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Manufacturing Matters- Tuesday Top-Up 79

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What’s Been Happening in our MAKE│NZ Community

3 weeks… will we see you in Auckland?

We’re helping kick off EMEX 2026 with our full day conference.

Delving into AI, Industry 4.0 integration, robotics and human‑robot collaboration, future‑ready skills, and workforce upskilling, we’re covering a range of presentations and case studies.
Hear from range of presenters such as:

  • Dr Jan Polzer (Faculty of Engineering and Design, Auckland University) running an interactive workshop on Industry 4.0
  • Scott Adams (Argon & Co) presenting on human robot collaboration
  • Dion Orbell (Buckley Systems), Nathan Hay (Argus Manutech), Kayne Mulcahy (Mulcahy Engineering) on the human capital challenge, with an interactive workshop
  • Natalia Galin (Galin Engine) Charlie North (Dawn Aerospace) Josh Down (ENI Manufacturing) working through Start Ups
  • Dean Boston (FEWORX) running a Q&A on matching capital and opportunity
  • Richard Rookes (MHM Automation, Wyma Solutions) Philip Benson (AW Fraser) presenting an interactive workshop on amalgamation and agglomeration

You can find the programme, special discounts, and more HERE

Future Events

• Reminder: our next Fireside Chat on May 11 will be showcasing the PV (photo voltaic) installation on the roof of Hamilton Jet’s new factory building. We’ll hear from Steve Lockhart, Manufacturing Engineering Manager at Hamilton Jet, and Andy Wells, MD at Sunergy Solar, who worked with Hamilton Jet on the project.

If you haven’t received an invitation for this event (yet), it’s probably because you are not a member of MAKE│NZ. To join, or enquire about becoming a member, please contact Sabine at sabine@makenz.org .

News From The World of Manufacturing

•We’ve had a number of cases recently where fairly substantial manufacturing businesses in Canterbury and beyond were acquired by larger companies, mostly overseas. Without reference to any case in particular of these, there is a fair bit of evidence available internationally about what constitutes best practice in what’s referred to as Mergers & Acquisitions [M&A].

•In the case of mergers, examples of two companies coming together who are equal partners and contribute equally to the combined entity – rather than one ending up the dominant force – are quite rare. One successful example in that respect was the merger between United Technologies & Raytheon in 2020. This $121 billion merger of equals created Raytheon Technologies Corporation (now RTX). It was structured to bring together two major, roughly equivalent aerospace and defence leaders, creating a new, highly competitive entity rather than just absorbing one company into the other.

Back to straight-out acquisitions, which is what the cases referred to above were. From an operational perspective, there is a dilemma that invariably raises its head: When a smaller company is acquired by a larger one, should the larger company that made the acquisition be forcing the company that has been acquired to adopt its systems and processes or leave the company that has been acquired to continue with its own systems and processes which have been proven to work well to date – assuming the acquisition wasn’t a deliberate choice of buying an underperforming entity?

There is a substantial body of evidence available to answer the question. The most widely accepted framework for resolving this is the Haspeslagh and Jemison Model. It argues that integration should be determined by two factors: the need for strategic interdependence (sharing resources) and the need for organisational autonomy (preserving the target’s “secret sauce”).

The Evidence-Based Solution: “Selective Integration”:

Research from Harvard Business Review and firms like McKinsey suggests that successful acquirers use a “Best-of-Both” or “Selective” approach:

  • Integrate the “Back Office”: Standardisation of Finance, IT infrastructure, and Purchasing is almost always beneficial. Empirical studies show that standardizing purchasing procedures significantly improves business performance by leveraging the larger company’s scale.
  • Protect the “Front Office”: Autonomy should be maintained for R&D, Product Design, and Sales if those are the reasons the company was acquired. Forcing a nimble startup into a rigid, 12-month corporate product cycle often kills the very innovation that made it attractive.
  • Speed vs. Precision: Evidence suggests that while speed is vital for cost synergies (cutting overhead), precision and patience are better for revenue synergies (launching new products).

A practical rule is: keep the best operating model for the activity, not necessarily the one belonging to the bigger company. Standardise finance, reporting, procurement, and governance early; keep production processes, customer interfaces, and specialist engineering routines more autonomous until the combined company has evidence on which approach performs better. That is especially true in manufacturing businesses built around tacit know-how, regulated quality systems, or hard-won customer trust.

Real-world manufacturing M&A successes usually share the same pattern: keep the target’s operating strengths intact where they create value, integrate the systems that matter for scale, and run the whole thing with disciplined program management. The best examples are not “full assimilation” deals; they are selective integrations with clear choices about what to standardise and what to preserve.

There are standard examples of classic acquisition failures and successes. For failures, the acquisition of the US automaker Chrysler by Daimler Benz is often quoted as a classic failure driven by cultural incompatibility, leadership imbalance, unrealistic synergy expectations, and operational friction after Daimler effectively imposed its model on Chrysler.

Daimler-Chrysler is the clearest example of the “force the target to become like us” mistake in a manufacturing setting. Daimler forced Chrysler to adopt its “systematic” reporting structures and formal dress codes. American engineers felt stifled by the German “suit-and-tie” bureaucracy. The two companies couldn’t even agree on a single financial reporting system, leading to massive internal friction.

The Outcome: The merger destroyed billions in value. Daimler eventually sold Chrysler in 2007 for a fraction of the original price, largely because they tried to “systematize” a culture that thrived on being unstructured.

Among the more successful examples was the 2022 acquisition of US gearbox and suspension manufacturer Meritor by engine manufacturer Cummins, which paved Cummins’ entry into the integrated ePowertrain and accelerated zero-emissions portfolio. It involved the technology integration for electric powertrains, the formation of cross-functional engineering teams and the co-location of manufacturing footprint.

Other recent examples of successful acquisitions in the US include Atlas Copco buying Isra Vision in 2023 and the 2026 acquisition of Dana Off-Highway Drive & Motion Systems by Allison Transmission. These are all acquisitions on a much larger scale than the recent New Zealand examples, but the critical success factors arguably apply across the spectrum.

It will certainly be of interest a bit further down the track to learn how this has played out in the recent New Zealand manufacturing acquisitions.

Fun Facts (some of them not so funny)

•We sometimes forget how important it is for workplace health and safety to provide clear and relevant instructions:

Taken at London’s Heathrow Airport

Lest people are engaging in dangerous and undesirable activities

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