The nation`s electrical equipment companies have more than a rooting interest in whether one of their own, Square D Co. of Palatine, is acquired by French rival Groupe Schneider. Part of the battle concerns an industrial way of life.
For most of this century, U.S. makers of motor controls-products that start, control and protect industrial electrical motors-have built their equipment according to rugged standards established by the National Electrical Manufacturers Association (NEMA), a trade group based in Washington.
In recent years, competing products made in Europe have been gaining market share in this country, largely because they are smaller, cheaper and more varied. These products meet standards established by the International Electrotechnical Commission (IEC), based in Geneva.
Like plumbing fixtures, electrical-appliance plugs and scores of other products found in the home, industrial electrical equipment is sold based on uniformity and compatibility of design as well as minimum safety standards. Altering designs is an expensive and often highly political issue, in part because of the tremendous investments already sunk into making the equipment a certain way.
Yet among many original equipment manufacturers in the United States, especially makers of control panels, air compressors and material-handling equipment, the switch to IEC-type equipment prevalent in Europe is in full swing.
As much as 20 percent of the estimated $2.5 billion of annual electric motor control equipment sales in the United States are under the IEC banner, and the percentage is expected to climb. Replacement parts of imported equipment account for some of the demand, but shifting preferences by U.S. equipment makers comprise the source of the growth and the nub of the controversy.
Some in the industry believe the shift could be accelerated if Schneider, a French champion of the IEC standard, succeeds in its $1.98 billion takeover attempt of Square D, one of NEMA`s largest members. European manufacturers are now wrestling with a host of controversies regarding uniform industrial standards for the 1992 economic unification of Europe. Many in Europe believe the IEC will gain strength as an international standard body after 1992.
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Although Square D and many other U.S. electrical equipment manufacturers gradually have added IEC-type equipment to their product lines, it`s widely believed in the industry that Schneider would be a more unabashed promoter of IEC-type equipment in this country, if only to expand the market for its European-made goods. Schneider already sells motor-control devices in the United States through its Telemecanique subsidiary, which has a plant in Maryland.
Square D makes a full range of electrical distribution products, including residential circuit breakers, but the standards controversy is focused on electrical control devices.
”We think IEC will be the international standard, and it will gradually grow in this country,” said Didier Pineau-Valencienne, Schneider chief executive officer, during a recent visit to Chicago. ”The evolution is in our favor and not in NEMA`s.”
”Knowing the French, they will want to sell French,” said Kenneth Horr, senior product manager for Furnas Electric Co. in Batavia, one of the U.S. manufacturers that offers NEMA- and IEC-type equipment. Horr previously worked for Telemecanique.
Pineau-Valencienne said that under Schneider ownership Square D would sell whichever equipment the U.S. customer wanted, but added, ”We might gradually favor IEC.”
In the executive suites of major U.S. electrical equipment manufacturers and at NEMA headquarters, the official attitude favors coexistence and letting the customer decide which type of product to buy. Antitrust concerns bar an organization such as NEMA from even appearing to dictate design standards.
But U.S. manufacturers of industrial electrical controlling devices and their salespeople still have a visceral reaction against the prospect of IEC- type equipment expanding its beachhead in America. It`s sort of like a Cadillac salesman talking about a Toyota. But their attitude reflects more than just a buy-America spirit.
Basically, a NEMA-type motor control can be expected to perform under virtually any conditions up to its rated horsepower. An IEC-type unit may be less durable under certain conditions within the same horsepower rating and needs to be more carefully selected for a particular use.
For example, an electric motor that is turned on and off a great deal might require an IEC-type motor controller rated higher than a NEMA-type controller for the same motor.
Therefore, sales representatives dealing in NEMA-type products are angered by IEC-based competitors` using NEMA-equivalent ratings to market their products. This is especially true for products being sold directly to equip manufacturing plants, for example, compared to products used as components of other industrial products such as fans or hoists.
”You have to know the application you`re putting it to,” said Horr of Furnas Electric. ”IEC-type equipment requires more knowledge to apply it.”
While original equipment makers may favor IEC-type equipment`s small size and lower price, ”electricians in a plant tend to always be suspicious of electrics that get too small,” Horr said.
For one thing, advocates of NEMA-type devices believe they require less maintenance and less worry, especially under extraordinary usage. What`s more, Walter Kozikowski, manager of international standards for NEMA, said the history of product liability litigation in this country makes many users of electrical equipment want to err on the side of over-engineered products.
Kozikowski acknowledged that IEC-type products may be considered more precise for a given purpose and that no one can say one product is inherently better or safer than the other. ”That`s a perfectly acceptable answer until the first person gets hurt” and an equipment maker or plant designer has to explain why he or she switched from NEMA-type motor controls to IEC-type, Kozikowski said.
In its own sales literature, Square D adopts a pragmatic posture toward its own IEC-type line. ”If you don`t show your (original equipment manufacturer) an IEC device today, a competitor will tomorrow,” Square D advises its distributors.
This point of view amuses sellers of IEC-type products who believe that U.S. manufacturers simply are refusing to recognize that NEMA-type equipment, their cherished cash cow, is on its last legs.
”It`s sort of like the difference between the old eight-track tapes and cassette tapes,” said Ben Orr, a spokesman for the U.S. operations of Sprecher & Schuh AG, a Swiss electrical equipment maker that markets only IEC- type equipment in the United States. ”They both do the same thing equally well. One is basically smaller than the other.
”All the big guys who are manufacturing NEMA-type devices are working off of old tooling that`s been around for 25 years. They are not putting a lot of money into R&D (research and development); they`re just sitting back collecting their money.”
Orr contends that the International Electrotechnical Commission is far more responsive to industrial customers than is the National Electrical Manufacturers Association, which he sees as dominated by traditional manufacturers and electrical engineers.
Jim Bodie, district manager for Sprecher & Schuh in the Chicago area, noted that industrial customers have less incentive to buy over-engineered equipment, especially given tax laws that force them to depreciate equipment faster than in the past.
Orr said Square D approached his company six months ago about some kind of combination but was rebuffed. He`s convinced Square D, one way or another, will have to climb aboard the IEC bandwagon.
”The whole rest of the world is getting along just fine without NEMA,”
he said.
One local manufacturer that made the switch recently was Chicago Dryer Co., a manufacturer of commercial irons used by laundries, hotels and hospitals. Steve Culver, technical coordinator for the company and a Sprecher & Schuh customer, said that during an overall redesign of their product line, IEC-type controllers were chosen.
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Not only is the IEC equipment more compact, it is also simpler, with fewer wires and parts.
”Everything about it is better for us,” he said.