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Rebuffs NMTBA campaign: Hurco leads push to let VRAs lapse.

Rebuffs NMTBA campaign: Hurco leads push to let VRAs lapse

"They have failed." That's how a White Paper characterizes the voluntary restraint agreements limiting the import of machine tools into the United States. Issued by Hurco Companies Inc last month, it presents a case against any extension of the VRAs and calls for their expiration on Dec 31 after being in place for five years.

Presented at a Hurco press conference, it claims "the VRAs have the perverse effect of favoring Japan's machine-tool industry rather than the US machine-tool companies that were supposed to be aided. Japan fears most of the competition from a marriage of low-cost iron (from countries like Taiwan, South Korea, Turkey, Mexico, Poland, etc) with European or American CNC technology, and it is this marriage that is impaired by the VRAs."

Hurco feels VRA extension would interfere with the efforts of aggressive US machine-tool companies to compete in the US and on a worldwide basis, would contribute to the further decline of static US firms, and would work at cross-purposes to the legitimate aim of maintaining the US machine-tool capability as a vital part of the US national defense.

Brian McLaughlin, Hurco CEO, points out that the VRA structure is a contradiction to US policy committed to free trade and that, as the US is no longer the world's largest machine-tool market, few US companies will survive under any circumstances if they don't achieve the economies of scale achievable by addressing the world market.

Hurco, a machine-tool and numerical-control producer, claims the VRAs don't address the national security issue because they ignore the CNC and software portion of the machine tool which, rather than its "iron", is the key to its performance. "Most significantly, almost all the companies supporting VRA extension on national security grounds are buying computer numerical controls from Fanuc of Japan," the White Paper claims, adding: "Japan's CNC manufacturers are completely uninhibited by the VRAs. Since this is the part of the machine that often sells the whole package, Japanese machine-tool companies suffer no practical restriction from the VRAs."

Even so, the position paper rejects the idea of extending VRAs to cover CNC and software. "CNC technology involves leading-edge use of state-of-the-art computer chips and software, and only those companies that match their efforts in the marketplace daily against the best technology of the world's leading players will stay competitive techonologically."

The paper takes a swipe at the NMTBA--The Assn for Manufacturing Technology and its efforts to push the Bush Administration to extend the VRAs even though Hurco is a member of the group. "What their position paper didn't say was more important than what it did," Hurco claims, noting only a small portion of the association's membership is impacted by the VRAs; that only a few strong supporters have emerged; that the association never canvassed its membership on its extension campaign; and that most machine-tool executives Hurco contacted have little knowledge of the issue and no conviction either way.

The NMTBA contends that the VRAs accomplished what they set out to do; that from 1987 to 1989, US machine-tool companies averaged productivity gains of 11.3% per year. It claims the 24 VRA-affected companies invested $350.7 million from 1987 to 1991, a 90% increase in investment; that their spending for R&D over the five-year period rose, as a percentage of sales by 40% from 3.8% in 1986 to 5.3% in 1990; and that during that period, 88% of the NMTBA survey respondents had introduced new product lines and were working to open new markets.

The NMTBA contends that the company's balance sheets haven't improved and that lasting stability and full strength of the industry have not been achieved, necessitating extension of the VRAs.

Hurco claims that "If the US truly wants to assure that its machine-tool industry will survive and prosper, it can best play a role in insuring that the US dollar won't again become an inflated-value currency vis-a-vis our major trading partners."

PHOTO : Hurco's McLaughlin
COPYRIGHT 1991 Nelson Publishing
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Hurco Companies Inc., voluntary restraint agreements, National Machine Tool Builders' Association
Publication:Tooling & Production
Date:Nov 1, 1991
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