MRO Today - Manufacturing Industry News Archives

Manufacturing Industry News:
News from the week of Feb. 2, 2004

ITW to locate new factory in Charlotte, N.C.
OSHA cites Georgia Pacific following fatal fall in factory
Ford's Six Sigma director to keynote LMU2
Factory orders increase in December
Productivity slows in the fourth quarter
Manufacturers Alliance expects sound recovery in 2004-2005
Jobless claims increase in latest week
Fiscal 2005 budget asks $461.6 million for OSHA
Timken Co. named best supplier by Oshkosh Truck Corp.
SME conference to demystify fuel-cell technologies
Planned job-cuts top 100,000 in January
Federal funding for MEPs to remain static
Web site assists in choosing CMMS and EAM software
NAM president sees balance and health in GDP report
ISM: Manufacturing continues growth in January
Tyson strike ends bitterly 11 months after it began
MEP wins Harvard award for innovation in government

ITW to locate new factory in Charlotte, N.C.
Illinois Tool Works Inc.'s food equipment group selected Charlotte, N.C., as the location for its new manufacturing facility dedicated to the production of Vulcan-Hart and Wolf commercial cooking equipment.

The selection of Charlotte for the company's new state-of-the-art facility followed an extensive, nationwide search.

"We very carefully considered the decision to locate our new facility in Charlotte," said Joe Hahn, vice president of ITW's North American food equipment group. "I am confident our customers across the nation will quickly realize the benefits of the efficiency we're building into both the production line and shipping systems."

Wolf Range Co. will move to new corporate offices in Southern California, which will house finance, sales and marketing, administration, technical service and customer service.

The groundbreaking for the new facility is scheduled for early February. Over the next several months, ITW will transition elements of the Wolf and Vulcan manufacturing processes to the new plant as well as to the existing operation in Baltimore. The company expects the transition to be complete in the fourth quarter of 2004.

"This shows that we are continuing to succeed at meeting our strategic goals of filling the gap in manufacturing jobs with growth companies like Illinois Tool Works," said Charlotte Mayor Pat McCrory.

Charlotte boasts one of the nation's healthiest economies. The more than 1,200 manufacturing firms with operations in Charlotte focus on everything from textiles and metal working to chemicals, non-electrical and electrical machinery. Its prime location at the intersection of two major interstates also makes Charlotte an ideal location for product distribution centers.

"We are excited about ITW's decision to bring new manufacturing jobs to this community. Their move helps our effort to renew growth in the manufacturing sector," said Mecklenburg County Commission vice chairman Dan Ramirez.

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OSHA cites Georgia Pacific following fatal fall in factory
The Occupational Safety and Health Administration (OSHA) cited Georgia Pacific Corp. for failing to protect workers from safety hazards that contributed to the death of an employee at the company's Cedar Springs, Ga., paper products plant.

"Recognizing hazards and providing adequate safeguards are essential for employers to protect their workers," said Labor Secretary Elaine L. Chao. "The $102,000 in significant penalties proposed in this case demonstrates that this administration is committed to protecting workers' health and safety."

According to OSHA's investigation, an employee was clearing paper from an operating conveyor on Aug. 5, when the worker apparently fell onto the conveyor and was thrown into an operating "beater pit," where paper was being shredded.

The company was cited for failing to provide guardrails or other means of fall protection to prevent employees from falling into the pit and for failing to conduct required reviews of procedures for rendering machinery inoperable during maintenance or repair.

The agency issued 18 serious citations with proposed penalties totaling $52,000 and four repeat citations with $50,000 in proposed penalties. These citations included failing to protect workers from unguarded machinery and electrical hazards.

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Ford's Six Sigma director to keynote LMU2
Debbe Yeager, Ford Motor Company's director of lean/Six Sigma, will provide one of the keynote addresses at MRO Today's "Lean Manufacturing University 2" conference May 25-26 at the Wyndham Hotel in Cleveland. Yeager is responsible for the implementation and performance of Ford's improvement initiative at all of its plants around the globe.

