Rockwell Automation CEO Talks Policy, Pipelines and Football

Says U.S. must address cost disadvantages, including regulations and taxes, to be globally competitive.

By Jonathan Katz   

Nov. 16, 2011

CHICAGO -- Rockwell Automation Inc. CEO Keith Nosbusch echoes a sentiment shared by many leaders of large multinational firms that U.S. manufacturers are overburdened with regulatory costs that put the nation's industry at a competitive disadvantage.

He cites figures from the National Association of Manufacturers that show U.S. manufacturing costs are 20% higher than their largest trading partners.

"That's an awful lot to make up for in productivity to be globally competitive, says Nosbusch, whose company posted revenues of $4.86 billion in 2010.

Part of the problem is a public perception that manufacturing is not "an important dimension of the economy," Nosbusch says.

IndustryWeek spoke with Nosbusch about key manufacturing and leadership issues during Rockwell Automation's 20th annual automation fair at Chicago's McCormick Place Nov. 15.

IW: What is the most important policy issue you'd like to see addressed?

KN: I think it's about how we deal with those structural-cost disadvantages. I don't think there's any one policy issue. If we wanted to wrap it up in a nice bow it's really around the global competitiveness of U.S. manufacturing. And then what needs to be done to have one. In addition to that, we need trade agreements. You can't expand exports without trade agreements, and the U.S. is way behind other countries in creating bilateral trade agreements, and without that we are not going to have trading surpluses with our friends. That has to be high on the list of policy changes.

IW: What do you see as the fastest-growing segment within your company?

KN: Today it would probably be the process industries. It's where we believe we have the greatest growth opportunity. Historically we've been thought of as more of a discrete automation supplier, and with the evolution of the capabilities into the Logix architecture we now can do DCS control. While historically we have always been a supplier of intelligent motor control to the process industry, we now do process control, DCS control and safety control. Those are all capabilities that we have, and we see that as our greatest growth opportunity in the future.

IW: Has the development of unconventional oil and gas resources created significant growth opportunities for your company?

KN: There's growth in even traditional oil and gas development, but certainly in certain regions of the world, particularly the U.S., there is a boom. You look at what's going on with shale and some of the oil reserves in North Dakota and some of the things they're finding in Colorado. We do see real good opportunities in oil and gas based upon nontraditional either energy deposits or new technologies that allow them to get access to what were previously low-yield capabilities. Of course, there's a lot of interest in North America, and you have Canada with the oil sands. That is creating quite an opportunity for the U.S. to become more energy independent.

IW: Were you disappointed when President Obama said he would delay construction of the Keystone XL pipeline?

KN: Yes, very disappointed because of two reasons: One, it definitely provides jobs, and they're good jobs. And, secondly, it's about a better balance of payment with a great neighbor. Canada is our best trading partner. We can reduce our dependency on foreign oil. It's a stable source. And they're a great partner, and I think we live in a political environment. It's challenging to see those types of inactivity that doesn't move the ball forward.

IW: President Obama recently said at an economic summit that United States has become 'lazy' when it comes to attracting new investment. Do you agree with this statement?

KN: I don't think we've gotten lazy. I think it goes back to some of these infrastructure costs. It's about creating an attractive environment for investment, and I don't view that as lazy. It's the environment that you've created for investment, and it's about being competitive. The world is competitive, and there are many people, many countries, many industries that are actively seeking investment, and you have to get on the field and play. I think it's just not going to happen by people hoping or wishing. You have to compete, and you see many countries willing to do that, including European countries. So it's not just about new, developing countries. It's about all countries across a wide spectrum of understanding that if you compete you can attract foreign direct investment.

IW: You were a co-captain for the University of Wisconsin football team in the 1970s. What do you recall as your greatest moment from your playing days?

KN: Well, back in those days it was a big deal that we could beat Penn State. I think just playing, competing at a high level and getting a great education at a great school. The highlight was that. Let's face it, my playing days ended pretty quickly after college, so it was really about what college did for me. It gave me a chance to get an education, and that's my greatest memory.

IW: Did it teach you any leadership skills that you still utilize today in business?

KN: No question about it. The discipline of being an athlete and taking an engineering curriculum, you had to be a little disciplined and study and be able to chunk your time and stay focused on that. It's about teamwork. It's a great team sport. Business is a great team sport. It's not about individuals. It's about how well do you work as a team, as a unit, and if one function breaks down as you know the play doesn't go or you get one returned on you. So it's really about the collaboration, the teamwork, the disciplines and quite frankly, maybe the most important one: picking yourself up and keeping on going because you get knocked down a lot. The question is, what do you do when adversity comes? It always happens -- sometimes the whole game, sometimes a quarter, sometimes a play. It's the same thing in business. It's not always up and positive. You have to pick yourself up. It's about persevering and getting up and forgetting about the last play and worrying about the next one.