October 14, 2012
Intellectual property and Japan
While Unimation was establishing the robot’s credentials, Japan was enjoying economic prosperity, but anticipating a labor shortage. Thus, in 1967 Joe was invited to give a lecture in Tokyo to a large group of engineers, which included a marathon, 5-hour Q&A session. This interaction culminated in a 1969 licensing agreement with Kawasaki Heavy Industries to manufacture and market Unimate robots for the Asian market— a good marriage that endured and prospered for 15 years.
By 1983 they had shipped over 2,400 Japan-made Kawasaki Unimate robots.
Joe wrote to several manufacturers suggesting that they might want to look closely at their technology and our patents. As a result, ASEA, Cincinnati Milacron, and IBM became licensees from which we derived royalties on their robot sales.
As George Devol had learned long ago, ownership of patents is a valuable asset, from which we benefited handsomely. They protected our intellectual properties and helped us develop a strong licensing position that lasted years. It was a gratifying position, but they were eroding our market share and making our technology obsolete.
First triumph of the robots: revolutionizing auto making
The automotive industry was the engine that drove the American economy, so we concentrated our energies there. Until the end of the 1960s, the auto body assembly line was a moving conveyor on which major body subassemblies were hung.
Our nemesis was that it used a level of skill and intelligence the robot didn’t have. Yet we knew that the big payoff was in applying the robot to the body assembly lines. This required a product designed for both automation and indexed conveyors.
These measures would open up many other applications, yielding a superior product while reducing cost. We now needed a champion at a high corporate level with insight, foresight, and guts. GM’s plant manager Les Richards had all three.
GM had rebuilt its plant in Lordstown, Ohio in 1969, making it the most automated automotive plant in the world, building 110 cars per hour [utilizing 28 spotwelding robots), twice the rate of any plant then in existence. Lordstown was to be the answer to Japan’s onslaught. It was to produce a high-quality small car [ Vega, and later, the Impala] that would satisfy the American public at a competitive cost, putting GM back on top.
The technological impact of the Lordstown experiment revolutionized automobile making and secured the robot’s place. It wasn’t long before other companies turned to robotics and indexing systems for a more disciplined approach to manufacturing.
At the same time, the European market came alive with Unimates at Fiat, Volvo, Mercedes Benz, British Leyland, BMW. Their unions welcomed robots performing all of the dangerous jobs.;
The activity in the auto industry created many nonautomotive employment opportunities, as diverse industries sought to improve their position through the application of technology: Bendix, Pratt & Whitney, Dupont, Whirlpool, GE, and many others. For some time our only competitor was Cincinnati Milacron of Ohio. This changed radically in the late 1970s when Japanese conglomerates began producing industrial robots.
Success evolves into a family of robots
Our robot “family” grew with each new application’s demands. The original 1900 Series developed into other series with extended reach; increased repeatability and lift capacity; 6-degrees of freedom; stronger wrists; Univision. New technical innovations were incorporated: solid-state memory; microprocessors; high performance electric motors replaced hydraulic and pneumatic ones; transistor controls; new programming languages.
In 1977, Joe shrewdly bought Victor Scheinman’s company, Vicarm, and renamed it Unimation West. We further developed Scheinman’s robot into the Programmable Universal Machine for Assembly (PUMA). We also acquired his VAL language, which was cutting edge.
Unimation also attempted to augment its line of machines by entering into marketing license agreements with other manufacturers, such as Trallfa of Norway and Electrolux of Sweden, but all were only mildly successful. The bottom line was that we were not very good at marketing someone else’s product.
Fatal flaw: blind eye to new technology
What happened next marked the beginning of the end. Joe’s innate business sense failed him, and his rigidity skewed his judgment in a critical decision.
In 1981, the 9000 with VAL was Unimation’s answer to all the competitors who were seriously eroding its customer base.
But it could not overcome one great deficiency—hydraulics. The auto industry wanted electric-driven robots. Joe balked at this, convinced that the muscular robots required had to be hydraulically driven.
He met with GM’s CEO to argue his position, but lost. The partnership that was struck in 1961 virtually ended at that meeting. To rub salt in the wound, GM then announced its partnership with Fujitsu/Fanuc to market Fanuc’s line of electric robots.
By 1981 Unimation was carrying long-term debt of $19M, owed to Condec for development of the robot. Schafler, pressured to generate more cash, restructured the company. Paul Allegretto, a Condec executive, was made Executive VP and I was named VP and General Manager of the newly created Systems Division.
Allegretto took the company public to pay off Condec and Joe had no choice but to go along. The proceeds paid all indebtedness and the remaining $6M provided working capital for Unimation—not much for a pioneer whose technology was becoming obsolete, and with significant competition.
Enter Westinghouse: the beginning of the end
With the success of taking the company public, Allegretto told Joe that if he weren’t made CEO he would quit. Joe accepted Allegretto’s offer to quit and then reassumed the reins.
But things did not go well for the company. Sales dropped as the competition gained momentum. GM was leading the charge for electric-driven robots, which Unimation still did not have. Joe’s previous confrontation over hydraulics with GM’s CEO didn’t help, and between Cincinnati Milacron, Asea, and GMF Robotics, Unimation’s position was seriously undermined.
Yet Unimation had a number of suitors, all with a desire to gain a foothold in robotics. In December 1982 Westinghouse paid $107M, buying its way to the top of the domestic robot industry. The merger of the two companies moved rapidly.
Almost immediately, Unimation’s fortunes plummeted and its market share eroded. The general economic recession [1980-1982] caused a drop in sales, but industry competition contributed greatly to Unimation’s financial downward trend. The largest segment of our business, auto manufacturing, was shifting to electric-driven robots.
Goodbye Shelter Rock Lane
Those of us who grew up with the entrepreneurial spirit of Unimation could not readily adjust to the ponderous ways of giant Westinghouse. I was the first to go among the executives.
In July 1983 I became SVP of Robot Systems Inc. in Georgia. Joe continued as president of Unimation, though his was an association of oil and water. Unimation West eventually broke away; Kawasaki and Unimation Europe ground to a halt under the new management.
Finally, in 1984 Joe threw in the towel, saying, “I resigned in dismay. I was heartbroken because this was my baby, and it was crumbling before my eyes.” In 1985 he founded Transition Research Corp., which later became HelpMate Robotics.
In March 1985, I returned to Unimation as Manager of Distributor Sales. As I became familiar with the new Danbury operation, I felt that it was only a matter of time before Unimation would be absorbed into Westinghouse’s Pittsburgh operation. Sure enough, my duties were suspended as operations in Danbury wound down.
Westinghouse’s disclosure that it was setting up a joint venture with Matsushita Electric seemed the final move in a series of strategic shifts since the merger that were “essential to improving competitiveness in the factory automation market.” Time would show otherwise.
Before shutting the doors at Shelter Rock Lane—where it all started back in 1954—and moving what little remained of Unimation to Pittsburgh, those eligible for early retirement were so advised by Westinghouse. I was one of them.
In 1989 Westinghouse sold Unimation to Stäubli of France.