Issue link: http://read.dmtmag.com/i/103862
Home Shopping Network D LEGAL LINE uring a lull in the holidays, I had a few moments to catch up on the last two issues of Fred Manfredi's excellent "Machinery Outlook."Since our firm represents a broad range of clients in our and related industries, this was time well spent. The first article that caught my eye was the announcement of Zoomlion's new 4,500 ton crane. This was a shocker. Although I inspected several Zoomlion cranes at the last CONEXPO, they were in the 100-200 ton range. A 20x plus expansion in the lifting range was completely unexpected. Intrigued by this development, I started looking at Zoomlion's website. This led to other websites, demonstrating the broad range of equipment being made in China by, literally, over 100 manufacturers. Cranes to wheel loaders to compactors and everything in between is being made by manufacturers large and small, all of which seem to have carved out some niche in their vast home market. Indeed, no equipment buyer or user has to venture outside China to shop for their needs. Shopping at home is fully covered by national and regional manufacturers of virtually anything needed. Fortunately - or in some cases, unfortunately - virtually every machine and type is a copy of some recent or not so recent western machine(s). Indeed, some of the lesser known manufacturers are even making copies of their competitors' machines, perhaps cooperatively, perhaps not. This is not bad, at least for the "incountry" markets and possibly those close to home. However, the smaller the manufacturer, the less developed the supply line for parts and service. This situation brings to mind numerous similar situations from industrial history, as every developing nation invariably copies the products of developed nations until a home-grown technology base is established. The United States copied British and French shipbuilding, railroads, gun making and other essential skills even after "decolonizing" itself. This lesson was lost on the American South, with disastrous results in the Civil War. More recently, even Caterpillar, after having no luck in designing its own hydraulic excavators (not surprising, having grudgingly given up cable controls only a few years earlier), threw in the towel and "liberated" some engineers from a European manufacturer. The rest is history. In this context, the overnight expansion of the excellent pre-World War II Japanese Navy was based entirely on the lessons learned from the ships it had purchased from the great Scottish Yards in the 20s and earlier. The same holds true for the post-war Japanese steel, automotive, rail, and aerospace industries, based this time on the American model with a home-grown twist. This knowledge base passed downstream to Korea, and the giant Hyundai, Daewoo, Samsung, and other vertically integrated chaebol enterprises became world leaders. These companies, leaders first in heavy shipbuilding, now are serious players in our industry Robert W. McIntyre IDA Association Legal Counsel and others. This is from a country that, according to a photo sent by my father from Seoul in 1954, showed a vast city of houses and workshops with not a building over five stories…not so today. Similarly, Brazil, not a country with a long and storied aviation history, is now home to the incredibly successful Embraer company - a major player in commercial jet and turboprop aircraft. All is a result of seeds planted by European engineers that were unhappy with the fragmented aerospace scene in western Europe in the 1970s. The rest is history. From a modest copy of some Aermacchi designs for commuter turboprops, Embraer is now an aerospace force to be reckoned with and is nipping at the vulnerable lower end of Boeing and Airbus's commercial and military markets. The other parallel from history that is very evident in China is fragmentation. In what became the world's largest car, bus, and truck market, literally hundreds of manufacturers spread all over the country. This was the United States in 1900 to 1932…although the automobile and its cousins, the highway truck and bus, were basically invented by the French and Germans. Until Henry Ford, every Continued on page 52 IDA UNIVERSAL January-February 2013 11