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Danaher reveals plans to merge and sell direct

01 April, 2001

Danaher has finally revealed how it plans to merge the clutch of motion control companies that it has bought over the past few years. Going against industry trends, it plans to expand its direct sales force and to focus on selling individual components rather than systems or "solutions".

The company has formed a business called Danaher Motion that is split, in turn, into three divisions:

• GPS (general-purpose systems), based on the former Kollmorgen, Pacific Scientific, Superior, Bautz and InMotion businesses;

• MC (motion components) bringing together Portescap, NEAT, and Warner Electric; and

• SPS (special-purpose systems) combining API Motion, Pacific Scientific`s Irish operation, and Atlas Copco`s Swedish business.

Initially, at least, the acquired businesses will remain as brand names, but Danaher plans to rationalise its vast range to form a single combined platform for electronics and for motors within each group. This new platform will probably revealed at the SPS drives show in Germany in November.

The Danaher name will gradually supersede the existing names as the new ranges are phased in over a typical product life cycle of about three years. "No new products will be introduced as Kollmorgen," explains Udo Aull, Danaher Motion`s vice-president for sales and marketing in Europe. "All will be Danaher." But, he adds: "we will continue to support the existing products for at least eight years".

Speaking exclusively to Drives & Controls, Aull revealed that Danaher plans to focus on selling high-performance components to large OEMs with in-house integration expertise. "We are not copying Siemens or Rexroth to become a systems supplier," he explained. Smaller customers needing technical backup will be able to deal with distributors.

Aull concedes that "not all customers will be fully satisfied" with Danaher`s proposed changes, but he points out that in future they will be offered products that are "fully supported worldwide". He also admits that "we will lose opportunities by not offering systems" but says that Danaher has traditionally been a components supplier.

Under the new structure, distributors will play a smaller role and exclusive distributorships will end. In the UK, the GPS division will have three field sales engineers and four distributors, the MC division will have two sales engineers and two distributors, while SPS sales will be handled directly from Sweden. Precise details are still being decided.

Aull reports that despite the uncertainty of the past year, sales grew by 30% in 2000 and are expected to expand by a further 15% this year. Danaher Motion has combined sales of around £560m with some £145m of this being in Europe.

Aull says that Danaher is already a "very lean organisation" with sales per employee close to DM1m across the group. But there will be job losses as a result of the rationalisation. He refuses to give any numbers, but says that that company is aiming for margin improvements of 2-4% over the coming 18 months.

The new-look organisation will make its official European debut at the Hanover Fair. All of the legal changes needed to create the new structure are due to be completed by the end of this year.

In another departure from convention, Danaher plans to provide soft-motion and soft-PLC programs as free downloads from the Internet. Aull predicts that this will happen within 18 months.

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