MRO Today - Manufacturing Industry News

Manufacturing Industry News Archives:
News from the week of April 18, 2005

ATI Metalworking Products purchases Garryson
Milwaukee Electric Tool wins award for patriotism
Top businesses donate $169 million in supplies to UTEP
Industrial production climbs in March
GM sees minority supplier spend decrease in 2004
Increasing energy prices hamstring production activity

ATI Metalworking Products purchases Garryson
Allegheny Technologies Inc. segment company ATI Metalworking Products has acquired the assets of U.K.-based Garryson Ltd. from Elliott Industries Ltd. for approximately $17 million.

Garryson produces tungsten carbide burrs, rotary tooling, and specialty abrasive wheels and discs.

"This growth oriented bolt-on acquisition strengthens our ATI Metalworking Products business unit," said Pat Hassey, chairman, president and CEO of Allegheny Technologies. "Garryson had sales of over $30 million in 2004. In addition to expanding Metalworking Products' product offerings, the acquisition is expected to provide revenue and margin synergies by utilizing our tungsten carbide powders to produce tungsten carbide rods, which are made into value-added finished products at the Garryson operation."

"We expect this acquisition to create new opportunities for growth and improved profitability," said Dave Hogan, president of ATI Metalworking Products. "We add two new product lines, carbide burrs and specialty abrasives, and strengthen our rotary tooling capabilities. Major markets for Garryson-brand products include aerospace, transportation, particularly shipbuilding, oil and gas, and the chemical process industry."

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Milwaukee Electric Tool wins award for patriotism
Milwaukee Electric Tool Corp. was awarded the Pro Patria Award by the Defense Department and the Employer Support of the Guard and Reserves (ESGR) at the organization’s awards dinner in Green Lake, Wis.

The Pro Patria Award is ESGR's highest honor, and Milwaukee Electric Tools was selected from 11 finalists who won State Chair Awards.

More than 500 employer nominations were received from Guard and Reserve members in Wisconsin.

The ESGR recognizes employers for military-friendly policies that reflect outstanding support of military employees.

“These companies symbolize the highest levels of commitment to their military employees,” said ESGR state chair Jim Rebholz. “With more than 50 percent of our entire military in the Guard and Reserve, we need the backing of employers like Milwaukee Electric Tool Corp., who allow their citizen-soldiers time off to serve our country. On behalf of over 140 civic, business and military leaders on our committee, I congratulate them for supporting their employees who are National Guard and Reserve members."

When a Milwaukee Electric Tool employee is activated, the company provides differential pay, making up the difference between an employee's salary and the amount earned while serving in a military capacity.

The company also maintains health insurance and other benefits for activated employees. In addition, coworkers send care packages to the employee and keep in communication with military members’ families back home.

“It is an honor to be recognized through the nomination of Tom Gudex, Master Sergeant, United States Air Force, and associate engineer in Brookfield, Wis., headquarters, for the Pro Patria Award,” said Daniel R. Perry, Milwaukee Electric Tool president and CEO. “Our entire team wholeheartedly supports the efforts of all those who serve in the United States Armed Services, for they are truly the champions of freedom and world peace.”

Milwaukee Electric Tool employs 79 people who serve, or have served, in reserve components of the military, two disabled veterans and 29 Vietnam veterans.

"We are a team, and when anyone on our team is injured, inactive, or in this case, active reserve, you can count on our team to pull together and win the war; in business and on the battlefield,” said Perry.

Throughout his one-year deployment, Milwaukee Electric Tool supported Gudex and his family.

“They made sure my family was cared for, kept benefits going and sent letters of encouragement," said Gudex. "When we were short of tools in the desert, the company donated thousands of dollars worth of tools so we could get the mission done safely. When I returned home, they welcomed me with open arms and held welcome-back parties.”

ESGR is a Defense Department volunteer organization that provides free education, consultation and mediation for employers of Guard and Reserve employees.

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Top businesses donate $169 million in supplies to UTEP
The University of Texas at El Paso (UTEP) received an in-kind contribution of software, hardware and training with a commercial value of $169 million from General Motors, EDS, Sun Microsystems and UGS.

These companies selected UTEP as the newest member of their prestigious engineering-education partnership.

Officials from the four companies announced the multi-million-dollar gift, the largest in-kind contribution in university history, during an event-filled visit to the UTEP campus.

The companies selected UTEP to Partners for the Advancement of Collaborative Engineering Education (PACE), a worldwide program established in 1999 that prepares students at selected universities for careers in automotive engineering.

“The university is honored to be selected as a PACE institution, and we are excited about the opportunities that these software tools will create for our students and faculty,” said UTEP president Diana Natalicio. “The PACE partners are world leaders in design and engineering. We are extremely pleased that these major corporations recognize the strength of our programs and understand the value of investing in the education of UTEP’s talented engineering students.”

Roderick D. Gillum, GM’s vice president of corporate responsibility and diversity, and officials from other PACE corporations toured UTEP’s engineering laboratories, visiting with students and faculty.

The corporations selected UTEP as a PACE institution because of the university’s strength in design, engineering and manufacturing curriculum, and its experience and interest in collaborative research and product development.

