MRO Today - Manufacturing Industry News

Manufacturing Industry News Archives:
News from the week of April 12, 2004

Industrial production slips in March
Manufacturers continue to cut workers in Wisconsin
Timken device warns workers of machinery problems
Advanced technology products at risk in the U.S.
U.S. Chamber of Commerce urges action on counterfeiting
Wagner recalls drill battery chargers
Jobless claims increase in most recent week
Metalformers predict business will hold steady
More unemployed workers starting their own businesses
OSHA to target 4,000 worksites in 2004
Ford installs vision-guided robots at two plants
Machine tool consumption surges in 2004
WinWare introduces inventory-tracking doorway
Rockwell Automation achieves global SCP Certification
Seagrave to expand facilities, add jobs
Bush details plans to retrain workers
SkillsUSA competition to showcase tool usage
Executives expect to change industries
Quarterly manufacturing index reaches all-time high

Industrial production slips in March
Industrial production fell 0.2 percent in March after two months of large gains, according to the Federal Reserve. At 114.5 percent of its 1997 average, output was 3.4 percent above its level in March 2003.

For the first quarter as a whole, production rose at an annual rate of 6.6 percent, and in the fourth quarter of 2003, it increased at an upwardly revised annual rate of 5.6 percent.

In March, manufacturing output was unchanged. The rate of capacity utilization for total industry declined 0.2 percent to 76.5 percent.

Manufacturing output was unchanged in March; the factory operating rate edged down 0.1 percent to 75.2 percent, and was 4.8 percent below its 1972-2003 average. Production increased at an annual rate of 5.9 percent in the first quarter.

The production of durable goods edged up 0.1 percent in March. Among high-technology industries, production of computers and office equipment moved up 2.4 percent; the output of semiconductors and related electronic components rose 2.5 percent; and the production of communications equipment fell 2 percent. Production of furniture and related products was up 1.2 percent.

The following indexes also rose in March but by smaller amounts: primary metals; machinery; electrical equipment, appliances and components; aerospace and miscellaneous transportation equipment; and miscellaneous manufacturing.

However, the overall gain in the output of durables was held down by a decline of 1.1 percent in the output of wood products, a decrease of 0.3 percent in the output of fabricated metals, and a drop of 2.2 percent in the output of motor vehicles.

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Manufacturers continue to cut workers in Wisconsin
Wisconsin’s seasonally adjusted unemployment rate for March 2004 was estimated at 5.1 percent, compared to a rate of 5.8 percent last March and 5.2 percent in February 2004, according to the Wisconsin Department of Workforce Development (DWD). However, manufacturing jobs continue to wane.

The March 2004 seasonally adjusted rate for the United States was estimated at 5.7 percent.

“While Wisconsin’s job market experience last month shows improvement over one year ago and the prior month, difficulties with manufacturing continue to weigh upon the state’s struggling labor market,” said DWD Secretary Roberta Gassman.

Manufacturing is down 4,700 jobs from March of 2003 and lost 1,600 jobs between February and March. There were 499,500 manufacturing workers employed in the state during March, down from 504,200 during the same period a year ago, according DWD's Wisconsin Labor Force Summary.

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Timken device warns workers of machinery problems
Timken is helping industrial customers identify potential machine malfunctions before catastrophic failures occur with StatusCheck, a wireless condition monitoring system that transmits vibration and temperature data.

Each StatusCheck system includes up to 100 wireless transmitters, a data receiver and a companion software program.

StatusCheck can be used to measure temperature and vibration in bearings, bearing housings, gear boxes, motors and other industrial devices.

"Monitoring temperature and vibration trends can signal potential issues early on. StatusCheck helps maintenance teams schedule repairs and avoid costly unscheduled downtime," said Matt Schleich, global manager of new products and services.

Created by Timken engineers, StatusCheck uses wireless radio frequency communications, approved by the Federal Communications Commission, to transmit critical machine data. Transmitters can be mounted with magnets or bolts, providing flexible mounting options on hard-to-reach machines.

Data is transmitted to a central receiver connected to a personal computer on which StatusCheck software is installed. The software displays data in real time, logs information and triggers alarms when set points are surpassed. When alarms are triggered, the software will notify maintenance personnel by e-mail, cell phones or personal digital assistants.