Other confirmed speakers for the conference currently include:
• Leonard Brown, lean manufacturing manager, Boeing;
• Dennis Schlernitzauer, manufacturing manager, ArvinMeritor;
• Gretchen Rhodes, director of quality, Smith & Nephew;
• Butch Brotherton, lean coordinator, Carver Pump Company;
• David Thompson, president, Kennedy Manufacturing.

Additional speakers from best-in-class companies will be added in the coming weeks.

Prior to the conference, on May 24, leaders from George Koenigsaecker's renowned Simpler Consulting group will provide focused lean workshops.

For more information or to register for the conference and/or workshops, call or click here to download a PDF brochure. To reserve a hotel room for the event, click here.

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Factory orders increase in December
New orders for manufactured goods increased $3.7 billion in December, or 1.1 percent, to $342.4 billion, according to the Department of Commerce. This was the highest level since December 2000 and followed a 0.9 percent November decrease.

Year-to-date, new orders for 2003 were 3.9 percent above the same period a year ago.

New orders for manufactured durable goods increased $500 million in December, or 0.3 percent, to $181.9 billion, revised from the previously published $100 million decrease.

Within durable goods, new orders for machinery increased 3.5 percent in December, compared to a 2.6 percent increase in November. Orders for industrial machinery surged 15 percent in December, compared to a 6.6 percent decrease in November.

New orders for transportation equipment increased 1.9 percent in December, compared to a 0.2 percent decrease in November.

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Productivity slows in the fourth quarter
Non-farm business productivity increased 2.7 percent during the fourth quarter, compared to a 9.5 percent increase during the third quarter, according to the Labor Department. For all of 2003, productivity rose at an annual rate of 4.2 percent.

Productivity is measured by worker output per hour.

Manufacturing productivity grew 4.8 percent in the fourth quarter, reflecting a 6.6 percent increase in output and a 1.7 percent rise in hours of all persons. Productivity in the manufacturing sector posted a 4.3 percent increase for all of 2003.

Productivity in the durable goods sector increased 6.4 percent in the fourth quarter and 6.7 percent in 2003.

While important, increases in productivity can often be attributed to fewer workers completing the same amount of work in the same amount of time. With 2.8 million jobs lost in manufacturing since 2000, productivity increases are to be expected. Innovation in technology often boosts productivity, as well.

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Manufacturers Alliance expects sound recovery in 2004-2005
A Manufacturers Alliance/MAPI economic forecast sees solid growth in the next two years for the U.S. economy and the manufacturing sector as the current recovery looks to have staying power.

The Manufacturers Alliance/MAPI Forecast for 2004 and 2005 predicts inflation-adjusted Gross Domestic Product (GDP) growth to be 4.9 percent in 2004 and 3.4 percent in 2005. This forecast will be updated every February, May, August and November. By supplying major assumptions for the economy and running simulations through the Global Insight Macroeconomic Model, the Manufacturers Alliance/MAPI generated unique macroeconomic and industry forecasts.

“We incorporate the findings of our Business Outlook Survey of large manufacturers as well as our own expertise in developing the forecast,” said Daniel J. Meckstroth, chief economist for the alliance.

Manufacturing activity should gain momentum, with industrial production growth expected to increase 6.1 percent in 2004 and 6 percent in 2005. The largest percentage gains will come from a rebound in the high tech sectors of manufacturing. Computers and electronic products are expected to rise 20.4 percent in 2004 and 16.3 percent in 2005. Non-high tech industries will grow moderately this year and next.

Capital investment will also play a role in sustaining growth for the first time since 2000.

Real investment in equipment and software should increase 13 percent in 2004 and 8.4 percent in 2005, growing several times faster than the general economy. Net exports also will contribute to economic growth. Exports should rise 11.6 percent this year and 13.2 percent next year, while imports will increase at a more moderate 7.7 percent in 2004 and 6.8 percent in 2005.

