The last domestic motor manufacturer is now in foreign hands. On top of it, imported motors are not meeting energy-efficiency requirements here in the land where such design considerations first emerged.
Just what’s going on?
These thoughts—and the consequences for green engineering and U.S. manufacturing—hit me recently when I visited Baldor motors in Fort Smith, Ark.
Baldor hosted a meeting for publishers of the magazines they advertise in, and Design News—one of our newly acquired titles—has worked with Baldor for many years. It was the first such meeting since 2006 when they hosted 50 publishers, this year they invited 30, this in itself may be reflection of the woes in traditional business to business media or perhaps Baldor is being more discriminating.
The event was graciously hosted by Randy Breaux, Baldor’s VP of Marketing who has a disarming Cajun charm but anyone driving marketing for a billion dollar-plus company is one smart guy. Randy kicked off the meeting with an overview of Baldor which was fascinating for me because I have spent my media career in the electronics market and all this motor stuff is brand new to me.
Randy kicked off with details on how Baldor was just purchased by the Swiss engineering giant ABB for $4.3 billion. This means the last domestic motor manufacturer is now in foreign hands.
This is not a nationalistic rant but more a question of why? In other industries, the U.S. has maintained a presence; think cars, semiconductors, aerospace, and software and heavy equipment. So why did the U.S. electric motor business become foreign controlled?
Motors are heavy and are essential to every domestic industry and application you can possibly think of; conveyors, escalators, elevators, farms, mining, water and waste treatment, food and chemical processing, car washes, auto dealerships even theme parks. In the average commercial building , 40% of the energy budget goes to lighting but another 40% goes to electric motors in the elevators and HVAC systems. So, given the potential for energy savings in motor control, why hasn’t the U.S. maintained a presence in this market?
John Malinowski talked to us about newly implemented motor energy efficiency legislation (EISA) that was started here in the U.S. and now leads the world but is unfortunately very poorly enforced. This means that thousands of motors are coming into the country through loopholes or lack of oversight that aren’t meeting levels of efficiency set back in 2007. It’s always interesting to see how these innovation vs. just good-enough-but-cheap tech battles play out.
What's the future hold?
I think Baldor will win in the long run because energy costs are constantly rising and the cost of a motor is only 2% of total lifetime cost, on average energy costs are 11x the purchase price to run a motor for a year.
I also learned that the controllers for motors are called “drives” and this is where the semiconductor content comes in because intelligent controllers can save 40% in energy costs and 32 bit microcontrollers have the processing power to save a lot of energy. Motor drives are also a major product for ABB so it explains why the Baldor acquisition is strategic for ABB.
I missed the factory tour but would have loved to see the winding and fabrication of these huge motors. Michael Faraday would be proud!
Also worth noting is that Randy told us that orders were up 30% in January over last year and that is a very clear indicator of a jump in economic activity in the U.S. Two major drivers of growth are agriculture (have you been following the price of corn?) and the environmental controls industry, going green sometimes needs a big motor.
Baldor has been making electric motors for 91 years and as we saw there is continuous innovation and improvement in the motor market. They’re now foreign-owned. Any idea, where the next new motor start-ups will be coming from?
David Blaza is senior vice president of UBM Electronics (the company that publishes EE Times and EDN). David has over 20 years of sales, marketing, and publishing experience in the technology sector working for companies as diverse as IBM, Motorola, Mars Electronics, CMP and now United Business Media. He is a graduate of the University of Bradford, England (BS, Materials Science) and the University of Stirling, Scotland (MS in Economics & Technology).