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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.