite as full as my stomach. So I am ignoring the naysayers because business prospects are good, and this does not include the fabricated metal sector, which is the last to return to profitable growth. My forecast for the coming year is modest increases in all segments, and secretly I think it can be better than that.

So, I sit back, satisfied that all is well; at least on the feast day. Isn’t that what it is all about?

FABTECH a big success

The numbers are in from the organizers and sponsors of Fabtech 2010, and the results are even better than our instant analysis indicated. A 12% increase in attendance over the 2006 Atlanta show and a 23% increase in exhibitors over that event gave lie to the pre-show babble that Atlanta was not a good venue for fabricating and welding technology.

Congratulations to the organizers (the FMA, SME, AWS and PMA) and all those 1100+ exhibitors who had faith that a) the market was recovering and b) the Southeast remains a hotbed of fabricating technology.

Sample comments from exhibitors: “We got more leads out of this show than all the others combined that we’ve participated in.” And from another: “Everybody’s positive about the future, and things look and feel a lot better then they did a year ago.” From an attendee: “I now know this is the one place I need to go if I want to find the latest technology to improve processes, reduce costs, and stay competitive.

I said earlier that I had seen many smiling faces at Fabtech and now I know why; it was a better show than last time and that one was, in my mind, a great show.

Let’s hope the enthusiasm from the exhibitors and attendees lasts into the New Year to kick start the recovery in the fabricated metal products sector.

Fabtech: the buzz was on fiber laser cutting

Trade shows, especially machine tool shows, are strange animals. They seem to have a life of their own, taking on an atmosphere that may echo current events such as EMO Hanover opening the day after 9/11, where a pall hung over the fairgrounds. Shows can also reflect the economy, such as Fabtech 2008 in Las Vegas, where exhibitors were euphoric, still riding a high that resulted from an overheated EuroBlech a few weeks earlier. I recall watching the crowds using the escalators at that convention center and commenting about their smiling faces.

Sometimes, exhibitors are reserved and cautious as a show starts, mirroring the popular feeling in the streets outside. At Fabtech Atlanta, the show opened on election day, and inside the convention center, it was like nothing was happening outside. I spoke with large numbers of exhibitors and attendees and never once did the subject of the elections come up until I prompted a response relative to opinions on business conditions for 2011.

I haven’t seen the numbers and show analysis for Fabtech yet so these observations are mine, but similar to many I spoke with. Fabtech 2010 was a success: Some said a good show; some, including most exhibitors, didn’t hesitate to call it a great show. Certainly the traffic on the first two days was satisfactory, relieving concerns that the Southeast fabricating markets were not booming as they were three years prior. Before the show I had heard reservations by exhibitors and attendees, a common one being the markets in the Southeast were still in recession and that the region could not support a large fabricating show.

Well “they” were wrong again, as they were three years ago. The action in exhibits that were showing advances in laser cutting technology were heavy at all times. I happened to overhear a group of three attendees standing in line for refreshments, checking their watches to insure they had time to see a last fiber cutting demonstration.

Fiber laser cutting seemed to be a common thread among those I spoke with; whether out of curiosity or advanced knowledge, I gathered that this technology rang a bell with a large sector of the visitors who were looking at laser cutting.

So, being as provincial as I can, let me say that those showing fiber laser cutters at Fabtech had a great show. As for those who chose not to do this year's Fabtech for one reason or another, have faith because I heard many comments about those of you who have or are about to have a fiber laser cutter from show attendees.

In my September/October review of fiber lasers cutters on the market, I speculated on the fiber laser's impact: Would it just pirate sales from CO2, add to the markets, or do a little of both. The jury is still out, but it is obvious that fiber laser cutting caused a buzz, a term that is out of vogue but appropriate. For me that’s enough because it seemed to be a reason for the crowds at this year's Fabtech, with the follow-up is in the hands of the sellers.

Its a small world after all

Longer ago than I care to remember, I took my son to Disneyland where we enjoyed all the rides except for Small World. The only reason for our disenchantment with this Disney ride was the incessant playing of the song, "Its a Small World". All the time spent in line to enter the ride, probably 30 minutes, we were bombarded with this tune and then subjected to it continuously throughout the ride.

For the rest of the day that song reverberated in my brain and I found myself humming it repeatedly. I was humming it so much that I vowed never to listen to it again, a hapless goal if you have ever visited Disney’s parks.

However, I have been itching to find a reason to use the song title in my writing. And now I have the opportunity so I will get it out of my system, once and for all.

It is a small world, this manufacturing sector served by precision processing operations. This world is made for sharply focused laser beams which, depending on wavelength choice, can produce remarkable results such as those that benefit from “cold processing”.

As we finish the first decade of the new millennium, allow me to resurrect statements and thoughts I made as we entered the new decade. I quote from the January 2000 ILS Annual Economic Review, “All in all, ILS editors think 2000 should see the long-predicted move to microprocessing as the key to industry sales growth.”

I will confess that it took a little longer than I had imagined back in 2000, but we are now there and it’s a small world after all. It would be nice if we had a hymnal to celebrate the occasion and I may have found it in a new book published by Springer (www.springer.com/series/856) entitled Laser Precision Microfabrication. This book, edited by Koji Sugioka, Michel Meunier, and Alberto Piqué, is an expansion of their original concept, which was to present selected papers from the International Symposium on Laser Precision Microfabrication (LPM), which has been held at international venues since the first one in Saitama, Japan, and the latest in Stuttgart, Germany in conjunction with LASYS 2010.

As an editor trying to cover concurrent session at conferences, the choice of which to attend is difficult, made untenable if your interests are broad. So I thank the book editors for compiling a very valuable display of the current and near-term processes for laser microprocessing. The book is a very useful selection of papers and contributions that covers laser ablation, micro and nano-structuring, patterning, microforming, and the more familiar processes: cutting, drilling, welding, and marking.

The selection of authors is excellent, and they treat each subject in 13 chapters as if the readers are novices to that particular technology. And for those who are deeply interested, the authors have included lengthy and comprehensive references at the end of each chapter. What this does is make this book a valuable reference resource on my bookshelf ,and I will likely make heavy use of the Index as I seek an explanation for some application that I am writing about.

So here’s the close: it’s rapidly getting to be a small world in laser material processing. As the macro applications begin to mature, it will be these rapidly developing micro processes that will act to increase markets. Driven by more reliable and responsive lasers integrated into “laser only" processing systems, it doesn’t take a genius to realize that when attending the next concurrent session conference, more time should be spent in the microfabrication session. However, the book will still serve as a “basics” for those who are not laser “junkies," but are process engineers looking for a solution to a difficult microfabrication operation.

I recommend the book for process engineers and applaud the editors for the selection of contributors who have written on both an introductory and advanced level for readers.

The book Laser Precision Microfabrication, Springer Series in Material Science 135, is available from Springer, www.springeronline.com; in the U.S., you can call 1-(800)-Springer.

Stick with the message

Every once in awhile, as the Editor-in-Chief of Industrial Laser Solutions, I am reminded of the mission of this magazine.

A reader, Barry Buchanan, contacted me about his reading of an article in the September/October issue that dealt with laser marker selection. He writes, ”While reading the article, I found myself wishing that I possessed the information written here 10 years ago when I was first contracted to develop a marking program for a large hand tool manufacturer marking round plated products, and that sales people had this same information and fully understood it. I eventually installed 22 (laser) marking systems in their company. I contacted several people involved with laser sales and none were able to explain the differences. Most seemed to think that a Nd:YAG, a ND:YVO4 and a fiber system, because they are all 1064 wavelength, are all the same when actually, as Peter Grollmann (the author) pointed out so well, they are quite different and each has its own place in the field of marking. It took me some time to grasp these differences especially in the fiber verses YVO4 systems. A company I was working with to develop a marking program wanted to peruse the fiber as a replacement system, so I was doing a lot of sampling, but not until I finally had the opportunity to have a system in house for a month and work with it, did I fully understand the differences. This is the best written article I’ve seen comparing the good and not so good points of solid state laser marking systems. It is very well written and provides a wealth of information to anyone trying to start a marking program.”

