Stanley Works sales show promise in fourth quarter
Three safety companies consolidate into MCR Safety
PTDA to sponsor 2005 power transmission conference
NIBA elects board of directors officers, president
ISM: Manufacturers have high expectations for 2004
SKF to close North Carolina seal plant
DISC rolls out new features for Enlighten.Net suite
Southeast to lead wholesale distribution industry in 2004
Airgas welcomes new members to second advisory council
Simonds International awarded ISO9001:2000 registration
Grainger hosts holiday celebration for military families
Parker Hannifin to acquire Denison International
Machine tool consumption declines in October
NAW, Pembroke Consulting to release new study
Parker Hannifin posts strong monthly order trends
3M to cut 125 workers
PMA praises federal rollback of steel tariffs
Factory orders increase 2.2 percent in October
Unemployment slips to 5.9 percent in November
I.D.A./ISMA presidents rally the troops at Business Expo

Stanley Works sales show promise in fourth quarter
Stanley Works said its sales growth exceeded expectations in the first two months of the fourth quarter, and sales are expected to increase by a mid-teens percentage over the prior year. Current order rates are consistent with these sales trends.

The company's previous guidance issued Oct. 22 was for a sales increase of about 7 percent. However, October-November sales increased 19 percent over the same two months of 2002 and, aside from Best Access Systems, sales increased about 10 percent in the two-month period. The company now expects fourth quarter sales to increase by a mid-teens percentage.

The more favorable outlook arises from:
• strong demand from home center and mass merchant customers;
• improving industrial tool demand associated with better economic conditions; and,
• unforecasted successes in residential entry doors and Mac Tools.

Europe continues to benefit from currency translations, although their sales in local currency are essentially flat with the prior year.

With the improved sales outlook and the accelerated cost reduction initiatives, the company expects earnings per fully diluted share of 46 cents to 53 cents in the fourth quarter, up 84 percent to 112 percent over last year. 

"Fourth quarter sales are benefiting from numerous organic growth initiatives as well as a better economy," Stanley Tools chairman and CEO John M. Trani. "Should the strong sales environment persist throughout December, fourth quarter earnings per share, aside from the charges related to the Operation 15 actions, also have the potential to be a record."

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Three safety companies consolidate into MCR Safety
Beginning in January, three industrial safety companies will consolidate into MCR Safety. The three companies include hand protection manufacturer Memphis Glove, eye and face protection maker Crews and protective body wear manufacturer River City.

MCR Safety will bring together 30 years of PPE service and quality. Memphis Glove was started in 1974, followed by River City Protective Wear in 1981 and Crews Inc. in 1984. MCR Safety's goal is to have a seamless consolidation and raise the industry benchmark for its distributors' service expectations.

"MCR Safety's strategy is to build upon the individual strengths of Memphis Glove, Crews and River City to form a single, fully integrated PPE supplier to our distributors," said MCR Safety CEO Mitch Lewellen.

He added: "Distributors want more integration and supply chain efficiency. They want to become more operationally efficient. These are the same demands placed upon them by their customers. MCR Safety will help our distributors become more profitable by taking costs out of their supply chain."

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PTDA to sponsor 2005 power transmission conference
The Power Transmission Distributors Association (PTDA) has become a sponsoring organization of IFPE 2005 --The International Exposition for Power Transmission.

PTDA will host a pavilion at the IFPE show, March 15-19, 2005, in Las Vegas. PTDA members exhibiting in the pavilion will save 15 percent off the non-member exhibit space rate.

IFPE is an international exposition and technical conference devoted to power transmission and motion control technologies. It will bring together buyers and specifiers from key markets such as owners, managers and design engineers, with exhibitors of hydraulic, pneumatic, electrical and mechanical components, systems and controls.

IFPE will again join forces with CONEXPO-CON/AGG 2005, the world's largest international gathering place in 2005 for the construction and construction materials industries. Together, both shows expect more than 100,000 industry professionals from more than 120 countries to attend.

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NIBA elects board of directors officers, president
NIBA-The Belting Association recently announced the election of officers for its board of directors, according to NIBA executive vice president and CEO Randy Rakow.

