Nearing Retirement, Juki's Bob Black Reflects on a Long Career
After more than 40 years in the electronics manufacturing industry, Juki's Bob Black is nearing retirement. Bob sat down with me at the recent SMT Hybrid Packaging show in Nuremberg to reflect on his career and talk about the importance of strategic partnerships, even if that means playing nice with your competitors. (Best of luck in retirement, Bob!)
Barry Matties: Bob, you’ve been telling me about some of your last official trips coming up, because you’ll be going into full retirement next March. Congratulations!
Black: Thank you.
Matties: How long have you been in the industry?
Black: I started in this industry in 1975, so it’s 43 years this year.
Matties: Please give our readers a little background on how your career started.
Black: I was contacted by a guy that I'd worked with at a gas station in high school. He was starting a company to sell tools and supplies to Silicon Valley companies. He wanted somebody to run the inside of the business, the purchasing and the accounting and so forth. I talked to him, and we started RGB Industrial Tool and Supply. In nine years, we grew that company to about $17 million in sales with offices in Oregon, Washington, and the original in Northern California. It was really a successful company.
Matties: And from there, you ultimately moved into the electronics space?
Black: Well, that was electronics but in a different way. We were selling hand tools and soldering irons and solder, that kind of stuff. We had the opportunity to sell Juki—in those days it was Zevatech—soldering machines. Zevatech then started to make placement machines, some of the first ones in the world. Most of their documentation was in German, and I spoke German from taking it in school. So, I was given the responsibility of leading that and started to learn about placement machines and sell them in Silicon Valley. That developed into enough of an interest that I sold my share of the company to my partner and started Zevatech Inc., which was one of the first placement companies in the U.S.
Matties: And that was your own company?
Black: It was part mine. We had partners. I owned about 25%. We made very high-end placement machines. The mechanics were made in Switzerland, and the software and electronics were from the United States. They were beautiful machines, but they were a little expensive. Switzerland is not exactly an inexpensive place to do things. So, we needed a smaller, lower-cost machine because a lot of the customers liked our machine, but they couldn't afford it. We were contacted by Juki in Japan. They were interested in selling our high-end machine in Japan, and they were going to make a low-end machine themselves. We went and visited Juki and we'd been at that time about 10 years in the placement business. They were very familiar with high-volume manufacturing, being in the sewing machine business for industrial sewing machines. We struck a deal and made a joint venture for marketing and sales, and we had the exclusive to sell in the Americas and Europe; they had the exclusive to sell our products in Asia. That's how we started working together. They came out with the machine we called the Placemat 460. It was one of the first entry-level placement machines in the market. We sold almost 1,500 of those machines in the next four years in the United States.
Matties: That's a hot product to have. In the many years that you've been in the industry, what sort of things have surprised you along the way?
Black: Oh, I don't know about surprises, but a few things have struck me. First, all the people said through-hole would go away and, as you know, it's still here with us. Chances are it will never go totally away. I think the fast emergence of China surprised a lot of people and created great challenges for us in the Americas because our market was halved in the space of about seven years. If a market drops in half, it becomes much more competitive. Because of that, the market is much more competitive than it was when I started; the margins are much tighter.
Matties: Now, we see a long list of competitors out there in terms of placement equipment. What sort of demands do the fabricators have today on suppliers?
Black: Faster, smaller, cheaper.
Matties: Always the same?
Black: Always the same. They want the CPH, components per hour, per square meter, per dollar. That's how most companies analyze equipment today. You must be credible. You must have a decent reputation, make decent quality equipment and have good service. But, there are a lot of companies that can do that today. This is one of the reasons why 10 years ago, I made the decision to branch out with partner companies. The first one is here at this show, Inertec, with selective solder. We've been working together 10 years. I asked them if they would make soldering machines for us to sell in the United States. And, never forget, we shook hands on the deal. No contract signed yet, and the next time I showed up, Ernst Hohnerlein had his parking lot all torn up. His employees were all parking in the street. I said, "What are you doing?" He said, "I'm building your factory. With all these machines you're going to buy from us, we don't have enough space."
So, he was building a second building for us, and we’d only shaken hands on the deal. That impressed me. His son is now running the company, and Ernst is retired. That's been very good. That was the first of our OEM agreements, followed by GKG in printing, which has been a fantastic partnership. GKG has now grown from smaller company when we started to the number one manufacturer of screen printers in the world. That's been very gratifying to see. Our oven partner is JT in Shenzhen. Same thing, we've grown nicely with them, had good business. Then, our latest addition of five years ago was Essegi from Italy, with the component storage systems. That partnership has developed to the point where our Japanese parent company is now manufacturing them in Japan under license in a partnership with Essegi. They're now number one in world-wide market share in component storage, too. Adding those product lines to the placement has allowed us to stay strong and healthy as a company, and not just depend on placement machines, which is a very competitive business for survival.