The forecast also envisions the unemployment rate drifting down, averaging 5.5 percent in 2004 and 5.2 percent in 2005. There should be a significant swing in non-farm inventories, from $4.8 billion in 2003 to $78.8 billion in 2004, further helping to accelerate a healthy economy.

“The expected return of job growth will keep consumer spending strong,” said Meckstroth. “Equally important to manufacturers is strong growth in exports and in business investment. The declining dollar will boost export growth, and federal tax relief, low interest rates, increased corporate profitability, and pent-up demand for equipment are some of the factors that will lead to a rebound in equipment purchases.”

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Jobless claims increase in latest week
New claims for unemployment insurance increased 17,000 to 356,000 for the week ended Jan. 31, according to the Labor Department. The four-week moving average was 345,250, unchanged from the previous week's revised average.

The four-week moving average is generally considered by economists to be the more reliable of the two because it smoothes out week-to-week volatility.

Both rates remained below 400,000, which is the level economists use to define a weak labor market and a stable one. This is the 17th consecutive week both levels have remained below 400,000, which denotes stability in the labor market.

Continuing claims for unemployment insurance were unchanged at 3.1 million for the week ended Jan. 24. Continuing claims are those older than two weeks.

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Fiscal 2005 budget asks $461.6 million for OSHA
Occupational Safety and Health Administration (OSHA) administrator John Henshaw said the Bush administration requested $461.6 million for the agency in the fiscal 2005 budget, a net increase of $4.1 million over the appropriation for 2004.

The budget includes $2 million in new funding to fulfill OSHA's responsibilities under the 14 whistleblower statutes that the agency enforces and a $6.6 million increase to expand outreach and compliance assistance programs, including $500,000 targeted at reaching small businesses.

The president's fiscal 2005 budget request for OSHA reflects the agency's continued focus on strong, fair and effective enforcement; outreach, education and compliance assistance; and cooperative and voluntary programs.

"The president's proposed budget makes the best possible use of the resources we have to keep driving down the numbers of workplace injuries, illnesses and deaths," said Henshaw. "This is a balanced approach, and it works. This budget will help us achieve a greater impact on worker health and safety."

Under the president's proposed budget, enforcement remains a high priority for OSHA. OSHA is planning to conduct 37,700 inspections of workplaces in fiscal 2005, the same number as planned in fiscal 2004. OSHA's responsibilities under 14 various whistleblower statues have expanded, especially with the addition of the Corporate and Criminal Fraud Accountability Act (Sarbanes-Oxley). The budget includes an additional $2 million to provide essential contract support to sustain the investigative effort and expertise needed to handle whistleblower investigations.

"Strong, fair, effective enforcement coupled with compliance assistance, outreach and education, and partnerships is the recipe for success," said Henshaw. "We are building on our successes and on our strategies that work."

Reaching out to and partnering with employers and employees to help them make workplaces safe and healthy is also at the top of OSHA's agenda. The agency is requesting an additional $6.6 million to expand compliance assistance and outreach activities.

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Timken Co. named best supplier by Oshkosh Truck Corp.
The Timken Company was recently recognized as "Best Supplier" by the Oshkosh Truck Corp., a manufacturer of specialty trucks and truck bodies for the fire and emergency, defense, concrete placement and refuse hauling markets.

The recognition honors Timken's excellent performance in delivery, quality and product support. Last year was the first year Oshkosh formally recognized suppliers with this award.

To be nominated, Oshkosh required suppliers to demonstrate ongoing quality products and services. Based on the number of product receipts, suppliers are judged on a 100-point scale and must receive and maintain the maximum rating of 100 percent for an extended period of time.

"We view Timken as a partner who shares in the success of our organization," said Michael Wuest, executive vice president and chief procurement officer for Oshkosh. "Timken consistently maintains excellent performance, and such commitment does not go unrecognized. We are proud to be associated with Timken and look forward to continuing our successful relationship."

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SME conference to demystify fuel-cell technologies
The Society of Manufacturing Engineers (SME) will launch the new event Alternative & Advanced Energy Technologies: Manufacturing Challenges & Opportunities in Dearborn, Mich., on Oct. 12-13.