Bruce Dieleman, director of business growth for Sparks Belting Co. in Grand Rapids, Mich., assumed the presidency of the association's board for 2004.

Other officers include:
• first vice president Ted Lushch of Jerry Bros. Industries;
• second vice president Tom Richardson of Conveyor Accessories Inc.; and,
• treasurer René Morf of VIS USA LLC.

Immediate past president Charlie Vickers, who is also senior vice president of McLeod Belting Co., will also serve on the executive committee. The officers will serve a one-year term.

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ISM: Manufacturers have high expectations for 2004
Economic growth in the U.S. will strengthen in 2004, according to the nation's purchasing and supply executives in the Institute for Supply Management's Semiannual Economic Forecast.

Expectations for 2004 are higher in both the manufacturing and non-manufacturing sectors, and both sectors are more optimistic about the coming year than they were one year ago. The overall prediction is for economic growth to continue at a relatively strong level in 2004.

Expectations for 2004 are high, as 76 percent of survey respondents expect revenues to be greater in 2004 than in 2003. The panel of purchasing and supply executives expects a 5.8 percent net increase in overall revenues for 2004, compared to an increase of 2.8 percent reported for 2003.

Manufacturing industries expecting the greatest improvement over 2003 include: electronic components and equipment; transportation and equipment; fabricated metals; primary metals; textiles; instruments and photographic equipment; furniture; rubber and plastic products; food; wood and wood products; glass, stone and aggregate; and printing and publishing.

"Manufacturing purchasing and supply executives are optimistic about their organizations' prospects for the first half, and predict additional growth during the second half of 2004," said Norbert J. Ore, chair of the ISM manufacturing business survey committee. "At present, the sector is in the midst of recovery as manufacturing is in its fifth consecutive month of growth as reported in the monthly manufacturing ISM Report On Business. Manufacturing seemingly has significant momentum at this point, with near record strength in new orders and production. The manufacturing sector has experienced many challenges as it has grown in 24 out of the 35 months since Y2K."

In the sector, respondents report operating at 80.1 percent of their normal capacity, up slightly from 79 percent reported in May 2003. Purchasing and supply executives predict that capital expenditures will increase 3.2 percent in 2004, compared to the 2.7 percent increase reported for 2003.

Survey respondents also forecast that they will continue to reduce their purchased-inventory-to-sales ratio in 2004. Manufacturers have an expectation that employment in the sector will grow by a modest 0.3 percent, while labor and benefits costs are expected to rise an average of 2.7 percent.

Manufacturing purchasers are predicting growth in exports and imports, with exports growing at a slightly lower rate compared with imports. They also expect the U.S. dollar to maintain its current positive position against currencies of major trading partners.

They predict the prices they pay will increase 1 percent during the first four months of 2004, and will increase an additional 0.3 percent for the balance of 2004, resulting in only a moderate change in prices during the upcoming year. Respondents' major concerns are inflation, energy costs, health care costs, currency changes, and terrorism/war.

A special question was asked of purchasing and supply executives to determine their progress in achieving efficiency from the application of technology to supply management. While a few companies rate themselves as being almost finished, 84 percent are less than three-fourths complete in achieving efficiency from the application of technology.

To read the report in full, click here.

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SKF to close North Carolina seal plant
SKF USA Inc. announced a plan for consolidating its Chicago Rawhide seal plants to improve the company’s long-term competitive position. The plan includes the closure of the Franklin facility in North Carolina and the outsourcing of the stamping operations from the plant in Guadalajara, Mexico.

Production from the Franklin plant will be transferred to other Chicago Rawhide facilities in North America. The plant in Franklin manufactures standard line seals for various industrial customer segments in North America.

In CR Mexico the component stamping operations in the manufacturing of seals will be outsourced to a local manufacturer.

The process for phasing-out is expected to take place over a period of at least 12 months and some 170 employees in the two plants will be affected.

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DISC rolls out new features for Enlighten.Net suite
Software developer Distributor Information Systems Corporation (DISC) is improving its Enlighten.Net suite with applications for version control and automated site subscriptions.

