Gear manufacturers weigh-in on state-of-the-gear-industry today
The ever-volatile election cycle has ended. Gear companies—and metalworking organizations in general—must now shift their focus toward customers. Can they meet orders in a timely fashion? Is it time to strengthen the talent pool? How is their equipment stacking up against the competition? Overall, there is a feeling business will turn the corner in the 3rd and 4th quarters of 2025. Gear Technology spoke with representatives from Atlanta Gear Works (AGW), Croix Gear and Forest City Gear (FCG) on the state of gear manufacturing in 2025.
A Shifting Gear Market
Ruthie Johnston, CEO, Croix Gear.
Kika Young, president of Forest City Gear.
The gear market—and metalworking in general—has witnessed a tumultuous couple of years in manufacturing. A couple of things happened with COVID according to Ruthie Johnston, CEO, Croix Gear.
“First what we found is that companies over bought and over stocked believing the panic orders that their customers placed to be in line to get their products. The supply change shortages didn’t allow them to build. So, the shelves were full. With that in mind, customers were not buying as much. They were using up the stock they had.”
In 2024, Johnston saw companies laying off nearer Q3 and Q4.
“The election happened, and we started to see the orders coming in for 2025. We have brought in new customers this year. We decided to enter some new market spaces. We are excited because have added outstanding talent to our arsenal to take us into ’25 and beyond,” Johnston said.
Croix Gear serves a remarkably diverse customer base. “We make gears for cars, forklifts, robots, commercial food mixers, tooth grinders for horses. The list goes on. We are in the process to be certified for aerospace, Johnston added. “We have customers that will be requiring more from Croix in this area. It will trickle down to our vendors and suppliers.”
Atlanta Gear Works is a total-solution process-critical rotating equipment design, engineer, manufacture, and repair company headquartered in Dawsonville, Georgia, less than an hour north of Atlanta, at the entrance to the Blue Ridge Mountains. For more than 30 years, the company has served some of the country’s leading manufacturers with innovative power-transmission solutions, high-quality products, and beyond-the-expected service. “For our business we see more carburized, hardened and ground gearing today. We have adapted by adding grinding capacity,” said the AGW executive team.
AGW recently finished rebuilding two 50-year-old damaged gearboxes from one of the largest water pumping plants in the world—the W.G. Huxtable Pumping Station, which protects the livelihoods and lives of thousands of vulnerable residents in the rural Mississippi Delta. The importance of keeping Huxtable ready to pump is undeniable. And the key to readiness is keeping all ten of its identical 50-year-old gearboxes operational. The contract to repair the remaining gearboxes runs through 2026. AGW added a new Kapp Niles Gear Profile Grinding Machine ZP 24 in combination with two other Kapp Niles grinders in order to cut down on total repair time.
FCG announced the groundbreaking of new warehouse in October. The 50' x 100' climate-controlled warehouse will serve as storage for finished goods, while prioritizing storage space in the existing footprint for in-process items for Cut Teeth Only jobs.
“Really since 2008, U.S. manufacturing has been on a roller coaster ride. From offshoring to the manufacturing renaissance, advances in 3D printing, IoT, AI advancements, robotics, COVID, remote work, and now (hopefully) a strong stance toward re-shoring—things have been interesting!” said Kika Young, president of Forest City Gear.
“For the industries we serve, we are seeing an uptick in quoting across the board, from industrial food applications to military, and defense to outer space and aerospace. Industrial applications, pump gears, and robotics are also holding strong, “Young said. “The new administration is very friendly toward U.S. manufacturing, and we are eager to continue our current growth trajectory. We are excited, literally, and figuratively, to keep being out of this world!”
Companies are looking for greater efficiency, collaboration, and meeting delivery dates. Some companies have sourced their gear manufacturing out which opens opportunities for companies like Croix Gear, according to Johnston.
While electric vehicles, and electric applications in general, still require some gearing, it is far less than a typical internal combustion engine and has had an impact on industry. Counterintuitively, FCG has seen an uptick in quote requests relative to EV gearing due to the higher quality requirements needed to offset the acoustic signatures that are no longer masked with an internal combustion engine, Young added.
