Here in Cincinnati, one refers to Cincinnati Milacron simply as "the Mill." That's about two parts familiarity and one part fondness for a company that has been successfully making machine tools here for over a century. Go abroad and you'll find no name more symbolic of American machine tools than Cincinnati Milacron. Stay home, and you'll find an entire industry of people that has followed this company for years.
So it came as a shock, but little surprise, when Milacron announced that it is selling its machine tool business to Unova. All business indicators have pointed to this eventuality for years. It says much for the Milacron mystique, though, that so many couldn't quite believe that it would ever come to be.
Milacron chairman Dan Meyer calls the sale "bittersweet," explaining that it's difficult to cast off such a central part of one's heritage, but that the move nonetheless is in the best interests of both Milacron and the machine tool business it leaves behind.
I have to agree. Milacron and Unova are companies going in opposite directions. Milacron's plastics business eclipsed machine tools long ago. Then in the last few years the Industrial Products Division—cutting tools, grinding wheels and coolant—became larger as well, leaving machine tools accounting for less than a quarter of the business. There were better places for the company to invest.
Unova, on the other hand, sees the machine tool business as its primary growth path. Already well represented in automotive production, Unova gains a large stake in standard machine tools as well as a strong presence in the aerospace industry. The new firm will be around $2 billion in sales, 60 percent of which is on the machine tool side.
Americans have good reason to be suspicious of machine tool company acquisitions. In the 1980s, the lack of corporate commitment wrecked many of our most venerable builders. But this is different. This is a company that is actually dedicating itself to the machine tool business, and that has just bet a big piece of their future on it. To stay competitive in this business, you have to love machine tools. Thankfully, there are still companies that do, and that have the resources to stick around for the long haul.
Maybe it's not quite going to be the Mill anymore. It's hard to say. But this new company is going to be among the world's most powerful machine tool builders, and we're awfully glad to see it here.