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Atlas Copco

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Atlas Copco manufactures compressors, mining and construction equipment, power tools, assembly systems, and motion control products. It is also involved in the rental equipment and service industries.

It owns a number of subsidiaries, but often encourages them to maintain their own identity. So, instead of uniting under one brand, Atlas Copco offers a range of choices within the same product market.

Atlas Copco is headquartered in Stockholm, Sweden and has 33,000 employees.[1] Its 2007 revenues were SEK 63,355 million (US$9.985 billion).[2]

Contents

[edit] History

[edit] The Railway Business

Atlas Copco was founded in 1873 as AB Atlas. It was established by Eduard Franckel, chief engineer for Swedish State Railways. He eventually became the company’s first managing director, but shared ownership with large-scale industrialist D.O. Francke and financier A.O. Wallenberg.

Initially, AB Atlas specialized in manufacturing railway equipment for Swedish railways. It acquired one of Sweden’s largest railway-car makers, Ekenbergs söner, and quickly became Sweden’s largest manufacturing company, in terms of production capacity.[3] However, its early success turned into debt. By 1877, orders from Swedish state and private railways fell drastically. The country was entering a recession and AB Atlas could not avoid the fallout.

During the 1880s, Atlas’ losses were mounting and financiers were withdrawing themselves from their investment.

“Initial investment in Atlas had not only been made at the wrong time but also in the wrong industry," said corporate historian Professor Torsten Gårdlund.[4]

In an effort to turn the company around, it expanded into different lines of production, mainly steel and wrought iron components for bridge construction. It also made an unsuccessful foray into marine steam engines and boilers. Failed efforts to save the company resulted in its liquidation near the end of 1890.

However, Wallenberg saved the company from destruction. Its assets were taken over by a new company called Nya AB Atlas (New Atlas Company).

Under new direction, Atlas began specializing in the manufacturing of heating ducts. It also produced steam engines, locomotives, and machine tools.

Production of railway cars came to a complete stop in 1911.

[edit] Diesel Engines

In the early 20th century, Atlas began experimenting with diesel engines and pneumatic products. The first riveting hammers and drills were introduced in 1901, followed by piston compressors in 1904, and pneumatic drilling equipment in 1905.

By 1914, pneumatic equipment had become a profitable business.

World War I drastically increased the demand for diesel engines. So, in 1917, Atlas merged with AB Diesels Motorer in an attempt to improve its product and sales of oil-driven engines. Since Sweden was neutral during World War I, Atlas Diesel had the advantage of selling engines to both the Allies and the Central Powers. However, as the end of the war approached, sales dwindled, and were nearly non-existent by 1920. The following four years were marked with heavy losses.

With debt growing, Atlas Diesel installed a cost-cutting program that included selling its headquarters, minimizing its workforce, and reducing its share capital. The company sold many of its older facilities and relocated production of compressors and pneumatic products to a southern suburb of Stockholm called Sickla.

Soon, pneumatic products were outselling diesel engines, but still focus remained on the diesel engine business.

The company was hit with another financial crisis with the Great Depression, but fought through with a new emphasis on expanding its pneumatic business. Profitability eventually returned in the late 1930s as many countries were rearming themselves for the beginning of World War II. In fact, sales of pneumatic tools tripled and diesel engines doubled between 1935 and 1939.[5]

New management continued moving focus from diesel engines to pneumatic products because it accounted for approximately two-thirds of sales.[6] Still, diesel engine production continued throughout the war, but was discontinued thereafter.

[edit] Profitability and Expansion Through Pneumatics

The compressed air division of Atlas Diesel expanded further after the war with a network of sales subsidiaries around the globe. It also expanded production capacity in Sweden and established new manufacturing plants abroad. Meanwhile, the company was taking part in a number of pneumatic tool developments.

Atlas Diesel developed a new drilling technique called the “Swedish Method,” which utilized a lightweight rock drill equipped with a pusher leg and drill steels with tungsten carbide bits. It could be operated by one man, which allowed Atlas to penetrate new international markets.

The company’s new focus resulted in a name change in 1956. It would now be known as Atlas Copco (Compagnie Pneumatique Commerciale) AB, to showcase its dedication to pneumatic tools.

By this time, international subsidiaries were beginning to pay off. Exports accounted for approximately 65 percent of sales, which resulted in more facilities established around the world.[7] New manufacturing plants were purchased in Denmark, Italy, India, Brazil, Spain, and Mexico.

During the 1960s, more than 80 percent of sales were made outside Scandanavia.[8] However, profits fluctuated because of the increased cost of rising wages, research, development, investments, and marketing. The company was expanding exponentially and, as a result, underwent a major reorganization.

Atlas Copco was divided into three groups: Atlas Copco MCT (mining and construction equipment), Atlas Copco Airpower (compressors), and Atlas Copco Tools (industrial technology).

Atlas achieved record sales during the 1970s, but suffered during a worldwide recession in the early 1980s with a sharp decline in profits in 1982 and 1983. The recession resulted in closing 25 percent of its 46 factories and losing 20 percent of its 20,000 employees.[9]

By the mid-1980s, the company had recovered a considerable amount of its profits with renewed demand in Western Europe and the devaluation of the Swedish Krona. Sales outside of Sweden now accounted for 92 percent of total sales.

Expansion for Atlas Copco continued through the late 1980s. It acquired Chicago Pneumatic Tool Co. (compressed air tools and assembly systems), SA Ets Georges Renault (grinding and sanding machines and small assembly machines), Desoutter Brothers plc (industrial tools and assembly units), and Secoroc (rock drill bits). However, instead of simply uniting these companies under one name, Atlas Copco encouraged them to maintain their own profile so it could offer a range of choices within one market.

The company met and dealt with another recession in the early 1990s. During this time, Atlas Copco continued acquiring subsidiaries. It added two manufacturers of electric tools: AEG Elektrowerkzeuge and Milwuakee Electric Tool.

In the late 1990s, Atlas Copco branched into the service industry by acquiring Prime Service Corp. and rental equipment by purchasing North American Rental Service Corp.

[edit] The Company Today

Atlas Copco continues to manufacture pneumatic tools, construction and mining equipment, and assembly systems. It also offers related service and rental equipment.

It is a public company with headquarters in Stockholm, Sweden.

It employs approximately 30,000 people. It operates 68 production facilities in 20 countries, including Belgium, Sweden, USA, Germany, France, and China.

The company president and chief executive officer is Gunnar Brock.

[edit] Equipment List

[edit] Through Dynapac Subsidiary

[edit] References

  1. Annual Report. Atlas Copco. 2008-09-09.
  2. Annual Report. Atlas Copco. 2008-09-09.
  3. Atlas Copco. Funding Universe. 2008-09-09.
  4. Atlas Copco. Funding Universe. 2008-09-09.
  5. Atlas Copco. Funding Universe. 2008-09-09.
  6. Atlas Copco. Funding Universe. 2008-09-09.
  7. Atlas Copco. Funding Universe. 2008-09-09.
  8. Atlas Copco. Funding Universe. 2008-09-09.
  9. Atlas Copco. Funding Universe. 2008-09-09.

[edit] External Links