Outlook for 2012
 By Glynn Fletcher – President Americas, GF AgieCharmilles
Dear valued GF AgieCharmilles customer,
For the first time in several years, U.S. manufacturing has outperformed the rest of the economy, and we at GF AgieCharmilles see that strong performance continuing through 2012.
While several industries have contributed to this positive growth, the Aerospace market sector, in particular, is one we see continuing to present a significant amount of opportunity going forward in 2012. We base our predictions, in large part, on the fact that Boeing has estimated that commercial airline companies will need 33,500 new airplanes by the year 2030, a need valued at about $4.0 trillion.
And what is most noteworthy is that a large majority of those airplanes will be built in North America, which presents a tremendous amount of opportunity for U.S. manufacturing. And those opportunities are further expanded when one also takes into account the defense sector of the Aerospace industry, a sector that the United States spends as much money on as the rest of the world combined does.
In addition to increased Aerospace work in 2012, U.S. manufacturers will see significantly more work once outsourced to China returning to the United States, mainly because China is no longer the "default location" for low-cost plants to supply the U.S. market.
Chinese wage inflation running at 16% a year for a decade has closed much of the cost gap between the two countries. The gap in "productivity-adjusted wages" is expected to narrow from 22% of U.S. levels in 2005 to 43% (61% for the U.S. South) by 2015. Add in shipping costs, reliability woes and technology piracy, and the case for manufacturing in the United States grows even stronger. In fact, we at GF AgieCharmilles are currently seeing a surprising amount of the production of computers, electrical equipment, machinery, automobiles and engine/motor parts, plastics and rubber, fabricated metals and even furniture making its way back to the United States.
However, to truly secure the business opportunities in 2012 and beyond, U.S. manufacturers must continue maintaining and increasing their competitive advantages. Simply adding more spindles to improve productivity and capacity is no longer the most effective approach. Instead, incorporating highly advanced manufacturing systems will differentiate U.S. manufacturers from the competition and significantly improve productivity.
As a machine tool building company, GF AgieCharmilles' plan has been, and will continue to be, developing such complete high-tech manufacturing systems that deliver increased speed, efficiency and precision and that allow you, our customer, to achieve more with less. But just as critical, we will continue to pair these systems with unparalleled service, application support and training to truly optimize part processing operations and to further leverage the competitive advantages such systems provide.
We at GF AgieCharmilles also know that success is not created and delivered by any one function within an organization. Leveraging the value inherent in advanced precision machining solutions, for instance, requires an orchestrated effort on our part as a supplier, which is why we have the resources in place for proactively, not reactively, working with our customers for extended periods beyond the initial machine installation to ensure that value expectations are met.
In closing, GF AgieCharmiles would like to extend a heartfelt thanks to all our customers for their loyalty. For our part, we will continually strive to live up to our claim of "the global reference for precision machining." And we will continue to not only supply high performance machine tools but to also provide the support resources necessary to ensure that you, our customer, do indeed realize the entire value anticipated when you selected us as your manufacturing partner.
Happy New Year, and all of us here at GF AgieCharmilles wish you all the best in 2012.
Sincerely,
Glynn Fletcher
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