MRO Today - Manufacturing Industry News archives

Manufacturing Industry News:
News from the week of July 12, 2004

Timken recommended for ISO/TS 16949:2002 certification
The Timken Co.'s automotive group was recommended for certification to ISO/TS 16949:2002. The company's third party registrars made the recommendation after concluding its audits in June 2004.

The ISO standard specifies the quality system requirements for the design, development, production, installation and servicing of automotive-related products. Developed by the International Automotive Task Force (IATF) in conjunction with the International Organization for Standardization (ISO), the quality management standard aligns existing American, German, French, Italian and Japanese automotive quality systems standards within the global automotive industry.

"Quality is a core value of The Timken Company," said Stanley V. Williams, global manager of quality systems for the automotive business. "The successful registration of our automotive bearing business' quality management system to ISO/TS 16949:2002 helps to ensure that our customers will continue to receive the products of the highest quality now and well into the future."

This current recommendation to ISO/TS 16949:2002 applies to 21 of the 23 manufacturing locations for tapered, needle and steering products worldwide, as well as the bearing business' support locations in Canton, Ohio, and Torrington, Conn.

The remaining two facilities -- Vierzon and Maromme -- located near Paris, France, are currently registered to ISO/TS 16949:1999. The upgrade assessment to the 2002 version is scheduled for fall 2004.

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Managers, executives switch industries to find jobs
Falling confidence in the ability to find a job is prompting a growing number of unemployed managers and executives to broaden their job searches to new towns and new industries, according to a new survey from global outplacement firm Challenger, Gray & Christmas Inc.

Relocation among job seekers jumped 25 percent in the second quarter, the highest since 2001, while industry switching increased 18 percent to its highest level in two years.

"The economy may be at its strongest since 2000, but the job market has been much slower to recover. While evidence shows that employers are finally starting to add some workers, we have not seen a significant drop in job search times, which strongly suggests that employers are being very selective," said John A. Challenger, CEO of Challenger, Gray & Christmas.

"At this point, the best way to improve one's chances of finding a job quickly is to cast the widest net possible, which means looking for jobs out of town and in new industries," he said. "Managers and executives who have been reluctant to adopt these strategies earlier now appear to embracing them."

The Challenger quarterly survey of 3,000 discharged managers and executives shows that 16.5 percent relocated for new jobs in the second quarter, up 25 percent from a first-quarter relocation rate of 13.2 percent.

The second-quarter relocation figure is the highest since the fourth quarter of 2001, when 17 percent of job seekers relocated.

More than half (51.2 percent) of the managers and executives surveyed changed industries in their new positions, 18 percent more than in the first quarter (43.6 percent). This is the highest level of industry switching since the second quarter of 2002 when it reached 54.9 percent.

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General Motors finds huge success in Chinese market
General Motors said its operations in mainland China set a first-half record for sales. The company also plans to invest heavily in the Chinese auto market over the next three years.

GM and its mainland China manufacturing operations sold 259,653 vehicles in the first six months of 2004. This represented an increase of 57.6 percent from the first half of the previous year.

"Our strong results underscore the growing popularity of GM's unmatched product lineup and the outstanding performance of our joint ventures," said Phil Murtaugh, chairman and CEO of the General Motors China Group. "We also continue to seek additional opportunities to increase our presence in China in order to meet rising demand over the long haul."

In June, GM also announced a series of new investments that, pending government approval, are expected to exceed $3 billion over the next three years.

The funds will be allocated for a number of projects including:
• the introduction of new vehicles and powertrains,
• the creation of new facilities at GM's Pan Asia Technical Automotive Center (PATAC) automotive engineering and design joint venture,
• the expansion of GM's existing manufacturing joint ventures, and,
• the launch of a new financing joint venture.

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Machine tool consumption climbs in May
May U.S. machine tool consumption totaled $224.3 million, up 9.9 percent from April and up 54.2 percent from $145.4 million reported for May 2003, according to the American Machine Tool Distributors' Association (AMTDA) and the Association For Manufacturing Technology (AMT).

With a year-to-date total of $1 billion, 2004 is up 46.1 percent compared with 2003.

"The manufacturing sector's confidence in the direction of our national economy continues to grow," said Ralph J. Nappi, president of the American Machine Tool Distributors' Association. "May machine tool consumption builds upon a six-month trend of strong capital investments made by U.S. manufacturers. All indications point to continued investment for the rest of the year despite the machine tool industry's recent challenges of product supply."

