September 2008 Edition
INDUSTRY NEWS
President George W. Bush visited The Lincoln Electric Co. plant, Cleveland, on July 29 to discuss the energy problems America is facing and how companies like Lincoln Electric can help.
Touring the plant with Lincoln President George D. Blankenship, President Bush visited automated welding stations, including a 5-arc submerged arc welding system used for welding gas pipelines and wind towers. There he pressed a button on the control, starting a short weld on the pipe.
After the tour, he addressed around 300 factory workers saying he was “proud to be here with ‘the welding experts.’ ”
He also spoke about the administration’s measures to deal with high gasoline prices, focusing on expanding offshore drilling, increasing vehicle efficiency, and promoting alternative fuels. Bush urged Congress to take action on these issues, as well as highlighted the industry’s importance to the solutions.
At its annual technology seminar, Hurco, Indianapolis, introduced 12 new machines, with more to be released at IMTS, all showcasing its integrated control with WinMax Software. James Fabris, president and CEO, announced the start of changes it plans to implement within the next few years.
Flow International Corp., Kent, WA, a developer and manufacturer of industrial waterjet machines, announced the U.S. Federal Trade Commission accepted a consent decree which will permit the merger of Flow and Omax Corp., Kent, WA.
The consent decree provides that Flow will make available to other abrasive waterjet companies royalty-free licenses to two Omax patents that relate to the controllers used in waterjet cutting systems. The licenses do not include any transfer of technology, will not cover any other patented equipment or processes owned by Flow or Omax, do not apply to any intellectual property outside of the U.S., and expire in five years.
The Modern Applications News Industrial Average – MANIA – tracks 34 publicly-traded companies in the metalworking field and compares the companies’ 30-day trend to the corresponding trend of the Dow-Jones Industrial Average
In his first official message since becoming president of Hardinge, Inc., Elmira, NY, Rick Simons assured the industry that the company remains committed to serving its customers’ needs. He announced the company made several changes in its organization to improve its reputation. Mike Hillock joined the company as the vice president of sales and marketing to develop and expand its international markets; Jeff Ervay was appointed as director of North American sales; Andy McNamara was made director of technical services; and Paula Ameigh became director of marketing and customer services.
“I am pleased with the progress we have made to keep The Hardinge Group in the mind of all those in the machine tool purchasing market,” Simons said.
Unbalanced U.S. trade with China since 2001 has had a devastating effect on U.S. workers, according to an economic snapshot report by the Economic Policy Institute, Washington, D.C.
Between 2001 and 2007, 2.3 million jobs were lost or displaced, including 366,000 in 2007. These jobs were displaced by the growth of the U.S. trade deficit with China, which increased from $84 billion in 2001 to $262 billion in 2007.
Growing China trade deficits between 2001 and 2007 eliminated jobs in all 50 states and the District of Columbia.
Job displacement exceeded 2.0 percent of total employment in Idaho, New Hampshire, South Carolina, Oregon, California, Minnesota, Vermont, Texas, and Wisconsin.
The effects of growing trade deficits with China have been felt across the U.S. and no area has been exempt from their impact.
While traditional manufacturing states such as Wisconsin, Tennessee, and the Carolinas were certainly hard hit, so too were states in the tech sector such as California, Texas, Oregon, and Minnesota.
Rapidly growing imports of computers and electronic parts accounted for almost half of the $178 billion increase and eliminated 561,000 U.S. jobs. Idaho, which lost an estimated 9,000 jobs in computer and electronic products alone, was the hardest-hit state in the country in terms of share of total state employment.
The full snapshot can be found at
www.epi.org/content.cfm/webfeatures_snapshots_20080730 .
May U.S. manufacturing technology consumption totaled $341.21
million, according to the American Machine Tool Distributors’ Association –
AMTDA – and the Association For Manufacturing Technology – AMT. This total, as
reported by companies participating in the United States Manufacturing
Technology Consumption – USMTC – program, was down 16.4 percent from April, but
up 2.2 percent from the total of $333.8 million reported for May 2007. With a
year-to-date total of $1.94 billion, 2008 is up 17.2 percent compared with 2007.
These numbers and all data in this report are based on the
totals of actual data reported by companies participating in the USMTC program.
"The May machine tool consumption numbers again demonstrated
continued strength and growth in many markets across the country, except in the
automotive sector in the upper Midwest," Peter Borden, AMTDA president, said.
"However, the concerns about energy and commodity prices, along with the
traditional summer and pre-IMTS buying slowness, may in the next few months
reduce the gains that we have seen thus far this year to bring the orders closer
to the forecasts."
The USMTC report, jointly compiled by the two trade
associations representing the production and distribution of manufacturing
technology, provides regional and national U.S. consumption data of domestic and
imported machine tools and related equipment. Analysis of manufacturing
technology consumption provides a reliable leading economic indicator as
manufacturing industries invest in capital metalworking equipment to increase
capacity and improve productivity.
U.S. manufacturing technology consumption is also reported on
a regional basis for five geographic breakdowns of the United States.
Northeast Region
Northeast Region manufacturing technology consumption in May
rose to $48.48 million, 4.7 percent higher than April’s $46.30 million, but 16
percent less than the total for May 2007. The year-to-date total of $269.89
million is off 0.1 percent when compared with 2007 at the same time.
Southern Region
May manufacturing technology consumption in the Southern
Region stood at $43.47 million, down 11.6 percent when compared with April’s
$49.17 million, and 19 percent less than the May total a year ago. The $314.75
million year-to-date total is 47.2 percent higher than the 2007 total at the
same time.