"StatusCheck was designed based on our knowledge of bearing performance and rotating machinery. We continue to bring customers the latest technology in products and services that are bearing-related and system-focused," said Schleich.

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Advanced technology products at risk in the U.S.
The sharp deterioration in U.S. trade in advanced technology products (ATP) could have important implications for U.S. international commercial and national security interests, according to a new study by Ernest H. Preeg, the Manufacturers Alliance/MAPI senior fellow in trade and productivity.

Preeg's study, The Threatened U.S. Competitive Lead in Advanced Technology Products (ATP), examines trade data released for the first time by the Census Bureau on U.S. trade in ATP.

ATP is defined as those products with the highest levels of embedded R&D and technology-oriented personnel: scientists, engineers and technicians.

A trade surplus of $30 billion in 1998 fell steadily to a deficit of $27 billion in 2003. The largest sector deficit was in information and communications products at $57 billion in 2003, and the largest bilateral deficit was with China at $21 billion.

Preeg contends that the sharply negative trend in ATP trade is an indication the United States may be losing its earlier strong competitive advantage in this area, but the causes of the decline are not clearly understood and more in-depth and updated analysis of U.S. advanced technology industry should be done. The most important international relationship for more detailed study is with China, in view of the dramatic rise in ATP imports from China, and the related trade deficit.

“We do not have the luxury of waiting for a complete accumulation of facts and analysis before taking action,” Preeg said. “Discussion of a comprehensive and forceful policy response to maintain U.S. high technology leadership should be engaged as a matter of urgent and vital national interest.”

A proposed policy response to this end is provided in the study. For more information on the study, visit www.mapi.net.

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U.S. Chamber of Commerce urges action on counterfeiting
The United States Chamber of Commerce warned lawmakers that counterfeiting was a significant drag on economic growth and urged greater vigilance and enforcement of existing laws.

"These crimes are growing in size, scope and severity; no product or category is safe,” said chamber president and CEO Thomas Donohue in testimony before the Senate Judiciary Committee. “The crisis is pick-pocketing businesses, stifling innovation and costing American jobs.”

Trade in counterfeit goods accounts for 6 percent to 9 percent of all world trade and is sharply rising, according to some estimates. Intellectual property crimes drain an estimated $200 billion to $250 billion from the U.S. economy alone.

“It’s a big business and it’s getting bigger,” said Donohue. “Counterfeit products threaten our health and safety and have severe consequences for economic growth and job creation.”

By some estimates, product counterfeiting results in the loss of 750,000 American jobs every year. From an economic perspective, intellectual property crimes deter new product innovation, reduce business sales and tax revenues, create liability concerns, lower corporate and shareholder profits, destroy well-established brands, and diminish consumer confidence, according to the Chamber’s testimony. Counterfeit products have been linked directly to aggravated illnesses and even deaths.

The chamber urged lawmakers to take additional steps, including: strengthen anti-counterfeiting laws, increase enforcement efforts, raise public awareness of the implications, and work with our international allies to counter global intellectual property theft.

“These are not victimless crimes, but rather real criminal activities with significant personal economic and social consequences,” said Donohue.

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Wagner recalls drill battery chargers
Wagner Spray Tech Corp. in Plymouth, Wis., recalled 180,000 chargers for its cordless drills.

The company said a defective battery can cause the charger to overheat, possibly melting the base and resulting in minor property damage.

Wagner received 11 reports of the charger base melting. No injuries have been reported.

The recall includes 9.6-volt, 10.8-volt, 12-volt, 14.4-volt and 18-volt charger bases. The chargers were made in China.

The drills and chargers were sold in stores and through mail order from January 1996 through December 2003 for between $40 and $100.

The company decided on the voluntary recall in consultation with the U.S. Consumer Product Safety Commission in Washington, D.C.

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Jobless claims increase in most recent week
New claims for unemployment insurance jumped 30,000 for the week ended April 10 to 360,000, according to a Labor Department report. The four-week moving average of jobless claims increased 6,750 to 344,250.

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.

Continuing claims for unemployment insurance fell 22,000 to 3 million for the week ended April 3. Continuing claims are those older than two weeks.