Twenty-five years ago, when I co- founded ILS, I promulgated a mission statement that is as pertinent today as it was back in the days when laser processing was struggling to find a place in the manufacturing plants. In three sentences this statement is as important today as it was then:

“Manufacturing professionals require timely technical information about and evidence of the benefits of laser materials processing and the products that affect these processes. Keeping pace with all these benefits requires access to information from professionals who are knowledgeable about advanced laser materials processing. Industrial Laser Solutions provides first-hand experience about the technology and benefits to advanced laser material processing, educating readers in ways to improve profitability.”

As I read Barry’s letter it occurred to me that it was a perfect example of what we try to achieve with ILS in every issue. I should have this mission statement blown-up and posted over my computer terminal as I select editorial themes for next year. Thank you for reminding me, Barry.

The glorious colors of fall

We are fast approaching the height of the fall foliage season here in Southern New England. The peak foliage line is just poking into the local area and some pockets of brilliant color are just passing prime.

Purists among the locals will be arguing about the intensity and beauty of the colors for at least two more weeks as the peak period passes prime. Some will credit the long dry summer as the reason colors were less intense, while others will recall the heavy rains of spring as the reason the reds are redder and the golds deeper this year.

I’ve been laying the groundwork for my annual economic review, a process that entails a lot of reading of articles I have accumulated over the preceding months. As I look at these I am struck by the sameness of judging the beauty of this year’s foliage. A case for a sluggish recovery makes sense, but the reports from some of the key public companies run counter. This gives the impression that appearances of sluggishness in the economy are false clues to a mixed bag of active markets that just happen to be in the sectors that favor laser technology.

I was driving along a favorite state highway that is noted for its mix of gold and red foliage, and is usually one of those delightful perspectives especially when the afternoon sun casts oblique light, which draws the most out of the colors. Much to my chagrin, the trees were bare of leaves in the normally glorious section of roadway.

A thought crossed my mind that this could almost be an analogy for the laser system market; colors were mostly sharp, representing the majority of the market that covers lasers used in the energy, semiconductor, medical devices and aerospace industries. But key sites, such as the laser cutting market, were barren, reflecting continued resistance on the part of buyers in this sector. And continuing the thought, this usually bright section of highway was desolate and dull, depressing those who view it, just as the metal cutting market is dragging down market results.

The leaves, for the most part, will be gone from this area by the end of the month, not to be replaced until next spring. Here the analogy falls apart, as the market will likely get a boost from two big trade shows, featuring laser metal cutting, in the coming weeks that will either set the tone for recovery in the coming year or, worst case, continue to reflect a muddled economy.

How quickly time flies

Last week at ICALEO in Anaheim, the 50th anniversary of the first working laser was celebrated officially by the Laser Institute of America at a special closing plenary session, Celebrating 50 Years of Laser. During the week at ICALEO participants took advantage of the presence of numbers of technology pioneers to informally exchange reminiscences of the early days. I almost wish that I was carrying a recorder to save for posterity some of the anecdotes that were being shared.

I had the great pleasure of sitting with Nobel Laureate Charles Townes in the lounge atop one of the hotel towers and together watching a beautiful sunset over the Pacific Ocean, while sharing a glass or two of wine.

Charlie, as he likes to introduce himself, remains a thoroughly down-to earth individual who carries his fame easily. At a rather advanced age — he turned 95 in July — he remains both inquisitive and entertaining. While he freely regales with anecdotes, he also has a deep curiosity for what you do. He was especially interested in the beginnings of the industrial laser business, which in those early days was far removed from the lofty academic world he lived and worked in. Although we travelled in different circles over the years, we shared many acquaintances who are among those who were the backbone of a developing business sector.

Charlie was interested in my comments on the shifting fortunes of the industrial laser world with Asia, led by China, as the main market driver. Sensing his interest in the commercial aspects of laser technology I asked if, in those early days, there was much talk about taking the product to market. He allowed that it may have been part of conversations, especially in his interactions with Bell Labs, but that he was a physicist with physicist’s curiosity about technology not markets.

The day after this pleasant interlude, I saw Charlie hustling through the Orange County Airport, towing his suitcase, passing through hordes of people lined up at a Starbucks and an adjacent departure gate, and not a soul realized a Noble prize winner had passed by. Dressed in a suit and tie he looked like just another businessman rushing to catch a plane. And that’s the way he wanted it.

ICALEO: From modest beginnings to world-recognized conference

Twenty-nine years ago at the Anaheim Marriott, I had the pleasure, as General Chairman, to call to order the first International Laser Processing Conference (ILPC). This event, the first of its kind, was the culmination of three years of planning and diplomatic negotiations between cooperating societies. In 1978, as president of the Laser Institute of America, I conceived the idea of the LIA joining forces with the Japan Laser Processing Society and the Japan Society for Laser technology to bring together the best industrial laser materials technology in Japan and the United States. At that time, these two countries were at the forefront of process development and Europe had not yet made its mark.

Looking back, an international conference on a nascent technology was a brash idea, as it had not been done yet. And negotiating to get two, then-competing organizations in Japan, each led by a strong personality, to agree to co-sponsor, was an even brasher idea. Behind the scenes meetings in Japan resulted in a momentous, for the time, meeting at the Hilton Hotel in Tokyo, where the Japanese partners put aside their reticence and agreed to take an equal share with the LIA to make ILPC happen. At the time, I felt a little like the Secretary General of the United Nations, bargaining with strong personalities for the betterment of all participants.

With the strong support of a marketing team from my then-employer, Avco Everett Metalworking Lasers, we planned, organized, and conducted the first ILPC. Thirty-three papers by leading process developers in the two countries made up two days of technical sessions. The team produced a bound copy of the proceedings for handout at the meeting, a first for a technical conference. The registered attendees, many from Europe, filled the ballroom at the Marriott, and the consensus opinion was that ILPC was a great success and that it should go forward. The European attendees, mainly researchers from Germany, went on to be the highly visible drivers behind Germany’s growth as a power in industrial laser material processing.

The LIA recognized the need for an annual event and responded accordingly; the following year the first International Congress on Applications of Lasers and Electro-optics was held. This year marks the 29th anniversary of ICALEO, born from that modest joint US/Japan conference, with an audience five times larger than in 1981.

Looking at the proceedings of ILPC 30 years later is a little like looking at the history of industrial laser activity in manufacturing. Among the topics were: hermetic sealing of titanium, cutting stainless steel, high resolution mask repair, heat treating low carbon steel, machining ceramics, manufacturing blanking tools, surface alloying and laser marking, and serialization. And the list of presenters reads like a who’s who of laser process developers.

ICALEO has become THE international advanced laser material processing conference, recognized around the world as a window on applications for the future. And to think that it all traces back to that brash decision to hold ILPC.

It’s not over till the fat lady sings

That sound you are hearing is the wild celebration going on in the ILS office as we revel in response to the notice that the recession was over in June 2009. The Business Cycle Dating Committee of the National Bureau of Economic Research made the announcement to deafening silence in Washington on September 20th. The Republicans and the Democrats were reticent to celebrate because the former won’t admit the economy is growing and the latter is still sensitive to the lack of new jobs. The Tea Party doesn’t know how to react as it was good news, and they don’t know how to deal with that; you can’t get mad about good news.

However, we here at ILS are overjoyed. As a matter of fact, we almost decided to make yesterday a company holiday until we got bogged down over the celebration date, September 20th 2010, or the end of June 2009.

We did begin to discuss the timing of the announcement: how come it took so long for the Committee to become aware that the economy had turned? The chairman of the Committee, quoted in the Wall Street Journal,September 21, 2010, said the committee was concerned that announcing the recession had ended a year ago might be confusing as many people “think recession means a bad time and there’s no question we’re [still] in bad times.” Excuse me, since when is good news, of any kind, confusing? When you are down as low as we were in June 2009, any good news is a blessing. You may recall the ILS effort to find a “Sliver of Light” back in those grim days.

