ROBOT SLOWDOWN; Robots suffer from joblessness, too
The bloom is off the robot boom.
Lured by forecasts of a market that would soar to $1 billion by 1990, scores of firms jumped into the robot business in the past year including such corporate heavyweights as General Electric, International Business Machines, and General Motors.
But current robot sales are being nipped as companies cut back on machinery purchases, intensifying an already fierce competitive battle. The result may be that some robotmakers leave the fray. ''A shakeout is inevitable,'' says Nathanael B. Greene Jr., an analyst with the San Francisco brokerage firm Hambrecht & Quist.
At the same time, the scramble to replace sagging sales to automobile and farm-equipment makers promises to speed development of new robot uses. So, over the long haul, the outlook for the robot industry still appears promising. ''I see no reason right now to change my long-term trend'' projections, says Bache Halsey Stuart Shields vice-president Laura Conigliaro. She sees robot sales of $ 335 million to $350 million by 1984.
For most robotmakers now, though, sales are running significantly below last year's level. ''For the industry, a 10 to 15 percent decline (for each company) is in the ballpark,'' says George Rehfeldt, group vice-president at Cincinnati Milicron, a major robotmaker.
As a result, the industry's growth rate has been cut in half. From 1980 to 1981, robot sales grew at a 55 percent rate to $155 million. This year they are expect to grow at a 26 percent rate to $195 million, according to Bache estimates. In 1983, Ms. Conigliaro says she thinks robot sales could range between $240 million and $290 million.
The only reason sales are up at all is that ''so many new companies are being added to the industry,'' and each adds some new business, Ms. Conigliaro says.
Robotmakers have been heavily dependent on auto companies and to a lesser extent on farm-equipment makers, both of whom have been hard hit by the recession. Their woes are the key reason that orders for all machine tools have fallen 75 percent from the first quarter of 1980.
''It is our customers who are in trouble,'' explains Robert Trouteaud, a marketing official at Prab Robots Inc. In Prab's second quarter, which ended April 30, new orders were flat, and the order backlog declined 12 percent from the previous quarter.
In addition to delaying robot purchases, companies also have slashed robot-related hiring. Demand for engineers who specialize in designing robot applications ''is down 20 percent'' from last year, says Jeffrey Christian, president of Christian & Timbers, a Cleveland-based high-technology search firm.
Robotmakers have reacted to sluggish sales both by cutting prices and by offering below-market financing for robot purchases. ''We are in a tough market and are fighting for every deal,'' says Cincinnati Milicron executive Rehfeldt. Earlier this year, for example, Asea Inc., the US subsidiary of the Swedish firm Asea AB, cut the price of its robots 25 percent.
The sales battle is especially important to more established robot companies who want to hold their share of the market in the face of competition from new entrants. As a market matures, the share of pioneering firms usually declines. For example, Ms. Conigliaro estimates that Unimation Inc., the leading US robot producer, will see its market share slide from 43.8 percent in 1981 to 32 percent this year and 23 percent in 1983. Unimation officials could not be reached for comment.
However, executives from large firms will battle for every market share point. Reacting to Bache estimates that Cincinnati Milicron's share will slip from 32 percent in 1981 to 16 percent in 1983, Rehfeldt says, ''If our share of the market went to 16 percent I wouldn't be working here any more.''
In their effort to boost sales, robot firms are going after new users. Food manufacturers and warehouses are one major new source of business. ''Applications in food processing have definitely increased,'' says Paul Von Jankowsky, a spokesman for the Robot Institute of America.
And new robotmakers are looking at other markets far afield from the auto and farm-equipment markets. For example, makers of small assembly robots are hoping to increase the use of robots in manufacturing electronic gear. ''I see some rapid advances in electronics and light assembly,'' Mr. Christian says.
Still in the short term at least, robot firms find themselves with excess manufacturing capacity. ''We have more (production) capacity than we know what to do with,'' Prab vice-president Walter K. Weisel told an industry meeting earlier this year.
Already, managers have been shunted aside as companies struggle with the robot sales downturn. For instance, General Electric Company recently replaced the general manager of its robot operations and brought in an executive ''a little more attuned to running what is going to be a very big business,'' a corporate spokesman says.
One problem the new manager at GE faces is how to reduce the inventory of robots GE has contracted to buy from Hitachi Ltd. of Japan. ''We are committed to take (a certain number) for resale whether or not we can move them,'' the GE spokesman notes.
However, some robot firms have escaped the current downturn relatively unscathed. At Automatix Inc., a two-year-old Massachusetts firm, sales are running 300 percent above last year and should hit $9 million in 1982, according to company chairman and president Philippe Villers. Automatix markets turn-key robot systems for arc welding, assembly, and inspection, and is a leader in the use of robot vision.
''Intelligent robot systems have a special appeal to customers,'' Mr Villers says. An intelligent robot is one controlled by a computer which allows it to ''sense'' and react to its surroundings using visual or tactile sensors.''The appeal is that advanced or intelligent robots have enormous potential and customers don't want to put together the large teams (needed to design and build robot systems) themselves.'' Who's who in the robot industry: estimated share of US market Unimation 42 percent Cincinnati Milacron 25 percent Asea 8 percent DeVilbiss 6 percent Prab 6 percent Copperweld 4 percent Advanced Robotics 3 percent Nordson 2 percent Automatix 2 percent Source: Hambrecht & Quist