ABSTRACT
The arms makers played a key role in the birth and development of the machine tool industry. The developments resulting from the demands of the armories resulted in the American System of Manufactures. In fact, "how the 'American system' developed is the story of the real birth of the machine tool industry". Two major technological leaps played a leading role in propelling the US machine tool industry into a worldwide leadership position: the development of high speed steel and the use of the electric motor and the invention of numerically controlled and computer numerically controlled machine tools. While having an industry largely composed of small- to medium-sized firms hindered the industry's competitiveness, some of these firms were owned by large conglomerates. Domestically, demand for machine tools expanded, led by the US automakers. The Big Three increased their demand for machine tools by 81% between 1992 and 1994, and a sizeable portion of these orders went to US suppliers.
