MRO Today - Manufacturing Industry News Archives

Manufacturing Industry News:
News from the week of April 4, 2005

Michigan lawmaker to hold hearing on manufacturing
Rexnord to acquire Falk Corp. for $295 million
SKF to build new factory in China
Baldor to move linear motor plant to Arkansas
Dexterra, Strategic Distribution deploy MRO solution
ISM: PMI slips in March

Michigan lawmaker to hold hearing on manufacturing
Congresswoman Candice Miller, R-Mich., chairman of the House Committee on Government Reform’s Subcommittee on Regulatory Affairs, announced a hearing for manufacturers April 12.

“The Impact of Regulation on U.S. Manufacturing," will welcome a series of expert witnesses to address reducing the cost of unnecessary federal regulations on manufacturers.

A recent study from the Small Business Administration found that regulations alone cost businesses about $7,000 for each employee.

“That number is unacceptable. It makes employers want to cut their workforces, not build them,” Miller said. “We must free small businesses and all manufacturers from needless regulation. But we must do so without diminishing the true intentions of those regulations and without reducing the benefits of those rules to society, the environment, and workers."

A separate study from the National Association of Manufacturers estimates that, as a result of excessive governmental regulations, structural costs for American manufactured products are 22 percent higher than any foreign competitor.

“Again, that’s unacceptable. Our manufacturers need to grow and need to prosper. Instead, they’re struggling because of hurdles our own government created,” Miller said.

Among those scheduled to testify in front of the subcommittee:

Former three-term Michigan Governor John Engler: Engler is now president of the National Association of Manufacturers. The NAM is the nation’s largest industrial trade association, representing small and large manufacturers in every industrial sector and in all 50 states.

John Graham: Graham is serving for President Bush as administrator of the Office of Information and Regulatory Affairs within the Office of Management and Budget. His responsibilities include coordination of regulatory review, paperwork reduction, statistical policy and information policy in the Federal government. Graham is on leave from the Harvard School of Public Health.

Al Frink: Frink is the Assistant Secretary for Manufacturing and Services for the U.S. Department of Commerce, serving as chief advocate for the U.S. manufacturing sector within the federal government. He brings 30 years of private-sector experience to his new position. As a small business executive, Frink built internationally recognized carpet manufacturing company Fabrica International.

Thomas J. Duesterberg: Duesterberg is president of Manufacturers Alliance, a top business-research organization. Duesterberg published numerous articles on public policy issues in newspapers, magazines and journals and is the co-author of two books, one on health care reform and the other on competition and deregulation in the telecommunications industry.

"We need a strong, vibrant manufacturing industry," said Miller. "The subcommittee is eager to hear these witnesses discuss how manufacturers across the country can grow and thrive."

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Rexnord to acquire Falk Corp. for $295 million
Rexnord Corp. entered into a definitive agreement to purchase the Falk Corp. from Hamilton Sundstrand, a subsidiary of United Technologies Corp., for $295 million. The transaction is expected to close in the second quarter of 2005.

Rexnord Corp., headquartered in Milwaukee, is a worldwide manufacturer of mechanical power transmission components with revenues of approximately $800 million.

Falk Corp., also headquartered in Milwaukee, is a manufacturer of gears and couplings, with annual revenues of approximately $200 million.

"By combining two successful companies that have complementary products and technologies, we create a bigger, stronger business, with combined annual revenues in excess of $1 billion," said Robert Hitt, Rexnord CEO. "This acquisition is consistent with Rexnord's growth strategy, enhancing our capabilities and enabling us to better serve our customers."

"Falk Corp. has a strong market position, with substantial brand equity and a significant installed base," said Dave Doerr, Falk president. "Falk looks forward to joining with Rexnord to offer our customers the best solutions to their power transmission needs."

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SKF to build new factory in China
SKF and wholly owned subsidiary SKF (Dalian) Bearings and Precision Technologies Co. Ltd. will build a new factory in the Dalian Economic & Technological Development Area in the northeast of China.

The new factory will manufacture and recondition large bearings of different types.

The first phase of the factory will be finished in 2006 and the number of employees will initially be 85. The factory size and number of employees will increase until reaching full capacity and 240 employees.