The industrial laser marketplace seems to be on a solid upward track, especially in the microprocessing sector. We have been very cautious about the macroprocessing sector, specifically the market segment for laser cutting for sheetmetal fabricating, which stubbornly seems to have reached a neutral phase. Hopes for a stronger recovery in this market have suppliers focusing on EuroBlech next month and Fabtech in November. The former was incorrectly judged as a positive success two years ago when exhibitors misread visitor enthusiasm as a sign of prosperity only to be rudely awakened on December 1 when orders cancelations began to roll in. So, many observers at the Hanover show this year will be extremely cautious in assessing good news from the exhibit floor.

Here at ILS the party is winding down as the ephemeral nature of the celebration took hold and reality set in. We decided that the June 2009 turning point was the official date and not the belated announcement from the government, and that dull employment news overwhelmed a partying mood. Oh well, it was a short but invigorating moment, and I noticed smiles as we returned to our daily routine.

The ups and downs of forecasting

I don’t know about you, but I am getting a little weary with alternating good and bad news from the global manufacturing countries and on a micro scale individual manufacturing companies.

As an example; the manufacturing economy news from Germany has swung wildly from very bad to miraculous recovery, back to bad in just a few short months. Back in June at LASYS in Stuttgart I heard a Federal Government Minister singing the blues about the sorry state of the Mittelstand in Germany not being able to compete with their opposite numbers in China. He was all gloom and doom as were several industry leaders at a later press conference. And just a month later German business confidence was up.

I don’t know if you have ever done the following but I did as it occurred to me that this economic reporting had weaknesses so I simply have listed references’ that I saved as background for my Annual Economic Review of the industrial laser market. I have inserted directional arrows to reflect my emotional ups and downs. I am not picking on Germany but it is a world leader in the production and use of industrial lasers, so it serves as an interesting example

German Industrial Orders Show Weak Growth (AP - January 22) ↓
German Manufacturing Orders Unexpectedly Declined in December
(Bloomberg February 4) ↓
German Manufacturing Orders Extend Record Plunge (Bloomberg March 11)↓
German manufacturing gauge climbs to record high (Market Watch April 22) ↑
German manufacturing orders surged in March signaling rate of Germany’s recovery is gathering speed (Fin Facts May 6) ↑
German Manufacturing Orders Look Strong (Seeking Alpha June 7) ↑
German Manufacturing Orders Fall (WSJ July 7) ↓
German Business Confidence Up In July (AP July 23) ↑
Unexpected Decline in German Manufacturing Output (RTT News Aug 6) ↓
German manufacturing orders drop 2.2% in July (Market Watch Sept 15) ↓

So, should I panic in October or just wait for another economic news reversal? I had a mentor who taught me more about economic forecasting then I ever learned in my university days. I shall always remember his caution, “Look at a forecast as a snapshot in time. It’s what you see today and it will change tomorrow.”

Not laboring on Labor Day

Labor Day was officially established as a federal holiday by an act of the U.S. Congress in 1984, an action which was seen as an antidote to the violent government/labor relations of that period. The original concept was to celebrate the strength of the labor unions and to honor the industrious workers of America. Over the years the holiday lost its original focus and more recently has become the “unofficial” end of summer and the start of a new academic year.

This year, for many in the United States, Labor Day will be an anachronism, a day to celebrate workers when more than 9% of them are unemployed, caught in the fallout from the just-ended recession. There will be one or two lofty speeches, generally ignored, and some political puffery, especially in an election year. But on the whole, for many of us unaffected by Hurricane Earl, it will just be a very pleasant long weekend that marks the end of a too long baseball season (if your team is out of the playoffs) and the start of the long awaited return of college and professional football, with all the optimism an unblemished record brings.

Over the years I have editorialized about the plight of the worker in this country's manufacturing industries as companies moved to more automated practices that tried the capability level of their workers, but also displaced many who were made redundant.

China, one of the world’s most vibrant manufacturing sectors, is undergoing its own wrenching labor unrest as workers are winning concessions from factory owners by demanding more equitable salaries as they see a burgeoning middle class, which they cannot join, enjoying a more prosperous way of life. Other countries are taking advantage of this labor unrest, and industry in the Asian nations is flexing its muscle to offer alternatives to manufacturing in China.

In Europe, the engine that pumps the economy, Germany, is bemoaning the loss of labor as transient workers that filled the shops have returned to their native countries, which in turn are bidding to be part of the industrial market and to compete ironically with Germany.

I can’t recall a recent Labor Day when there has been so much stress in the global workplace. I’ve been sitting on the shore of a pleasant body of water located in New Hampshire watching others enjoy the warm water that always seems more delightful in September here in New England. It’s so peaceful that it is hard to work up the energy needed to editorialize about Labor Day. So exercising my rights to a “day of rest and celebration,” I’ve decided to pass on any pontificating about happenings in manufacturing and to just enjoy the end of summer.

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The Korean powerhouse

After traveling 9000 miles in 16 hours, it is a bit much to present, over six days, three seminars on the current state of industrial laser material processing and to rub shoulders with CEOs of the leading South Korean laser system manufacturers. But you do what you have to in this global technology era.

I was pleased to present my views on trends in the industrial laser material technology to several Korean audiences. The main event was participating in the 3rd International Microtech – MEMS Business Conference, a part of Laser Korea 2010. In return I had the opportunity to meet with several of the leading Korean manufacturers of industrial laser systems for both macro and micro processing.

Over the years, Korean laser companies have been reticent in sharing market data with outsiders. On this trip I found these companies more willing to define and quantify their business and markets. I sensed a sort of frustration with some of the CEOs I met with in regard to their peers across the Yellow Sea in China. Several times the comparative size and strength of the Korean suppliers vis-à-vis their counterparts in China were called to my attention.

The upshot is that in my Annual Economic Review I may have been underestimating the size and output of the Korean system manufacturers. While most of the information shared was oral, it wasn’t hard to value the Korean industrial laser system business at $600-$700 million, a figure that surpasses the reported number from China. And more to the point, China, along with Taiwan, are the largest markets for Korean laser system exports.

Because of this newfound cooperation, I expect to tweak my 2010 numbers as I begin to work on this year’s economic report.

The sharks are circling

This blogger has been on a bit of a hiatus enjoying some picture perfect vacation weather here in New England. Not that you particularly care but the month of July set temperature records here and we experienced several 90 degree heat waves during the month.

One consequence of this was rising water temperatures that caused the seal population along the Cape Cod coast to increase dramatically drawing the attention of Great White Sharks that also posed threats to salt water enthusiasts.

I’ve just finished compiling data for a review of fiber laser systems used for sheet metal cutting that will appear in the September/October issue of Industrial Laser Solutions. I identified a dozen suppliers that will exhibit flat sheet cutters at one or more of the big international machine tool shows scheduled for the next three months.

What is significant is the growth of the fiber laser as the heat source for this major applications sector. It is estimated that about 100 flat sheet fiber laser cutters were sold in 2009, an accomplishment in a year which saw sales in the entire sector drop by as much as half at some equipment suppliers. Based on my estimate of the 2009 flat sheet laser cutting market, this means the fiber laser now represents about 3% of total sales. And indications are that the unit numbers could double in 2010, especially as these laser systems will be highlighted at the big fabricating shows.

Three new players in this market, Amada/JDSU, TRUMPF and Hypertherm, will create some excitement at these shows, mostly because they will introduce new fiber lasers into the marketplace, posing new competition for industry leader IPG Photonics.

What can come of this is the possibility of significant growth in the fiber laser metal cutting business. Amada and TRUMPF are already among the market leaders with their CO2 powered units and Hypertherm, known for plasma technology, is offering a fiber laser package to system integrators. Whether these sales are pirated from CO2 laser sales remains to be seen, but the thinking is that even if some of this occurs it will not diminish the impact of sales to current non-laser users. There are a large number of shops now cutting sheet metal that have chosen not to invest in laser cutting, chief among these are shops using plasma, which might want to expand into precision cutting of thin gauge stainless steel, for example.. Will they now be tempted by the new fiber laser cutters? Some in the industry are betting on yes.

