Archive for May, 2008
May 30th, 2008
Jim Sinegal is Costco’s CEO. According to ABC’s website he is quoted as saying, “We’re going to be a company that’s on a first-name basis with everyone.” Knowing the names of employees has lead Costco to have low employee turnover. Its turnover is far lower than Wal-Mart.
As high schools look to create more meaningful links with businesses, imagine a future workforce where local industry officials know our RPS 205 students by name. One way to start is by bolstering efforts for student work based learning opportunities. As students build relationships with community members they will gain confidence and become loyal members of our workforce.
Mr. Sinegal puts it best: “We’re in the business of building an organization, an institution that we hope will be here 50 years from now. And paying good wages and keeping your people working with you is very good business.”
May 29th, 2008
Since my earlier post on this topic, Congressman Manzullo has joined the battle. Long an advocate for small business, he has written to The Honorable Carlos M. Guiterrez and asked that the government see what can be done to mitigate the problems of rising steel prices. Some of us can pass them on, others are unable, so it presents a problem for some local manufacturers.
Specifically, and I quote from Congressman’s May 22, 2008 letter:
1. The U.S. government should challenge the foreign governments, particularly Brazil and Australia, where mining companies are headquartered to prevent holding our steel companies hostage to a global collusion of the raw meterials used in the making of steel.
2. The U.S. government should develop a comprehensive strategy, which includes the threat of using our trade remedy laws, to remove these foreign export restrictions on scrap steel, coking coal and other key raw materials.
3. We need to lower the pressure to raise steel prices in the U.S. by removing any outdated anti-dumping and countervailing duty orders placed on foreign imports, particularly those on steel products that are in short supply in the U.S.
4. We need to aggressively confront unfair foreign government subsidies.
(end of quote)
While new steel plants are being built in the U.S., I would rather see U.S. steel companies building them instead of German, Russian and Indian companies. (See article from Washington Post, link below).
http://www.washingtonpost.com/wp-dyn/content/article/2008/05/27/AR2008052703099.html?sid=ST2008052800220
Where do we go from here? What ideas do you have? Let us know and we’ll get them into the right hands.
May 26th, 2008
A collaborative proposal between Northern Illinois University (NIU), Rock Valley College (RVC), and the Abilities Center to establish a training program encompassing Laser Cladding operations was awarded a three year grant supported by the National Science Foundation (NSF).
“Development and Field Test of an Internet-based Multimedia Simulation and Remote Laboratory System of Laser Cladding Technology for Technicians” is the title of the project that will receive an award of $850,000 over the three year grant period. This significant award will allow the project directors to develop and field test a multimedia- and database-supported simulation and remote laboratory system on the internet for training laser cladding process technicians, which will eventually be offered nationally at two-year community college engineering technology programs that choose to offer the training as part of their applied technical degree curriculums. The cost of the training will be determined by the tuition and lab fees established by each community college. The project will contribute to the training and commercialization effort in the robotic direct-diode laser cladding technology as an emerging high-quality and low-cost process of refurbishing expensive distortion-sensitive parts, enabling training of industrial laser operation, safety, and part processing in a robotically guided laser cell in a real-world work environment, that otherwise would not be possible through conventional laboratory.
The project combines the curriculum leadership of RVC, the existing clientele base of the Abilities Center, a community center for advanced technology education, and the educational research and the hardware and software expertise of NIU, supported by a number of industry partners leading the field of laser cladding equipment and applications. The program will be co-directed by representatives from each of the collaborating institutions. Three representatives from NIU who are participating in the project are: Dr. Promod Vohra, Dean of the College of Engineering and Engineering Technology (CEET); Dr. Richard Johnson, Director, Research and Development Outreach for CEET; and Dr. Xueshu Song, Professor in the CEET Department of Technology. Representing Rock Valley College is Charles Billman, a professor in the Aviation Maintenance Technology Program, and representing the Abilities Center is Phil Pilcher, Director of MULTITREX, a division of Abilities Center that is responsible for developing innovative educational materials.
The internet-based training course under development will consist of five modules: The Fundamentals of Laser Cladding; The Equipment of Laser Cladding; The Process Control of Laser Cladding; the Safety of Laser Cladding; and The Remote Laboratory of Laser Cladding. Each module can stand alone as an individual curriculum entity, including on-line help and quizzes and can be used in either sequential or random order. Throughout the modules, realistic video and graphic images of laser cladding equipment and processes will be juxtaposed with schematic illustrations of the system being studied, epitomizing the ideal of using virtual reality to enhance the reality of the training program.
