The Ductile Iron Society
will conduct a “Design with Ductile Iron” seminar on Tuesday, October 28th,
2014 (9:00AM – 3:00PM) at the Decatur Conference Center & Hotel in Decatur,
IL. Check out more information here.
There is certain to be some very good information presented,
so be sure to get there!
There are reports in places like Farm Equipment Magazine about layoffs
and such at the major ag producers.
These make sense and were fairly predictable based on IRS changes late
in 2013 affecting the ability to write off large pieces of equipment. In short, farmers cannot write off massive
purchases very easily anymore, so they logically are extending the time they
use existing combines and big tractors. For
casting producers this means fewer castings for such equipment lines.
However, good weather means record
crops. That logically means more
castings for consumable castings – after all, you still need to harvest those
“A separate report
shows new car, light-truck and SUV sales are expected to drop 0.7% in August
compared to the same time a year ago, hitting a total of 1.49 million units,
according to publishers of the vehicle price guide Kelley Blue Book. Although sales are down from a raw volume
perspective, they remain up slightly after adjusting for the difference in
selling days in August 2014 versus August 2013.”
Now, most high-volume automotive foundries I know are jammed
with work, and if they are not busy then they have other problems. I myself think we will see a leveling off in
fleets look to finally be refreshed. This
from HDT.com states:
“Orders for heavy and medium duty trucks were
on the rise for the second month in a row in July, according to ACT Research's
latest State of The Industry report… The report found that 30,103 Class 8
trucks were ordered in July and year to date orders are 33% higher than in 2013.”
also reminds us that freight
rates are still high. These are
signs of a growing economy and signs of potential opportunity for Metalcasters.
Ag is a Mixed Bag
has been a lot of reports of sever slowdowns in the Agricultural Equipment
sector. These stories impact Metalcasters
greatly. From what you blogger hears and
sees, the impact is greatest on pieces of large equipment (combines, etc.). Other types of equipment seem to be doing
fine, and now and then we are seeing news like this story:
“CNH Industrial N.V. is
investing $24 million to expand production in Burlington, Iowa, with the addition of the company's
crawler dozer production line.”
This is all part and parcel of what your
blogger thinks to be a soft landing in the Ag sector.
Things That Need to be Taught to Humans #7
The protocol of “Opening Doors” has
been neglected for a long time (at least by me). When approaching a door, and especially an
airlock enclosure in cold-weather places, you should exhibit some courtesy. I want to extend my thanks to Andrew from
Pittsburgh, who referred me to the Art
of Manliness website where I received a needed
refresher course. The piece starts this
are two ways to mess up etiquette. One is too ignore it altogether. The other
is to over-think it and overdo it, and thus make it weird and awkward. So keep
that in mind as you read these guidelines; the most important thing to remember
is simply to be natural and to use common sense! It’s definitely not too
complicated; these guidelines are simply designed to allow you to be smooth …”
Read the whole thing please. Andrew will get a free lunch for his support.
Joe from Pittsburgh
Joe is a bright young engineer who designs
railroad equipment. He looks great with
his AP notebook (made in USA!). Joe will
also get a free lunch to recognize his good taste in stationary. Remember, you can send me a photo of yourself
with your AP gear for use on this blog and get a free lunch as well!
week saw the implementation of the first-ever Special Edition of AP University. It was
conducted in coordination with Dotson Iron Castings exclusively for Oshkosh
Corporation. We talked about steel and cast
iron and ductility and casting conversions and lightweighting and ADI and patterns and
castings and other things that are good and beneficial to mankind. A great time was had by all.
Oshkosh Corporation is of
course a global company facing the challenges characteristic of such a position. I hope we at AP uplifted the work of the attendees
in rising to those challenges. The AP
folks certainly learned a lot from the event!
Many thanks to Matt
Schindle of Dotson and Rex Harrison of Oshkosh for all they did to make this possible.
Attendees at AP University can always get up close and personal with the molding process. In this video an intern
at Joyworks Studio makes a nobake mold
as part of the instructional program for component designers.
of this blog know how I feel about the Black
Swan by Nassim Nicholas Taleb. Those
of you who are new should know that Amazon’s blurb explains the idea well in
just a few words:
“A black swan is an
event, positive or negative, that is deemed improbable yet causes massive
The classic example is an earthquake or tidal
wave. If you build your plant to survive
a 500-year tsunami, then GREAT! Except that
the next tsunami might be a 10,000-year tsunami. Then you have trouble.