There are other fiber laser/system suppliers that can also impact the fabricated metal products market when they crank up their promotion. This could happen as this market sector finally recovers from a two year recession that has not, until now, shown the rapid rebound experienced by other industrial laser market sectors.

The temperature of the metal cutting market is rising drawing customers and, like the seals in the waters off the Cape Cod coast attracting sharks, in this case new market entrants ready to challenge the industry leader.

Is a puzzlement

I’m sitting on a hill in Little Compton, RI, above a tidal pond connected to the Atlantic Ocean, admiring what would be a great view except for heavy, black clouds that are being sundered by lightning flashes. It just figures that three weeks of hot and rain free weather were broken by a Canadian cold front moving through on a day that was planned for some R & R with classmates. Before you hand me that old saying about needing the rain, consider that it didn’t have to be today.

It’s all about expectations. Most every time I go down to the Maine coast I can count on foggy weather, save a glorious week in Boothbay Harbor when it only rained one day. So my expectation when planning a trip there is that inclement weather will occur.

A few weeks ago I had expectations about the country talking itself into a double-dip recession, and sure enough we seem to be doing it. I grant you that the economic news is not great, and were it not for the distractions of the World Cup, it likely would have been worse.

One of the songs in the movie Anna and the King of Siam is titled A Puzzlement. The King sings “Is a puzzlement” because he does not understand the changes that are happening. I have adopted this phrase when I am frustrated with certain events.


For example, U.S. unemployment figures were down last week, but the inevitable "but" was that they were not down by as much as anticipated. Housing starts were up last month, but not by as much as hoped. Steel production was down more than expected, but still was up from the preceding period. It’s when good news is not so good news, is a puzzlement.

And thus comes the second half of the "W" recession, or when a recovery is not large enough to be a recovery. Congress is back from another of its vacations so I expect that rhetoric will fill the news and talk shows about a slowing economy. The political right is using this to shoot at the president, while the political left will use it as raison d’être to spend more stimulus money. No matter how you cut it, we’ll all be the losers one way or another once the pols decide to use the double-dip as a political tool. Another puzzlement.

The laser business is having it mild ups and downs, with some sectors experiencing a mid-summer dip, but when haven’t they gone through this? I recall when I was in the capital equipment business we wrote off July as a month when we could not expect orders at the previous month's levels. So what’s changed? It wasn’t a recession then, just the summer doldrums. Now as it occurs in 2010, some say it’s the precursor to another recession. Is a puzzlement.

Expectations are that consumers will spend us out of recessions, and yet we chastise them for running up credit and going deeper into debt. I was on a rare shopping trip for summer wardrobe bargains on a weekday last week. The department store was pretty much empty, especially the men's department. I asked the sales clerk if he was concerned about the economy. No, he answered, a flier just came out advertising a big sale next week, and all the customers are holding off making purchases until then. I didn’t see that flier or I would have waited myself. . Luckily, the clerk kindly set my goods aside to be paid for this week at the sales prices. Consumer recession? Is a puzzlement.

As I wandered the store, waiting for my wife to find some bargains to lay-away for the sale, I perused the clothes racks looking at sewn-in labels. It’s a game I play when I kill time in the women’s department while she tries on possible purchases. My tops on international manufacturing locations has been 10 countries, but this day I could only make seven as China and Vietnam seemed to dominate certain brand names.

It occurred to me that the U. S. clothing manufacturers aren’t feeling the impact of the shoppers for these goods as they are all made offshore. Retail sales may be off, but that impacts the stores not the manufacturers. Simplistic? What else do you expect? I’m relaxing watching the storm move offshore and a brighter sky approaching from the West. It will be a better afternoon with the expectation for a lovely sunset; and that’s not a puzzlement.

The next big fireworks

I’m sitting on the side of one of three hills that make up most of a bowl; dense woods comprising the rest shields us from the launching point of the annual July 4th fireworks display. About 6000 others join my family for what has become a holiday tradition.

Those of you who have experienced it know that the anticipation level for the first explosion ratchets up as darkness finally settles in about 90 minutes after sunset. In this period, costumed villagers mingle with the crowd and hand out lollipops to the impatient children. Meanwhile the odor of mosquito spray mingles with the smoke from the rifle fire of the local militia who entertain the mostly happy crowd.

So I had some uncomplicated time to think about the next big fireworks in industrial laser material processing. I thought back to the 1990s when the tapering off of older technologies and the decline of the semiconductor and microelectronics sectors were offset by the growth in processing sheet metal, followed by the rapid acceptance of laser applications in the medical device business, which accounted for most of the growth rate. Since then, we have been looking for the next big bang.

Slyly, seemingly unnoticed, microelectronics came back midway through the first decade while aerospace and marking/engraving held their own. The recession was the great leveler and only application in semiconductor (surprisingly) and energy (photovoltaics) bucked the trend. Medical device processing prompted by new laser technology, fiber and ultra-fast pulse took us out of the recession as noted by quarterly reports of public companies.

A few weeks ago I had walked through the laboratories of Fraunhofer ILT in Aachen and saw several dozen early developments in laser material processing, many in the microprocessing category. At that time I mentioned to several of the innovators showing their work that ILS had christened the first decade of this millennium as the era of microprocessing, a prediction that was slightly premature as this sector only caught on towards the end of the decade as the new lasers offered users a better approach, making up for some of the declines of the older lasers.

At LASYS in Stuttgart a raft of new ultra-fast pulse lasers were introduced to serve the growing needs of the microprocessing sector. And across the plaza at the Congress Center 500 attendees were listening to advanced material processing technology, much of it in the microfabrication sector.

Has the era of the high-power laser cutter run its course as the major revenue producer? I think not, at least for the foreseeable future as pent-up buying demand will boost sales sometime and the advent of multitudes of high-power fiber laser cutters will expand the process into new market subsectors. Bu the handwriting may be on the wall and a shrinking market share may make metal fabricating less than the 800 pound gorilla of the system revenue picture.

The problem is that even with ultra-fast pulse lasers at $200K plus, it will take a lot of them to make up for the almost $1 billon of high-power lasers sold in 2008, the last great year for this product.

Maybe I was in a too laid back frame of mind July 4th evening, but I just couldn’t quite see a major explosion that would vault another application - other than sheet metal cutting - into the revenue lead in the next couple of years. But just then the fireworks company unloosened a barrage of magnificent bombs that took our breath away. And maybe, just maybe, I thought I might be wrong.

Rose-colored glasses?

The day after a cataract operation on my right eye, I woke to find that I have been missing a more color-intensive world. As I removed the protective patch, placed after the operation, I immediately noted that my new eye lens was causing me to see brighter colors. Opening and closing my left eye revealed that, even with my corrective glass lens, I am now seeing colors that before were slightly muted; a good term for the change is brilliant. As my eyes adapted, the changed eye began to modify the unchanged eye and as the old advertisement for color TV broadcasting said, I was seeing the world with new color.

With just the wave of a scalpel, my view of the world changed. Wouldn’t it be great if a giant scalpel could change the mess in the Gulf, strife in the Mid-East, the situation in Afghanistan and employment problems here at home? My world is definitely brighter today, and I wish others' were, too.

Actually, it needs brightening today as the G-20 Summit produced dire warnings that the dreaded double-dip recession was more of a reality, and the infamous W-shaped recession and recovery was more likely. What’s worse, the Summit observers were now talking about a lengthy recovery of 2 to 3 years. Thanks a lot guys; didn’t you have any positive discussions in Toronto?

The stock market seemed to ho-hum the whole thing, with little movement on the Monday after the G-20 ministers had their fill of Canadian bon hommie and went home before they could cause any more anguish. I don’t know about you, but I am getting a little tired of that roly-poly woman in the yellow blazer, Merkel, who seems to get her way by threatening to upset the European economy by doing just about what she pleases.