Enlighten.Net's version tracking and control capabilities automate the creation and maintenance of document audit trails. Users and administrators can search and restore an unlimited number of versions of any intranet document. The ability to delete documents (or their versions) permanently is reserved for intranet administrators, who can also endow selected users with the right to restore documents from previous versions. Administrators can also set document controls so that users must check documents out in order to edit them and check them in again to store them back to the intranet.

Employees who work with time-sensitive information, or on collaborative projects with people from outside their groups, may have trouble staying in the loop.

The Net.Search capability now allows users to narrow any intranet document search to specific sites, time periods, file types or versions (current or previous). And, users who prefer keyboard shortcuts to the mouse will also welcome the software's new ability to recognize most of the shortcuts used in typical office suites to perform formatting, editing and other functions. Shortcuts also display in application menus.

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Southeast to lead wholesale distribution industry in 2004
The new report NAW Economic Forecast 2004 by Pembroke Consulting and Economy.com for the National Association of Wholesaler-Distributors forecasts that wholesaler-distributors in the Southeast will lead the industry in jobs and revenue growth.

Among wholesaler-distributors across all 50 states and in the Southeast, Florida's wholesale distribution companies will likely be the fastest growing in terms of revenues. On average, revenues by wholesaler-distributors in Florida are forecast to rise 8 percent in 2004. Georgia's distributors will also see revenues climb 5.2 percent, followed by North Carolina at 4 percent and South Carolina at 3.6 percent, respectively.

Florida will also lead the Southeast in employment growth among wholesaler-distributors with predicted hiring growth of 3.5 percent. North Carolina will see wholesale distribution jobs climb 1.7 percent followed by South Carolina at 1.4 percent. Georgia will see jobs in wholesale distribution increase at about 1 percent. 

Employment and revenue growth among wholesaler-distributors in the Southeast will be the fastest growing in the nation. The regional average for revenue growth by wholesaler distributors was forecast at 6.2 percent and the regional forecast for employment growth among wholesaler-distributors was 2.1 percent.

According to Pembroke Consulting's regional analysis, there are approximately 61,000 locations involved with wholesale distribution in the Southeast. These companies employ more than 660,000 people in the region in jobs ranging from sales and office workers to truckers and warehouse workers.

The report forecasts the national average employment growth among all wholesale distributors at 1.4 percent and revenue growth by wholesale distribution companies at 5.6 percent. Across the U.S., the wholesale distribution industry consists of more than 300,000 companies that employ nearly one out of every 20 Americans

To purchase this report, click here.

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Airgas welcomes new members to second advisory council
Airgas Inc. added Jim Weiler of Weiler Welding Co. Inc. in Dayton, Ohio, to its Distributor Advisory Council (DAC), which met recently for it second annual meeting.

The fall DAC meeting also welcomed new members David L. Fischer of General Welding Supply Co. in Denver and Perry Johnson of Hohenschild Welders Supply in Kansas, Mo.

The DAC formally meets with Airgas senior executives to discuss the Airgas Value-Added Distributor Program and issues that will enhance the services provided to distributors and resellers through Airgas’ 12 regional companies.

“Our DAC continues to grow and expand as we formalize our approach to this important channel,” said Pat Visintainer, senior vice president of sales, who coordinates the DAC meetings.

Other continuing DAC members for the coming year include: 
• Bob Ames and Mary Shanaman of Commonwealth Supply in York, Pa.;
• Mark Davidson of Best Welders Supply Inc. in Tulsa, Okla.;
• Jim Earlbeck of Earlbeck Gases & Technologies in Baltimore;
• Paul Greiling Jr. of Welding & Therapy Services in Louisville, Ky.; and,
• John Small of Pooch Welding Supply in Benton Harbor, Mich.

“Our meeting this fall validated the strong working relationship we are forging with these independent distributors. Their input and guidance is extremely important so that we can strengthen product offerings and service levels to all our independent distributors with the most reliable supply network in the industry, at competitive prices,” said Visintainer.