One of the most important concepts emanating from this training program is the concept of a “hybrid” laboratory which combines a traditional laboratory at the remote end, an interactive interface at the user end, and the virtual multimedia simulations—all via the internet for maximum cost and educational effectiveness. The educational effectiveness and efficiency has been assessed by pilot testing with a small group of students and will be further confirmed in years two and three of the project with large-scale formal field tests at Rock Valley College. For information about participating in the RVC program, please contact Charles Billman at 815-921-3014 or by Email at C.Billman@RockValleyCollege.edu.
Source: NIU ROCK Newsletter
May 23rd, 2008
The last two evenings have been the most fun for Thom and I. we spent them celebrating with two of our local Robotics Teams. When sponsors arrive they pair you up with two students to be with you throughout the evening. The students can hardly eat because they are telling you all about their experience and excitement for their team. We have been supporting the local teams since the first year at Christian Life High School. Toni Vander Hayden has since helped encourage the mentoring of our two remaining local teams and they have helped start one in Oregon. Freeport has the oldest team but I haven’t gotten to meet them. The excitement and pride we felt during each of the two hour programs was exhilarating!
Women of Today’s Manufacturing has sponsored the Winnovation team for four years. This team has grown from the first year to be a Global leader in Robotics. They have accumulated 19 awards. They are the pit to go to for help and any kind of tool etc. needed, during competition. They ended up in the top 96 teams out of 1500 competing this year. They are going to have an August 2nd Camp for regional teams to come to learn how to do Robotics Teaming better. They have grown to 30+ team members with mentors and several generations of family of support behind them. Scott and Karen Hill are the stars of the show as they lead this group to success with the fun and love that kids this age deserve and need!
The Rockford team is a small team of nine great kids! Hamilton Sundstrand and Woodward provide most of the eight mentors. With the smaller group each of the team members was able to share what being on the Robotics team did for them or meant to them. Exciting! Public speaking skills, designing, fixing, hands on machining or programming, PR and promotion, fundraising. I hope they are sure to put this experience on their resume as they will be great future employees for some lucky company.
The best was when each team spoke about their graduating Seniors. On both teams each of the Seniors was going onto college in a Manufacturing related field. They were not doing that because someone encouraged them to blindly do this. They picked the field based on the actual experience they have and knowledge of what the career they have chosen is really going to be like. SUCCESS!
Both teams are recruiting team members, mentors and sponsors. You can contact them….what you will get out of this is way more than you put into it! I still feel the glow of the last two evenings!
Winnebago—-Karen Hill at hillarc@aol.com
Rockford—-Adam Czerwonka aczerw@woodward.com
Web Sites— www.rockfordrobtics.com and www.team1625.com (well worth a look!)
May 21st, 2008
Genchi Genbutsu is a Toyota Production System term meaning “go and see for yourself.” A few years ago Rockford Public School officials did just that in our manufacturing community: they went and saw the incredible things that go on in our local businesses. Many still talk about that day as “eye-opening.”
Please remember that the business community can “go and see” what goes on in our schools by visiting classrooms and offering their expertise. I submit that this must go beyond the obligatory classroom speaker visit.
At Auburn High School a few years ago Woodward engineers assisted with a project in a technical education classroom. Student engagement was high and Woodward completed the loop by having students out for a plant tour at the end of the project. Students were able to “go and see” how their classroom linked to the world of work.
Linking our school classrooms to what goes on in our local businesses is vital to ensure lessons stay relevant. You are all invited to come and see.
May 20th, 2008
As we discuss the viability of Manufacaturing in our Region and our USA—education and workforce float up to the forefront of the discussion. Companies that have managed to find a, niche or a USA or Global, market where they are thriving despite what our media—oh no this is a news media sponsored Blogg—-says need dependable workers. Workers who show up on time ready to work everyday; Workers who can read; Workers who can problem solve and interact about their solutions with fellow employees and customers. Workers who can pass a drug and alcohol test. Workers with skills; Where do successful companies find such people?
There are several training programs and facilities which I hope to discuss in a future Blogg but today let’s talk about TechWorks. TechWorks is on 15th Ave. It is under the umbrella of the Goodwill Abilities Center. It is a great transitional training program. It is a great increase your skills program. Examples: Blue Print reading, CAD, Manual machining processes, CNC machining processes or think up the manufacturing related training your needs and they can probably come up with the class, if you have the students. They do this type of custom training quickly (not on a semester basis) and in a cost effective manner.
