Machine tool consumption continues growth in August
BSA report explains linear bearings
Harley roars ahead in third quarter
Jobless claims climb to 352,000
GM reduces greenhouse gas emissions by 72 percent
Jobs act creates mixed reaction from economists, lobbyists
Creative minds seen fleeing American industrial economy
OSHA cites GM for alleged failure to report injuries
Outsourcing answers cost-cutting needs, but at what price?
Melin Tool purchases Countersinks Inc.
SAP unveils ERP software enhancements for manufacturers
Plant managers form association to address issues
New NAM president optimistic about manufacturing sector
Futurist Canton to speak at MRA Trail Blazer event
Unemployment data shows slight growth

Machine tool consumption continues growth in August
August U.S. machine tool consumption totaled $225.5 million, up 6.4 percent from July and 54.2 percent from $146.3 million reported for August 2003, according to the Association For Manufacturing Technology (AMT) and the American Machine Tool Distributors' Association (AMTDA).

With a year-to-date total of $1.8 billion, 2004 is up 38.4 percent compared with 2003.

"With machine tool consumption up 38.4 percent for the year, this reinforces the results seen at [International Manufacturing Technology Show]," said John B. Byrd III, AMT president. "Exhibitors at IMTS didn't need numbers to tell them that a capital investment recovery is underway. They came away from the show with orders and with a renewed optimism about the growing manufacturing revival."

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

August machine tool consumption in the Northeast totaled $31.4 million, up 5 percent compared to July's $29.9 million and 20.6 percent ahead of August a year ago. At $259.5 million, year-to-date machine tool consumption was up 48 percent.

Southern machine tool consumption in August stood at $32.6 million, 17.6 percent less than July's $39.6 million, but up 34.8 percent compared to last August. The year-to-date total of $270.9 million is a 5.4 percent drop compared to 2003 at the same time.

At $81 million, August machine tool consumption in the Midwest was 1.6 percent higher than July's $79.7 million and 58.9 percent higher than the total for August 2003. With a year-to-date total of $710.6 million, 2004 is running 46.5 percent ahead of 2003 at the same time.

Totaling $44.1 million, Central region machine tool consumption was 20.8 percent ahead of July's $36.5 million and up 67.3 percent from the August 2003 figure. Reaching $309.2 million, year-to-date 2004 machine tool consumption was 47.3 percent above the comparable figure for 2003.

Western machine tool consumption in August rose to $36.5 million, up 39.1 percent compared to the $26.2 million total for July, and 94.4 percent higher than the August 2003 total. At $228.4 million, year-to-date 2004 is 77.9 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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BSA report explains linear bearings
The newest Educational Services Committee (ESC) report from the Bearing Specialists Association (BSA), clarifies the diverse category of linear bearings by identifying the basic machine functions and the linear bearing features required for each function.

BSA's Linear Bearings report considers a number of linear guidance systems, including flat cage assemblies, recirculating roller bearings, recirculating roller systems, recirculating linear ball systems (six-row, four-row and two-row), recirculating ball units, track roller systems, and round shaft systems.

It also considers additional characteristics such as rigidity, accuracy, speed and friction. The report includes straightforward, informative charts.

The report is available free from the BSA Web site.

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Harley roars ahead in third quarter
Harley-Davidson Inc. reported record net revenues of $1.3 billion during the third quarter of 2004, up from net revenues of $1.1 billion during the same period last year.

The company generated third quarter net income of $229 million, or 77 cents per share, up from net income of $190.1 million, or 62 cents per share, in the prior-year period.

For the first nine months of the year, Harley-Davidson posted net revenues of $3.8 billion, compared to $3.5 billion during the first nine months of 2003.

Net income reached $680.8 million, or $2.29 per share, during the first three quarters of 2004. This compared with $578.5 million, or $1.90 per share, during the prior-year period.

"We are pleased to report that Harley-Davidson has once again produced record revenue and earnings for the quarter," said Jeffrey L. Bleustein, chairman and CEO of Harley-Davidson Inc. "Our financial results for the first nine months of the year position us to deliver another record year and are in line with our previously stated long-term targets."