The new company will serve customers segments such as metalworking, power generation, mining and construction.

"We have during the last years been growing with good double-digit figures in China," said Tom Johnstone, president and CEO of SKF. "To be able to continue to grow with good speed and also to improve our market position in China, we need to strengthen our manufacturing capacity in the country. Long term we also see China as an excellent base for exporting both components and products to the rest of the world."

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Baldor to move linear motor plant to Arkansas
Industrial electric motor manufacturer Baldor Electric Co. will relocate its linear motor manufacturing plant from Santa Clarita, Calif., to Fort Smith, Ark., the city where the company is currently based.

The linear motor plant was acquired by Baldor in 1998. It currently manufactures several types of linear motors for precision applications such as pick and place machines, X-Y tables, material handling equipment and semi-conductor manufacturing equipment.

Baldor linear motors provide precise accuracy, fast acceleration and repeatability. They provide unique speed and positioning performance advantages over rotary motors.

Other applications include packaging equipment and medical equipment. In addition, they are found on amusement park rides, airport baggage handling equipment and biomedical inspection equipment. Baldor linear motors are used with motion control products made in the company's Fort Smith Drives Center and its Bristol, England, manufacturing plant.

"This move will allow us the opportunity to show our customers the capabilities of linear motors and our other motion control products when visiting our facilities in Fort Smith," said Ron Tucker, president and chief financial officer. "Moving this plant to Fort Smith will also allow us to easily expand production of these products as sales grow in the next several years."

Baldor has offered relocation to 42 employees of the linear motor plant in California.

"We expect some of these employees to make the move and we are already bringing them to Fort Smith to take a look at the area. Additional employees in manufacturing and engineering will be added from the Fort Smith area," said Roger Bullock, vice president of drives.

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Dexterra, Strategic Distribution deploy MRO solution
Software provider Dexterra Inc. and systems integration partner Strategic Distribution Inc. (SDI) implemented Dexterra's mobile facilities and asset management software at the University of North Carolina at Greensboro (UNCG).

The UNCG facilities management team, responsible for a 200-acre campus with a $6 million operating budget, need a wireless mobile software solution to help them issue real-time parts orders and work reports, access inventory and job details, and gain work-order updates from the field using a hand-held device.

SDI helped UNCG meet these requirements and eliminate its manual, paper-based processes using the Dexterra software. Now, UNCG maintenance engineers can accomplish more assignments per working day and are better prepared for upcoming scheduled maintenance.

“Since deploying the Facilities Management application from SDI, we are already seeing a 40 percent increase in efficiency as we are more immediately responsive and able to access historical information on site, from the handheld device,” said Anthony Schallert, director of physical plant for UNCG. “We are exceeding our planned objectives and now expect to see a full return on our investment within the first 14 months of deployment.”

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ISM: PMI slips in March
Economic activity in the manufacturing sector grew in March for the 22nd consecutive month, while the overall economy grew for the 41st consecutive month, according to the Institute for Supply Management's (ISM) Report On Business.

"The manufacturing sector maintained its strength in March, finishing the first quarter in a relatively strong position," said Norbert J. Ore, chair of the ISM Manufacturing Business Survey Committee.

The PMI indicates that the manufacturing economy grew in March for the 22nd consecutive month. The PMI for March registered 55.2 percent, a decrease of 0.1 percentage point compared to February's seasonally adjusted reading of 55.3 percent.

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

The past relationship between the PMI and the overall economy indicates that the average PMI for January through March (55.6 percent) corresponds to a 4.7 percent increase in gross domestic product (GDP) on an annual basis.

Respondents to ISM's survey included:
• "The construction sector continues to expand. Business is slowly growing. The only significant concern is rising interest rates, which could restrain capital expenditures."

• "Business has increased significantly over the past two months. We may be overbooked within four to six weeks and will have to add staff and shop employees."

• "Steel suppliers are grudgingly giving back some price, but not without tough talk."

• "The wet weather has kept shipments at a below-average level for this time of the year. However, we expect a very healthy year once we get through this current period."

• "Business continues very strong in all product categories for the markets we serve. Our open order status is 2.5 times what it was last year for the same timeframe."

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