This brings us to this
article in Automotive News. I hate
long quotes in a blog, but I cannot resist:
To protect itself
from production bottlenecks caused by unforeseen disasters, Toyota Motor Corp.
has asked 400 North American suppliers to identify any key parts that are
produced by just one factory.
The automaker has
also asked the 400 to develop backup production plans in case a single-source
factory shuts down unexpectedly.
Bob Young, Toyota's
North American purchasing chief, says he wants to identify all "pinch
points" that could occur if a key plant is disabled by fire, flood,
earthquake or other disasters.
they'll be able to salvage the tooling" from the stricken plant, Young
said during an interview at the Toyota Technical Center here, near Ann Arbor.
"We're asking suppliers what they would do and how much time would they
need" to re-launch production.
Some suppliers might
maintain reserve stocks of components. Others might obtain certification to
produce parts in a second factory, if necessary.
But there are limits
to Toyota's disaster planning. The automaker will not ask suppliers to reserve
production capacity for emergency use. "We are not willing to pay them for
that capacity," Young said. "It would be very expensive."
I give Toyota’s Bob Young full marks for
candor and straight talk. I like him
already, and I have never even met him. None
of this changes the fact that long-supply chains pose inherent risks.
I visited a fellow who bought large
quantities of large steel castings from Asia for many years without ever having
experienced a scrap issue or a late shipment.
I told him his achievements were indeed impressive, and that he doesn’t
need me with such a smooth-operating supply base. He continued his story, explaining that he
wanted to locate a domestic source in case of “civil unrest” in the source
country. He didn’t want to actually BUY
from a domestic source … he just wanted the source teed up and ready to take
the phone call. Egad.
So here are the takeaways for a casting salesperson:
should have a ready answer when your customer challenges you on what will happen
you have a fire or a natural disaster.
you have two plants with similar equipment (Like AP! Yay!).
not, you should be ready to explain why you have never had an interruption in “x”
line of questioning means that asking about your foreign competitor’s plans is
also means that your domestic location and short supply chain are opportunities
to emphasize real and quantifiable value.
The North American Energy Boom is a good thing, but there is
cause for concern in the casting industry. The Wall Street Journal has published
a piece on the subject. The graphic
below shows the forecast demand for sand.
When I was on the Penn State FEF Advisory Board I attended
a talk given by a very knowledgeable person in that industry. It was
explained that the frackers want the same properties as the foundries. It
was also explained that one does not simply open a sand mine overnight (nor does one simply walk into
Mordor, for that matter).
But this is not some casting industry committee ... this is the Wall Street Journal. If I were a casting salesperson I would have answers in case the topic came up from buyers who want to know their longer-term price outlook. I would also be prepared to ask if they have the same concerns about offshore sources about their various inputs (they really, really should).
Things That Need to be Taught to Humans #6
Unless you have golfed together before, nobody cares about your golf game.
Absolutely nobody cares about your fantasy league.
not too much on castings today... but I hope you can get into these topics.
love Bloomberg Businessweek magazine because it provides some outstanding food
for thought, packaged nicely. On
July 24 there was a graphic (below) about The
Great Shrinking Workforce. The
accompanying verbiage was:
“In 2007, 66 percent of American adults were
either working or looking for work. This year that number dropped to 63
percent. The White House’s Council of Economic Advisers estimates that about
two-thirds of this decline comes from baby boomers retiring and the recession.
The rest? It’s not completely clear.”
to begin to parse such a thing? As Inigo Montoya would say, “Let
me explain. No, there is too much – let me
graphic shows what many of us already know: People are not working!
White House’s Council of Economic Advisers is “not completely clear” on what is
causing this besides the retirement of the boomers. Let me enlighten them: Too many have given up finding work or have been reduced to part-time
because of overall economic uncertainty, some of which is government-related.
nobody hires full-time people … or starts a
family … or opens a factory … or buys a house … or makes any big decision when
they don’t know what’s coming next. Decision
makers simply cannot answer questions like these:
Will another state
open up land to fracking development? What
will that do to my job?
legislation hold? What will that do to
Will the stock market
crash again due to excess liquidity? What will the dollar be worth in five years?
