Atlas Copco

Early development

AB Atlas, as it was previously named, was founded by Edvard Fränckel, who was a Swedish industrialist, politician and senior official at Swedish State Railways. The company was established along with Andre O. Wallenberg, Johan W. Arnberg, Carl G. Cervin and Fredrik Didro. In its inauguration phase, Atlas dealt with the manufacturing, purchasing and selling of all types of material for railroad construction and operations. After the hard hit of the recession in the 1880s and the decline in railroad construction, Atlas diversified its undertakings and branched off into locomotives, central heating and tool machinery. In 1899, Atlas began developing their first air compressors and established itself as a compressor manufacturer. As older production branches started phasing out, Atlas teamed up with Diesel Motors in 1917 and the new company of Atlas Diesel emerged with two primary divisions: diesel engines and compressor air products.^[7]

War-time development

The Atlas Diesel merger experienced significant growth during the First World War and towards the end of the war, export dominated 40–50 % of production. The depression years caused significant losses for the company, which led to several financial reconstructions in the 1920s and 1930s. The economy began recovering, demand started growing again in the mid-1930s, and Atlas Diesel experienced a boom in sales, where compressed air operations was the most expansive area.The Second World War remained an active period for the firm and a time when strategic planning for development played a principal role. Manufacturing capabilities were embellished and the purchasing along with the acquisition of manufacturing subsidiaries in Sweden and other countries, was a key component to Atlas Diesel's continued growth after WWII. The "Swedish method" was another war period strategy that strongly influenced the firm's pneumatic program, consisting of lightweight rock drills and drill bits with carbide tips. In 1948 the company terminated its diesel manufacturing and the name "Atlas Diesel" was no longer pertinent. The name Atlas Copco became official in 1955 and was inspired by the Belgian subsidiary Companies Pneumatic Commercial.^[8]

Post-war international expansion

The Swedish method that was founded during the war period laid the foundation for the international expansion Atlas Copco engaged in starting in the 1950s. The purchasing of the Belgian compressor company Arpic Engineering in 1956, was the firm's first major international acquisition. Eventually, Arpic's plants carried out a majority of Atlas Copco's compressor production. In 1960 another important acquisition was made with the purchasing of Craelius. In the 1970s, international expansion accelerated dramatically, due to various structural reforms and efficiency measures brought on by weakened economic conditions and increased production costs. These conditions meant that Atlas Copco had to accelerate and brake simultaneously in order to keep profitability up. A number of strategic acquisitions were therefore made including the French compressor manufacturer Mauguière. In order to strengthen their position in the United States, several strategic acquisitions were made in the Airpower business, including the key purchase of Worthington Compressors.^[9]

In the early 1980s Atlas Copco was the world leader in rock drilling and pneumatics. Seeing the potential in industrial tools, they purchased Chicago Pneumatic Tools in 1987, which opened up the important American, French and British markets. Atlas Copco then became one of the world's largest manufacturers of pneumatic tools and monitoring systems. At the end of the 1980s the company's geographical foothold grew and assortments expanded due to several acquisitions including the French company Ets. Georges Renault that manufactured pneumatic power tools. The British company Desoutter Brothers Plc. that supplied industrial tools and monitoring systems was purchased in 1990. In 1992 AEG Elektrowerkzeuge was purchased and in 1995 Milwaukee Electric Tool was acquired, which further strengthened the company's reach. In 1997, Atlas Copco made its biggest and most important acquisition with the purchasing of the Prime Service Corporation, which was the largest machine leasing company in the United States. The North American Rental Service Corporation was purchased in 1999.^[9]

Compressor Technique

Atlas Copco's Compressor Technique area creates products such as industrial compressors and vacuum solutions, oil and gas treatment equipment, air management systems, and gas and process compressor/expanders. The products are mainly used in the manufacturing, oil, gas and process industries. Their compressor solutions are used in ships, trains and hospitals, and in other facilities and applications. Their main market competitors in this area are Ingersoll-Rand, Kaeser, Hitachi, Gardner Denver, Cameron, Sullair, and Parker Hannifin.^[11]

Vacuum Technique

Atlas Copco’s Vacuum Technique business area provides vacuum products, exhaust management systems, valves and related products mainly under the Edwards, Leybold and Atlas Copco brands. The main markets served are semiconductor and scientific as well as a wide range of industrial segments including chemical process industries, food packaging and paper handling. Principal product development and manufacturing units are located in the United Kingdom, Czech Republic, Germany, South Korea, China and Japan.

Industrial Technique

Atlas Copco's products in Industrial Technique are mainly developed for the automotive and aerospace industries, but are also used in industrial manufacturing and maintenance and vehicle service. Products manufactured include assembly systems, industrial power tools, quality assurance products and various types of software. Their main competitors in this area are Apex Tool Group, Ingersoll-Rand, Stanley Black & Decker, Uryu and Bosch.^[12]

Construction Technique

This area produces portable compressors, lighting towers, pumps and generators, paving equipment, compaction equipment, demolition tools and construction tools for a wide variety of infrastructure projects. These include civil works, road construction, gas and oil, and drilling construction projects. The company's main competitors in this area include Doosan Infracore, Kaeser, Sullair, Volvo, Caterpillar and Wirtgen.^[13]

Manufacturing

Atlas Copco manufactures critical equipment components in-house and co-operates with business partners for non-critical components. Approximately 75% of the production cost of equipment represents purchased components and around 25% are internally manufactured core components, assembly costs and overhead. Equipment represents less than 60% of revenues and the manufacturing of equipment is primarily based on customer orders and only some standard, high volume equipment is manufactured based on projected demand.^[14]

Distribution

Atlas Copco has customer centers in about 90 countries and sales in about 180 countries. Sales and service are primarily direct, but also channeled through alternative sales mechanisms, e.g. distributors. Sales of equipment is performed by engineers and service and maintenance are performed by technicians. Service is the responsibility of divisions in each business area. The responsibility includes development of service products, sales and marketing, technical support, service delivery and follow-up. About 40% of revenues are generated from service (spare parts, maintenance, repairs, consumables, accessories, and rental).^[14]

Brands

The Atlas Copco Group has dozens of brands around the world, including Chicago Pneumatic for compressors and tools, Edwards for vacuum, BeaconMedeas for medical gas solutions, and SCA & Henrob for automotive assembly solutions.^[15]

Structure

Atlas Copco's organization is based on the principle of decentralized responsibilities and authorities. Their operations are organized into four business areas and more than 20 divisions. The organization has both operating units and legal units. Each operating unit has a business board which reflects the operational structure of the Group. The duty of a business board is to serve in an advisory and decision-making capacity concerning strategic and operative issues. It also ensures the implementation of controls and assessments. Each legal company has a legal board focusing on compliance and the legal structure of the Group.

Innovation

Atlas Copco conducts research and development in a wide range of technologies at their global research centers, where each division has its individual area of focus and resources. Training and workshops have been rolled out in customer centers and product companies in Europe and China. The divisions work with eco-design achievement templates that are integrated into marketing material for customers. The Construction Tools division also introduced the HRD100, the electro-hydraulic hand-held rock drill developed in collaborations with customers in South Africa.^[16]