Last month’s takeover of Bridgeport Machines by Goldman Industrial of Boston, Massachusetts caught much of the machine tool industry in the UK and the US by surprise.
Bridgeport, formed in a management buy-out from Textron in 1986, is well known for its machining centres. Its more recent financial problems, which resulted in around 60 employees being made redundant in the UK alone last year, are also well known. Over the past year, the company had been offered for sale to several of its larger US rivals.
The surprise was that Bridgeport did not go to one of the big names in the industry but to a privately owned and entrepreneurial company named after the father-and-son team that runs it.
Goldman’s machine tools business was built through acquisitions rather than organic growth and is spread across six subsidiaries. Most are grouped together as the Vermont USA Machine Tool Group: Bryant, which makes grinding machines; Fellows (gear shaping); J&L Metrology (comparators); and Jones and Lamson (lathes).
There is little overlap between these businesses and Bridgeport’s – except in grinding machines, which Bridgeport makes in Elgin, Illinois. The two big attractions for Goldman are likely to be Bridgeport’s vertical machining centre capability, and its network of European distributors.
Although Goldman may not be buying Bridgeport to close it down, there is some doubt over how much the new owner will spend on it. One senior industry insider said: `I would be surprised if they invested much in the business. That’s not what they are like.’ A Goldman spokesperson was unavailable for comment.
Although most of its 1,000 employees are based in the US, Bridgeport has a relatively large operation in the UK, with around 400 workers at is Leicester plant. No decision will be made on any plant closures until the summer.
There are both negative and positive signs for Leicester. Bridgeport’s drop in profits last year was blamed on its European operations in general and the strength of sterling in particular. The pound has not got any weaker since then, and even after last year’s redundancies, company secretary Robin Mowday said the company in the UK was just breaking even.
But on the plus side, Leicester makes the sought-after vertical machining centre, and is well-placed for a UK and European upturn. It also has some advantages over the the company’s main US plant at Bridgeport, Connecticut, where wages are high and skilled labour is scarce, unlike in the east Midlands.
The other surprising aspect of the deal was its size, or lack of it – just £35m for a company with an annual turnover of £135m. This may be due to investors losing confidence – but Bridgeport may have other problems that have yet to come out.