Significant revenue growth. Increased costs of materials. Products produced above cost. Injury and Illness rates up slightly. New collective bargaining agreement. Improvement in best workplace standings.

These are all challenges that small manufacturers face too.

Making money on small metallic parts is difficult  due to variable and rising metal prices. But other costs to produce are also a factor.

In 2011, to make each penny  it cost the U.S.Mint 2.4 cents. Each nickel cost 11.2 cents per coin to produce. And the U.S. Mint isn’t able to raise their prices…

2.4 cents for your thoughts...

Higher demand and increased unit costs of production resulted in a combined loss of $116.7  million dollars  for pennies and nickels last year.

That is the impetus behind the Coin Modernization, Oversight, and Continuity Act of 2010-  to provide authority for alternative metallic materials for circulating coins.

I like to benchmark to the U.S. Mint  for the production of high volumes of small metallic parts. Like us they face rising prices, high volumes, changing mix, and require advanced machine technology to produce their essential products. So when I see that they have to implement a new method for allocating SG&A expenses, struggled with highly variable and escalating material prices, and had to do a lot of heavy lifting in the labor relations area, I compare to our industry in 2011 and smile.

Congratulations to Deputy Director Richard A. Peterson and his team at the U.S.Mint.  I happen to have two pennies in my pocket to rub together, even if they did cost you darn near a nickel to make…

Link to U.S. MINT 2011  Report