“Gears in an EV engine need to be quieter because there is no noisy motor to cover up the sound. FCG does not have TS certification and refrains from automotive work, EV or otherwise. However, it is becoming apparent that battery production (specifically lithium requirements) nor the electrical grid can support widespread EV use at this time. While FCG doesn’t dabble in the automotive world, we hold that the gearing within automotive will stay strong across the board,” Young said.
Utilizing Emerging Technologies
As a job shop, widespread automation has also not been an option yet for lower-volume work at Forest City Gear.
“I am personally interested to see what we can do with cobots soon. Adapting around COVID—when our main end-user was aerospace and most of the world stopped flying—was certainly a challenge! We moved our focus toward robotics during that time. At FCG we’re constantly working to stay on the cusp of leading technology and being aware of market and economic changes. If you are not evolving, you are dying. Luckily, we can utilize the excellent resources, market research, webinars, and networking made available by the AGMA to further our efforts in these areas,” Young said.
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Atlanta Gear Works does not see an emphasis on robotics soon but according to the executive team, the company will be exploring additive manufacturing.
“At AGW, the focus will remain on reliability and uptime for our heavy industrial customers. “All of our customers and vendors say they are enthusiastic about 2025 and we’re also very optimistic.”
According to a recent report from BDO, many manufacturers were figuring out where they land on the innovation adoption curve as it relates to artificial intelligence (AI) in 2024. BDO anticipates 2025 will be the year that manufacturers advance their AI maturity. Manufacturing will see a variety of AI use cases proliferate. Beyond streamlining routine tasks, some manufacturers—especially those who were early adopters or early majority—will use AI in more sophisticated ways.
For instance, they may use AI to accelerate product development, including prototyping, machine-learning-informed engineering processes, and models that can simulate product performance and design. Other manufacturers may use AI to enhance employee experience. For example, AI can translate instructions into multiple languages in real-time. In doing so, manufacturers can teach new skills and programs to their workforce, despite language barriers, enabling more efficient upskilling across the enterprise.
Another significant trend will be building and maintaining a strong data infrastructure. However, many manufacturers continue to face challenges working with a dozen or more disparate systems that have unique and asynchronous data inventories, resulting in weaker data foundations.
In 2025, BDO expects manufacturers with greater data maturity will not only expand their AI use cases but also take a more data-driven approach to all operations to gain a competitive advantage. Some manufacturers, for example, will analyze plant floor data to optimize production practices and help cut costs. Others may leverage data to bolster their employee retention efforts, identifying turnover trends and understanding how employee churn impacts output quality from their warehouses.
Education and Training
Staffing gear manufacturing shop floors remains one of our industries’ greatest challenges. Recent engineering graduates tend to focus on software, research and computer science. The gear industry needs system specialists able to manage the growing demands in both mechanical and electrical engineering.
“We have one fully–trained full–time mechatronics tech already part of our team,” Johnston said. “We also have one that we have cultivated at Croix Gear. He is in his last year of school. I am looking to hire new engineers. I can find mechanical and manufacturing process engineers, but it is very difficult to find one that has gear training or knowledge.”
FCG will continue to develop a local labor pool, starting in middle schools and high schools in the area. “We are active in many local organizations to stay proactive in this area and have recently joined the wonderful program, Craftsmen with Character, which is the brainchild of the brilliant Dave Hataj of Edgerton Gear. We are active with the National Tooling and Machining Association’s apprenticeship program, several area robotics clubs, national manufacturing days initiatives, and much more,” Young said.
In 2024, AGW added two engineers and 15 machinists and assembly technicians. As a result, the company has added a second shift. The executive team continues to focus its efforts on minimizing customer downtime.
Keeping an Eye on Changing Markets
What will the EV and hybrid markets look like in 2025? How will wind, solar and clean energy projects fare under the new administration? What surprising end markets will gain momentum this year in gear manufacturing?
“FCG is very intentional in not letting any individual customer, or even end market, take too big of chunk of gross sales. As we saw through COVID, diversification is key to weathering the storm. While putting all your eggs in one basket might make you a lot more efficient (and a lot more money in the short term), it’s just too risky an approach for us,” Young added.
Big picture, we will keep a close eye on potential mergers and acquisitions and gear companies looking for potential buyers in 2025.
“I’m curious what succession will look like?” Johnston said. “There are so many buyers out there today!”