Bleustein said Harley will increase its shipment target to 339,000 motorcycles in 2005, a 7 percent increase over the company's 2004 goal of 317,000. So far in 2004, the company has shipped 236,702 units in the United States and abroad.

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Jobless claims climb to 352,000
Initial claims for unemployment insurance increased 15,000 to 352,000 for the week ended Oct. 9, according to the Labor Department. The four-week moving average was 353,000, an increase of 4,000 from the previous week.

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 11,000 to 2.8 million for the week ended Oct. 2. Continuing claims are those older than two weeks.

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GM reduces greenhouse gas emissions by 72 percent
General Motors' U.S. facilities reduced their overall composite greenhouse gas (GHG) emissions more than 72 percent in the past 13 years, according to a voluntary report GM filed with the Department of Energy (DOE) 1605(b) GHG Emissions Registry.

GM was the first automotive manufacturer to voluntarily report its greenhouse gas emissions to the DOE and has done so every year since its inception in 1995.

In actual numbers, GM reduces its U.S. stationary GHG output from 55 million metric tons CO2 equivalence in 1990 to 15.3 million metric tons CO2 equivalence in 2003.

"GM has demonstrated that voluntary energy and GHG reduction initiatives work, and they make good business sense," said Elizabeth Lowery, GM vice president of environment and energy. "So far, the stationary GHG emissions from U.S. facilities have decreased more than 72 percent over the past 13 years."

The DOE 1605(b) was initiated under the 1992 Energy Policy Act, which provides organizations the opportunity to voluntarily report greenhouse gas emissions.

Emissions of CO2 from GM's facilities in the U.S. declined 22.2 percent, from 11.7 million metric tons in 1990 to 9.1 million metric tons in 2003.

GM publicly committed to reducing its global levels of stationary carbon dioxide (CO2) emissions by 8 percent in five years from 2000 levels, an unprecedented level of commitment from any corporation, to date.

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Jobs act creates mixed reaction from economists, lobbyists
The American Jobs Creation Act of 2004, passed by both houses of Congress and now on its way to President Bush's desk, left lobbyists saying "thank you" and at least one economist saying "for what?"

Susan Hering, a senior economist at UBS Investment Research, told IndustryWeek.com the bill will not create the jobs its moniker suggests. But, she says it will also probably not take jobs away. She says tax relief for businesses will only reach about $2.5 billion in 2005.

"Moreover, the relief is spotty because it is aimed at domestic manufacturers -- as capriciously defined by Congress," she says.

The National Association of Manufacturers (NAM) welcomed the legislation, calling it a relief for manufacturers and portending an economic boost as a result.

The NAM had worked diligently for passage of the measure that will repeal the export provision ruled illegal by the World Trade Organization (WTO). 

“European tariffs on more than 1,600 U.S. products have reached 12 percent and could go as high as 17 percent,” said Michael Baroody, NAM executive vice president. “The NAM expects that in response to this legislation, the EU will lift those tariffs.”

The NAM took a different stance on the jobs the bill is supposed to create, saying it includes numerous tax measures intended to benefit business and encourage job creation.

The Aerospace Industries Association (AIA) hailed the congressional action as a critical step in providing manufacturing tax relief and in supporting fair market access for the nation's export industries.

"These reforms will make the U.S. tax code WTO compliant while ensuring it does not obstruct the ability of manufacturers to create jobs and plan long-term capital investments," said AIA president and CEO John W. Douglass.

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Creative minds seen fleeing American industrial economy
As the outsourcing of U.S. jobs continues, America is also experiencing the exodus of many of its most creative business, research and academic minds to other countries, according to an article in Across the Board, The Conference Board’s bimonthly magazine.

Sweden, Finland, the Netherlands, Denmark and Ireland are among the favored hotspots for creative talent in business and other sectors.

The Conference Board is a not-for-profit research and business membership organization connecting more than 2,000 companies in more than 60 nations.

As a result of this creative exodus, high-end, high-margin creative industries that used to be the United States’ province and a crucial source of prosperity have begun to move overseas, according to article author Richard Florida. Other countries, such as Ireland, are becoming more competitively creative at a faster rate than the United States.