Too bad security didn’t let some of the protesters slip through into the yellow zone so that the isolated ministers could hear what the “people” were protesting. I am all for civil protest, if "civil" and opposed to the idiots who seem to think that breaking store windows and burning police cars is going the attract change. In Toronto, all it caused was a $1 billion security outlay; oh well, some of it went for police overtime, so it did help the Ottawa economy a bit.

So now the talk is about another recession, or a continuance of the one we thought was over. It’s what we hear on the talk shows and from the commentators of both sides. The term double-dip gets your attention, better than a W-shaped recession and recovery.

Back before the recession, I cautioned about talking ourselves into one as the Web and papers were full of projections on the severity of the “next big one” and sure enough it happened. Now rationally it wasn’t just random talk; it was the greedy bankers, insurance companies and investment houses that did us in, but talk helped.

So let’s not let the current round of negative talk start the ball rolling, even if some of it emanates from that woman in Berlin. Things are moving up for us here in the U.S., thanks in part to a hot market in Asia--read that as China so let’s not upset the cart with talk of a double-dip. And let’s hope the doomsayers find something else to jaw about, maybe the lousy refereeing in South Africa. I’m doing my part, going back to have my left eye done in a couple of weeks. That should make the world even brighter.

2x4 Redux

One of the themes I picked up on while participating in last week’s LASYS show in Stuttgart was the idea that the German manufacturing sector needs to become more competitive in world markets. Although the obvious target for competition was China, that country was never named.

I say "obvious" because in a Lasers and Laser Systems for Material Processing Working Committee meeting of the Verband Deutscher Maschinen und Anlagenbau e.V. (VDMA), to which I was invited, reference was made to the Asian market, primarily China, being the largest export market for German-made industrial laser systems outside of Western Europe.

Last year systems valued at $315 million (down 48.4% from 2008) were exported outside of Germany. Asia received 27.4% of these systems, of which China took 13.3%. Contrast this with exports to the U.S. of only 5.3% (it was a recession year, remember). In 2008 70% (~$629 million) of orders for laser systems were from foreign customers; last year it was 75%, but only $340 million. Even so, Germany is a major laser system exporter.

It was suggested that it would be better if those laser systems were put to work in Germany producing products to be exported in competition with the countries in Asia. The implication was thatautomated laser systems could reduce labor costs and contribute to improved productivity that would enable German manufacturers to become more competitive. A statement to the effect that the lower labor rates in China, for example, could be countered by productive, automated laser systems is true, as exemplified by experience in the U.S.

However, one should not denigrate the engineering talent in China, most educated in the U.S. and Europe, who have the ability, when needed, to install automated systems as that country's labor rates begin to climb, which has already started with increases of 35% or more being common. My view is that companies in China do what is necessary to meet domestic consumer demand. If this means goods of less than “world-class” stature, so be it. When consumer demand shifts, these companies are able to improve production technology to meet it, and some are already doing it.

German manufacturers have a burden that many competitors don't and that is onerous labor laws that contribute to high manufacturing costs. Unless regulations are eased, an unlikely scenario, new producers will be forced to become lean, mean manufacturing machines as has happened in the U.S.

In last week's Blog, I facetiously used the analogy of hitting someone on the head with a 2x4 to get his attention. For U.S. manufacturers it was the competition from China and outsourcing that was their 2x4 three years ago. Last year, at the depth of the recession, manufacturers reversed the trend and resourcing (bringing the business back) became common. And what reversed the trend was lean manufacturing (aided by the fall-out from the recession) which made these manufacturers more competitive.

U.S. industrial production has increased 10 months in a row as anaysts have noted. So my message to German manufacturers is that, to meet your competition in the world markets, shipping products rather than lasers to China, for example, you need to lean down and rethink your productivity plan, with lasers being part of this as they are key to many automated processes. And that is my 2x4 whack to you.

Find me a 2x 4

When I was young, very young, I worked each summer on a farm. It was a modern farm; with all the technology advances, diesel tractors, automated irrigation systems, and state-of-the art planting, cultivating and harvesting equipment.

And yet the owners still kept one old horse named Bill, used mostly for small plot plowing and narrow row cultivating. A farm hand, Myron, was responsible for this horse, the only person allowed to drive it for these operations.

I can recall watching Myron hitching Bill up for the days work, and being fascinated by the size and power of this animal. Myron would counter my wonder by stating that Bill was “not too bright”, needing a lot of encouragement to get going. He joked that every once in awhile he would “hit him upside the head with a 2 x 4 to get his attention.”

I don’t know why this stuck in my mind as I responded to a colleague’s concern about the latest U. S. employment numbers issued last Friday. We’ve had the same news each month for the past six months; good news from the marketplace and bad news from the employment scene.

A few months ago I, along with more learned observers, came to the conclusion that this was to be a “jobless recovery”. Since then I have been reiterating this opinion in print and verbally at several public forums. So many times that I am beginning to sound like a broken record on this subject; thus the 2 x 4 analogy. What does it take to get peoples attention?

Many companies are back to pre-recession production levels, and they are doing this with fewer employees than before the crash. When they leaned-down as the recession deepened they used every trick to keep their key people, on the premise that when things turned they wanted to be able to ramp up quickly. And this is just what happened, except they also found they could get back to normal with fewer people.

I don’t find this exemplary, but I recognize the wisdom of it, and I have sincere empathy with those affected by this change in employment practices, as this is a situation not of their making, and they are the unfortunate casualties.

Proof that this is working is given by the U.S. productivity numbers, up 2.1% for the last quarter, but up 6.1% over the past four quarters, the largest gain since 2002. So, doing more with less seems to be working. So back to the analogy, what will it take to get the publics attention, a whack with a board? Times have changed and we need to revise our thinking on the employment numbers. Experts think these will shift down over time as the unemployed find other work and their numbers gradually decline. The time period for this is said to be lengthy and that is not a relief for those affected.
Out of this may come a sleek, streamlined, superefficient U.S. manufacturing industry - buffed-up by automated processing systems, among these highly efficient

Lasers: A bright future achieved

I have refrained from commenting, in my blogs, on the 50th anniversary of the first working laser, an event that is being celebrated this year and as such is receiving wide publicity. I have already presented my views on this momentous scientific breakthrough at several international conferences, with two more to go in the next few weeks. Also I have contributed to several publications, other than Industrial Laser Solutions, all as overviews.

I’d like to take this space to make the event more personal. On the day in 1960 when Ted Maiman’s ground-breaking experiment became public knowledge, I was a research staff member at Raytheon’s Research Division, where we were conducting basic material studies for the company's electronics interests. Working in the Ceramics Group, I was part of a team, approached by the Microwave Devices Group, to design and build a synthetic ruby crystal growing furnace; the ultimate goal was to use these crystals as the media for an optical maser (the old term for the laser).

Raytheon and several other electronics companies were madly rushing to be the first to make this optical maser function, as theorized by many physists. The interest of Raytheon’s Research Division was to gain a share of the government funding that would flow once the device could be proven.

After Maiman’s announcement, work at the laboratory ramped up as the path to success was opened and only lack of imagination would hinder success. Raytheon went on, without me, to advance the technology and to start a commercial laser division that eventually gained acclaim with its development of Nd:YAG, a material used as the energy source for the famous SS-500 laser system, widely used for laser processing by industry in the 1970s and 80s. The pace of laser development in those early years was frenetic as lab after lab made breakthroughs, sometimes weekly. The 1960s was a golden period in R&D for inventive minds that quickly brought forth the ion laser and the CO2 laser.

Shortly thereafter, I abandoned laser technology for my first love: electron beam devices. While working for a company manufacturing industrial e-beam evaporation and welding systems, I finished the requirements for my BS by submitting a thesis on “The Laser – A Bright Future”: talk about a trite title.

Try as I might, I can’t find a copy of the thesis, which probably didn’t survive several moves. But my memory is that I tapped what little published material I could find (before Google, remember) and constructed a glowing report on how the world would be the better for this powerful light. I mentioned laser drilling and laser welding as possibilities, ideas lifted from work done at Western Electric. As I recall, my professor gave me a C+, more for grammar than for technical exposition. I often think he had no idea what I was writing about.