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Simonds International awarded ISO9001:2000 registration
Joining the ranks of the world's most progressive companies, Simond's International was recently awarded registration in the more stringent ISO9001:2000 Quality Management System.

Having previously operated under the ISO9002 Quality System, Simonds obtained the new certification, which covers its manufacturing processes for carbon, bimetal and carbide bandsaw blades.

The ISO9001:2000 designation also recognizes that Simonds' overall business practices also meet a higher standard in continually improving its operation when dealing with distributors and customers.

"The ISO9001:2000 registration demonstrates our continued emphasis on meeting the needs of our customers today and then working to meet their expectations for ongoing improvement," said Simonds International president Ray Martino.

Simonds International maintains a network of factories, warehouses and distribution centers throughout the U.S., Canada, Germany and the United Kingdom to facilitate product distribution and order processing. Its products are sold through a comprehensive distributor base.

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Grainger hosts holiday celebration for military families
More than 80 Marines and family members from Marine Air Control Group-48 who participated in Operation Iraqi Freedom were hosted by Grainger for a morning of holiday activities as recognition for doing their patriotic duty.

“Operation Candy Cane” took place Dec. 6 at Grainger’s corporate headquarters in Lake Forest, Ill. The event featured breakfast with Santa, a magic show and madrigal singers. Children had their faces painted and received special presents donated by Grainger employees.

The Marine Air Control Group-48 is based at Naval Station, Great Lakes, and consists of both active and reserve Marines. These Marines were deployed to the Middle East in February and provided command and control functions for operations from Kuwait to Baghdad.

“We’re thrilled that Grainger is opening their doors to the Marines and their families during this very special time of the year,” said Sgt. Maj. Thomas Smith. “It’s nice to know that our corporate neighbors support our troops throughout the year.”

In 2001 and 2002, the company and its employees hosted more than 100 sailors from the Great Lakes Naval Base for Thanksgiving dinner.

“Grainger is honored to host the Marine families for ‘Operation Candy Cane,’” said Grainger president and chief operating officer Wes Clark. “This event is a way for Grainger employees to say thank you to the men and women who give so much for our freedom.”

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Parker Hannifin to acquire Denison International
Parker Hannifin Corp. will acquire Denison International plc in a cash tender offer. The agreement calls for Denison shareholders to receive $24 in cash for each Denison ordinary share.

As part of the transaction, expected to close in the first quarter of 2004, Parker will acquire Denison's cash at closing. As of Sept. 30, Denison's balance sheet reflected $56.2 million in cash with $800,000 in notes payable.

"Denison is among the best performers in the industry, with a well established footprint in international markets for industrial hydraulics, including solid, profitable performance in Europe and a significant presence in Asia, all of which will be additive to our profitability and growth acceleration plans, especially in China," said Parker president and CEO Don Washkewicz.

"We are very excited about the prospects of this combination," said Parker hydraulics group president Lee Banks. "Denison has additional systems capabilities we can bolt onto our business, and brings a number of complementary technologies, including vane pumps, hydrostatics and a digitally controlled fan-drive system."

With annual revenues of approximately $180 million, 61 percent of Denison's business is in Europe. Denison employs approximately 1,150 people in Europe, Asia and North America.

"Strategically and culturally, our organizations are a good fit, with common principles of conservative management and long-term value creation, reflected in both our balance sheets and our ability to attract and retain talented, hard-working people," Banks said.

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Machine tool consumption declines in October
October U.S. machine tool consumption totaled $157.6 million, down 26.6 percent from September and down 8.7 percent from $172.5 million in October 2002, according to the Association for Manufacturing Technology (AMT) and the American Machine Tool Distributors' Association (AMTDA).

With a year-to-date total of $1.6 billion, 2003 is down 13.4 percent compared to the same period in 2002.

"Manufacturing output is improving and the impact on machine tool orders is positive but uneven," said AMT president John B. Byrd III. "In the Western region, monthly order rates outperformed 2002 levels for the past four months while the Northeast and Southern regions have had irregular gains, but the signs are there that the five-year slide is coming to an end."