“For the first time in modern memory, top scientists and intellectuals from elsewhere are choosing not to come to the U.S.,” Florida says. “The altered flow of talent – aided by more stringent security measures – is already beginning to show signs of crimping the scientific process.”

Cities in other parts of the world are outscoring American cities on measures of new talent, diversity and brainpower. Brussels is fast becoming a creative-class center to rival Boston, Seattle and Austin. Vancouver and Toronto are also set to take off; both city-regions have a higher concentration of immigrants to help drive their creative economies than New York, Miami or Los Angeles. As creative centers, Sydney and Melbourne rank alongside Washington and New York.

Many of these countries also offer to highly mobile creative talent spectacular waterfronts, beautiful countryside and great outdoor life. They’re also safe, as they are rarely at war. They’re becoming creative centers that draw talent from all over the world.

What should alarm U.S. economists and legislators, according to Florida, is that metropolises from other developed countries are transforming themselves into magnets for higher value-added industries through a variety of means: from government-subsidized laboratories to partnerships between top local universities and industry. Most of all, they’re attracting foreign creative talent, including American – from graduate students to established intellectuals and top scientists. The best young creative minds are no longer flocking to America, as they did for decades – most recently when they came to Silicon Valley in the ‘90s to begin the dot-com explosion. So future cultural and industrial revolutions are less likely to begin in the United States.

“To strengthen our creative economy so that it produces more jobs to replace the ones we’re losing, the U.S. desperately needs economic, cultural and political leadership with enough savvy to bridge ideological, geographical and international gaps,” Florida said. “Until politicians on both sides of the aisle catch on, the responsibility will surely fall to American economic leaders to create business and trade environments that are increasingly diverse, tolerant and inclusive, and to draw on the immense reservoir of foreign and domestic talent that will pull the American creative economy out of its current stall.”

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OSHA cites GM for alleged failure to report injuries
A Massena, N.Y., automobile parts manufacturer's widespread failure to record work-related hearing losses and other occupational injuries, as well as a variety of safety hazards, resulted in $160,000 in fines from the Occupational Safety and Health Administration (OSHA).

General Motors Powertrain Corp. was cited for alleged willful, serious and other violations of health and safety standards at its Route 37 East plant. OSHA began its inspection April 13 in response to an employee complaint.

OSHA's inspection identified 98 instances where the company did not record on the OSHA 300 Log work-related noise-induced hearing losses and other injuries and illnesses suffered by employees at the plant. Accurate recordkeeping is essential for protecting workers since it provides the opportunity for timely identification and correction of conditions that can harm workers.

The Massena plant's failure to record work-related injuries led to the issuance of two willful citations, carrying $140,000 in fines. OSHA defines a willful violation as one committed with an intentional disregard of, or plain indifference to, the requirements of the Occupational Safety and Health Act and regulations.

Six serious citations, with $12,000 in proposed fines, were issued for a variety of safety hazards including an obstructed exit route, inadequate guarding of moving machine parts, no load rating for an elevated work platform, failure to assess the need for personal protective equipment for workers, lack of warning signs and a non-exit door not marked as such. A serious citation is issued when death or serious physical harm are likely to result from a hazard about which the employer knew or should have known.

An additional $8,000 in fines is proposed for two other citations concerning improper recording of injuries and illnesses on the OSHA 300 log of occupational illnesses and injuries.

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Outsourcing answers cost-cutting needs, but at what price?
The need to reduce operating costs, improve return-on-invested capital, and more quickly enter and exit markets has increasingly made manufacturing outsourcing a strategic staple in many industries, according to a new report by AberdeenGroup.

Despite the promise of manufacturing outsourcing, Aberdeen's Outsourced Manufacturing Strategies Benchmark Report finds that many companies struggle to achieve expected benefits.

This is because many companies who employ contract manufacturers fail to implement the necessary strategies, processes and supporting technology that can efficiently deliver new products to market, reduce costs, and ensure product quality and availability.