So there you have my modest contribution to the beginnings of laser technology. Now, after four decades of intense immersion in the industrial material processing sector of this technology, I look back at that feeble forecast I made in the 1960s about this invention's contributions to humanity and think, if only.

It could be worse

It could be worse

It’s a lovely spring day and I am walking along the river, which is higher than normal thanks to the runoff from heavy rains resulting from several Northeasters we experienced. A faint voice calls out to me as through the trees I see a rowboat struggling to keeps its head against the roaring river. It’s the Town Crier, and as I near him I can just make out what he is saying.

“I didn’t expect the river to be this high and fast,” he says between gulps for air, as he was rowing to beat the band to keep positioned in the center of the river so that his voice could be heard in the village.

“Where’s your usual rower?” I ask.

“Had to let him go, what with the length and depth of the recession,” he answers. “Been running lean since then and I tell you it’s a chore to row, hold the script, and read the news, all at the same time.”

“Bedsides,” he yells as he digs his oars in to counter a particularly choppy rush of water. “I hadn’t figured on the river rising so suddenly. It’s not what the forecasters told us at the annual Criers meeting in March. We expected a slow, gradual increase in volume that would not cause worries about possible flooding.”

“But surely you saw the signs earlier,” I counter. “Rain set records for weeks and even after a mild winter, it surpassed the usual spring increases. I’ve been telling the guys at the tavern they might want to plan on an unexpected rise in the water.”

“Yeah, I heard about your comments, but like most, didn’t give them much credence, as the recent history of droughts had me question your sanity. Besides, I figured I could handle it without hiring back.”

“Well it’s easy to see I was right," I crow. “And before you comment, it is a surge, bound to taper off to a steady flow. But after the past experiences we’ll be happy with this bounty and count our blessing that the ground will be ripe for a good harvest this year.”

I don’t know,” he says. “I’m not ready to start passing the news that this is going to be a much better year than predicted. There is the possibility that some of the build up in the reservoir has to be drained off before we can expect a smooth predictable flow.”

“Granted,” I agree. “But that will happen and the effect will be just to stabilize the flow as I suggested last January. Besides a group of soothsayers down in Washington have decided that the pace of the economic recovery will be faster than expected and this performance will likely last for 18 more months.”

“Yes, but suppose Mother Nature sneaks up on us with some natural calamity like a volcano. Or suppose some other States have a drought and figure out a way to borrow our water. It could affect the volume and maybe my boat will scrape bottom again. And what if the gifts some Greeks are bearing turn out to be fake and the economy in Europe tanks?”

“Right,” I harrumph. And what are the chances those could happen at the same time?”

Just then another surge caught the prow of his boat and it swung around, taking the Crier downstream at an increasing rate. His last understandable words were: “Maybe with prosperity returning, the town fathers will let me rehire again I won’t have to do the news from this *#%&*# boat."

Up and down like a roller coaster

Just when I was beginning to feel good about global recovery, and at a time when industrial manufacturing news was overwhelmingly positive, comes the new threat of economic collapse in Europe, spawned in Greece and spreading throughout the rest of the world. While I was in Germany two weeks ago, this was all the talk amongst the European manufacturers; they were truly worried that this might be a sign that another economic recession was coming

During the last few years, it seems as though there have been a series of lurchings from one international crisis to another. For example, an expert on the morning network news today informs that the Iceland volcano saga may be just the tip of the iceberg. so to speak, A series of volcanoes may be stimulated by the current one, whose name I can’t pronounce, leading to a decade of ash generation problems, disrupting air traffic to and from Europe.

And I just read that Bender Shipbuilding, a company ILS profiled in 2003-4 was shut down and auctioned off last week. Bender was one of the first shipyards to use a laser for cutting thick plate for ship structures.

The Bender news was part of a Wall Street Journal article, stating that cuts are now common in US manufacturing, where potential capacity in April was just 70.1%, up from last June's 65.1%, but down below historic averages of 80.8%.

Bender’s demise is especially galling as the 91-year-old company built a reputations as an innovative shipbuilder, mostly of the small service boats used in industries such as the off-shore oil business and the Gulf fishing industry. Before the recession, they employed 2000 people and today the company is down to 180; it now remains as Signal Ship Repair and will not be involved in shipbuilding any longer.

I don't know what happened to the laser cutter. Itwasn’t listed as an asset of the company, but I am sure that it will appear somewhere else, maybe not in shipbuilding, but in some other company wanting to cut thick plate with high quality edges.

One bright light from this episode is that the auction brought in about $4 million, more than expected, and the auctioneer said it was a good sign that the recession was over because attendance and bidding was up. Small consolation for the employees of a once proud shipbuilder.

Aachen to expand to global prominence in laser processing

Last week I had the privilege, and pleasure, to return to the Fraunhofer Institute for Laser Technology (ILT) located in Aachen, Germany. Two specific reasons brought me to Aachen; the first was the eighth convening of the biennial International Laser Technology Congress – AKL ‘10, during which I participated in a Technology Business Day. The second purpose for the visit was to join in the celebration of the 25th Anniversary of ILT, an occasion that brought back memories of my first visit shortly after the opening of the then new institute.

AKL for years was a German-only event where activity at ILT was reviewed and presentations by sponsoring organizations were presented. Two years ago, ILT recognizing that its research and development work was international in scope, invited the world to attend AKL, thanks to its thoughtfully provided simultaneous translation services. For this an increasing number of non-Germans were grateful. However, as one of those, let me comment that the translators, while extremely efficient and capable of handling complex technical jargon, sometimes lagged in their delivery, causing some of the speaker’s points to be lost. Without advance copies of the PowerPoint presentations, we were left to buttonhole speakers for clarifications on points after the sessions.

That minor aggravation aside, the sessions were, as always, well attended, the opening session filling a large ballroom with most of the 500 attendees and 60 sponsoring companies. Concurrent sessions on Laser Material Processing, Laser Measuring Technology, and Laser Beam Sources drew heavy attendance with special emphasis on Laser Additive Manufacturing, Ultra-fast Precision Processing, and Laser Processing in Solar Technology.

Space is too short to comment on all of the interesting work presented, but the subject that seemed to create the most buzz at later social events ands sponsor exhibitions was the fast rise of Ultra-Fast Laser technology and applications. Is seems that only a few yeas ago laser devices were clunky bench-top arrangements of complex equipment. Now sleek, well designed and engineered, and less costly products are available and a range of new applications are being developed for these products. Laser technology influenced the growth of industrial laser markets more rapidly than many imagined. As a cap to the technical sessions the second Innovation Award was made to Fleming Du of Edgewave GmbH, for his development of a high beam quality Q-switched laser for microprocessing

The visit to ILTs 11,000 m2 facility, was nostalgic for me as I recalled standing on the mezzanine and looking down into a large, mostly empty hall 25 years ago and not having the foresight to imagine the current view, which is a completely crowded area jammed with laser systems conducting more than 60 processing developments overseen by more than 300 employees. ILT has come a long way, and under its current leader, Prof. Dr. Reinhart Proprawe, has expanded its scope of work internationally to the point where a massive expansion plan is underway that will increase the laboratory by several thousands of square meters. Work on the first phase of this, a multi-story car park, which will free up acreage for the building expansion, is well under way. This expansion is part of a 10-year plan that will see ILT and its associated RWTH Aachen University more than double in size with an 800,000 m2 expansion. This expansion is expected to create 10,000 new jobs as more than 250 nations and international companies will be able to conduct research and development alliances with the institutes.

On a final travel note; the trip home was complicated by the effluent by a burp from the Iceland volcano. Airports all over Western Europe were affected to one degree or another as the winds shifted the ash cloud back and forth all weekend. My flight out of Frankfurt finally left as the air traffic controllers gave the pilot permission to take a northerly route back to Boston. This took us over Amsterdam to the Faroe Islands and just south of the coast of Iceland where we passed over and had a spectacular view of the volcano spewing forth more ash. Quite a treat and for me a once in a lifetime view of an active volcano from almost on top of it.