What will happen to support
for ethanol? Will climate change flood my cottage on the oceanfront?
Should I train the
employees in my body shop to make repairs on aluminum auto bodies?
do not need to be an economist to know these things. You just have to be awake. Just look at the chart below that I compiled
from the CDC. Births drop off in 2008,
right when the recession hit.
Here are a couple of metallurgical tidbits for you. I was going through some old trade journals
when I leafed through the August 2007 issue of modern
casting magazine. That issue had two back-to-basics-type articles
by the AFS’s 5-L committee on Liquid Metal Processing (that committee’s
functions are now covered by the 5-P committee).
The first article was written by the late Fred Linebarger
(great person, great engineer). It discussed
nodularity testing. The second is about
chill-wedge testing which is a low-cost test that can be very useful in the gray
iron casting process. These are topics that
should be intimate to anyone buying and selling ductile iron or ADI castings. I can’t quite locate these articles on the
modern casting website but I will follow up with them to see if a link is
Some Vision in Rail
issue of Progressive Railroading has a piece by Greg Grissom of GREX (I
have not met Greg). In the PDF version
it is page 17. Greg discusses some
big-picture ideas, one of which is likely interesting to readers of this blog:
“Visionary people in
R&D focused railroad and supplier companies will continue to drive the industry
forward. All-time high levels of capital
spending by Class I railroads, coupled with the technology advances fueled by
many research partnerships (for example AAR, FRA, Volpe, universities and
supplier R&D), will continue to improve safety and drive down the
track-caused accident rate as seen over the last decade. Supplier R&D
investment combined with strong railroad partnerships continue to support the
ongoing challenges of increased capacity and increased safety, and allows for
more efficient resource allocation. Railroads have guided suppliers to be sure
technology developments maintain a focus on minimizing track time, combining
technology offerings on common inspection platforms and employing useful data
reporting. This two-way communication fuels innovation and streamlines
development for the next solution.”
The rail industry use a lot of castings. I hope casting suppliers take it upon
themselves to meet the challenge of such collaborations. To do so, suppliers have to do more than be “order-takers”
– they have to do the legwork that allows for growth in the casting market –
they need to be “order-makers.”
The same magazine features this piece confirming what I heard
anecdotally, and which should be common knowledge for casting salespeople. Specifically, car builds and especially tank
car builds are still very strong from the North American energy boom:
“In the first quarter
(of 2014), rail-car orders totaled 24,050 units … Although tank-car order
activity continues to dominate the freight-car environment, officials at
Economic Planning Associates Inc. (EPA) say they are “enthused” by the strong recent
growth in demand for mid-sized and small-cube covered hoppers, as well as the
high level of backlogs for hi-cube equipment. Demand for tank cars, covered
hoppers still strong, EPA says.”
Freight rates stay
Heavy Duty Trucking magazine offer the monthly North
American Spot Freight Index. That
journal states the following, suggesting a strengthening economy still fraught
appear to have contributed to record-high volume and rates on the spot
truckload market this year, including disruptive weather, an improved economy,
and seasonal fluctuations of freight and capacity, said DAT. As a result,
shippers have increasingly relied on third-party logistics providers to meet
the needs caused by the growing volume of exception freight.”
Branding … not very
American style (with bonus Godfather reference)
is a nice
short article in the Economist about artisan food producers and their
geographic branding efforts. In short, “The EU is demanding protection for 145 food
names, including feta, asiago, Gorgonzola, munster and fontina. … Americans are
unimpressed. They see all this as an attempt to erect trade barriers and raise
prices by reclaiming words that have long since passed into general use.”
is a competitive economy and we respect branding … but we have limits. Attitudes in other countries are markedly
different, where provenance matters a great deal more in branding. As for your blogger, I really like certain
things, and if the provenance of a specific good wine involves a chateau with
100-year old vines tended by blind, tattooed monks, then GREAT! Otherwise, it’s what is in the glass that
still matters most.
said, on manufactured goods “Made in USA” still carries an awful lot of cachet
with your humble blogger (see post from July 17), and usually for some very
good reasons. That’s provenance, is it
not? I guess you can count me as a
hypocrite … but then
again, Senator … we are both a part of the same hypocrisy (52 seconds into
this clip, pardon the language).
