MRO Today - Manufacturing Industry News Archives

Manufacturing Industry News:
News from the week of Jan. 10, 2005

Wisconsin sees significant job loss related to China
NAM outlines legislative agenda for 109th Congress
Business Roundtable offers guidelines on pensions
OSHA's Hispanic Outreach Module available on Web site
Machine tool consumption continues upward trend
Software maker Datastream appoints president
Unemployment holds at 5.4 percent in December
Hudson employment numbers fall in December

Wisconsin sees significant job loss related to China
Wisconsin is among 10 states most affected by low-cost labor in China, according to a report from the Economic Policy Institute. The report indicated that Wisconsin lost 1.5 percent of its workforce, or 41,150 jobs, between 1989 and 2003.

The state ranked ninth on the list of ten states hardest hit by manufacturing's movement to China. Maine ranked first, with 2.5 percent, or 15,396, of its jobs heading to China during the 14-year period.

"Growing trade deficits with China have displaced production supporting 1.5 million U.S. jobs since 1989," wrote Robert E. Scott, the report's author. "The rate of job displacement is accelerating, especially since China entered into the WTO."

He added: "It is hard to overstate the challenges posed by this export behemoth."

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NAM outlines legislative agenda for 109th Congress
With the 109th Congress now sworn in, National Association of Manufacturers (NAM) president John Engler said his organization’s membership will push hard for a variety of pro-growth, pro-manufacturing legislative and regulatory actions that will strengthen and expand the ongoing economic recovery.

“Though U.S. manufacturing finally came out of a lengthy recession and led the rest of the economy with strong growth in 2004, many structural impediments to long-term growth remain, and we’re determined to push an agenda that will reduce or eliminate these impediments,” he said.

Outlining the NAM’s agenda for 2005, Engler explained how the NAM would strengthen manufacturing by:
1) reducing production costs in the U.S.;
2) leveling the international playing field;
3) better preparing a 21st century workforce; and,
4) promoting innovation, investment and productivity.

“Fierce global competition is here to stay, and America’s businesses and workers have no choice but to meet that competition head on," said Engler. "To be successful, we simply must control skyrocketing health care costs and end economy-sapping lawsuit abuse. We need energy policies that increase supply, improve efficiency and reduce dependence on foreign sources. And we need to continue moving away from costly command-and-control regulation by ensuring that sound science and economic analyses drive all regulatory actions."

In the area of international trade, Engler said the NAM will work for Trade Promotion Authority and renewal of WTO membership.

"We'll assist our trade negotiators to reach a successful conclusion to the ongoing Doha round," he said. "At the same time, our members are expecting the administration and Congress to prevail upon our trading partners to end currency manipulations, production subsidies and rampant trafficking in counterfeit goods."

Engler also addressed world-leading productivity and the ability to innovate among U.S. manufacturers.

“Making recent tax relief permanent, encouraging R&D, deregulating broadband, modernizing Social Security and simplifying the tax code can all help move our economy toward a more prosperous future,” he said.

The full NAM agenda for the 109th Congress is posted online at http://www.nam.org/agenda.

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Business Roundtable offers guidelines on pensions
The Business Roundtable issued a set of guiding principles for pension reform, which will be especially important to manufacturing retirees over the coming years.

Currently, there are more than 40 million retired persons depending on defined benefit pension plans for retirement security and more than $100 billion each year that employers provide into defined benefit plans on their behalf.

The Business Roundtable believes its defined principles must be reflected in any final pension reforms to ensure the economic security of the overall system and its ability to provide benefits to our nation’s retirees.

“With the unveiling of its proposals today, the administration has taken an important step toward reforming our nation’s defined benefit plans,” said Business Roundtable president John Castellani. “To ensure financial security for the millions of retirees that depend on the pension system, we must strengthen existing funding rules while maintaining the flexibility and predictability for employers that are essential to economic growth.”

The seven principles outlined by the Business Roundtable include:
• ensuring the continued success of the defined benefit pension system;
• avoiding disrupting or undermining the economy;
• providing predictability in future pension costs;
• eliminating barriers to pension contributions;
• preserving long-term outlook on pension plans;
• providing useful information to participants; and,
• protecting pensions from irresponsible employers.

The Business Roundtable urged that pension reforms not cause broad economic harm or harm to the overall pension system, stakeholders, retirees, investors or providers. The Roundtable said reforms that meet their principles will help strengthen current programs, offer more useful information to retirees and help to bolster the economy.

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OSHA's Hispanic Outreach Module available on Web site
The Occupational Safety and Health Administration unveiled a new Hispanic Outreach Module for its Compliance Assistance Quick Start Web tool, the agency's Web-based tool that provides a step-by-step guide to identifying OSHA requirements and guidance materials for specific workplaces.

The Hispanic Outreach Module will assist employers with a Spanish-speaking workforce to learn more about workplace rights and responsibilities, identify Spanish-language outreach and training resources, and how to work cooperatively with OSHA.

In addition, it provides a list of OSHA's Hispanic/English-as-a-second-language coordinators.

"This new Hispanic outreach tool is another step in our ongoing efforts to provide the most useful and accessible information possible so that employers, employees and businesses stay safe, healthy and successful," said acting Assistant Secretary of Labor for OSHA Jonathan L. Snare. "It's important that we continue to do all we can to inform workers and employers about how OSHA can provide assistance to those who need it."

Visitors to the site can use a step-by-step guide to identify OSHA Spanish-language resources on OSHA's Web site that will help them comply with the Occupational Safety and Health Act of 1970 as well as help them to prevent employee workplace injuries and illnesses.