Winnebago County has teamed up with TechWorks to offer loans to help manufacturing wannabes pay for the 10 week training program called: CNC Operator Training. Trainees pay a portion to start taking the class and then pay the rest when they get to work. The Goodwill Abilities Center even has a dynamo, Courtney Geiger, doing prescreening and job placement for the graduates. Interested employers can call her for employee candidate info. But call soon as they are being snatched up quickly…Two in the last week or so.
Despite the success of the Goodwill Abilities Center TechWorks Training facility they are working to make this piece of the workforce development solution more robust and user friendly. Sam Schmitz, President of the Goodwill Abilities Center with the help of Bob Trojan, Dave Morgan, Dick Gieson and I, board Members, are looking for input on how to strengthen this workforce development effort. Contacting us with training needs you as an employer or employee have would help us to solidify how we are going to grow this successful program. Is there anything we can do to better inform the community that we have this training available to Employers and possible new manufacturing students? Are you interested in supporting this effort? How?
Since the average age of manufacturing employees in our region are 55 years old manufacturing workforce development is a regional issue. Manufacturing jobs generally pay well and have benefits. This can help families live more stable lives. This is why the Goodwill/Abilities Center is interested in this kind of mission. Actually the mission statement on their web site says: Strengthening individuals, families and the community through education, employment and enterprise development. Two websites to check out are the TechWorks web site at http://www.techworksprogram.org/ and the Goodwill Abilities Center web site at http://www.abilitiescenter.org/. Contact information is right there.
We would appreciate it if you would come along side us as we come along side employers and future employees, to strengthen our region! We cannot be as successful without you!
P.S. If you are trying to encourage someone to participate in the training take them to see the movie Ironman and get ‘em all excited about making things—to better our world! That is what it is all about!
May 20th, 2008
In the recent edition of The Fabricator magazine, a trade journal published by the Fabricator Manufacturers Association, I took note of the “Industry News” section. Here are some excerpts:
Ahjin USA, a metal stamping company and Kia supplier, recently broke ground on a 200 worker facility in Chambers County, Alabama…with plans to add more workers over the next 5 years.
Armor Holdings in Butler County is investing $75.6 million in capital and creating 400 new jobs.
BMW announced plans to expand it’s South Carolina plant by 1.2 million square feet and adding 500 jobs.
Gulf Island Fabrication, Houma, LA created a marine services division adding 300 jobs and investing $200 million.
Man Industries Ltd., India plans to open its Western Hemisphere headquarters and a manufacturing plant in Little Rock, Arkansas adding 250 employees by next year.
Welspun Gujarat Stahl Rohren Ltd., an India-based manufacturer, announced plans to build a $100 million facility at the Little Rock Port Authority.
Nordic Windpower Ltd., a manufacturer of two-blade, utility-scale wind turbines, selected Pocatello, Idaho as the site for its new North American turbine manufacturing facility adding more than 160 technical, engineering and administrative jobs.
Superior Machine Co. of Florence, S.C. plans to expand its Marion, S.C. plant adding 34 jobs.
Toyota Industrial Equipment Mfg. Inc. Columbus, Indiana expanding for the 11th time since it opened in 1990.
Wabash National Corp., Lafayette, Indiana, announced plans to build a 300,000 sq. ft. manufacturing facility in Franklin, Kentucky.
So maybe they aren’t in the Rockford area, but it’s encouraging that Manufacturing in the U.S. looks like it’s growing, not dying. But these companies could be customers for some of our Rockford base manufacturers. I know some can be mine.
May 16th, 2008
I saw this in yesterday’s Wall Street Jouranal. While it doesn’t ease our pain, it at least tells the story.
Question…what would you do? What are you doing to offset these increases? Let’s hear from you.
Relentless increases in the price of steel are halting or slowing major construction projects world-wide and investments in shipbuilding and oil-and-gas exploration, setting the stage for a potential backlash against steelmakers.
In Turkey, a construction association said this week it will begin a 15-day strike in eight cities Thursday to press steelmakers to cut their prices, which have more than doubled locally since late last year.
In New Delhi, India, an ambitious bridge project has been put on hold because of steel-related cost overruns, and contractors are postponing or reining in construction of much-needed housing for the poor, prompting the Indian government to freeze steel prices for the next three months.
Venezuela, aiming to control prices, renationalized its largest steelmaker and is limiting exports. Oil executives in the U.S., meanwhile, say costly steel is threatening their energy exploration efforts.
