Tecnomatix Enters Into $50 Million Agreement

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This is the last MCADWeekly Review for 2003. We will pick up where we left off with the next Weekly to be published and available January 12, 2004. We wish you all peace and a great holiday season.

Tecnomatix Enters Into $50 Million Agreement

Tecnomatix Technologies Ltd. announced a global agreement with a major automotive manufacturer to implement Tecnomatix Manufacturing Process Management (MPM) solutions throughout the customer's manufacturing operations worldwide. This agreement represents an expansion of an existing relationship with this manufacturer and is expected to generate total revenues in excess of US$50 million over the next four years.

Under the agreement, the manufacturer will purchase Tecnomatix eMPower software, services and maintenance, including the eM-Planner product suite, a comprehensive set of applications for manufacturing process planning, simulation, and design and production validation.

"This is the most extensive agreement in the history of Tecnomatix. It addresses all of our customer's manufacturing disciplines worldwide, and firmly establishes Tecnomatix as the global leader and driving force in MPM solutions," said Harel Beit-On, Tecnomatix chairman and CEO.

Beit-On continued, "Tecnomatix has been working with this customer on several implementations over the past few years, and we have been able to deliver significant value during that time. Our eMPower solutions have reinforced their global virtual manufacturing programs and key enterprise strategies, including flexible manufacturing, digital process validation, capital asset reuse, and the alignment of product and process development. "

I'll venture a guess that the unnamed carmaker is either GM or Ford. Since both GM and Ford are already Tecnomatix customers, I feel pretty confident in that assertion, although previous orders were roughly in the $2-3 million range. According to the agreement, purchase volumes are expected to increase gradually during the early stages of the agreement, and accelerate over time.

NAFTA-Related Job Losses Continue To Mount In Manufacturing

In the context of slow overall job growth but still-plunging manufacturing employment, the Keystone Research Center (KRC) has released a new study showing that rising trade deficits with our North American trading partners have cost Pennsylvania nearly 31,000 manufacturing jobs since 1993, the year before the North American Free Trade Agreement (NAFTA) went into effect. KRC also found that overall trade has cost Pennsylvania up to 150,000 manufacturing jobs since 1993.

This week at a press conference in the Pennsylvania State Capitol Rotunda to release the new study, KRC was joined by members of a newly formed Trade Sanity Coalition of business and labor groups, including the Pennsylvania Manufacturers Association (PMA) and the Pennsylvania AFL-CIO. The Coalition has been conducting town meetings on the manufacturing crisis around the state over the past two months.

The new KRC briefing paper estimates job losses due to a rising trade deficit with Mexico and Canada in nine PA regions, each of which includes one or more Congressional districts. The KRC study builds on a recent paper by the Washington-based Economic Policy Institute which estimates NAFTA-related job losses in each of the 50 states. The main KRC findings included:

The increasing trade deficit with Mexico and Canada since 1993 cost Pennsylvania 38,325 jobs, including 31,014 manufacturing jobs.
Over the same period, trade with these NAFTA trading partners cost the United States as a whole an estimated 879,280 U.S. jobs, 686,700 of which (78 percent) were in manufacturing.
Pennsylvania has experienced the seventh-highest job losses of any state due to trade with Mexico and Canada. Only California, New York, Michigan, Texas, Ohio and Illinois lost more jobs due to trade with Mexico and Canada since 1993.
The Pennsylvania manufacturing jobs lost due to trade with Mexico and Canada since 1993 equal 3.5 percent of 1993 manufacturing employment.
Mushrooming trade deficits with all trading partners since 1993 have cost the U.S. as many as 150,000 manufacturing jobs.
Manufacturing job loss tends to drive down wage and benefit levels.
In 2002, the average annual pay in Pennsylvania manufacturing was $42,852 while the average annual pay in service-producing industries (including high-paying ones such as health care and education) was $33,376.
Jobs in Pennsylvania accessible to displaced blue-collar manufacturing workers - such as security services, call centers, and retail trade -- range between $16,000 and $22,000 per year.

"While unions and the PMA have long been antagonists," said Bill George, President of the PA AFL-CIO, "we have woken up to the reality that we are not each other's real problem. Now we need policymakers to wake up and establish trade policies that make it possible to sustain the middle class."

Stephen Herzenberg, KRC Executive Director, said that similar to British manufacturing in the late 1800s, U.S. and Pennsylvania must adapt to new conditions. "Our past manufacturing greatness - based on pioneering the giant industrial corporation - has left us unprepared for a world in which these companies increasingly source and produce overseas. Today, success in high-wage regions hinges on bolstering dynamic regional networks of more locally rooted businesses. To have a chance to seed such success, Pennsylvania must have the breathing space of new trade policies - or we will face the type of fall in relative living standards experienced by Britain in the 1900s."

This all adds up to bad news that continues to get worse, especially for the overall U.S. manufacturing sector. Interestingly (and sadly), the numbers from this study don't take China into consideration (where a good portion of the goods manufactured in Mexico today will ultimately be produced). Our country's executive branch isn't exactly doing any favors either as the Bush Administration announced an expansion of NAFTA to CAFTA (the Central American Free Trade Agreement). Obviously, the manufacturing jobs that continue to be lost will never return here, but the really scary thing is, what will they be replaced with? Since we as a country continue to actually manufacture less and less, will we be relegated to taking on the form of a national Wal-Mart in the eyes of the world? I truly hope not.

Poor Collaboration and Document Management Practices Exact High Cost From Business

Workshare, a provider of content productivity applications, has released a new study from market research firm Vanson Bourne entitled "The Cost of Sharing," highlighting the costs, risks and confusion created when employees work with other people on documents that are critical to corporate integrity and profitability. The report surveyed 100 businesses and is the first report of its kind to look at how organizations manage content inside documents, the technology available to help control the process, the types of people who contribute to the "collaborative mix," and the impact on business performance.

Specific findings from the study include:

63% of companies surveyed face financial penalties for not completing work on time; however, only 14% of companies feel they are in control of completing documents for submission on time.
90% of documents in circulation began as something else, but 68% of respondents were not aware of that metadata - hidden information within Microsoft Word files showing document amendments and author histories - may still exist in the their document.
70% of companies have people external to the company contributing to document content, increasing security and information management risks.

According to the study, two-thirds of companies engage in document collaboration with up to five people. The study also revealed that most collaborative groups are constantly changing, precluding consistent processes for collaboration. These collaboration challenges, among others, can lead to significant productivity losses, increased risk of missed deadlines, and impaired information security from hidden document metadata.

"Information professionals are overwhelmed with inputs from multiple people, and poor collaboration impacts the bottom line," said Jeff McClure, executive VP for the Americas at Workshare. "Beyond productivity losses, missed deadlines often come with financial penalties, and unmanaged document sharing can pose security risks. The need for a new collaboration approach has never been greater."

Jeffrey Rowe is the editor and publisher of MCADCafé and MCAD Weekly Review. He can be reached at Email Contact or 408.850.9230.

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