Midwestern Region
At $119.31 million, May manufacturing technology consumption
in the Midwestern Region was 26.2 percent less than the April total of $161.76
million but 20.8 percent higher than the May 2007 tally. Compared with 2007 at
the same time, the year-to-date total of $662.98 million is up 42.6 percent.
Central Region
Central Region manufacturing technology consumption rose to
$91.15 million in May, up 7.5 percent when compared with April’s $84.79 million,
and 3.4 percent higher than the total for last May. The 2008 year-to-date total
of $447.29 million is 2.9 percent less than the comparable figure a year ago.
Western Region
With a May total of $38.78 million, Western Region
manufacturing technology consumption was 41.5 percent less than April’s $66.25
million but up 9.2 percent when compared with May a year ago. The $247.47
million year-to-date total is down 0.2 percent when compared with 2007 at the
same time.
According to a survey of industrial equipment distributors
conducted by industrial equipment analyst Eli Lustgarten of Longbow Research,
Independence, OH, demand is moderate positive, but remains at depressed levels,
while prices and sales are increasing due to higher fuel and input costs.
"Twenty-three percent of survey contacts
reported improved year-over-year demand during June/July,
versus 16 percent in May," Lustgarten said. "Meanwhile, 97
percent of contacts indicted price increases during the
June/July time frame."
Longbow’s June/July industrial
distributor survey is consistent with recent economic data
and commentary from industrial distributors in the market
that show an industrial economy muddling through amid a
continued spike in input costs, which distributors are
aggressively attempting to pass through to customers.
Demand was moderately positive, likely due to seasonal and
geographic factors within the sample, but remains at depressed levels and below
May levels; the outlook remains cautious with near-term uncertainty given
anecdotal evidence of softening of demand over the summer. The full survey is
available from Longbow Research at www.longbowresearch.com .
The federal minimum wage increased to $6.55 per hour as of
July 24, 2008. However, many states also have minimum wage laws, and some are
higher than the federal minimum, according to a report by J.J. Keller and
Assoc., Inc., Neenah, WI. In cases where an employee is subject to both the
state and federal minimum wage laws, the employee is entitled to the higher of
the two minimum wages.
The states where the minimum wage increased as of July 1
included
- Illinois: $7.75
- Kentucky: $6.55
- Michigan: $7.40
- West Virginia: $7.25
Kentucky’s minimum wage will be the same as the new federal
minimum but takes effect several weeks before the federal increase.
Nebraska, North Dakota, Ohio, South Dakota, and Utah
increased state minimum wages to the same amount as the federal minimum and on
the same date.
This change may affect employers if the state minimum wage
applies to employees who are not covered by federal law.
Some other increases include New Hampshire minimum wage increased to $7.25 on Sep. 1; and effective Oct. 1, 2008, the Maine minimum wage will increase to $7.25.
Applied Manufacturing Technologies, Orion, MI, a supplier of factory automation design, engineering, and process consulting, opened an office in Bangalore, India. The office will support the growing Asia-Pacific market as well as AMT’s U.S. customers.
The new office will include all areas of automation engineering, training, field support, and development functions.
A U.S. Department of Labor, Bureau of Labor Statistics report stated 541 mass layoff events resulting in 76,514 initial claims for unemployment insurance were reported in the manufacturing sector in June. This is reportedly the highest monthly level since August 2003.
Contrary to this report, for North American midsized manufacturing sector, optimism with job security remains. According to a study conducted by Prime Advantage, a Chicago-based manufacturers' buying group, nearly 40 percent of its membership are still planning an increase in capital spending compared to 2007, while only 17 percent expect job cuts within the next six months.
Prime Advantage, Chicago, IL, a buying consortium for
midsized industrial manufacturers, announced the findings of its second Group
Outlook Survey, revealing the top economic concerns for the second half – H2 –
of 2008.
Raw material and energy costs continue to top the list of
cost pressure concerns, but this time they have become an overwhelming worry
among North American manufacturers.
The results of the first survey, released in January, showed
43 percent of the group’s manufacturing members were apprehensive of rising
material, and 17.5 percent concerned with energy costs.
This latest study reveals that 93 percent agree that material
costs will be an economic concern for the rest of 2008, with a 67 percent
agreement on energy costs following closely behind.
Survey data was collected from 72 senior-level
representatives of industrial manufacturing companies, including business
owners, vice presidents of procurement, and purchasing directors.
In addition to seeing 93 percent of respondents agree that
raw materials – including stainless steel, nickel, copper, and other metals and
plastics – were a major concern for H2 2008, two-thirds of all manufacturers –
up 49.5 percentage points from the first survey – agreed that energy costs will
be a major concern for the rest of the year.
Unlike the first Group Outlook Survey, inflation is now the
third highest concern, with 39 percent in agreement, up 31 percentage points
from January.
Logistics and supply chain costs followed closely at 38
percent – 21.6 percentage points higher than the first Group Outlook Survey.
Healthcare – 18 percent, foreign competition – 12 percent, overhead – 11
percent, and labor – 8 percent, were among the other cost pressure concerns
identified by survey respondents.
The Prime Advantage Group Outlook Survey also showed
confidence for employment opportunities in the second half of 2008. While only
17 percent expect job cuts within the next six months, another 17 percent expect
job growth and 66 percent expect to make no changes and keep their current
employee base at the same level.
The survey results are viewable online at
www.primeadvantage.com/companynews/pressreleases/2008-07-22-H2Survey_Announcement.pdf .