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Metalformers predict business will hold steady
Manufacturers are expecting a mostly steady economy, according to the Precision Metalforming Association (PMA) Business Conditions Report.

Conducted monthly, the report is an economic indicator for the manufacturing world, sampling 186 manufacturing companies. Information is based on conditions as of April 1.

Companies are predicting that over the next three months, general economic activity will continue to be positive or at least remain the same. Forty-nine percent of respondents expect business conditions to improve, down just 1 percent from last month; 43 percent said that activity would remain the same; and 8 percent thought it would decrease. These expectations, though down slightly from the previous few months, are still more positive than most of 2002 and 2003.

Manufacturers are expecting incoming orders to increase over the next three months. Results for two consecutive months indicated lower expectations than early 2004, but this may be the usual cyclical decline as summer approaches. Fifty-one percent of participants predicted orders would increase, down from 55 percent in March. Thirty-six percent anticipated no change, and 13 percent said orders would drop.

Since November 2003, fewer companies are experiencing short time or layoffs in plant workforce. Until the end of 2000, layoffs were reported at a 7 percent average. Layoffs then started to increase, to a high of 49 percent in December 2001.

In the April 2004 report, 15 percent of responding companies indicated they have workforce on short time or layoff, a 2 percent improvement from last month.

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More unemployed workers starting their own businesses
The percentage of jobless managers and executives starting their own businesses reached double digits for the first time since 2002, indicating that confidence in business conditions is finally growing.

The increase in start-ups could not have come a better time for the economy which is seeing a growing number of high-paying jobs shipped overseas. New businesses will be instrumental in redeploying the workers affected by this trend.

The new findings on start-ups come from the Challenger Job Market Index, based on a first-quarter survey of 3,000 discharged managers and executives. The latest data show that 10.1 percent of job seekers started their own business in the first quarter of 2004.

The first quarter start-up rate was 51 percent higher than the 6.7 percent rate recorded in the fourth quarter of 2003. The latest figure is the highest since 10.6 percent of jobless managers and executives started businesses in the third quarter of 2000.

Interestingly, the Challenger survey found that 88 percent of those starting a business were older than 40, up from 74 percent in the fourth quarter.

"These older individuals may have the most confidence in their abilities to establish a business. Not only do they have years of experience and business know-how, but through their careers they have probably established an extensive list of professional contacts," said John A. Challenger, CEO of global outplacement firm Challenger, Gray & Christmas Inc.

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OSHA to target 4,000 worksites in 2004
The Occupational Safety and Health Administration's (OSHA) site-specific targeting (SST) plan for 2004 will focus on approximately 4,000 high-hazard worksites for unannounced comprehensive safety and health inspections.

"Enforcement must continue to be the underpinning of OSHA's mission," said OSHA administrator John Henshaw. "At the same time, it must be fair, strong and effective to produce change where necessary. Our targeted program does this by allowing us to focus enforcement resources at workplaces where the safety and health risks are high and where they will have the most benefit to workers and employers."

Over the past six years, OSHA has used a site-specific targeting inspection program based on injury and illness data. This year's program (SST-04) stems from the agency's data Initiative for 2003, which surveyed approximately 80,000 employers to attain their injury and illness numbers for 2002.

This year's program is effective April 19 and will initially cover about 4,000 individual worksites on the primary list that reported 15 or more injuries or illnesses resulting in days away from work, restricted work activity, or job transfer for every 100 full-time workers (known as the DART rate).

The agency will again randomly select and inspect about 200 workplaces (with 200 or more employees) across the nation that reported low injury and illness rates for the purpose of reviewing the actual degree of compliance with OSHA requirements.

Finally, the agency will include on the primary list some establishments that did not respond to collection of both the 2001 and 2002 data.

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Ford installs vision-guided robots at two plants
Braintech Inc. approved installations of eight more 3D-Vision Guided Robotic (VGR) systems at two Ford Motor Co. plants in Canada, bringing the total Braintech installations at those two facilities to more than 20.

The VGR systems include robots manufactured by ABB Inc.'s robotic, automotive and manufacturing group.

At Ford's Windsor plant in Ontario, where V8 and V10 engines are produced, six systems were installed during the plant's December/January holiday break.

