'Robots can work together with people'

Fanuc chief urges firms to prepare for new industrial wave-

By Kim Yoo-chul

PYEONGCHANG, Gangwon Province _ Yoshiharu Inaba is secretive and rarely speaks to the media as he spends most of his time in discussions with clients ranging from Samsung Electronics to Apple, Tesla and Ford.

He is the chairman of Fanuc, a leading supplier of industrial robots, based in Japan. Fanuc is one of Japan’s most profitable companies.

But Inaba had to work around his already tight schedule to participate in this year’s Pyeongchang Forum, organized by the Federation of Korean Industries (FKI), as the forum has highlighted the growing roles of industrial robot technologies.

The chairman said Korean manufacturers should be adaptive to the tides of the emerging new industrial wave as emerging technologies like the Internet of Things (IoT) and artificial intelligence (AI) will change the world in the next several decades.

Be quick

The chairman said quicker execution was the key factor behind the company’s success in the industrial robotics business.

“Fanuc has tried to reflect the latest emerging technologies in core works and to establish our systems as the new standard,” the chairman said during an interview last week.

Fanuc, which was separated from Fujitsu in 1972, has total assets of about 60 trillion won with the company generating 6.7 trillion won in sales last year. The company achieved a 37 percent operating profit margin in 2015.

Its robots are used on the smartphone production lines of Samsung and Apple as they are used to make metal cases for iPhones and Galaxy devices. They are also used for everything from vehicles to beverages to pharmaceuticals.

“The reason why Fanuc keeps our manufacturing facilities operating in Japan despite growing fixed costs is that we want to prove that robots can work together with people in the same area and robots can help manufacturing companies maintain competitiveness,” Inaba said.

Fanuc has 38 production facilities in Japan and 1,500 employees, however, the company deployed 3,000 robots in the facilities handling 80 percent of labor on the production line.

“Sometimes, robots are better at self-learning. We are also seeing advances in AI. This trend will allow robots to watch, learn and to improve their capabilities. Also, by utilizing an IoT system, we can network the robots. Within the IoT framework, robots can exchange information for accuracy and efficiency,” Inaba said.

The chairman stressed that Fanuc is prepared to beat its rivals. “Our technologies will be in sync with various industrial standards.”

Fanuc’s annual production capacity of industrial robots was about 5,000 as of last year.

Inaba said “ability” is the key to management.

“Although my father created the company, he has no stake in Fanuc and the same goes for me as well. My oldest son, who is serving as the head of the company’s robotics business, has no stake in Fanuc,” the chairman responded.

“If my son proves his management capability, then yes, there are some possibilities that he will be promoted to chief executive. But I believe he can manage the company well without a stake in the company,” Inaba added.

Hedge fund threats

According to the chairman, leadership is the key to protecting businesses from growing threats from hedge funds.

“The best way to block takeovers from hedge funds is to improve corporate value as that means more returns to shareholders. I don’t think hedge funds could better manage the company than current Fanuc management,” the chairman said.

Fanuc was threatened with a takeover by a New York hedge fund Third Point, which had owned a stake in Fanuc. Later, Fanuc established a team to improve its communication with investors and vowed to increase shareholder return.

“No moves on us by hedge funds are being traced, for the time being,” he said.