One more plug for ADI
article in Farm Equipment Magazine
July/August issue of this excellent publication is online now and can be seen here. The piece on Austempered Ductile Iron (ADI)
with a few comments from yours truly. Subscribe today!
stated in that article “Salespeople who understand how castings are being used to
reduce the complexity of farm machinery …”. Specifically, I was driving at the fact that anecdotal
evidence shows that more designers are seeking out castings for improved
dimensional repeatability over weldments.
Now, I have no numerical evidence to prove this as a systematic
condition, but I will be looking for answers either way. The fact remains that multiple current and
former casting conversions were made based on this criteria, like this
award-winning example from Dotson Iron Castings.
“Trying to shake its
image as dirty, backbreaking labor and attract younger workers, the
industry—from construction firms and trade groups to equipment manufacturers
and machinery makers—is marketing itself as a place to use advanced math,
science and technical skills. ... There's a good reason
why the industry, now going into its busy season, needs to rework its pitch:
74% of construction firms report they are having trouble finding carpenters,
electricians, plumbers and welders, according to a 2013 survey by industry
trade group Associated General Contractors of America. ... "Construction
work is somewhat different from what it was… There is much more use of laser
and GPS-guided equipment, building-information modeling and other things that
require computer skills and use of technology that was not common before the
takeaways for the cast metals industry:
is a shortage of welders and machinists (but you knew that because you read
this blog), which means more opportunities to sell castings
industries are committed to seeking ways to reach the job candidates they need
by breaking up negative misconceptions ... which is what casting salespeople
need to do when dealing with customers who have not seen the seismic changes in
our industry over the past 20 years.
and free lunch
We all like a free lunch. But there is no such thing. See this
from the Automotive Fleet News (hat tip to John Keough):
Ford's U.S. dealers began ordering the 2015 F-150 today after receiving
pricing for the light-duty pickup that will increase due to the increased use
of aluminum in the body. Prices will
increase over the 2014 model by at least $395 and as much as $3,615 depending
on the model, according to a Reuters report confirmed by a Ford spokesman.
Who knew? We
all want things. But someone has to pay.
I hope all of that added cost is made up in improved fuel mileage, but that is
a blog post for another day.
I very recently wrote “From a marketing standpoint I have always thought that “authenticity”
always including a level of over-engineering.
More specifically, using something for a purpose other than that for
which it was designed ... I acknowledge that the relationship is not perfect -
nobody wears welding helmets on the dance floor.” This notion is already outdated.
I was at a concert last night in downtown Pittsburgh
(Offspring and Pennywise – buy your tickets now, punkers). I saw a guy in a Rancid t-shirt wearing green
steel mill pants like these,
probably from his dad’s dresser drawer. It
was absolutely outstanding because I honestly don’t think he was trying … it
just happened. That is the key – he wasn’t
trying. Yinz can still drive
in the Valley (that’s the Monongahela River Valley)
and see some millhunk gardening in his green pants. You would not even bat an eye. That’s real, and that’s very cool.
Dumenco in Advertising Age touches on this ever so lightly, hoping that advertisers
would cease using “authenticity” as a buzzword. I’ll start now.
I love this skit from Monty
Python about the man who says things in a roundabout way. Believe it or not
I have been guilty of this. Unfortunately, when looking at casting markets
sometimes you have to look at things in a roundabout way as well.
The American Association of
Railroads (AAR) sends out news
releases like this one. This is interesting for multiple reasons. First,
you can look at the Weekly
Railroad Traffic report the strength of the overall economy (Yikes!
Motor Vehicles and Parts!). This report validates what we see elsewhere,
which is that the economy is producing more in 2014 than in 2013. Except for coal.
And we knew that. A growing economy is good for casting producers, even if we
are dissatisfied with the pace of growth. Second, more parts being carried by
rail means more railroad castings will need replaced sooner instead of later.
