Machinery-Tool Industry M-Team Alliance on the Offing

Taipei, April 14, 2011 (CENS)--To cushion the impact of the FTA (free trade agreement) between South Korea and European Union that will hit the road in the beginning of July this year, five leading Taiwanese machine-tool firms, including Victor Taichung Machinery Works Co., Yeong Chin Machinery Co., Tongtai Machine & Tool Co., Quaser Machine Tools Inc. and Litz Hitech Corp., will join forces with 50 domestic manufacturers of machinery parts to form the M-Team Alliance, mimicking the A-Team Alliance launched by domestic bicycle firms, on April 22.

Soon after its inauguration, the M-Team Alliance will vote to choose first-term chairman. The most hopeful chairman is Bert M.H. Huang, incumbent president of Victor Taichung Machinery Works.

With the enactment of the FTA between South Korea and EU, South Korea's manufacturers of machining centers will enjoy zero customs tariff when shipping the products to the EU member nations, compared to current 2.7%. Accordingly, the FTA will have adverse impact on domestic manufacturers in this line in promoting sales to the EU market.

In addition, South Korea is also negotiating with the U.S. for the signing of the FTA which is expected to be settled by the end of this year or the beginning of next year. This is expected to deal a heavier blow to domestic machine-tool manufacturers as South Korea has been Taiwan's archrival competitor in the international machine-tool trade arena.

Faced with the harsh competition from South Korea, Taiwan's machine-tool manufacturers have resolved to form the M-Team Alliance to help domestic manufacturers boost product quality and international competitiveness.

In fact, the machine-tool M-Team was originally formed at the end of 2006 by two machine-tool manufacturers, namely Victor Taichung Machinery and Yeong Chin Machinery, in tandem with 20 manufacturers of machinery parts. To establish a more complete supply chain system, the machine-tool A-Team Alliance will soon be formerly inaugurated.

W.C. Hsu, vice president of Victor Taichung Machinery, said the M-Team is based on the Toyota Production System (TPS). The M-Team Alliance is aimed to foster the new-generation core competitiveness for domestic machine-tool industry. The association will also forge a brand-new operating model by helping member companies to improve product quality, shorten delivery time and cut production costs.