GE and Fanuc to Dissolve Automation and Control Joint Venture After 22 Years

Aug. 28, 2009
After 22 years of working together in the automation, robotics and embedded computing markets, General Electric and Fanuc Ltd. of Japan announced plans to dissolve their joint venture

After 22 years of working together in the automation, robotics and embedded computing markets, General Electric and Fanuc Ltd. of Japan announced plans to dissolve their joint venture, GE Fanuc Automation Corp., Charlottesville, Va., by the end of the year.

“Everybody, in this economy, has taken a hard look at their businesses to see where they’re strong. We see this as an opportunity to focus on those, and for Fanuc to do the same,” said Ellie Holman, public relations manager for GE Enterprise Solutions.

From Fanuc’s perspective, the dissolution of the joint venture is an opportunity to pursue adjacent markets, said Fanuc Honorary Chairman Seiuemon Inaba, who was chief executive of Fanuc when the joint venture was formed. “Our joint venture has achieved great success toward its original mission, which was to cooperate on the global growth and technical development of the PLC and CNC business. Over this time period, markets and opportunities also have changed dramatically, and both companies further expanded into adjacent segments. Today’s market conditions are such that it’s imperative we pursue these expanded opportunities, and while we have achieved great things together, it’s in both our best interests that we focus our efforts on industry opportunities unique to our respective companies and that will deliver greater benefits to both our companies.”

Under terms of the agreement, GE retains the software, services, embedded systems and control systems businesses globally, while Fanuc retains the global business in computerized numerical control (CNC) systems.

Key markets for GE’s automation and control software include process industries, food and beverage, packaged goods, water and wastewater. Embedded computing is focused on defense, aviation and telecommunications. The company will continue to develop and deploy those technologies through GE Intelligent Platforms, which is to be led by Maryrose Sylvester, current CEO of GE Fanuc Intelligent Platforms.

“GE could not have asked for better partners than Dr. Inaba and Fanuc,” said Sylvester in a GE release. “GE is proud of what our companies have achieved together — both the industry expertise and success across our product portfolios. For GE, this change will mean a continued, intense focus on serving our customers around the world while continuing to invest in significant growth platforms like process control systems, enterprise and automation software and embedded computing as we continue to build further expertise around the GE vertical infrastructure segments.”

The companies are parting on amicable terms and will continue to work together, building on their combined strengths, said Holman. “Those advantages don’t go away. We’ll still be cooperating with them and going forward we’ll still be maintaining those relationships,” she said. “We’ve invested in the past few years in embedded systems, and that’s not something that Fanuc has been doing. We like that business, we like automation and embedded computing, and we’ve been able to grow that through acquisitions and organic development.”

During the past two decades, many significant brands in the automation and control markets became part of GE Fanuc, including Total Control Products, CimWorks, DataViews Corp., AFE Technologies, Computer Dynamics, VMIC, Intellution, SBS, Condor and Radstone. These acquisitions, combined with organic growth, have given GE extensive offerings in process control, automation software, embedded computing, human-machine interface (HMI) and manufacturing execution system (MES) products.

Recent product introductions, particularly in the areas of MES, which integrates plant-floor control with enterprise management systems, and its new Proficy family of process systems have found widespread acceptance in the manufacturing community, Holman said.

GE Intelligent Platforms, with 3,500 people worldwide, is part of the company’s Enterprise Solutions unit under its Technology Platforms business. The unit will continue to go to market as it has been, with a substantial portion of its business conducted through electrical distributors such as Gexpro and industrial automation specialists.

“The business unit shouldn’t look different at all,” Holman said. “It’s business as usual from the customer’s perspective.”

The two companies formed GE Fanuc as a 50/50 joint venture in late 1986 to pursue high-performance industrial automation technologies ranging from programmable logic controllers to robotics. The group expanded over time as computers came into wider use on the factory floor.

The industrial automation market in general continues to lag the initial signs of recovery, with both Rockwell Automation and Emerson reporting slower sales in the first half of the year.