It never ceases to amaze me how quickly things can change. So I read with great interest the results of the recent World Machine Tool Output & Consumption Survey. The Survey is an annual tally of international machine tool production and consumption, sponsored by Gardner Publications, the publisher of Modern Machine Shop. (See the MMS Online Reports section for details)
While there was no change in the order of the world's top five machine tool producers last year—respectively Japan, Germany, United States, Italy and Switzerland—the gap between the top two has grown incredibly close. According to the Report's estimate, Japan produced some $7.7 billion worth of machine tools in 1999 while Germany came in just behind at $7.5 billion. "So what?" you say. After all, we all know that Japan and Germany dominate world machine tool production. The big deal is how close Germany is to regaining the lead, particularly when you consider that Japan has been the world's leading producer since 1982, and for much of that time by a very large margin.
Not so long ago, when European industry was mired in a recession that many machine tool builders failed to survive, such a shift would have been unthinkable. Even when Japan's domestic market went south in the middle 1990s, it was able to maintain its lead through aggressive exports. Indeed, Japan still exports more than 70 percent of its production versus Germany's 55 percent.
There are environmental contributors to these changes, not the least of which is the continuing dismal state of the Japanese economy in comparison to the relatively healthy state of affairs in Europe. For this and other reasons, I wouldn't bet that Japan's machine tool industry is headed for serious trouble over the long term.
But such shifts nonetheless illustrate that current thinking as to whom the dominant powers of the future will be is frequently wrong. Moreover, let me suggest that when change seems to happen quickly, it's more likely the result of unperceived forces that have been in play for a much longer time.
The lesson of it all is that no competitor's position is unassailable. Indeed, most competitors' opportunities and limitations have the most to do with their own points of view. Even though someone is way on top right now doesn't mean there isn't room for a hungry player to make its mark.