The PACE donation includes desktop computers and servers, specialized computer-aided design, manufacturing and engineering software, and faculty training.

“Our students will now have access to all of the tools that working professionals have when they do design of very complicated devices,” said professor Louis Everett, chairman of UTEP’s mechanical and industrial engineering department. “And we are not limited to only doing design of automobiles. We can allow our students to use the software to design anything that they desire.”

The PACE software, including NX, Teamcenter, Tecnomatix and MSC.Adams, will be used primarily by engineering students and faculty. These powerful modeling and simulation tools will allow students to design projects ranging from more efficient factories to simulated automobile crash tests to the flow of blood through artificial heart valves.

Additional software and training provided by the PACE contribution includes Altair Hyperworks, FLUENT, LS-DYNA software from LSTC. Computer workstations from EDS refurbished by Hewlett Packard were also contributed through PACE.

UTEP joins other universities in the United States, including the Massachusetts Institute of Technology, Virginia Polytechnic Institute, the University of Michigan and Brigham Young University as PACE Institutions.

The University of Texas at El Paso is a major urban research university with a Mexican-American majority student population. UTEP serves more than 18,900 students and is one of only 11 higher education institutions across the nation to receive the “Teachers for a New Era” grant from the Carnegie Corporation.

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Industrial production climbs in March
Industrial production increased 0.3 percent in March after a revised gain of 0.2 percent in February, according to the Federal Reserve. For the first quarter as a whole, industrial production rose at an annual rate of 3.6 percent after an advance of 4.5 percent in the fourth quarter.

At 118.5 percent of the 1997 average, overall industrial output was 3.9 percent above its March 2004 level. The rate of capacity utilization for total industry edged up 0.1 percentage point, to 79.4 percent, a rate 1.6 percentage points below its 1972-2004 average.

Manufacturing output edged down 0.1 percent in March, and the factory operating rate fell to 78 percent. The decline of 0.2 percent in the index for durable goods reflected a drop in the output of motor vehicles and parts and in the production of nonmetallic mineral products.

Output in other major durable goods categories rose or was little changed. Computer and electronic products advanced 1.1 percent and rose at an annual rate of 22.6 percent in the first quarter.

Among selected high-technology industries, the index for computer and peripheral equipment rose at an annual rate of 12.7 percent in the first quarter, and the output of semiconductors and related electronic components advanced at an annual rate of 39 percent.

Although the production of communications equipment fell in March, this index increased at an annual rate of more than 24 percent in the first quarter.

"The on-and-off price incentives for motor vehicles, reduced production of energy during a mild winter, and the continuing surge in consumer goods imports from low-wage countries have taken a toll on domestic manufacturers of consumer goods,” said Daniel J. Meckstroth, chief economist for Manufacturers Alliance/MAPI. “Fortunately, the equipment sector remains strong which indicates that firms are willing to invest in capacity-adding investments. As the industrial expansion matures, growth is settling into a slower but more sustainable pace.”

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GM sees minority supplier spend decrease in 2004
General Motors purchased $6.6 billion of direct and indirect materials with U.S.-based minority suppliers in 2004, down 8.3 percent overall compared to 2003, the company reported.

Despite reduced overall volumes, GM held the line on its Tier 1 minority spending as it again accounted for $4.2 billion. However, Tier 2 spending totaled $2.4 billion, down from $3 billion in 2003.

“Our Tier 1 minority spend represents more than 9 percent of our $46 billion in U.S. supplier purchases, however, our Tier 2 spend is down. We are working diligently with our Tier 1s to help them identify top-performing minority suppliers that can provide value as Tier 2 suppliers,” said Bo Andersson, vice president GM Global Purchasing and Supply Chain. “Supplier diversity has been a growth area for many years at GM and we continue to lead the automotive industry."

To support this growth, GM will continue to require its Tier 1 suppliers to source a minimum of 8 percent of its Tier 2 GM business to capable and competitive certified minority companies.

GM currently mentors more than 40 minority suppliers, providing leadership direction and resources to grow the suppliers’ strategic capabilities. In addition, minority suppliers are able to receive financing from Motor Enterprises Inc., a GM subsidiary that was formed in 1970.

Many of these minority companies are among GM’s top-performing suppliers. Last year; nine of the 77 GM Supplier of the Year winners were minority suppliers.

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Increasing energy prices hamstring production activity
The Federal Reserve's announcement that manufacturing activity declined in March reflects soaring prices for natural gas and oil, according to Chi Nguyen, international economist for the National Association of Manufacturers (NAM).

“Today’s report from the Federal Reserve underscores the critical need for comprehensive energy legislation which simply cannot be put off any longer," he said.

Though the Federal Reserve reported industrial production grew by 0.3 percent in March, nine out of 19 manufacturing sectors lost growth in large part because of a decrease in auto vehicle and parts production.

“Modern manufacturing is heavily dependent on energy,” Nguyen said. “This report makes it abundantly clear that we are paying a high price for the lack of a comprehensive energy policy. Job creation, economic growth, the strength of our manufacturing sector and our quality of life all depend on affordable and reliable energy supplies.”

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