Matties: I think you made some smart choices along the way. To that point, what advice would you give somebody who might be entering this industry?
Black: Find a new niche and exploit it. I don't think I would advise anybody at this point to produce another placement machine, though I'm sure we'll see placement machines coming out of China here in the next few years. So far that hasn't materialized, but it will. They're learning, and when they get to the point where they can make a reliable and accurate machine, as much as those in Japan or in Europe or America, then we'll see them in the market big time. Fortunately, I'll be retired.
Matties: What do you think the challenges are with placement machines?
Black: If you look at the top placement machines in the world, I would take five companies. I would take Panasonic, Fuji, Yamaha, Juki and SIPLACE or ASM now, who owns them in China. I think these five companies have probably 90% of the world's market, and the other 10 or 12 companies fight over the other 10%. It's striking that four are Japanese companies. Now, what do Europe, America and Japan do that's probably superior to what the Chinese have now? The answer all comes down to precision bearings. If you want to have an accurate robotic machine, you need precise and tight bearings. That's a skill that involves both precision machining and metals hardening, because if you don't harden the materials right the bearing wears too fast. We have bearings now in our machines that last millions and millions of cycles before they need to be replaced, as do our competitors.
So, what China is learning is this metal treatment technology, the bearing design technology and getting the long life out of a precision bearing. That takes some learning, but you can't just look at somebody else's product and knock it off because you don't see the heat treatment cycles and what's used to treat the metal to get it in that condition. That's pretty proprietary, and the companies that do it keep it closely held. But by trial and error, you will get there. That's the period we're in now. So, most of the placement machines you see from China now are low cost, limited life and they appeal to the entry-level part of the market. But they're improving, and we can see from companies like ASM that are making wire bonders and dye bonders, you can make precision machines in China. It will only be a matter of time. I've been fortunate enough to get to the point of retirement where I didn't have to face it.
Matties: When you look to the future, what do you see as the future from a technology point-of-view, and where do you think the equipment is going to be in 10 years?
Black: I think the trends that we've seen will continue. As you know, the 03051 is already introduced. We see in some of the new phones, which are coming out. Next year, we will see the 0201 metric, which is half the size of the 0105. It's a fly speck. I mean, 1,000 of them in your palm would look like a little pile of dust. So, you need to be very precise with two things: positioning and vision. The camera must have the resolution to see these parts, and to manufacture a nozzle that's small enough to precisely pick up this part is a real challenge, and I know that from Juki. One of our areas of expertise is nozzle manufacturing. In fact, we build the micro nozzles for several of our competitors in Japan. It might surprise people to know that. Now, why would we build nozzles for competitors? Well, sometimes competitors have patents on certain things. Sometimes, they come knocking on your door saying, "You're infringing my patent." A lot of times, how we license that patent is by cross-trading precision nozzles back to them, which is one of our patented areas of expertise. In that way, we cooperate, whether we like it or not.
Matties: You mentioned multiple partnerships. It sounds like strategic partnerships have been an important part of the formula for success for you?
Black: Absolutely. When I did it with the first company, I did not have the approval of Japan. I did it on my own, which could have had bad consequences, but I did it. It was successful, and I was able to convince my colleagues in Japan that this was a smart move, that you don't have to make everything yourself. You can let other talented people make things, and as long as they fit into your overall marketing scheme it can be a good thing. Now, I'm very proud to say Juki has this policy throughout the company. We have a lot of OEM partnerships. We work with a lot of other companies to offer a more complete product line to our customers, and it's a winning strategy. We wouldn't be the company we are today without our OEM partners and their efforts, and they wouldn't be as large and successful as they are today without our partnership and success. It's been a mutually beneficial thing.
Matties: As you look back, what are some of the highlights in your career that really stand out for you?
Black: Well, maybe it’s a funny answer but when I look and see the progress of the people that I've hired in the company as young people, entry-level, and I see what they've become today and the talents they have. This gives me more satisfaction than anything else. We have a wonderful team of people that I've worked with, and I've been very fortunate that at Juki we have not lost many people. I have many people that have been with me 25 or 30 years. It's gratifying to see them being able to take over and continue with the success we've had in the past. That's probably the most satisfying thing as I look at ending my own activities in the business.
The other thing, too, is we fight in the market like hell. It's a competitive industry and so forth, but I have mutual respect with colleagues in Fuji, Panasonic, SIPLACE, and in Yamaha, where we don't have to be impolite just because we are competitors. And on the occasion where we can work together, in SMEMA or in Japan in the Protec organization, it's cooperative to advance things in the industry. We do that. There's a certain amount of satisfaction in that, too. You know, having the mutual respect with people who also have been successful in a difficult industry. Anybody that's successful in the placement business, I have respect for.
Matties: Bob, congratulations on a very successful career. We wish you the best in retirement.
Black: Thank you very much. I appreciate it.