GOTHENBURG (Reuters) – Swedish engineering company SKF aims to create a demand slowdown to its advantage, the company’s chief executive, said, ” the strengthening of an intelligence program that has already been sent out to investment will rise.
FILE PHOTO: NEW headquarters, pictured in Gothenburg, Sweden, 11 September, 2019. REUTERS/Johannes Hellstrom
SKF supplies bearings to the automotive and industrial markets, has automated the production of a range of plants and animals, but the bulk of the 94 factories still need to be addressed.
“It’s been a long period of time in which we have had to fight in order to keep up with the high demand in some of the plants, and you can’t get it to rebuild the plant in a situation like that,” Alrik Danielson, told Reuters.
“So, it is clear that a number of these activities will speed up now.”
The world’s biggest bearings maker, which produces the likes of car manufacturers, Tesla and Volkswagen VOWG_p.DE), as well as a wind-turbine-makers, and in July posted a first-quarter decline in the sales of organic products, since in 2016.
That will break the years of strong growth has been accompanied by a forecast for a decline in demand on a year-on-year in the third quarter, with steady demand for its industrial businesses, and lower volumes in the automotive industry.
Danielson at the helm since 2015 and has called for a review of the factory’s network, cutting the number of plant species, and the relocation of production to better match demand from the customer, and to invest in the automation process, allowing jobs to be lost in their hundreds on the affected lines.
The Gothenburg-based company’s products can be found in most machinery with moving parts, expected to be 2.8 billion crowns ($288 million) in spending this year, an increase of 50% from 2016 onwards.
Danielson said that with the increased investment in the future, it will be considered and energy, it is the return on investment on projects.
“I have to say that the rate of return on this investment has been very good, so I’m not worried about that.”
IT is the automated parts of the production in Gothenburg, sweden, as well as in its factories in Schweinfurt, Germany, and an AMERICAN-style factory in Flowery Branch, Georgia, germany, among others.
It has already been highlighted in the plans for a new factory, Xinchang, China, while scaling down in Bari, Italy, where the construction of an automated production signal.
The automation of the production channel in Gothenburg, sweden in 2016 on the left 20 or more employees for the execution of a process that used to be 100 employees.
While it’s easy to hammer, it would have been much in evidence before the switch to automation has taken to lower lead times, improved quality, and greater flexibility. This in turn means that IT can continue to compete on cost, even for small orders, cut to size. THE WAIT-AND-SEE-THE-MARKETS
A lot of IT, the markets are in a wait-and-see mode, in anticipation of more clarity on the U.S.-china trade war and the conclusion of Britain’s planned exit from the European Union, but it is a pent-up need for investment in technology that can be used as a pillow, Danielson said.
“Yes, it’s a bit weaker, and we have said that, but it’s not a disaster by any means. My feeling is that it’s mostly wait-and-see ” (the markets) at this point,” he said.
Danielson added that to the ever-changing technology landscape and, with it, power, sensor, and analytical tools, it is also encouraging co-investment to be able to adapt to new business models.
“What’s really interesting is that the rapid pace of technological change, and gives a child the incentive to invest,” he said.
Even if you are sitting in your boardroom, and to invest in capacity, which is necessary for the modernization of your plant in order to remain competitive.”
FILE PHOTO: NEW CEO Alrik Danielson poses for a photo at the NEW head office is in Gothenburg, Sweden, 11 September, 2019. REUTERS/Johannes Hellstrom
Many analysts have questioned IT’s ability to defend its margins, as demand is on the decline, it is a business that is traditionally sensitive to economic downturns.
Danielson counters this by pointing to the higher margins last year, at the company’s peak years before the financial crisis.
“I’m sure we’ll be much better prepared to handle the question of swing sets today we have come to expect,” he said.
Reporting by Johannes Hellstrom; Editing by Keith Weir and David Goodman