Editor’s note: Welcome to So That Happened, our editors’ takes on things going on in the manufacturing world that deserve some extra attention. This will appear regularly in the Member’s Only section of the site.
Moving up the List?
Have you been in a factory recently that had smooth, durable, wood-like floors that were the perfect surfaces for autonomous guided vehicles (AGVs) and other light mobile equipment? If so, there’s a good chance that those were ResinDek floors from Louisville, Kentucky-based UW Solutions.
On Wednesday, Apogee Enterprises Inc. announced plans to buy UW Solutions from its private equity owner Heartwood Partners for $240 million in cash. The deal caught my eye because Apogee barely made our IndustryWeek U.S. 500 list of the largest publicly traded manufacturing companies in the United States, landing at No. 499 with $1.44 billion in sales. In 2023, it was No. 427.
Apogee got its start as a glass shop, evolving throughout the past 75 years to become a large supplier of architectural products such as the fancy curved windows found on modern skyscrapers, framing systems for windows on those buildings and ultra-clean glass panes for framing art at major museums.
UW Solutions is also in the display space with its ChromaLuxe brand offering metal and wood prints of photos and art projects (also for museums as well as hotels, airports and other high-traffic areas). It’s Unisub brand makes blank acrylic things such as keychains and plaques that professional printers use for employee-of-the-year awards. And, it has ResinDek, the flooring division that primarily serves factories (with flooring and shelving systems).
“We are expanding our product offerings for non-residential construction by providing an entry into manufacturing, warehousing, and distribution center projects, while accelerating our efforts to diversify the (large-scale optical – glass business speak for giant panes of display glass for art museums) segment. We expect meaningful opportunities to utilize the performance coatings capabilities of the combined business to drive long-term growth,” Apogee CEO Ty R. Silberhorn said.
—Robert Schoenberger
An SKF Spinoff Plan Speaks to the Focus on Focus
Sink or swim, kid.
That was the message from the directors of global bearings, seals and lubricant maker SKF last week when they announced that they plan to spin off the company’s automotive business in the next 18 months.
The number underpinning that decision for the auto group, which accounts for nearly 30% of SKF’s sales: 5.6%, which was its adjusted operating margin in 2023 as it continued to adjust to an automotive sector going through what CFO Niclas Rosenlew calls “a profound transformation.”
By contrast, SKF’s industrial segment put up a 15.4% margin. In relatively cold corporate press release language, that was phrased as follows: “A more focused Industrial company will be even better equipped to develop and execute its strategy and allocation of resources.”
The idea of concentrating on fewer areas over building diverse portfolios has gained currency in recent years in many executive suites. Investors also like it: The deal-making advisors at KPMG LLP have pulled together research showing that companies with units growing at different paces and having different margins are being increasingly undervalued by markets. Focus is on fire.
— Geert De Lombaerde
Nearly 5,000 on Strike at Textron Aviation
When it comes to labor strife, most eyes are focused on Boeing Co., where more than 30,000 members of the International Association of Machinists and Aerospace Workers walked off the job just after midnight on Friday, Sept. 13, after rejecting a tentative contract.
Still others have their eyes focused on Stellantis, which the United Autoworkers has accused of unfair labor practices. The union filed charges with the National Labor Relations Board just days after the Boeing strike began.
What may have flown under the radar is unrest at Textron Aviation in Wichita, where nearly 5,000 IAM members rejected a proposed agreement Sept. 21 with the aircraft manufacturer and initiated a strike following the expiration of their current agreement on Monday.
On its website, the union says that key sticking points revolve around wages, healthcare, job security and retirement security. The statement further noted that mediators have been contacted and sounded hopeful that talks could “potentially” resume next week.
The contract included a 26% general wage increase for union employees over its four-year term, with 11% of the increase immediately on ratification, as well as new longevity pay and an increase in the company’s 401k match, according to Textron.
For its part, Textron Aviation, which produces Cessna and Beechcraft jets, reports on its website that the strike impacts West Campus, East Campus, Wichita Service Center and components manufacturing facility locations.
Nevertheless, “we are prepared to maintain operations and will provide continued service and support for our customers,” the site stated.
—Jill Jusko
Technology Survey Says Tech Isn’t the Issue
Manufacturers are still tackling the exact same problems that plagued them prior to the Industrial Revolution.
A new survey, “The State of Technology in the Manufacturing Industry,” conducted in June 2024 by the ABI Research consulting firm, included feedback from 461 manufacturing leaders from in the Germany, Malaysia and the United States. Half of the top 10 concerns relate to workforce, not tech, with recruitment and retention cited as the top two people-focused problems.
Respondents also overwhelmingly felt that the next five years will bring more technology change to manufacturing than in the previous decade.
More than 75% of respondents felt cloud technology will foster real-time collaboration across the entire supply chain and enable remote monitoring of manufacturing facilities from pretty much anywhere on the planet.
A majority of respondents from Germany and Malaysia (62% and 60%) felt that cloud solutions boost manufacturing efficiency versus only 49% of U.S. manufacturers.
Companies such as John Deere are still way ahead of the game when it comes to 5G deployment, according to the report.
- 44% of responding companies are only in the initial rollouts of enterprise 4G
- 75% are still figuring out how to implement 5G and/or evaluating suppliers
- 74% of manufacturers say private cellular increases security of manufacturing data
Regarding cybersecurity, manufacturers in Malaysia and the U.S. agreed that vulnerabilities new technologies like AI, cloud computing and robotics pose the greatest cybersecurity risks. The survey lumps 5G into “new tech” which seems to conflict with the previous statements about private cellular and added security. German manufacturers worry more about data breaches and theft than new tech vulnerabilities.
The survey sheds more light on what practical use cases we might see for the much-hyped generative AI (GenAI) technology. More than three-quarters (78%) of respondents think GenAI’s most common use case will be identifying the root of production issues. Slightly fewer believe GenAI will enable the faster creation of work instructions.
There’s still (in my opinion way too much) faith the industrial metaverse might play a role in manufacturing. In Malaysia, 83% of respondents, in Germany 82% and in the U.S. 73% feel the metaverse can aid in new product development. Note: not “will” aid in new product development but “can” aid.
U.S. companies cited staff training and upskilling as the top use case for the industrial metaverse. Replace the buzzword with “virtual/augmented/mixed reality” (XR) and this is precisely what I’m seeing from live deployments.
On the IT/OT divide, only 39% of respondents feel those teams collaborate effectively. So, all’s well in that continuing debate…
—Dennis Scimeca
On Reshoring, Many Are Minding the Gap
Tony Guzzi last week painted one of the more intriguing silver linings we’ve seen in a while.
Speaking at the recent D.A. Davidson 23rd Annual Diversified Industrials & Services Conference, the chairman, president and CEO of construction and infrastructure titan Emcor Group Inc. said the push toward reshoring and nearshoring production capacity and shortening supply chains isn’t suffering from the general malaise in manufacturing investment. If anything, he added, the capex lull may be giving smart leadership teams a special window of opportunity.