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

Standing at $20.2 million, October machine tool consumption in the Northeast was down 22.2 percent from September's $26 million and down 27.1 percent compared to last October. The year-to-date total of $209 million was down 22.6 percent from the comparable figure for 2002.

Southern region machine tool consumption in October totaled $23.5 million, 23.2 percent below September's $30.6 million and 5.2 percent less than the total for October 2002. At $325 million, the year-to-date total was 8.2 percent ahead of the 2002 period.

October machine tool consumption in the Midwest stood at $64.7 million, off 39.7 percent from September's $107.4 million and 5.6 percent less than the total for last October. Year-to-date 2003 consumption reached $629 million, off 11 percent compared to 2002 at the same time.

Central region machine tool consumption was $29.6 million in October, 11 percent less than $33.3 million tallied in September, and off 25.5 percent from October a year ago. The year-to-date total of $263 million was 25 percent less than the comparable figure a year ago.

At $19.5 million, Western machine tool consumption in October was up 12.5 percent compared to September's $17.4 million, and up 66.5 percent compared to October a year ago. The year-to-date total of $157.3 million was off 21.5 percent compared to 2002 at the same time.

The United States Machine Tool Consumption 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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NAW, Pembroke Consulting to release new study
The National Association of Wholesaler-Distributors' (NAW) Distribution Research and Education Foundation (DREF) and Pembroke Consulting said a new edition of the wholesale distribution industry report Facing the Forces of Change will be released in March 2004.

The new report, Facing the Forces of Change -- The Road to Opportunity, provides strategic insights into key trends impacting the wholesale distribution supply chain through 2008. The new report covers key industry demographics, four major trends impacting wholesaler-distributors, competitive threats to distributors, supply chain technology, sales force issues, manufacturer relations, and much more. To order, visit www.nawpubs.org or call .

"The Facing the Forces of Change series occupies a unique position in the distribution industry and in the analysis of supply chain and marketing channels," said DREF executive director Ron Schreibman. "The new edition of the study builds on a tradition of excellence by bringing together an unprecedented volume of information to help wholesale distribution executives prepare for the future."

The report was written and researched by Pembroke Consulting president and NAW/DREF Fellow Adam J. Fein and his team of wholesale distribution experts. Fein will preview the study's findings Jan. 28, 2004, in Washington, D.C., during NAW's Executive Summit. For more information or to register, visit www.nawmeetings.org/am2004/. 

"Our report documents how the traditional ways distributors make money and grow will be rewritten by the combined influence of customer buying behavior, emerging competitors and the proliferation of technology in the supply chain," said Fein. "However, wholesaler-distributors have many new opportunities to put themselves on the road to renewed relevance and increased profits in the years ahead."

Facing the Forces of Change -- The Road to Opportunity draws upon a broad set of data including in-depth interviews with more than 100 senior distribution executives, manufacturers, customers, analysts, professors and association executives. The report also includes survey responses from 1,000 wholesale distribution executives and 400 senior manufacturing executives.

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Parker Hannifin posts strong monthly order trends
Parker Hannifin Corp. reported November orders for its North American industrial businesses increased 11 percent over the same month last year, while rest-of-world industrial orders increased 12 percent.

In the North American industrial units, the company noted continued positive signs in oil and gas, heavy-duty truck, construction and semiconductor markets, with power generation and machine tool also positive.

European orders continue positive year-over-year trends, while Latin America and Asia Pacific regions remain strong.

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3M to cut 125 workers
3M announced it will eliminate 125 jobs as demand falls for some of its industrial commodities. Affected workers will have 60 days from Dec. 31 to locate other work at 3M or face layoff.

"Global demand for many of our products has been encouraging, but U.S. demand for traditional abrasives and industrial tapes remains soft," said 3M Industrial Business executive vice president Harold Wiens.

Most of the cuts will take place at the company's Maplewood, Minn., facilities. During the company's 2001-2002 restructuring, 3M cut 6,500 workers from its payrolls. Since that time, layoffs have come at a slower pace, but the company is still restructuring eight business units into six.

"Cutting jobs is never an easy decision, but this action is necessary to reduce costs, increase our productivity and position our business for solid growth going forward," Wiens told the Star Tribune in Minneapolis.