Four systems are dedicated to robots handling cylinder heads destined for machining. The Braintech cameras and software direct the robots to unload 40-pound parts from pallets and place them on brackets fixed to a conveyor. They are then transported to work areas for precision machining.

The challenge is that the cylinder heads arrive four-to-a-pallet, in a variety of positions, having shifted in transit. Lacking vision guidance, a non-human controlled robotic or gantry arm can crash into the heads, damage them and cause the line to shut down -- costing an automaker up to thousands of dollars per minute in lost production.

With VGR, not only is this problem solved, additional savings can be realized, with potential savings per cell in the hundreds of thousands of dollars annually.

At another location in the Windsor facility, two new Braintech systems direct robots in unloading machined cylinder heads and placing them at an angle on engine blocks.

"This task is particularly suited for robots," said James M. Dara, Braintech vice president of sales and general manager of North American operations. "Machined aluminum engine heads are being fitted to iron engine blocks, presenting a significant sealing challenge; contamination by human hair, perspiration, finger prints or other elements could lead to engine gasket leaks. While robots eliminate that risk, Ford still faced the considerable challenge of directing its robots to seize and maneuver these bulky, sensitive parts in a changing work environment. Braintech's patented system solved the problem."

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Machine tool consumption surges in 2004
February U.S. machine tool consumption totaled $174.3 million, level with January and up 54.6 percent from $112.7 million reported for February 2003, according to the Association for Manufacturing Technology (AMT) and the American Machine Tool Distributors' Association (AMTDA).

With a year-to-date total of $347.9 million, 2004 is up 40.4 percent compared to 2003.

"February is the fourth straight month in which consumption was higher than the year-earlier month," said AMT president John B. Byrd III. "Forward-thinking manufacturers should begin making strategic-purchasing and product-development decisions now, as over the next 12 months, North American demand for goods in the retail and industrial products sectors is likely to remain stable or increase."

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

At $31.2 million, February machine tool consumption in the Northeast was up 46.6 percent from January's $21.3 million and up 103.7 percent compared to February 2003. The year-to-date total of $52.5 million is up 75.7 percent from the comparable figure last year.

February machine tool consumption in the South stood at $20.4 million, 17.6 percent less than January's $24.8 million and 9.6 percent less than the total for the same month last year. At $45.2 million, year-to-date machine tool consumption was off 9.2 percent from the same period in 2003.

Machine tool consumption in the Midwest totaled $53.9 million in February, off 28.1 percent from January's $75 million, but 16.6 percent ahead of February 2003. With a year-to-date total of $128.9 million, 2004 is up 18.7 percent compared to the previous year at the same time.

February's $33.2 million in machine tool consumption for the Central region was up 14.5 percent from January's $29 million and 111 percent higher than the tally for February 2003. The year-to-date total of $62.1 million is 77.7 percent higher than the 2003 total at the same time.

With a February total of $35.6 million, Western machine tool consumption is up 51.1 percent from January's $23.6 million and 176.4 percent ahead of the same month a year ago. Year-to-date 2004 machine tool consumption totaled $59.2 million, 140.6 percent ahead of the comparable figure for 2003.

The United States Machine Tool Consumption (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.

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WinWare introduces inventory-tracking doorway
WinWare released its Accu-Port system, a heavy-duty, electronically controlled RFID doorway that enables hands-off tracking of indirect materials.

Accu-Port was designed for industrial facilities that need to better manage indirect materials without adding or greatly changing processes to achieve results. Accu-Port enables an unmanned store room or tool crib to have complete accountability for those removing or returning inventory.

Using RFID technology, a user entering the store room or tool crib is identified by his badge. The CribMaster touch-screen interface identifies the person and highlights an enter button. The user presses the enter button and a gated, locked door opens allowing entry. The system can also be used without a locked door.

The user finds the required item, which is marked with an RFID label and walks back to the entrance, presses the exit button and walks back through the door. The RFID badge identifies the user who carried the items through the Accu-Port and completes an issue transaction for the inventory. When someone enters the Accu-Port with inventory in hand, the inventory is identified and adjusted back into inventory once the person completely enters the store room or tool crib.