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

Northeast machine tool consumption in May stood at $33.5 million, down 2.7 percent compared to April's $34.5 million, but up 74.8 percent compared to last May. With a year-to-date total of $150.1 million, 2004 is 68.5 percent ahead of 2003 at the same time.

Southern machine tool consumption totaled $25.7 million in May, down 4.2 percent from the $26.8 million in April, but up 13 percent compared to May a year ago. The year-to-date total of $142.1 million was 0.2 percent higher than the comparable figure a year ago.

With a May total of $98.8 million, machine tool consumption in the Midwest was 20.6 percent higher than April's $81.9 million and 63.8 percent higher than the total for May 2003. The $436 million year-to-date consumption total was 52.2 percent ahead of the total at the same time in 2003.

Machine tool consumption in the Central region in May totaled $43 million, up 23.3 percent compared to April's $34.8 million and up 46.8 percent compared to May a year ago. At $188.9 million, the year-to-date total was 53.7 percent higher than the comparable figure for 2003.

Totaling $23.4 million, Western machine tool consumption was off 10.6 percent in May compared to April's $26.1 million. But, it was up 67.4 percent compared to the previous May. The year-to-date total of $124.2 million puts this year 71.2 percent ahead of 2003 at the same time.

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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EPA to take action against DuPont
The Environmental Protection Agency's (EPA) Office of Enforcement and Compliance Assurance (OECA) is taking administrative action against E. I. DuPont de Nemours and Company (DuPont) for two violations of the Toxic Substances Control Act (TSCA) and one violation of the Resource Conservation and Recovery Act (RCRA).

These violations consist of multiple failures to report information to EPA about substantial risk of injury to human health or the environment from a chemical during a period beginning in June 1981 through March 2001.

Companies are required by TSCA to report such information immediately. EPA has the authority to seek a penalty of $25,000 per day for violations occurring before January 30, 1997, and up to $27,500 per day for violations occurring thereafter, for each day that DuPont failed to report the information. According to the EPA, fines for the alleged failure to provide the required information could possibly reach as much as $300 million.

The EPA is quick to note that a lower fine is much more likely.

EPA alleges that DuPont did not submit to the agency information the company obtained regarding the synthetic chemical Perfluorooctanoic Acid (PFOA). PFOA is used in the manufacturing process for fluoropolymers, including some Teflon products, at DuPont's Washington Works facility in Washington, W.V.

In 1981, the company observed PFOA in blood samples taken from pregnant workers at the Washington Works facility, and at least one woman had transferred the chemical to her fetus. DuPont detected the chemical in public water supplies as early as the mid-1980s in West Virginia and Ohio communities in the vicinity of the Washington Works facility. By 1991, DuPont had information that the chemical was in water supplies at a greater level than the company's exposure guidelines indicated would be without any effect to members of the community. In 1997, DuPont failed to provide EPA with all toxicological information the company had regarding PFOA, despite an EPA request for such information under the terms of an EPA-issued RCRA permit. An attorney working on a class action suit on behalf of citizens in Ohio and West Virginia brought this information to the EPA in 2001.

The information that DuPont obtained about PFOA was, and continues to be, pertinent to the agency's ongoing work to better understand PFOA. Since April 2003, EPA has been working cooperatively with DuPont, 3M, other companies and interested parties to develop the information necessary to better understand the sources and exposure pathways of PFOA.

This public effort will lead to the development of information that will assist the agency in determining what voluntary or regulatory actions, if any, would be appropriate to protect human health and environment.

This rigorous scientific review will ensure that any future regulatory action on PFOA is protective of public health and supported by the best scientific information.

EPA is working to complete a revised risk assessment, which will be released in Fall 2004 for public peer review by the agency's Science Advisory Board. To learn more about the agency's ongoing evaluation, visit: http://www.epa.gov/opptintr/pfoa/.

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Wisconsin adds factory jobs in June
Factories in Wisconsin continued to add jobs during June, with 10,500 more workers added during the month and 20,000 factory jobs during the second quarter, according to the Wisconsin Department of Workforce Development.

Both numbers exceeded expectations, as manufacturing jobs across the nation continue to waver in the face of offshoring and improving productivity.

Overall, the U.S. lost 11,000 manufacturing jobs in June, according to the Labor Department's monthly report on unemployment figures.