This unique conference will demystify fuel cell technologies by featuring interactive displays and exhibits of automotive, portable and stationary fuel cells. Researchers and developers of these technologies will deconstruct a fuel cell and show manufacturers how these devices work and how they are assembled.

Manufacturers will, in turn, learn how they can position themselves to become a supplier to the industry in an effort to produce these parts more cost effectively.

Participants will hear about the challenges of manufacturing cells both cost effectively and in low volumes while developing a supply network capable of producing the components and advanced materials that make up a fuel cell. In addition to discussing supply-chain opportunities, conference participants will learn how they can reduce their energy costs by implementing lean energy management practices within their operations.

For example, advanced energy systems used in plants and "green" buildings today can recover waste heat and recycle it into processes that reduce a company's total energy costs. Speakers will highlight the cross-industry applications of advanced energy systems and fuel cell technologies and their potential for transcending into other industries and markets. Presenters will also focus on the development of an infrastructure capable of safely delivering and storing hydrogen.

The event will also provide a forum for peer networking, information sharing, and technology exchange while offering participants a glimpse at the enabling technologies and manufacturing processes necessary to develop fuel cells.

Speakers will include energy experts from Argonne National Laboratory, Boeing, Center for Automotive Research, DTE Energy, ExxonMobil, General Motors, Motorola, NASA, Toshiba, Toyota, U.S. Department of Defense, and U.S. Department of Energy. Conference participants will include senior executives representing a cross section of industries including automotive, aerospace/defense, electronics, energy and other industries involved in developing fuel cells for wide-scale use.

For information on attending, speaking or sponsoring opportunities at this event, please contact SME at or visit SME's Advanced Energy Technology Web site www.sme.org/aet for more details.

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Planned job-cuts top 100,000 in January
Planned job cuts announced in January reached 117,556, surpassing 100,000 for the first time since last October, according to global outplacement firm Challenger, Gray & Christmas Inc.

January cuts were 26 percent higher than the 93,020 counted in December but 11 percent lower than the 132,222 reported in January 2003.

Historically, January has been a heavy job-cut month since Challenger began its tracking in 1993. It surpassed 100,000 job cuts six times, more than any other month. December, the next heaviest job-cut month, surpassed 100,000 only three times.

Consumer product companies led all others during the month with 22,775 job cuts. That is the largest number of consumer products job cuts announced in one month since Challenger began its tracking.

"It is too early to tell if we are going to have another year of heavy job cutting. We typically see higher job cuts in January as companies set into motion business plans and employment needs for the new year," said Challenger.

"One factor that might impact job-cut activity this year is the escalation of offshore outsourcing, which could see some employers eliminate jobs in America and shift the work to service providers in countries such as India, China and the Philippines."

"Another factor affecting job cuts is the possibility of increased mergers and acquisitions. We have already seen a couple of large deals announced this year, one of which expected as many as 10,000 job cuts to take place as redundant positions are eliminated," said Challenger.

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Federal funding for MEPs to remain static
Despite claims of supporting the Manufacturing Extension Partnership (MEP) in its recently released manufacturing strategy, the Bush administration proposed to fund the program at a third of its traditional funding level in fiscal 2005.

The president proposed $39 million for MEP in the 2005 budget request sent to Congress on Feb. 2. While this funding level marks a significant increase from last year’s proposed $12.6 million, the amount represents a 63 percent cut from the 2003 funding level.

MEP was funded at roughly $106 million for six years. The recent proposal echoes the funding level approved Congress in its 2004 Omnibus Appropriations Bill.

The president’s request comes in spite of support from a majority of Congress for full funding of the manufacturing extension program citing its success in bolstering the competitiveness of America’s small manufacturers.

Both the 2004 budget and the 2005 request will severely curtail the activities of MEP, a highly acclaimed public-private partnership that provides technical assistance and business support services to America’s small manufacturers.