Globally, steel prices are up 40% to 50% since December, and industry executives say they haven’t hit their peak. On Wednesday, ArcelorMittal, the world’s largest steelmaker by volume, boosted prices by €120 ($186), or 20%, a metric ton in Europe, citing increases in its own costs — from iron ore to energy and transportation.
“We have not yet seen that prices have peaked, what we have seen is the costs increasing every month,” said ArcelorMittal Chief Executive Lakshmi Mittal on a conference call with reporters.
Iron-ore prices have risen 71% this year. Two other crucial steelmaking ingredients, coking coal and scrap steel, have doubled in price. The run-ups are part of a broader surge in raw-materials prices amid tight supplies and soaring global demand, fueled in part by the rapid industrialization of China, India and other developing nations.
ArcelorMittal said Wednesday that its earnings grew 5.4% to $2.37 billion in the first quarter from $2.25 billion a year earlier. Both sales and shipments grew sharply as the Luxembourg-based company sold more steel in emerging markets.
The world’s voracious appetite for steel shows little sign of easing. In Turkey, a new shipyard, once completed, will need 100,000 tons of steel a year. And demand in the U.S. is rising, despite a sluggish economy.
While still in a position of pricing power, steelmakers are concerned that over time, their high prices will affect sales. “There will be impact on demand, and that is not a good development for the steel industry,” said Aditya Mittal, chief financial officer of ArcelorMittal, on a separate conference call.
As a result, steelmakers are taking steps to cut their costs. To shield themselves from higher raw-material prices, more of them are acquiring their own iron-ore and coal mines or deposits, as well as producers of scrap steel. Nippon Steel Corp. and other Japanese steelmakers announced this month that they would accelerate cost-cutting efforts, which could include layoffs and developing cheaper steel substitutes.
The industry is also consolidating, which should allow producers to become more efficient and gain economies of scale that could ultimately result in more pricing stability and fewer, larger players. In recent months, India’s Tata Steel Ltd. and Essar Steel Holdings Ltd. have made major acquisitions, as have Russia’s Evraz Group SA and Sweden’s SSAB Svenskt Stl AB. Even so, the world’s top-five steelmakers still account for just 18% of the world’s steel supplies.
Some steelmakers also are experimenting with ways to make their products less expensive, in an effort to keep customers from switching to less-expensive substitutes like aluminum or high-strength plastics. Finnish stainless-steel maker Outokumpu Oyj, which makes steel for appliances, has come up with a way to reduce the nickel content of its stainless steel to make it cheaper.
But until such changes take hold, steel prices will likley continue to increase.
Builders recently warned officials in Turkey, which rests in an earthquake zone, that rising steel prices have prompted some contractors to use cheaper, inferior-grade steel, threatening the quality of their buildings.
Some nations, meanwhile, are hoarding steel by erecting export barriers. Last week, India imposed a 15% duty on exported steel. Countries that don’t make enough of the metal are slashing import taxes in an effort to attract more. Last month, Iran announced it was lowering its import tax on rebar steel, used in new buildings and roads, to 9% from 20%.
The impact of high steel prices is rippling through industries from shipbuilding to energy exploration. Shipbuilders, who buy vast quantities of high-end plate steel are getting hammered, and analysts say steel-supply problems are slowing the pace of construction, especially at smaller shipyards like South Korea’s Daewoo Shipbuilding & Marine Engineering Co.
In April, an executive of Royal Dutch Shell PLC told a House committee that steel, which is needed to make drilling equipment and pipelines, and other raw-material costs were hampering efforts to find new energy sources. These costs “are a major challenge for oil and gas companies and are contributing to the delays and postponements of many projects,” according to Cambridge Energy Research Associates, a leading energy-research company.
Cellphone users could eventually feel the pinch. Eric Steinmann, development manager at wireless carrier NTCH Inc., which operates under the Clear Talk brand, says steel costs for each of the about 100 cellphone tower poles his company builds annually doubled to about $30,000 last year.
Robert Griggs, owner of Missouri-based Trinity Products Inc., a maker of steel pipes, tubes and rebar for bridges, said he tells his customers he can only guarantee prices for two weeks. Last year, it took six months for steel prices to rise $100 a ton, he said. Now, prices are moving that much in a month.
Shifting to lower cost materials isn’t an easy option for steel buyers, either. It takes years to retool auto and appliance stamping and dye machines, currently engineered for steel products. Also the cost of alternatives, such as aluminum and certain plastics, is increasing.
