Q&A with Dwight Smith and Ken Kernen

Vice president, Nidec Machine Tool Company

President, Federal Broach & Machine Company

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Nidec recently acquired Federal Broach & Machine Company. When did this happen, and what does it add to what Nidec can offer its customers?

Kernen: Nidec acquired the MHI Machine Tool Group, which Federal has been a part of since 2012.

It’s not that we just joined the Nidec Group. We’ve been a part of them as long as Wixom. Two years ago, when Nidec purchased the Machine Tool Group from MHI, Nidec put Wixom under what they call Federal Broach Holdings. We became a closer-knit family two years ago once Nidec bought us. Prior to that, even though we were part of the Machine Tool Group, we acted independently.

That’s basically how that went along. So, two years ago, we actually were all brought under the same umbrella, which is FBH.

What does that mean for what Nidec can offer customers now?

Smith: Now, combined with Federal Broach, we offer the solutions for hobbing, shaving, shaping, skiving, broaching, gear grinding and cutting tools. The Nidec cutting tools are all sold through Federal Broach and under the Nidec umbrella.

Recently, that’s also grown within the Nidec Machine Tool corporate world to include Nidec OKK Machining Centers. Recently, Takisawa Lathe has been added to the portfolio. Nidec has purchased PAMA, the Italian horizontal boring mill company. Nidec’s corporate growth by acquisition is putting together an extremely powerful global corporation in the machine-tool world.

Why was it important to bring Federal Broach into the Nidec family?

Kernen: The main reason for bringing us in back during the MHI time, was our helical broaching technology. When you talk about gear manufacturing, that was the one entity that was missing in their portfolio — the helical gear technology that was present in the transmission world. Once that was brought in, it gave them a leg up. No one else offered the full gamut of hobs, shaving, shaping, and helical broaching as well.

Smith: And from the gear machine tool perspective, the recent integration and the ability to work together is really based on synergy. We’ve got a large and active sales staff across the country, and by having them involved with the Federal Broach product, we have increased awareness. We’ve increased our penetration into the mindset so people now know Nidec offers the Federal Broach product as well.

What kind of advantage does this acquisition mean for the market?

Kernen: One of the things that helped Nidec was our service centers, which service gear cutting tools in general — not just broaches, but all gear cutting tools. Federal had already established itself — not only here in the United States, but also in Mexico — as a service supplier to the gear industry.

That gave Nidec an advantage that they didn’t have in the past. They were selling gear cutting machines, but they didn’t have that particular part of the service. Nidec was big into the job-shop market, and Federal had a very good footprint relationship with the OEMs.

Smith: From the customer’s point of view, and also for some of the larger producers with the Tier-One suppliers, we are in a much stronger position now where we can offer — not only the gear-making machines and the broaching machines — but also the cutting tools and the long-term service of those cutting tools. We have been able to establish the entire package.

Kernen: On the opposite side of that, we give them an avenue into the larger OEMs, but Federal struggled in the lower tier market, and Wixom has really opened that up for us as far as our broaching machine sales go.

What has been the industry reaction so far?

Kernen: The industry has been quite positive. They’ve shown a positive interest in not only our product in the tier market, but also with the Wixom product in the larger OEM market. I think we’ve got more inquiries. So, I believe that the reaction in the market has been positive.

Smith: Adding to that is the uptake of our cutting tool sales. We have been able to capture quite a bit of market share in, not only Tier One, but some of the OEM accounts, and that’s quite encouraging. One of the strengths of that is the ability to do the service work after the tool has been delivered.

How do you see the addition of Federal Broach positively affecting Nidec’s future going forward?

Kernen: I see it as nothing but positive going forward. In the past, we didn’t offer coating, and now with the the help of Nidec, we are doing in-house coating as well. So, going forward as a group, we just keep getting stronger and stronger. By adding OKK to the portfolio, and now with Takisawa for the lathe, we can be a turnkey integrator. We can offer the gearing world a one-stop shop. They can give us a product, and we can give them a solution.

Smith: As a solution provider, we listen carefully to customer requirements. With the combination of Federal Broach machines and tools, along with Nidec cutting tools and the service of those tools and the Nidec gear making machines, including hobbers and shavers and shapers and gear grinders and skiving machines, the customer can look to us for the entire solution.

Kernen: That’s our big selling point right now: We offer a complete solution that I don’t believe many others in the industry can offer.