The CribMaster Accu-Port system drives cost reduction by automating replenishment, creating and distributing purchase orders, reducing pilferage and misuse, reducing labor involved with inventory management, and suggesting optimum order points based on usage and an inventory-replenishment formula.

Along with these areas of cost savings, CribMaster and Accu-Port can also help identify process flaws and improve production performance by issuing items to cost centers and monitoring usage.

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Rockwell Automation achieves global SCP Certification
In its ongoing commitment to provide superior technological support and services to customers around the globe, Rockwell Automation announced that all five of its worldwide technical support centers achieved certification under the prestigious Support Center Practices (SCP) Certification program.

SCP Certification quantifies the effectiveness of customer support based on a stringent set of performance standards designed to reflect best practices in the industry. Each SCP audit involves a complex range of evaluations, including an extensive audit of operations and customer-satisfaction levels.

With the certification of its technical centers outside the United States, Rockwell Automation joins the ranks of other leading technology companies that have achieved SCP Certification. Currently, more than 200 technology support organizations around the world participate in the SCP program, and only three received certification worldwide.

"As the only automation supplier to achieve SCP Certification for all support centers worldwide, we are very pleased to receive independent validation for our commitment to superior customer support," said Rockwell Automation vice president of customer support maintenance Pat Babington.

SCP Certification requires comprehensive on-site audits to confirm that companies meet the requirements of more than 100 business elements defined in the SCP program, measuring factors such as corporate commitment and strategic direction, customer satisfaction, performance metrics, and research and development. Certified companies must continue to demonstrate their commitment to excellence and high performance standards through annual recertification audits.

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Seagrave to expand facilities, add jobs
Fire truck manufacturer Seagrave Fire Apparatus will expand to triple its market share and create several hundred jobs.

The Clintonville, Wis.-based manufacturer wants to increase its market share from 6 percent to between 15 percent and 20 percent in three to five years.

Seagrave said it will take market share from competitors, add to its product line and and increase sales territories to complete its expansion plan.

Many of the jobs created by the expansion plan will stay in Clintonville, while others will go to a subsidiary of Seagrave's parent company.

Those jobs will be housed in a 137,000-square-foot facility Seagrave announced it would build in Clintonville.

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Bush details plans to retrain workers
Workers who walk on concrete instead of on carpet will need to retrain themselves for different industries as increasing productivity and offshoring eliminates their jobs.

To this end, they may see the federal government take an interest in their well-being.

President Bush spoke April 5 in North Carolina on his way to throw out the first pitch at the St. Louis Cardinals baseball game. While most of his speech was devoted to domestic and foreign policy, toward the end, he focused on the Workforce Investment Act (WIA), a $4 billion federal program designed to help workers find jobs and training.

The president said he wanted to reform the act to give governors more power over the distribution of WIA funds coming into their states. He said he wanted to reduce the amount of overhead spending needed to help workers in WIA channels by capping overhead spending at 15 percent of federal funds.

The president also said the federal government should require job centers to report results, so the government can find out if taxpayer dollars are being spent properly.

President Bush also proposed and additional $250 million for community colleges to help create partnerships with job providers and the community college systems in the U.S.

"These are four reforms that will help meet the needs of this country as we go into the 21st century," he said. "This economy is changing. First of all, it's growing. And as it grows, it changes. And so what we need to do is adapt our systems and the programs we've got in place to help meet the needs of our people.

The National Association of Manufacturers (NAM) applauded the Bush administration for offering a proposal to improve the educational and retraining options available to workers.

NAM human resources policy vice president Sandy Boyd said this type of program is an appropriate response to a changing national and global economy.

“Workers need flexible options for obtaining new skills. The president’s goal of cutting red tape, reducing overhead costs by $300 million and working with local community colleges and other groups to double the number of those who can get training – or retraining – is a strong start,” said Boyd.

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SkillsUSA competition to showcase tool usage
More than 500 students enrolled in building and construction related education programs will advance their skills while gaining real-world experience using the latest in professional equipment, thanks to Irwin Industrial Tool Co.'s sponsorship of the SkillsUSA Championships, set for June 24-25 in Kansas City, Mo.

The two-day, national competitions pit high school and post-secondary students against each other for national honors in 75 hands-on skill and leadership categories.