May 15th, 2008
The movie, Ironman, is big at the box office and big with our younger population. I went to see it for fun, but was pretty quickly caught up in the innovation, manuacturing and futuristic dreaming that was background for this Box Office hit! I came out hoping that this could be a great connection between exciting young girls and guys to go into Manufacturing related fields as a career. Last Tuesday at the monthly MARRV Breakfast at the Stockholm Inn i asked the 30+ people there if they had seen the movie….one one had (generation gap!). I told them it was a great example of what many of us do each day—create, make, innovate, problem solve, use tools, make the world the place it is! During the WOTM Manufacturing Camp, at TechWorks, they are told the first day, that everything from your baby rattle to the handles on your casket are manufactured. It is pretty exciting to be a part of that world! I suggest you get out to the Movie—Ironman and take 16 to 25 year olds with you. Be sure to talk to them about the “manufacturing” they just saw. I am sure you will see something that you do or use everyday that you can tell them about. They are sure to be surprised! Even the May 19 ,2008 Time Magazine article, “Man Becomes Machine” tells us about the excitement from “tinkering” and how “the new machine men triumph”. My 20 something son-in-law reminds me that they show cased innovation, engineering, and manufacturing—”sometimes forgetting the laws of physics”…..but when you stay and watch the credits notice the names of Mold Shops, Sciencelabs, welders, futurists for the Department of Defense….and of course the hint of more to come. This is a vehicle for conversation with our young people! Ride it!
May 14th, 2008
After reading last Sunday’s Editorial titled “Rockford area needs to capitalize on China’s growth”, it made me think about my experiences in developing export and international business. While China is a large and growing industrial economy and our third largest export market, lessons that I learned in developing other international markets can be useful here as well.
On one of my fact finding visits to a number of Chinese manufacturing companies, I quickly learned, from them, that we (U.S.) have competition from Europe and other Asian countries to supply them with products and know how. They do have choices and if you want to service the China market, you must dedicate yourselves to this mission. This takes focus, commitment and contacts.
Preliminary market and product analysis should be made to determine if your product is unique, meets the Chinese technical standards (as in metric or other Chinese specification standards), is price competitive and some idea of sales and engineering support you’ll need. One of the key ingredients of your research is the technical standards that you’ll need to comply with, especially if you are a component supplier. These standards can relate to fit, form, function and even chemistry. As an example, the chemistry of steel in China may not be exactly the U.S. steel specifications. Don’t overlook this aspect of your research.
I have found it beneficial to learn as much as I could about this research instead of simply delegating it to someone else. Getting engaged in the process is important to better understanding. Often times, you are in front of a prospective partner who very often is more versed in his industry’s markets and products. I find they know more about our political and economic happenings than we do about theirs. Be Prepared!
One of the easiest ways to break into a new market like China is to “follow your customer”. One local manufacturer actually had his customer demand that he follow him into India and establish an operation with his customer. Your customer e will have done most of the market research and testing of his products salability thus reducing your risks. Alternatively, search for domestic customers who export into China and you’ll benefit from this supply chain.
If you don’t follow a customer, then looking for a partner in a similar or related business is another method that is effective. This way, you can share in the costs, double up on information gathering and in the end, both come out smarter.
Attending industry or customer specific trade shows has proven to be valuable in the research process. Nothing beats walking the exhibit halls, chatting with customers and competitors and asking questions to further your knowledge of the industry that you will serve. I’ve made numerous visits to exhibitions in Hanover, Germany, Birmingham (UK), Paris, Milan, and China and found these exhibitions to be a wealth of information. Some of the larger exhibitions in the U.S. such as the IMTS this September in Chicago can be beneficial as many of international companies have started to show their products in our country. Exhibitor, industry and market information is also available to take away and study on you air flight back home.
No matter what technique is used, understanding cultural differences are also valuable. Learning some of the language is a good door opener to your international partner. Understanding some of their history can also be valuable. Probably the most important I found is to understand their culture of work and pleasure. That may mean slowing down a little, taking a little longer to make decisions, get to know them as people and taking longer to eat a meal. Cultural understanding goes a long way in building the successful relationships that you need.
Don’t forget to utilize the many local sources such as the State of Illinois Office of Trade and Investment, the U.S. Department of Commerce Export Assistance Center located in Rockford, RAEDC and the Chamber of Commerce will also be of assistance. Seminars such as the recent “Go Global or Get Left Behind” and trade missions are also available to all.
Sounds easy? Not hardly. But if manufacturers think only locally or regionally, we will be left behind. As I mentioned in a recent blog, exports have grown dramatically over the past several years. Take advantage of these growing markets.
If you have some other thoughts, let me know!
Bob Trojan
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