Month: April 2010
Here’s the latest bullet points from AMT, The Association for Manufacturing Technology:
How about some hollandaise for these green shoots?
You can see the full national and regional report at AMTonline.
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Guest Post by Peter Morici, Professor and former Chief Economist, US Trade Commission.
The Washington Post reported on Friday morning that Treasury Secretary Timothy Geithner and Chinese Vice Premier Wang Qishan were close to a deal that would permit the Chinese yuan to appreciate by 3 percent this year.
This is wholly inadequate and would do little to resolve the U.S.-China trade imbalance, which was $227 billion in 2009 and 60 percent of the total U.S. trade deficit. The balance was largely oil.
China’s yuan is likely overvalued by 40 percent, and Beijing accomplishes this by printing yuan and selling those for dollars to augment private transactions. In 2009, those purchases were $450 billion or about 10 percent of its GDP and 28 percent of its exports of goods and services.
The U.S. trade deficit with China and on oil causes a shortage of demand for U.S. made goods and services and stifles investment in U.S. export industries, which are the most productive and R&D-intensive industries.
In 2010, the trade deficit with China is reducing U.S. GDP by more than $400 billion or nearly three percent. Unemployment would be falling rapidly and the U.S. economy recovering more rapidly but for the trade deficit with China and Beijing’s currency policies.
Longer term, China’s currency policies reduce U.S. growth by one percentage point a year. The U.S. economy would likely be $1 trillion larger today, but for the trade deficits with China over the last 10 years.
A three percent revaluation of its currency will do little to change those numbers. In fact, because of Chinese modernization, the intrinsic value of China’s currency rises each year. Hence, a three percent revaluation over the next year would not even amount to the change in yuan undervaluation.
As the U.S. trade balance with China grew worse, Beijing could say “see exchange rates don’t matter.”
Beijing is playing the Obama Administration for fools.
Peter Morici is a professor at the Smith School of Business, University of Maryland, and former Chief Economist at the U.S. International Trade Commission.
Sucker.
Prices of raw materials used to make precision machined products are up substantially, ranging from 44% to 114% from March 2009- March 2010 for 6 of the 7 materials we track.
Low inventories, increasing demand, idled production facilities, are among the factors involved here in North America.
As are the historic iron ore agreement and continued high demand in China.
Fuel price increases also impact freight, which is an important factor in our business.
We will not be shocked to see monies paid for steel in May to be $80 per ton higher than they were in April based on already announced price increases and the current price on #1 busheling which determines surcharges.
Read more and download the .pdf report here.
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Don’t You Agree?
It’s not about ability to promise.
Heck, that’s pretty easy.
It’s not about ability to plan.
I’ve seen (and made) some pretty nice plans in my day.
But plans that aren’t executed are- well, not much more than recorded dreams.
I think that it’s all about execution. That is, meeting and exceeding our customer’s expectations every day.
Every day! Every Customer! Every transaction! Every touch!
What is the secret of execution?
There are a couple. But the most important is your company’s commitment to continuous improvement.
Continuous improvement is what helps you keep your service and processes leading and sustainable.
The minute you stop improving, you reduce your chance of successful execution.
Every year, PMPA produces a NATIONAL TECHNICAL CONFERENCE.
We execute. But the reason we produce this conference is so that our member companies can drive continuous improvement of their key people. The people who make a difference- in their shop, in their culture, and to their customers.
I am looking forward to meeting the industry’s executioners in Pittsburgh at PMPA’s NTC.
Because it’s all about execution. Isn’t it?
Register.
Hotel.
Execution is the key. PMPA’s National Technical Conference drives execution by giving attendees tools they can use for continuous improvement.
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Machinability is one of those words that everyone uses but everyone also seems to have a different meaning.
Here is a look at just a few of the aspects of what that person you are talking with might have in their mind when you say “machinability.”
1) Surface feet per minute. High surface feet per minute equates to fast cycle times. Fast cycle times mean lots of finished parts per hour. Thus surface feet per minute equals machinability. (But too high surface feet per minute can mean premature tool failure and higher costs and downtime).
2) Tool life. Rapid tool wear is a sign of poor machinability. Long tool life equals better machinability. (Too long tool life can mean overpaying for tools or too slow cycle times).