"Improving financial performance dominates the agenda of enterprises that outsource manufacturing, but there are divergent approaches for achieving this," said Chris Jones, Aberdeen's senior vice president of value chain research and author of the report. "Best-in-class enterprises focus on more strategic actions, while laggard enterprises are fixated on tactical cost reduction. As a result, best-in-class enterprises are two to seven times more likely to achieve above-average to dramatically better performance in revenue, profit and return-on-invested capital."

The report indicates that losing control is the greatest issue for enterprises outsourcing manufacturing, but ironically, many enterprises fail to implement performance management programs that can rectify the problem.

To optimize outsourced manufacturing performance, Jones recommends the following:
• get basic performance tracking and management issues out of the way;
• integrate the contract manufacturer into the design process;
• focus on incorporating the contract manufacturer into other value chain processes such as logistics and demand management; and,
• embrace contract manufacturer network complexity: multiple manufacturers and tiers.

To obtain a copy of this report, please follow this link.

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Melin Tool purchases Countersinks Inc.
Melin Tool recently acquired Countersinks Inc. of Bensenville, Ill. With the addition of Countersinks Inc. and its more than 1,300 sizes and styles of countersinks, Melin Tool is well positioned to become a reliable source for high quality, competitively priced countersinks.

Melin will maintain the Countersinks name, dropping the Inc., as a division of Melin Tool.

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SAP unveils ERP software enhancements for manufacturers
SAP AG announced new and enhanced capabilities to mySAP ERP, its enterprise resource planning (ERP) software, that will help customers gain new insight to better manage their manufacturing businesses.

These capabilities will allow customers to gain improved visibility across plant-floor operations and better enable processes in the areas of lean manufacturing, track and trace, Six Sigma and compliant manufacturing.

Underlining SAP’s ongoing commitment to realize the adaptive manufacturing vision, these capabilities are enabling manufacturers, including Dow Corning and Rexam, to drive superior performance through improved responsiveness and business transparency.

Additionally, SAP announced the successful commencement of its shop-floor partner program, aimed at creating a strong ecosystem of software vendors supporting shop-floor technologies.

The announcements were made at the APICS conference held Oct. 10-13 in San Diego.

“The disconnect between the factory and the enterprise is a critical challenge confronting most manufacturers today and inhibits them from becoming responsive to customers and unforeseen demand or supply events,” said Dan Miklovic, vice president and manufacturing research director at Gartner. “Integrating manufacturing with enterprise and supply chain processes is an imperative for the factory to be responsive in demand-driven supply chains.”

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Plant managers form association to address issues 
A group of plant managers from the Fox Valley region in eastern Wisconsin is making production, safety, quality and overall workplace improvements by coming together to discuss plant issues once every six weeks.

The Fox Valley Plant Managers Association was started in November 2002, when Dean Zaretzke, plant manager for McCain Foods USA in Grand Chute, Wis., found about six other area plant managers who wanted the same thing he did: more information, more innovation, better quality and safety.

The group set some ground rules: protection for competitive information, no membership fees and no payment for running the group. Today, the group has 20 members and has focused on manufacturing improvements the companies may have otherwise missed.

The meetings have become extremely successful. Every six weeks, the plant managers gather together at a different facility. There may be plant-floor experiments going on for others to see, or they may discuss safety issues or bounce ideas off of each other. The group has learned that many manufacturing solutions are transferable, even though products may be completely different.

"One of the common things in manufacturing is we compete globally," said Theresa Moore, plant manager for Presto Products, a plastic products manufacturer located in Appleton, Wis. "We have to learn and be in a continuous state of improvement to maintain those manufacturing jobs. We can benefit from each other."

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New NAM president optimistic about manufacturing sector
Last Friday's jobs report from the Labor Department showing continuing, albeit slow, growth in employment indicates the economic expansion is ongoing, said to John Engler, the new president of the National Association of Manufacturers (NAM).

In the last employment report to be issued before the Nov. 2 elections, the government reported the economy added 96,000 jobs in September, while the unemployment rate remained steady at 5.4 percent.

"Looking back over the past year, however, it is clear that the economy is on a positive track," said Engler. "Since last August, the economy has created over 1.9 million jobs, slightly more than the number of jobs created during the 13 months following the 1991 recession."

