[John] CAPOZZI is President of K. N. Aronson, Inc., Arcade, N.Y
The experience of manufacturing equipment for an international welding market, and then selling to that market, is a relatively new one for K. N. Aronson, Arcade, N.Y.
Until 1985, the company's sales outside the U.S. were more a matter of good fortune and timing than of design. In the succeeding years, international sales have more than tripled and are a growing part of the company's business. This dramatic change can be attributed, in part, to ownership by a corporation that is international in scope and is committed to the welding and metal-working industries. By way of background, K. N. Aronson is principally owned by Koike Sanso Kogyo Company, Ltd., of Tokyo; a minority share is held by Nippon Sanso Kogyo Company, Ltd. K. N. Aronson came into being when the two Japanese companies purchased the Aronson Machine Company and the Airco Cutting Machine operations from BOC Group, London, UK. Koike and Nippon combined their existing American operations — Koike America and Tanaka, respectively—with the former Airco businesses to create K. N. Aronson, Inc.
Present and former parent organizations are both headquartered overseas, and both function all over the world; but it is a basic difference in philosophy that has been responsible for increased international sales of cutting machines and welding positioners.
In short, Koike Sanso has made a worldwide commitment to international sales. This business philosophy, embodied in company president Yasuo Koike, demands that all of the company's sales offices throughout the world sell the K. N. Aronson products to obtain more volume for the business.
As a result, K. N. Aronson markets products around the world through the Koiko Sanso organization. Koike has divided the world market among its various sales offices. For example, K. N. Aronson is responsible for all of its own and Koike products in all of the Americas and Israel. The corporation's other sales organizations are Koike-Europe, Koike- Korea, Koike-Singapore and Koike headquarters in Tokyo. The pricing and specifications of K. N. Aronson products is controlled by the company's U.S. headquarters in Arcade, N.Y. All special inquiries are also process there, and the company maintains reasonably good control over the situation.
Company management recognizes the strengths and weaknesses of the American and Japanese manufacturing groups, taking advantage of the strengths and improving the weak areas to expand its market share. For example, when K. N. Aronson came into being, it was agreed that all cutting development and engineering would be done in Japan and positioning technology would reside in Arcade, the traditional strong suit for each entity. That policy has evolved into a good working relationship, where each group provides input relative to its own market needs to help the other develop the right products. Not only is technology leveraged, but so is manufacturing. International manufacturing capability is quite extensive. Basically, a large part of Koike's Tokyo cutting machine production line has been duplicated in Arcade. Engineers from Japan were sent to the U.S. on temporary assignment to help convert designs from metric to the English/inch system and to help set up comparable manufacturing methods.
With today's relatively weak dollar, the machines made on this U.S. assembly line have, in many cases, a cost advantage. Of course, this is predicated upon similar production volumes and obtaining domestic vendor materials. Regardless, when one adds up the exchange rate difference, freight costs and import costs, the domestic machines still maintain a slight cost advantage, plus significantly better lead times.
Currently, the company produces seven major Koike cutting machines in the U.S. The variations and different configurations of those models extend the product line to more than 100 machine models.
With geographically diverse manufacturing, the company has the option to choose the most advantageous location. The decision is based on price, delivery, foreign acceptance, availability of vendor materials and, in some cases, service or government policy. A classic example is the political climate Japanese companies face in Korea.
Korea formerly imported vast amounts of technology and goods from Japan to further its own industrialization, which eventually led to a serious imbalance of trade. As a consequence, Korea now places severe restrictions on Japanese imports. At the same time, Korea is attempting to expand American imports to prevent trade imbalances from reaching the point where acrimony develops. Korea is very sensitive to worldwide perceptions, as evidenced by its efforts in staging the 1988 Olympics, and does not wish to be labeled an unfair competitor. Daewoo Industries, one of Korea's industrial giants, is a regular customer of Koike Sanso. Daewoo's Automotive and Heavy Machinery Divisions have been using and appreciating Koike cutting machines for 10 years. However, to comply with Korean government guidelines to reduce reliance on Japanese goods, Daewoo would have been forced to look elsewhere for its cutting machines. K. N. Aronson's structure, aided by a favorable exchange rate,...