Planes, trains, redux

I’m reminded of that old John Candy movie as European air travelers to and from Europe recently struggled to get to their destinations by whatever means they could, thanks to airline problems with Iceland’s volcanic ash. An acquaintance, in the U.S. for a conference, returned to Germany through Mexico to Madrid and then by train to Frankfurt. It was a case of adaptability and flexibility, traits of which I find we typically are in short supply.

I just returned from a trip to Long Island where I used an auto ferry for part of the trip. For those of you familiar with Interstate 95 in Connecticut, you know that the stretch from New Haven south can be a nightmare, so taking the ferry to and from Port Jefferson is a relaxing and stress-free way to cut more than 100 miles of heavily trafficked roads off the trip.

The point is that I adapted to a potentially messy situation on the Interstate and, by rearranging my plans, I built flexibility into the schedule that enabled me to pull this off. In all fairness, the ferry trips added another $25 to the trip cost, $100 for the ferries less the $75 I saved for mileage.

As this is being written I am assuming that a trip to Germany next week, where I will present at the AKL Technology Business Day in Aachen, will happen. However, it is a little more problematical, as I do not have a fall-back plan if the ash from Iceland's volcano returns to plague the skies again.

The subject of adapting to change and having the flexibility to make it happen is pertinent to our industry. The past few weeks have seen a plethora of news items on manufacturing in the U.S. adapting to the recession's recovery by making improvements in productivity. I have spoken to numerous managers from the equipment supplier industry who mention the commitment their customers have made to “lean” and “green” manufacturing, promulgated by the cuts they made as the recession deepened.

Quite often I heard the word flexibility mentioned as they told me of the draconian cuts that were effected and how they found they could survive with less. This experience, born in one of our most disastrous economic climates, may be an aberration, and as things begin to ease, the temptation to a looser approach, emulating the old ways, may return. Some would argue that they see hints of this in the staffing-up that is apparent at some of the leading suppliers. However, I would counter by pointing out that cuts made last year were deep into the marrow of the bone and that one can only push employee efficiency so far before you lose talent to competitors.

My message is the one I have harped on for some time now: lasers for industrial material processing are for the most part productivity enhancers, and in many cases automated to the point where productivity per man-hour is not lessened. I don’t have numbers to support this, but my instincts, based on long observation of this industry sector, tell me laser technology will ride out the recovery in good shape.

What goes around comes around

Attendees at last weeks SALA event were given reinforcement that fresh applications are making inroads into industry and that these manufacturing tools may, in the future, offset some, of the market softness projected as laser sheet metal cutting matures.

Both of these applications, laser additive manufacturing (LAM) and paint stripping, are not new; developments can be traced back to the 1970s. What prevented them from widespread industry acceptance was basically equipment oriented, the high cost and complexity of the lasers used. With the evolution of improved solid state and carbon dioxide lasers and the introduction of fiber lasers, the cost/watt for beam delivery has decreased to justifiable levels and the ancillary equipment; for LAM better and more efficient powder delivery and for paint stripping improved beam scanning devices and more efficient effluent exhaust systems, has made these two processes more user friendly.

As a consequence LAM, driven in part by today’s lean manufacturing practices, is expanding its user base from costly part repair to actual part manufacture for limited scale production. While paint stripping, heretofore confined to graffiti removal and some military aircraft paint removal operations, has broadened its appeal and other market sectors such as stripping of off-shore drill rigs and highway bridge paint removal are now considered practical. At SALA we saw a back pack model powered by a fiber laser that is being used to strip paint from sections of aircraft.

If indeed, the manufacturing world has gone lean, and orders for specific parts will be filled by instant manufacturing, then the LAM process will soar as it is the perfect answer for art-to-part thinking which is becoming common in certain sectors of manufacturing. At next months LAM Workshop, a large audience of interested manufacturers will get a glimpse of technology changes that bodes well for these processes to be a reliable and well used manufacturing procedure.

As for paint stripping, wider use on military aircraft will be superseded by use in the commercial airline industry, a potential major user of the technology and through the use of back pack type devices experience broader industry use in those applications requiring the ultimate in portability.

Considering that I was personally involved in both technologies in the 1970s it is very satisfying to see them become industry accepted manufacturing practices 35 years later.

On another note, I want to call attention to a feature article appearing in the April 19th issue of Newsweek magazine, where one of my favorite writers, Daniel Gross makes the case for a dramatic turnaround in the U.S. manufacturing sector. In The Comeback Country he makes the case that America has “pulled itself back from the brink - and why it’s destined to stay on top.” A nice contrarian perspective that is only marred by a weak kneed Editors placement of four economist’s view of The Shape of Things to Come. A classic case of my pet peeve on the use of “but” that I describe in My View in the May/June issue of Industrial Laser Solutions.

Is it or isn't it?

Guess who I ran into at the tavern this past weekend: the Town Crier. We shared a hard cider while he brought me up to date on what was happening on the local scene; he didn’t report world news because it would be stale by the time he got it from London. When last I had seen him he was preparing for the winter as we were in the throes of what appeared to be “an old fashioned New England winter.” It didn’t happen, though, and that old furry forecaster from Punxsutawney was wrong: we had an early spring.

The river stayed open this year, the Town Crier told me, but record rainfall precipitated high water all winter with floods in the spring, as new records for rainfall were set, so he couldn’t get out in his boat.

“Just goes to show you,” I intoned, “You can’t count on anything when it comes to forecasting. Why, I heard that the Federal government has a special committee that convenes to tell us when we are in or out of financial recession." )

“Is that right? “He asked as he exhaled some alcoholic breath that caused me to move the candle that illuminated our table, in case he ignited. “How do they do that?”

“Beats me,” I said, scratching my head for emphasis. “I guess they hibernate in that same hole as Punxsutawney Phil and don’t come out until the guys that meet under that old tree on Wall Street in New York City, to invest in companies, pick the magic number.”

I told him that the country seems to be doing okay as more pleasant weather arrives. Shoppers were back and the Merchant has been bragging about how increasing sales for the past three months has wiped out his thin inventory. The Farmer got his seed in already thanks to the early Spring and he is talking about record crops this year. It seems he has found some export markets and he is thinking about turning over some new acreage. This of course is good news for the Cooper as the need for his barrels has increased.

“But I heard that things in Europe were somewhat dicey," he countered.

“Old stuff.” I replied. “You need to get better data sources. You’re beginning to sound like that government committee who just peeked out of their hole and still see clouds. Maybe you need a better news source."

“But I get my news from travelers who post notes on the bulletin board in front of the town hall across the river where the stage stops. The people who leave these seem to have some interesting thoughts.”

“Ah, but do they sign them? And, if they do, what are their credentials and do they have an agenda?” I posited.

“Can’t say, but they seem to be in the know.” he apologized.

“There you go,” I said. “And this is what you have been broadcasting?”

Plunking down a few coins for the cider I left him scratching his head in a quandary as I head out for an afternoon tea party.

Markets are looking better

Markets are looking better
It must be a sign of the early Spring we are experiencing here in the Northeast: flowers are popping up way ahead of schedule, and my telephone is ringing with requests for an update on the January forecast for the industrial laser market.

I have just finished preparing a report I will deliver at the AKL ’10 Technology Business Day in Aachen next month (http://www.optoiq.com/index/photonics-technologies-applications/lfw-display/lfw-article-display/371996/articles/laser-focus-world/industry-news-2/2009/12/eli-innovation-award-2010-deadline-imminent.html) so I have been reviewing my numbers and find they are pretty much as expected (http://www.optoiq.com/index/lasers-for-manufacturing/display/ils-article-display/6731610609/articles/industrial-laser-solutions/volume-250/issue-10/features/the-worst_is_over.html). I was on target with growth in the energy, aerospace, semiconductor, microelectronics, and medical devices sectors. And, so far I've been correct on the timing stretch for the fabricated metal products market (second half) and automotive prospects (next year). So my first quarter grade rates an A.