In spite of the loss, the U.S. saw manufacturing jobs increase by 75,000 during the previous four months. These gains were tempered by the fact that disenchanted workers continue to re-enter the workforce after sitting on the sidelines for so many months and by the loss of nearly 3 million manufacturing jobs across the country during the past several years.

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Timken purchases SES Technical Group
As part of its ongoing strategy to offer improved value for customers through a broader and enhanced range of friction management products and services, The Timken Co. acquired the assets of SES Technical Group, a division of SES LLC.

SES Technical Group of Richfield, Ohio, specializes in vibration analysis, infrared thermography, continuous monitoring systems, wear particle analysis, and 24-hour emergency service. The acquisition will add approximately $2.5 million in revenue to Timken Industrial Services.

"The associates of the SES Technical Group bring new capabilities to Timken that will allow us to build on our heritage of working with customers," said Mike Arnold, president of Timken's industrial group. "The addition of the SES Technical Group's service offerings expands our ability to grow beyond bearings and deliver innovative solutions to our customers."

In conjunction with the acquisition, Timken named Matt Schleich general manager of reliability services. Schleich will have operational and strategic leadership for this business.

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Fluke launches Web site to help educators
Electrical test and measurement manufacturer Fluke Corp. is teaming up with educators to bring the latest test and measurement expertise into the classroom.

The new Fluke Education Partnership Program combines a wealth of educational materials and application information with product discounts, all accessed through its Web site. The program is available to instructors in two- and four-year educational settings, as well as apprenticeship programs.

Created by experts at Fluke, classroom materials are easy to use and understand. They include colorful graphics and a step-by-step orientation to solving real-world problems. When these modules are coupled with theoretical curriculum, labs, demonstrations and hands-on experiences, they are a powerful teaching tool.

The modules include:
• Module overview. A planning aid to preview content quickly;
• Easy to use presentations. Complete with talking points, these PowerPoint presentations are ready to use in the classroom.
• Lesson materials. They include application notes and articles.
• Visual aids. Posters with colorful diagrams and illustrations help students understand and remember key concepts.

Modules focus on topics educators need most. Entire modules or individual components can be selected from the Educators Portal or ordered on CD. Modules include topics such as Electrical Measurement Safety, Digital Multimeter Basics, Electrical Measurements on Adjustable Speed Drives, Insulation Resistance Testing and Troubleshooting, and Servicing HVAC/R Systems. New materials are added to the Web site regularly.

Educators enrolled in the program receive 25 percent off list price on Fluke tools for use in the classroom and labs. Students can also place orders for personal use. Orders may be placed through an authorized Fluke distributor using order forms posted on the Fluke Educator’s Web site.

Educators can sign up by visiting http://support.fluke.com/educators.

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Manufacturing survey predicts robust recovery, growth
The momentum of the recovery in the manufacturing sector remains strong, according to the quarterly Manufacturers Alliance/MAPI Survey on the Business Outlook.

The June 2004 composite index of 80 is the highest in the survey’s 32-year history. It surpasses the previous high of 78 in March 2004 and concurs with the general consensus of economic indicators.

The survey reflects the views on current and future business conditions of 60 senior financial executives representing a broad range of manufacturing industries. While a variety of indexes are included in the survey, the business outlook index is a weighted sum of shipments, backlogs, inventories and profit margin indexes.

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

“The rise in this index, along with the strength shown by all the individual indexes, indicates that the expansion of manufacturing activity is real and robust,” said Donald A. Norman, Manufacturers Alliance/MAPI economist and survey coordinator.

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

Respondents also were asked about the impact of higher commodity prices on their businesses. A large majority (83 percent) expects overall prices will rise moderately in 2004, but remain below 4 percent.

Key commodities senior financial executives expect to rise this year include steel, natural gas, oil and gasoline, chemicals, and shipping. Among the commodities projected to remain at their current level or fall are aluminum, copper, rubber and coal.

Companies responded in a number of ways to higher prices. The most important action taken has been a greater reliance on longer term supply contracts for key commodities, identified by 52 percent of the respondents, followed by hedging, cited by 27 percent. The most important effect of higher commodity prices has been to reduce company earnings (39 percent) followed by the need to devote more time and effort to ensuring supplies of key commodities (36 percent).

When asked what factors would contribute most to lower commodity prices, 40 percent of the respondents cited an expectation of a slowdown in China’s economy, while 27.5 percent said expanded production of commodities.

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