MEP helps the nation’s 355,000 small manufacturers adopt new technologies, processes and business practices and improve the productivity and competitiveness of American manufacturing. The MEP network consists of more than 1,800 professionals working in some 400 offices nationwide and in Puerto Rico.

“The administration can’t continue to serve American’s small manufacturers by cutting $67 million out of a $106 million program, ” said Mike Wojcicki, president of the Modernization Forum, the trade association for the MEP centers. “With our manufacturers continuing to face stiff international competition and manufacturing jobs fleeing our shores, cutting an effective program like MEP sends the wrong message to our nation’s small business owners and stands in stark contrast to the administration’s promise in its recent Manufacturing Report to support MEP."

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Web site assists in choosing CMMS and EAM software
Cmmscity.com and Technology Evaluation Centers Inc. jointly announced the launch of Cmmscity.com Technology Evaluation Center to assist in selecting the best-in-class Computerized Maintenance Management Systems (CMMS) and Enterprise Asset Management (EAM) Systems vendors.

Cmmscity.com Technology Evaluation Centers (TEC) is an online knowledge base for evaluating and selecting CMMS and other enterprise technology solutions. TEC gives decision makers a cost-effective and comprehensive way to make critical technology decisions.

Together, TEC and Cmmscity.com created the total access model, providing meaningful and impartial product data, with side-by-side comparisons, interactively, on-demand, anytime, anywhere in the world, and at affordable rates.

The structure of this new tool guides decision-makers through the labyrinth of CMMS software. It gives unparalleled access to the knowledge of the top CMMS analysts in the world, who have devoted their careers to understanding the software and researching user experiences and implementation successes.

The Cmmscity.com Evaluation Center allows the user to choose the right solution based on a detailed set of criteria that can be tailored to the needs and requirements of their solution at a fraction of the price charged by consultants. The CMMS knowledge base contains more than 2,700 criteria.

"We wanted to bring supply CMMS software selection out of the dark ages and into the 21st century," said Cmmscity.com publisher Terrence O’Hanlon. "For too long, the selection process has been very much a hit and miss experience and a frustrating one at that. With TEC’s decision-making tools and our detailed knowledge of the industry, we are now able to provide the software buyer a stronger methodology and 24/7 access to the knowledge base. We fundamentally believe the analyst industry is changing. We are very excited at this breakthrough."

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NAM president sees balance and health in GDP report
The advanced report on Gross Domestic Product (GDP) from the Commerce Department showed that the economy grew a solid 4 percent in the fourth quarter, following 8.2 percent growth in the third quarter.

National Association of Manufacturers president Jerry Jasinowski called it a balanced and healthy report.

“While continued strong performance of the economy last quarter certainly bodes well for manufacturers generally, ongoing growth in investment and exports specifically is even more important,” said Jasinowski. “For the first time since the third quarter of 1999, both exports and business investment in equipment and software increased at double-digit rates. Exports increased by a stunning 19.1 percent, the fastest pace in seven years. Equipment software rose a solid 10 percent. As a result, business investment and exports accounted for 60 percent of economic growth last quarter.”

Jasinowski said the lack of an upturn in investment and exports during the early stages of the economic recovery contributed to the manufacturing sector’s unprecedented struggle and unusually slow employment growth.

“Thankfully, conditions have significantly improved and the recoveries in investment spending and exports that began in the third quarter continued into the fourth,” Jasinowski said. “I expect these trends to be sustained in 2004 and that manufacturing will grow at 6 percent, actually outpacing the economy as whole for the first time since 1999. So I believe we’ll begin recovering some of the 2.8 million manufacturing jobs lost since July 2000."

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ISM: Manufacturing continues growth in January
Economic activity in the manufacturing sector grew in January for the eighth consecutive month, while the overall economy grew for the 27th consecutive month, according to the Institute for Supply Management's Manufacturing ISM Report On Business.

ISM's PMI registered 63.6 percent in January, an increase of 0.2 percentage point when compared to the seasonally-adjusted 63.4 percent in December.