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PMA praises federal rollback of steel tariffs
Precision Metalforming Association (PMA) president William E. Gaskin called President Bush's decision to end steel tariffs the correct decision for 13 million workers in steel-consuming industries, for the manufacturing sector that is just beginning to recover and for the overall U.S. economy.

“We applaud President Bush’s decision to terminate the steel tariffs," said Gaskin. "We’ve got a win-win situation. This is the best decision for U.S. manufacturers and the best decision for the president politically, as there are far more people whose jobs would be at risk if steel tariffs were continued until March 2005 than if they are ended now.”

Keeping the tariffs in place would have resulted in deteriorating relationships with U.S. trading partners. Based on the World Trade Organization (WTO) ruling that the 201 tariffs were illegal, the European Union, Japan and other trading partners were prepared to retaliate with more than $2.2 billion in tariffs on U.S. exports. If the president had not eliminated the tariffs, steel-consuming industries as well as numerous other industries would have been further penalized by retaliatory tariffs.

The announcement spread quickly through manufacturing plants around the country. Nels Leutwiler, CEO of Parkview Metal Products in Chicago and PMA chairman, expressed optimism that the president’s decision to end steel tariffs would help metalforming companies and their customers by stabilizing pricing and availability of steel during the months ahead. 

“As we enter 2004, the U.S. market for steel is tightening with rising prices, and there is limited availability of certain flat-rolled products,” Leutwiler said. “The termination of the tariffs will help prevent a disastrous repetition of the supply crunch we faced in 2002 when the tariffs began. Steel tariffs seriously disrupted our industry in 2002 and have continued to be a drag on our business in 2003."

While it is difficult to predict steel prices, it is clear that the termination of the tariffs will mean lower prices than would have prevailed if the tariffs remained in effect. In addition, the removal of the tariffs should boost employment in the manufacturing sector and help stem the transfer of jobs overseas.

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Factory orders increase 2.2 percent in October
New orders for manufactured goods in October increased $7.3 billion or 2.2 percent to $341.2 billion, according to the Department of Commerce.

New orders for manufactured durable goods in October, up five of the last six months, increased $6.2 billion or 3.4 percent to $184.9 billion, revised from the previously published 3.3 percent increase.

New orders for machinery increased 1.8 percent in October to $21.8 billion. Within the machinery category, industrial machinery orders declined 4.4 percent in October following a 7.8 percent increase the month before.

New orders for computers and electronic products increased 3.9 percent in October to $34.2 billion. And, orders for transportation equipment, which includes motor vehicle manufacturers, increased 5.5 percent to $54.2 billion.

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Unemployment slips to 5.9 percent in November
Employment continued to trend up in November and the unemployment rate, at 5.9 percent, declined slightly from 6 percent in October, according to the Department of Labor.

Total non-farm payroll employment edged up by 57,000 in November to 130.2 million, seasonally adjusted. Some 8.7 million Americans were still without work.

Monthly factory job losses have averaged 17,000 since August, compared with an average decline of 53,000 for the 12 months ending in August. Employment in durable goods manufacturing was unchanged in November, while small job losses continued in nondurable goods.

The manufacturing workweek rose by 0.2 hour to 40.8 hours, and manufacturing overtime edged up by 0.1 hour to 4.4 hours. Since July, the factory workweek has increased by 0.7 hour and factory overtime has risen by 0.3 hour.

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I.D.A./ISMA presidents rally the troops at Business Expo
As the industrial supply channel appears to be on the rebound after a three-year decline, the presidents of the Industrial Supply Manufacturers Association and the Industrial Distribution Association told an ISMA/I.D.A. audience how to take advantage of the emerging recovery. 

ISMA president Ray Reynertson and I.D.A. president Jim Beckstein spoke at the I.D.A. Annual Distributor and Manufacturer Business Expo in Chicago Nov. 22-24. 

Both presidents focused on the difficulty faced in the last few years in the U.S. industrial supply channel. 

Click here to read Ray Reynertson's speech. Click here to read Jim Beckstein's speech.

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