I am concerned about disturbing news for Germany, as reported by Laura Stevens in the Wall Street Journal (http://on.wsj.com/c7DaDj) about German corporate failures. In addition, I have been receiving reports from other sources that all is not well with the Mittelstand (small and medium companies). These companies are the backbone of Germany’s export economy and also happen to be big-time users of industrial lasers, thanks to government subsidies to promote laser technology in the 1990s.

Germany is the engine that pumps the European economy, and its industrial laser products dominate certain markets. It’s a little early to speculate on the impact of an anticipated record number of bankruptcies, but the experts are projecting a sharp decline in the country's GNP. Will this disrupt my forecasts? Yes and no. I had planned on a slow recovery in Germany with probable help from expanding markets for its products in some of the other EU countries. But the depth of the problem with the Mittelstand may act to stultify my forecast to a greater degree.

On the other hand, China keeps increasing the demand for imported industrial lasers and, surprisingly, the aforementioned market sectors in the U.S. are stirring some unexpected growth with domestic suppliers. These may act to offset some of the German decline, and it still looks as though the 5% growth target is achievable.

In June I will be presenting a world view of the markets in a plenary session in celebration of the 50th anniversary of the laser to be given at the Stuttgart Laser Days. Perhaps I will have a better perspective at that time.

If this is Tuesday, it must be Belgium

Four industrial laser events are coming up in the next three months, two in Europe and two in the U.S., the first here in New England in two weeks. This event, the Symposium for Advanced Laser Applications (SALA) (www.ccat.us/sala) is, as the title implies, a two-day look at advances in industrial materials processing, with a focus on the applications that are of interest to the aerospace industry. However, the presenters are careful to advise that these applications are applicable to other industry sectors as well. One of two highlights is the first CCAT Innovation Award for Laser Applications in Manufacturing Operations, a long overdue recognition of the efforts individuals make to transition the technology into industry. The second is an Open House tour of CCAT, where SALA attendees will view five advanced laser material processing systems performing state-of-the-art applications such as laser cladding, laser drilling and laser paint stripping.

The second event chronologically is AKL’10, the International Laser Technology Congress (www.lasercongress.org) to be held in Aachen on May 5-7. This biennial event featuring more than 60 speakers has built a reputation as Germany’s leading forum for applications of laser technology in the production environment. As a presenter at the opening Technology Business Day, I can vouch for the quality of the technical presentations and the always busy technology exhibits that draw large crowds. This year the organizer, the Fraunhofer Institute for Laser Technology, celebrates its 25th Anniversary with a social celebration and tours of its facility on the last day. At a Wednesday evening banquet, the Arbeitskreis Lasertechnik AKL e.V. and the European Laser Institute will present their Innovation Award Laser Technology in a very impressive ceremony.

Later in May, the Laser Institute of America will present the Laser Additive Manufacturing (LAM) workshop in Houston on May 11-12. This is the second in the series that showcases the advances being made in this fast-growing technology. This year the feature, appropriate for the venue, will be tailoring surfaces for use in the oil, gas and energy industries. As the title indicates, this is a workshop where attendees have the opportunity to network with the speakers to learn more about LAM solutions. The highlights of LAM (www.laserinstitute.org/LAM) this year are the presentations by the always entertaining Professor Bill Steen, who will share his thoughts on the technology, and by Ingomar Kelbassa. who will describe an example of a processing application on aero-engine repairs.

And finally, if you made it this far, there is one left and that is the big one, LASYS 2010 (www.lasys-messe.de) in Stuttgart on June 8-10. A relative newcomer to the international show scene, this biennial trade fair for systems solutions in laser material processing is a one-of-a-kind event where, under one roof at the beautiful new Messe Stuttgart, legions of exhibitors, many direct competitors, will show their newest laser solutions for manufacturing operations. LASYS covers industrial lasers only and to back this up a new feature, The Solutions Centre, will be staffed by professionals ready to answer your most complex laser processing questions. Concurrent with the show are the Stuttgart Laser Technology Forum (SLT), the International Symposium on Laser Precision Microfabrication (LPM) and a short course on the Basics of Lasers and Laser Materials processing by the WLT.

If I survive all these events, there should be a resulting raft of interesting blogs.

I would be remiss if I did not mention my indebtedness to ILS Senior Editor Laureen Belleville, who is leaving for the world of biotechnology. Twenty-five years ago Laureen started her career with ILS helping me produce the first Industrial Laser Annual Handbook. Just fresh out of college she decided that technology publishing was her future and off and on over the next 20+ years, she and I worked to make ILS a leading industrial publication. Most recently, Laureen had been the driver behind our journey into the digital world and she deserves most of the credit for the ILS website and the e-newsletters. Frankly, without her, this would have been a hard trip for a dinosaur like me. So thanks, Laureen, and best of luck in your new endeavor; you will be missed.

Change for the sake of change, or…?

News item: The U.S. army has decided to forego bayonet training in favor of alternate exercises, learned in Iraq and Afghanistan ducking rifle-mounted projectiles, that place emphasis on twisting, turning, and dodging maneuvers than in hand-to-hand contact. In a spirit of disclosure, I am a Cold War veteran (got a medal to prove it) who was obliged to take bayonet training while in an expedited basic training program. I kept trying to explain to my Drill Sargent, a combat veteran named Hartsock (really), that I, with a Class C non-combat profile and destined for the Signal Corps Electronics school, shouldn't have to undergo this strenuous exercise.

Besides, I argued, unsuccessfully, if there was one round left in my weapon I was going to fire it rather than engage in a duel of cold steel with an adversary whose bayonet was three inches longer than mine. And it turns out, as a left hander in an Army whose training manuals were written for right-handers, the exercise as taught was backwards for me. So you can see my relief that a new generation of warriors won't be saddled with this outdated training regime. Today our highly trained and well educated warriors just call down air support, no more cold steel for them.

I'm reminded of this and another Cold War anecdote as I was having dinner in Bruges, Belgium, with a diverse international group and the subject turned to the former Eastern Block, our erstwhile foes in the Cold War. I told them the story of sitting with a colleague, just days after the Wall came down and the former Soviets became our friends overnight. We were in his apartment in St. Petersburg, and after a few vodka toasts started reminiscing about us being opponents in the Cold War. I recited the bayonet training exercise story to him and, laughing, he told a very similar story about his experiences as a conscripted basic trainee who, being a graduate physicist, found it even more amusing. We laughed because within a period of a few weeks we had become friends and compatriots as opposed to the previous situation.

All of the above happened because the Bruges dinner table discussion was about economic geography. I was being mildly criticized for continued use of the term Eastern Europe as an economic entity in European laser system sales. Actually, I simply use the same designations that appear in the Europeans' analysis of the laser market there; and this term is also used by financial reporters in other publications both here in the States and abroad.

My dinner host suggested I was really referring to the rise of industrial laser activity in Central Europe, as opposed to Eastern Europe; the difference being that the former, composed of hot economies in Slovenia, Slovakia, Romanian, Hungary, Poland, and the Czech Republic (to name a few) are being confused with the less-than-exuberant markets in the former Soviet States, known as Eastern Europe, which includes all the ‘stans.

"Whoa," I say, "Is this a reality? Am I off-base here?" Others at the table, mostly from the American Continent, agree with me. "Yes, you are," say my European hosts. "We refer to markets here in Europe as Western, Central, and Eastern and we see vibrant action in the Central region, but not in the Eastern."

Should I be a pioneer among my fellow laser market reporters and now divide European sales into three categories that mean nothing to most readers? My hosts agreed the too-detailed division does not resonate with most of the ILS readers. I'll throw it to these readers. Would it be better to refer to the markets as EU and non-EU countries; a description favored in the offices of NATO and the EU in Brussels? This would be a harder concept to get across in Asia where these geographic and economic distinctions are too complex to define when the message is laser sales, not politics.

So I'll leave it to readers. Should I, like the U.S. Army, drop an outdated exercise and get with the real world today or is the status quo OK for now? Frankly, divining the economic health of markets in three European entities, when I can barely get cooperation on financial statistics from just two now, will be a difficult task. But then I learned how to balance a bayoneted rifle under my right forearm, contrary too what my brain was wired for, so I should be able to adapt.