Irwin will help students, teachers and leaders benefit from the contests by donating tools, prizes, financial support and student-travel expenses, a barrier to student participation.

"Champions at Work is the theme for this year's SkillsUSA Championships, reflecting the dedication and quality of participants and sponsors whose support makes the competitions possible," said Tim Lawrence, SkillsUSA executive director. "Without the commitment of companies like Irwin, thousands of students would miss out on the valuable experiences and life lessons the SkillsUSA programs deliver. These forward-thinking companies are helping prepare students for lifelong contributions to society by giving them a foundation for successful careers."

NASCAR Nextel Cup driver Kurt Busch will attend the competition to sign autographs and speak to competitors at the Irwin workshop, an interactive mobile marketing display set up outside Bartle Hall.

Lee "Hackman" Breton will also make an appearance on behalf of Lenox tools. Breton will use a Lenox bi-metal hacksaw blade to cut a car in half by sawing through the frame and sheet metal. Event attendees can guess the amount of time required for Hackman to complete the task, with the closest prediction earning a Lenox prize package.

"We are pleased to support SkillsUSA because we recognize that training programs for America's next generation of leaders are more critical than ever," said Neil Eibeler, president of sales for Irwin. "Today's job market is extremely competitive and programs that prepare today's students for tomorrow's workforce will give them an advantage when competing for employment. Skilled tradespeople are the backbone of our economy and we're proud to provide professional grade products to help develop the next generation of leaders in the building and construction trades.”

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Executives expect to change industries
As outsourcing and productivity increases push an increasing number of factory workers into new industries, a new report from the Association of Executive Search Consultants (AESC) said senior executives will be joining them.

A poll of 569 senior executives revealed that 45 percent expect to pursue career opportunities in a new industry. Only 55 percent expect to stay in their current industry. AESC conducted the poll Feb. 19-26.

"For the past few years, executives have been reluctant to leave their current positions, let alone their current industries," said AESC president Peter Felix. "Now with the economy improving, executives will look at new opportunities with an increasingly broad perspective. Although each industry and company has its own unique set of business issues and culture, increasingly the barriers between industries are coming down and executive skills and experience are transferable."

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Quarterly manufacturing index reaches all-time high
The long-awaited recovery in the U.S. manufacturing sector is expected to continue to gain steam in the near term, according to the quarterly Manufacturers Alliance/MAPI Survey on the Business Outlook (ER-568e).

The March 2004 index of 78 is the highest in the survey’s 32-year history and surpasses the previous high of 77 in December 2003, signaling the recovery gained traction.

The composite business outlook index was produced semiannually starting in March 1972 before being compiled quarterly since September 1991.

In a related issue, employment prospects in manufacturing seem to be improving for 2004, with positive results possible as early as the second quarter.

A composite business index above 50 indicates that overall manufacturing activity is expected to increase over the next three months. It should be noted that the index measures the direction of change rather than the absolute strength of activity in manufacturing.

Nearly all components of the index maintained the high levels achieved in the previous quarter.

“The significance of the March survey results is that the surprising strength shown in the previous quarter’s survey was repeated for a second straight quarter," said Donald A. Norman, Manufacturers Alliance/MAPI economist and survey coordinator. “This adds confidence to expectations that manufacturing sector activity will expand in 2004.”

Executives also were queried on the outlook for manufacturing employment. More than one-third, 36.2 percent, indicated employment would increase moderately or significantly in 2004, compared to 25.9 percent who said employment would fall.

Employment increases may be seen as early as the second quarter, where 27.5 percent expect a moderate or significant bump in hiring, compared to 17.2 percent who indicated employment in the sector will decrease.

Among the factors cited by executives who indicated employment would be stable or fall were productivity gains (84 percent), followed by offshoring, and sourcing more parts and production from abroad. Each received 27 percent. Respondents could choose more than one answer.

An overwhelming majority said the most important factor driving labor costs in the United States was health care costs, 76 percent, followed by pension costs, 10 percent. Respondents also were asked whether employment in specific categories would increase, decrease or stay the same. Employment is expected to increase in assembly, technical, temporary workers and machining/production. Conversely, employment is expected to decrease among supervisors and middle-level managers.

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