A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

"The manufacturing sector gained momentum in January as the PMI continued to accelerate," said ISM Manufacturing Business Survey Committee chair Norbert J. Ore. "Both new orders and production remain quite strong, indicating that the manufacturing sector is experiencing a much-needed recovery. The prices index accelerated significantly as the metals and energy categories showed significant price volatility."

Comments from purchasing and supply managers are generally encouraging with mentions of "record sales and orders on a per-day basis" and "companies are beginning to refill their inventory pipelines."

However, others are still reporting that they see no sign of the recovery, best exemplified by the comment "Recovery? What recovery?" It is obvious that certain sectors are lagging the rest of manufacturing as we start the new year, according to the report.

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Tyson strike ends bitterly 11 months after it began
Workers at the Tyson Foods plant in Jefferson, Wis., voted to end an 11-month-old strike and accept a contract similar in many ways to the contract over which the union went on strike last year.

The union voted in favor of the strike mainly to save their jobs and their union, which could have been decertified by replacement workers if the strike lasted more than one year. The one-year deadline would have been Feb. 28.

The vote was 293 in favor of the four-year contract and 70 against it. In the end, workers from the United Food and Commercial Workers voted to accept the contract, even though many still did not agree with its contents.

The original contract proposed by Tyson asked for major concessions, including a four-year wage freeze, lower wages for new workers, the elimination of profit-sharing, shorter vacations, less sick leave, smaller pensions and increased health care costs for less comprehensive care.

Tyson said it wanted to bring the Jefferson plant more in line with other regional Tyson workers. Some workers will now have to re-enter their old jobs, work next to replacement workers they harassed on the picket lines and swallow the fact there was little else they could do.

"As long as the laws are on the side of the big corporations, there's nothing we can do," machine operator Greg Warren told the Milwaukee Journal-Sentinel. The law "is just a tactic for large corporations to break the union or get the union to do what they want."

Tyson spokesperson Ed Nicholson said the company was pleased union leadership encouraged a yes-vote on the contract.

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MEP wins Harvard award for innovation in government
Harvard University's Institute for Government Innovation selected the Commerce Department’s Manufacturing Extension Partnership (MEP) as one of the nation’s “most creative, forward thinking, results-driven government programs.”

The Ash Institute for Democratic Governance and Innovation, part of Harvard’s John F. Kennedy School of Government, included MEP in its short list of semifinalists for the 2004 Innovation in American Government Awards announced Jan. 29.

MEP centers across the country and in Puerto Rico work directly with small and mid-sized manufacturers to help them grow business and provide good, high-paying jobs for American workers. These not-for-profit centers employ roughly 2,000 professionals who work directly with small manufacturers, providing customized technical assistance and business support services.

MEP was one of 50 programs chosen from nearly 1,000 applicants as the best and brightest in government. At the end of the selection process, five winners will receive grants of $100,000. The selection committee will determine the winners after conducting site visits and hearing formal presentations from a group of 15 finalists.

This recognition comes at a critical turning point for the MEP program. MEP earned widespread support in Congress and previously secured $106 million annually for the past six years. However, under pressure from the Bush administration, Congress provided $39.6 million for MEP in the FY 2004 budget, a 63 percent cut from the program’s traditional funding level.

“MEP has set the bar for state and federal cooperation and earned Harvard’s selection with a proven performance record of bolstering America’s manufacturing competitiveness,” said Mike Wojcicki, president of the Modernization Forum. “Our small manufacturers urgently need MEP assistance, but pending funding cuts will severely hamper MEP’s ability to serve these companies and make them stronger. Perhaps this recognition will spur on efforts to restore funding in FY 2004 and fully fund MEP in FY 2005.”

The awards used four criteria in evaluating each application:
• novelty;
• effectiveness in addressing important problems;
• significance; and,
• the potential for replication by other government entities.

The applicant pool covers a wide variety of government programs. For instance, the 2004 semifinalists include 10 federal programs, 15 states, 21 localities, 3 charter schools, and one American Indian Nation.

You can see the awards announcement at the Council for Excellence in Government Web site.

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