The site also includes OSHA English-Spanish and Spanish-English Dictionaries (with phonetic pronunciation guides) that contain more than 2,000 general OSHA and construction safety and health industry terms.

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Machine tool consumption continues upward trend
November U.S. machine tool consumption totaled $275.2 million, up 18.3 percent from October and up 40.4 percent from $196 million reported for November 2003, according to the American Machine Tool Distributors' Association (AMTDA) and the Association For Manufacturing Technology (AMT).

With a year-to-date total of $2.7 billion, 2004 was up 43 percent compared to 2003.

"Pent-up demand, tax incentives and the need for increased capacity have caused U.S. manufacturers to continue their investments in new machine tools," said AMTDA president Ralph J. Nappi. "With year-to-date numbers running 43 percent ahead and all five regions showing positive growth, there appears to be a clear signal of continued strength in the industry; 2004 will end up to be the strongest year for machine tool sales since 2000 with all indications for further growth in 2005."

U.S. machine tool consumption is also reported on a regional basis for five geographic break-downs of the United States.

November machine tool consumption in the Northeast stood at $37.4 million, down 5.7 percent compared to October's $39.7 million, but up 59.6 percent compared to November 2003. At $400.8 million, year-to-date machine tool consumption was 60.2 percent higher than the comparable figure in 2003.

Totaling $52.2 million, Southern machine tool consumption in November was up 92.1 percent compared to October's $27.2 million, and 193 percent higher than the total for November a year ago. The year-to-date total of $403 million was 12.4 percent higher than the comparable figure for 2003.

Midwestern machine tool consumption in November totaled $91.1 million, down 8.2 percent from October's $99.3 million, but 17.1 percent higher than the November 2003 total. With a year-to-date total of $1 billion, 2004 was running 39.1 percent ahead of 2003 at the same time.

At $57.2 million, Central region machine tool consumption in November was 51.3 percent higher than October's $37.8 million, but down 3.3 percent compared to November 2003. The year-to-date total of $488.3 million was 47.1 percent higher than the 2003 total at the same time.

November machine tool consumption in the West totaled $37.2 million, up 29.2 percent from October's $28.8 million and up 109.6 percent compared to November a year ago. With a year-to-date total of $344.4 million, 2004 was up 87.5 percent compared to 2003 at the same time.

The United States Machine Tool Consumption 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.

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Software maker Datastream appoints president
Datastream Systems Inc.'s board of directors named Alex Estevez president of the company.

Estevez, who has served as Datastream’s chief financial officer for the past six years, will assume his new responsibilities effective immediately.

Under Estevez’ leadership, Datastream returned to profitability, generated 16 consecutive quarters of positive operating cash flow, eliminated all company debts, and increased cash balances from less than $10 million to more than $47 million.

“In a relatively short period of time, Alex has significantly improved the financial strength of our company," said Larry Blackwell, chairman and CEO. "With his managerial strengths and strategic insights, Alex is uniquely qualified to help me lead our business. I am very pleased to recognize Alex's many contributions to Datastream and to work with him in this new capacity.”

Prior to joining Datastream, Estevez worked in the investment banking technology group at Raymond James & Associates, where he focused on technology-based mergers and acquisitions and equity offerings, including Datastream’s initial public offering. Estevez holds an undergraduate degree from Harvard College and an MBA from Northwestern University.

In a related move, Datastream promoted Brad Stevens to senior vice president of global operations, effective immediately. In addition, Larry Blackwell, who previously held the position of president, will remain chairman and CEO. Datastream retained a national executive search firm to assist in the recruitment of a new chief financial officer. Until this search is complete, Estevez will retain those responsibilities.

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Unemployment holds at 5.4 percent in December
The number of unemployed persons, 8 million, and the unemployment rate, 5.4 percent, were unchanged in December, according to the Labor Department. The jobless rate has been either 5.4 percent or 5.5 percent in each month since July, slightly below the rates that prevailed in the first half of 2004.

Manufacturing employment increased by 3,000 jobs in December. The industry added 76,000 jobs in 2004; nearly all of the gain occurred early in the year.

Both the manufacturing workweek and factory overtime were unchanged at 40.5 hours and 4.5 hours, respectively.

In another jobs report, the Conference Board’s Help-Wanted Advertising Index – a key barometer of America's job market – dipped one point in November. The index now stands at 36. It was 38 one year ago.

“Job growth continues to be sluggish, despite periodic reports that some companies are planning to add workers in the months ahead,” said Conference Board economist Ken Goldstein, a specialist in the labor markets. “This is reflected in the Conference Board’s Leading Economic Index, which has declined in five of the last six months, and by dips in consumer confidence. The widely-awaited turnaround in job growth has yet to arrive.”

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Hudson employment numbers fall in December
The Hudson Employment Index for manufacturing workers declined 1.9 points in December to 90.8 from 92.7 in November, measuring a second straight drop and reaching its lowest level in 2004.

Key factors contributing to the drop in worker confidence include the rise in the percentage of workers anticipating staff layoffs and those worried about losing their own jobs.

The national Hudson Employment Index also reached its annual low in December, falling 1.3 points to 103.6.

While national hiring expectations held steady at 31 percent, optimism about hiring among private-sector employees declined 2 points to 35 percent in December. Still, both of these figures reflect increases over last year’s levels.

“Despite the fact that the workforce has lowered its hiring expectations and has lingering financial concerns, future employment prospects look promising,” said Jeff Anderson, senior vice president of Hudson Global Resources, North America. “The number of workers expecting their next jobs to be better increased 2 percentage points in the last month - and 6 in the last year - which means that workers still feel there is room for personal career improvement.”

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