GMF Robotics to Lay Off 200; Cites Cuts in GM Orders
GMF Robotics, the nation’s largest industrial robot company, said Friday that it will lay off 200 of its 690 employees as a result of a sharp cutback in robot orders from its main customer--General Motors.
GMF, a 50-50 joint venture between GM and Fanuc Ltd., a Japanese robotics firm, said it is being forced to reduce its work force and streamline its management structure as a result of losing $88 million worth of robot orders from the auto industry, mostly from GM.
The robot producer, based in Troy, Mich., said GM had canceled big orders for robot painting systems and other automation equipment as part of the auto maker’s broad cutback in capital spending on future product programs.
Easy Access to GM
GMF, set up four years ago by GM as part of the auto maker’s aggressive push into factory automation, quickly surged to become the sales leader in the robot industry on the strength of its easy access to GM, the nation’s biggest robot customer. GM had set up the venture as a way to gain access to Japanese robot-making technology.
Today, Fanuc still produces virtually all of the hardware in GMF’s robots, while GMF’s American engineers develop the computer software needed to tailor its robots to the needs of its customers.
Those ties to Fanuc, one of the world’s leading robot producers, gave GMF another big edge over smaller domestic robot producers, which lacked such easy access to Japanese manufacturing technology.
As a result, by 1985 GMF had captured 31% of the industrial robot market in the United States, with sales of $187 million. It had become so successful, in fact, that many of its competitors started to grumble that GMF had an unfair advantage in bidding for GM work, which has accounted for nearly three-quarters of GMF’s sales.
But that heavy dependence on GM has now come back to haunt GMF. Plagued by weak profit margins and sluggish sales for many of its newest car lines, GM has over the last few months begun to pull back from some of its most ambitious future product programs to save money.
At the same time, the company has found it increasingly difficult to integrate all of its new automation equipment into the production flow on some of its factory floors, and so has been forced to delay the introduction of new robotics technology in some manufacturing applications. So cutbacks in robot orders were inevitable.
Industry analysts add that the entire robotics industry has been slumping this year, as capital spending by major manufacturing companies has been slowing down.
“Everyone else in the robot industry has already had layoffs, but GMF has been holding out because they have had such good business,” said Laura Conigliaro, high-technology analyst with Prudential-Bache Securities.