Engler said that looking forward, a survey of senior corporate executives from small and large companies on the NAM board of directors taken recently in Washington shows that conditions will improve for manufacturers in the second half of the year.

"I've only been on the job a week, but I met lots of manufacturers at our board meeting and was struck by their optimism," said Engler. "The great majority of NAM board members reported steady increases in exports, capital investment and job creation. Our members are clearly upbeat about the economic situation."

Engler said most of the directors responding to the survey expect Gross Domestic Product to grow by 3.1 percent in the second half of the year.

"This would leave us with 3.5 percent growth in 2004," Engler said. "When you consider the impact of sky-high energy prices, the continuing war on terror, the cumulative burden of excess costs imposed on U.S. manufacturers and the disruption caused by the extraordinary series of hurricanes that hit the Southeast, this is still a most positive report."

Almost 80 percent of the corporate leaders responding to the survey expected employment to increase or stay the same.

"Only a small percentage of our directors blame weakness in economic growth and job creation on foreign competition. By a margin of more than four-to-one, they cite the excess costs of doing business in the U.S. associated with health care, runaway litigation, regulation, taxes and energy as the single greatest threat to the economic recovery. This is a clear reminder that there are important policies we can pursue here at home to strengthen manufacturing and make America a more attractive place to do business."

Engler, the former three-term governor of Michigan who assumed the presidency of the NAM last week, said the overall picture for manufacturing looks positive in the near term.

"After a three-year recession that started in June 2000 for manufacturers, conditions are improving quickly," he said. "Over the past year, manufacturing production has surged 6.5 percent, the fastest pace in six years, surpassing its previous peak in June 2000."

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Futurist Canton to speak at MRA Trail Blazer event
James Canton, renowned global futurist, social scientist and author, will showcase the next Trail Blazer Speaker Series event developed by MRA-The Management Association. The event will take place Dec. 2 from 8 a.m. to 11:30 a.m. at the Midwest Airlines Center in Milwaukee.

Canton will share his forecast of trends and innovations to help attendees rally company resources around future smart initiatives that will put them on the winning side of the talent revolution. According to Canton, the vast changes yet to come will frustrate and transform every aspect of business.

Canton's multi-trend analysis, developed at the Institute for Global Futures, predicts the short-term focus that grips business today will cause organizations to miss rich opportunities for future success. His wakeup call will galvanize company leadership and provide the vision to ask hard questions about the core competencies, strategic positioning and technology platforms companies will need to demonstrate real-time agility in the marketplace.

Canton will illustrate what's next for the workforce and customers, markets and demographics, technology and security, and competition. He will share strategies that will help companies prepare for the future.

Author of Techno Futures and the soon-to-be-published Future Smart and The New Future, Canton's research points to one thing: The capacity of business leaders to envision future opportunities and change direction in real time is essential for the 21st century.

To read a recent article from Canton, click here.

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Unemployment data shows slight growth
The number of jobs created in the U.S. increased by 96,000 during September, and the unemployment rate held steady at 5.4 percent, according to the Labor Department. The consensus estimate by economists had the number of jobs increasing by 150,000.

The number of jobs created during August was also revised downward to 120,000 from 150,000.

Within the goods-producing sector, manufacturing employment dropped 18,000 jobs in September, with job losses occurring throughout the durable and nondurable goods components of the industry.

Manufacturing added 88,000 jobs in the previous seven months, with most of the gains registered from March through May. This decline took a serious chunk out of those gains.

The manufacturing workweek fell by 0.1 hour to 40.8 hours, and factory overtime was unchanged at 4.6 hours.

"The average person on the street might see the 96,000 job gain and an unchanged unemployment rate as good news, but overall this is a very disappointing report," said John A. Challenger, CEO of global outplacement firm Challenger, Gray and Christmas Inc. "A close look at the household survey reveals that the civilian labor force actually fell by 221,000 and the number of people employed dropped by 201,000. Meanwhile, the employer survey shows a disturbing drop in manufacturing employment after several months of increases."

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