That’s good for makers of steel and iron castings.
Similarly, news from the
world of heavy trucks further illustrates this trend. Truck
Tonnage dipped a bit in June but is still trending up. The same conclusions
On the flipside we have this
piece from Farm Equipment Magazine. Farm Equipment is still moving slowly,
especially big-ticket stuff like combines (a small bird says combines will
pick up again in early 2015). I think this is not so much from regular
market conditions but rather from late 2013 tax legislation that we have
discussed in this space before.
Castings in Tourism
Ok, I am a nerd for
castings. I love this part from a steamship engine that wrecked off of Virginia
Beach in 1904. The old-time foundry workers knew their stuff.
I also love this
“black steel fish pan” on display at the Smithsonian. Notice that the handle is
welded on. This is easy and appropriate because it is steel.
My own Lodge Cast Iron 12” skillet is made in one piece because it is gray cast iron. If you do not already have one, get one. They are made in USA, of course. Henry Lodge is President and COO of Lodge Manufacturing Co. and he is a really nice person. I had the honor to give a presentation at the AFS Southeast Regional Conference in Birmingham a few years ago. I spoke with Mr. Lodge after my talk and he was very gracious. I am sure he does not remember me, but I certainly remember the impression he made.
Things That Need to
be Taught to Humans #5
I waited tables and
tended bar for years and years so I offer these specific suggestions to humans in those
1. Nobody wants to wait
for the check. Ever. Just drop it off politely when it looks like things are
2. When someone asks
“what’s good on the menu?” the correct thing to do is answer them. Nobody wants
to hear “everything is good!” –they want guidance on limiting choices. You can
always say something like “I like the pastrami but the Reuben is the top
seller.” In Milwaukee once I was actually told “I don’t know … I am a
vegetarian and I do not eat here.” Double yikes!
As expected the July/August 2014 issue of Farm Equipment Magazine has an
article on ADI. There is some good
material there if you are into casting sales.
For example, the article discusses Pequea Machine’s experience:
Pequea also made the transition from forecasting
production to lean manufacturing where the company fills orders as needed
instead of anticipating what they would sell. (Jim Westlake, Pequea’s
engineering manager), says “We’re a small shortline company and we weren’t
necessarily getting the same attention the big manufacturers could demand from
their overseas suppliers. With our
casting suppliers being local, our supply chain improved dramatically and we
have better control of our production and inventory.”
The question of “length of supply chain” is worthy one to
explore. This example is further evidence
of the reshoring happening nationwide. There
is more good material in that article, and you should by all means get a copy.
Sourcing and Authenticity
I do Marketing at Applied Process, and I am first to
acknowledge that the folks at Levi Strauss know more than I do (or at least
they have a big fat staff of MBAs on the job).
That doesn’t mean they cannot make mistakes. This is why you should see this article
in the Economist magazine.
From a marketing standpoint I have always thought that
“authenticity” always including a level of over-engineering. More specifically, using something for a
purpose other than that for which it was designed.
For example, motorcycles are cool because the original
bikers of the 1950’s used army surplus Harleys.
Leather jackets are cool because they are worn by pilots and bikers and
others who need some functionality.
Sunglasses are cool because you need them to protect your eyes. I
acknowledge that the relationship is not perfect - nobody wears welding helmets
on the dance floor.
The easiest example is that blue jeans are cool because they
are the folk clothing of America, worn by gold rush miners and cowboys. They are distinctly American. And as such the sourcing of this product
matters more than one might think to some people.
Back to the Economist.
Levi’s is having some marketing troubles. The article states:
One answer would be to redouble its bet on tradition by
emphasising Levi’s American roots, shifting production back home and moving
upmarket. That seems to have helped another Californian rock’n’roll legend,
Fender, which moved production of some guitars back to its home state after a
soul-destroying spell in the clutches of a media giant, CBS. But that is not
Levi’s plan. It is loth to raise prices, which would cede the middle of the
jeans market to rivals like Wrangler. Instead, it is taking almost the opposite
tack: a new marketing strategy shifts the brand away from rust-belt edginess
and toward a cheerier mainstream.
What a shame. If you
cannot market “Made in USA” with blue jeans then you need a new job.