3) Ability to hold surface finish and close tolerance. If you are constantly fighting the setup to keep the finish acceptable or to hold the specified tolerance, you are not experiencing “good machinability.”
4) Uptime. If the doors are open and your operators head is in the machine and his backside is pointing out, you aren’t making parts. Downtime equals not so machinable.
So what are the units of machinability? Is machinability measured in surface feet per minute? Tool Life? Surface finish or tolerance? Machine uptime?
In order to measure anything, you first have to have units with which to measure.
May I humbly suggest that the proper units of machinability are parts produced by the end of the shift, conforming to print, and requiring the least amount of operator intervention to produce at the quoted cost?
Only when we agree on this definition can we get a meaningful discussion between Purchasing, “I want the cheapest material.” Operations, “If you gave me better tools or material I could get this job running.” Engineering, “Why can’t you guys hit the cycle time, we figured that job ourself?” And Management, “Why can’t you guys hit plan? I buy you everything you want…”
The value that shop management adds is to facilitate the organization’s arrival, together, to the optimum state for the shop to produce given the resources available. To do that everybody needs to be on the same page.
When we’re talking about machinability, that page ought to read “parts produced by the end of the shift, to print, and requiring the least amount of operator intervention to produce.”
So how do you define machinability?
Have you seen the tragic results of a department maximum that cost the rest of the organization dearly?
(Not at your current employer, of course!
” Nudge. Nudge. Know what I mean?”
One of the joys of my job is always being on the lookout for great sources of information for the PMPA members.
Boy did I find a great source of news and info on the heavy truck market!
www.ftrassociates.com
Here are some factoids from a couple of their most recent news releases posted in their news room on their website:
1) FTR Associates has released preliminary data showing February Class 8 truck total net orders for all major North American OEM’s at 7,628 units, 19.7% higher than January when orders were the lowest since 2002.
Lesson there: January 2010 was lowest Class 8 truck sales volume since 2oo2! February data was still below 2009 average, but we think that for class 8 trucks, this may be the bottom.
2)FTR Associates continues to forecast Class 8 demand for 2010 and 2011 at the same levels as was forecast by the firm one year ago. FTR’s March North American Commercial Truck and Trailer Outlook Report forecasts 2010 demand for Class 8 vehicles will increase just 3% over 2009. The company projects that this will be followed by considerably more significant improvement of over 50% in 2011.
Analysis: FTR is forecasting only a 3% increase in demand for class 8 trucks in 2010. Last December, we ran a post about the heavy truck market that gave 6 reasons why we were bearish about prospects for heavy truck:
While the manufacturing indexes are showing improvement, we don’t see that any one of these 6 has gone away. And with intermodal continuing to gain market share, the need for new Tractors remains weak in our opinion.
We think that the folks at FTR Associates are right on the money with their research.
If supplying precision components to the heavy truck and trailer market is your company’s thing, we bet that you will find this FTR Associates to be a great new “Tool You Can Use.”
What is your take on the Heavy Truck Market? Are you seeing better than 3% growth? We said in December that heavy truck sales would lag GDP; if FTR Associates are correct at 3% growth for 2010 heavy truck, what does that tell us about 2010 GDP?
Published April 2010
By PMPA Staff
Hangsterfer’s Laboratories offers a wide array of metalworking fluids for manufacturers—more than 200 different products.
The Precision Machined Products Association recently joined forces with the Forging Industry Association, Industrial Fasteners Institute, National Association for Surface Finishing, National Tooling and Machining Association and the Precision Metalforming Association in a formal letter to U.S. Treasury Secretary, Timothy Geithner, asking the Secretary to cite China as an illegal currency manipulator in the Treasury Department’s Semi-Annual Report on International Economic and Exchange Rate Policies.
This joint letter urges Secretary Geithner to take action on this critical issue facing domestic manufacturers. Review the formal letter here.
Why is the China Currency Issue important?
It is a threat to the Global Economy.
How much is the Yuan undervalued? A mere 40% according to Bryan Rich.
“While most of China’s major economic competitors around the world have seen their currencies climb against the dollar by 20%, 30%,40%, even 50% in the last eight months, the Chinese yuan has been virtually unchanged” he wrote last October.
Money and Markets Graph
What can you do? We’re glad you asked!
Send Action Alert to your officials.
