SKF's Tom Johnstone
Though SKF Group's sales have taken a hit by the recent downturn (down 18.4 percent in 1Q09), President and CEO Tom Johnstone is optimistic about the $8.5B U.S. company's future prospects.
Speaking to reporters at SKF's Technical Press Day in Philadelphia, Johnstone described how the global company, headquartered in Sweden, is positioning itself to be ready to take advantage of opportunities when the economy comes back.
"We see this as a definite opportunity for SKF, as we're taking this time to get our house in order, engage with customers and take the knowledge that we've gained and funnel that into new applications and product development," said Johnstone.
In fact, SKF has broadened its product line well beyond the traditional roller bearings it got its start with over a century ago. Today, it's a major player in such diversified areas as wheel assemblies for railways, fly-by-wire systems for aircraft and mechatronics solutions for medical devices and agricultural equipment.
Wind energy is another core focus, which now accounts for some 5 percent of SKF's turnover. "It's the fastest growing market for SKF today," said Johnstone, pointing out that SKF technology is helping wind farms prevent random failures by monitoring conditions such as unbalanced propeller blades, shaft deflections and mechanical looseness in wind energy transmission systems.
Energy efficiency is somewhat of a preoccupation for SKF,
with new offerings such as a line of energy-efficient bearings that consume 30 percent
less energy and operate at lower temperatures, all while carrying the same
These developments would not have been possible, emphasized Johnstone, without the company's ongoing commitment to an aggressive R&D investment that has totaled $3.5B U.S. since 2003. In 2008 alone, the company increased its spending by more than 30 percent over the previous year.
"Even in a downturn, we do not intend to dramatically change our spend on R&D, because it is these efforts that sow the seeds for the future," said Johnstone. "It's not something you can simply switch on and off."
He went on to say the main focus of the company's R&D is aimed at the development of environmentally friendly technologies, extensions to its core product lines, and wholly new products to feed the innovation pipeline. It also plans to strengthen links with universities and high schools.
In addition to focusing on internal development, SKF is making acquisitions to complement its product line, like the 2007 purchase of S2M, a manufacturer of magnetic bearings.
And the company is staying close to its customers. In fact Johnstone said activity levels are actually increasing today, with many engineering teams focusing on re-engineering of existing designs and development of next-generation designs. Some companies, he said, are focusing on reducing costs, while others are concentrating on designs that will be faster, more efficient and more environmentally friendly.
"This is where we definitely see the opportunity," said Johnstone. "And that's because we have lots of new technologies that we can bring to them."