I am commenting a lot on the Wall Street Journal of late. Please be patient with me. I read more than one publication every day, but they are hitting on some pertinent things lately.
Aluminum in vehicle bodies
There is a piece in the Wall Street Journal today describing how, according to a survey of executives, “Auto makers plan a broad shift to aluminum from steel in larger vehicles over the next decade in North America, and 18% of all vehicles will have all-aluminum bodies by 2025, compared with less than 1% now, according to an industry study released this week.” One counterpoint from a pro-steel person was that “aluminum often has hidden costs compared with existing steel parts.” For example, "aluminum pillars are light but they're also fatter than steel pillars, and that can obstruct vision … It's not always about weight."
Truer words were never spoken. An individual component has a set of requirements to meet in terms of size, strength, cost, etc. Aluminum is sometimes the answer, and sometimes it is not. The brilliant engineers at Walther EMC do just fine competing against aluminum. If you are interested in designing lightweight your structural components and you want to do it cost-effectively, you need to put austempered ductile iron (ADI) on your list for evaluation.
More protein = more soybeans and grain = more castings
Yesterday’s WSJ had an article discussing a topic near and dear to my heart. One of my favorite pundits, Spengler in the Asia Times, wrote about this topic three years ago (as we will see). The WSJ piece states that “Consumers from Beijing to Boston are gobbling up more meat and dairy products, fueling multibillion-dollar mergers in the food industry and reshaping global agriculture.”
It goes on to state “World-wide meat consumption will rise 1.9% a year over the next decade, according to projections from the U.S. Agriculture Department, as rising incomes in places like China, Mexico and Central America allow consumers to afford more pork, chicken and beef. The United Nations Food and Agriculture Organization has projected that by 2030 the average person will consume about 99 pounds of meat a year, versus 86 pounds in 2007 and 73 in 1991. The U.S. Agriculture Department predicts that China and Hong Kong will boost beef imports by 55% by 2024.In response, farmers from the U.S. to Ukraine have planted more corn and soybeans, core ingredients in most livestock feed. U.S. farmers planted 97 million acres of corn in 2013, the most since the 1930s and up from 75.7 million in 2001.”
In 2011, before the Egyptian revolution, Spengler wrote in the Asia Times: “… China, not the United States or Israel, presents an existential threat to the Arab world, and through no fault of its own: rising incomes have gentrified the Asian diet, and - more importantly - insulated Asian budgets from food price fluctuations. Economists call this "price elasticity." Americans, for example, will buy the same amount of milk even if the price doubles, although they will stop buying fast food if hamburger prices double. Asians now are wealthy enough to buy all the grain they want.”
So … in short … Popovski would summarize this as:
1. The rising global middle class has added meat to their diet. They are not going back to an inferior menu.
2. Each pound of meat requires some larger number of pounds of grain
3. More pounds of grain will be needed and more acres of grain and beans will be planted
4. More castings will be needed from nimble, responsive domestic sources to build this equipment in an era that is short on welders (yet another piece in the WSJ … goodness gracious they seem to just type up what I see in real life)
World Cup begins today
If you do not follow soccer it is OK to get on the bandwagon this month. The FIFA World Cup begins today. Team USA starts group play against Ghana on June 16. I am very pro-USA, but we are in a challenging group (Portugal, Ghana, and Germany).
These events bring to mind a happy memory from a business trip to Italy. The Italian national team had won the 2006 World Cup and I was getting a morning coffee with my excellent friend Fabrizio. I asked him if how he felt about the triumph and he was only moderately happy to discuss it. He was more concerned about his favorite club team, and I asked him why. He replied something to the effect of “if Italy wins the World Cup I cannot easily and politely bring it up to some random Korean at the coffee shop. If Inter wins a league game, then there are plenty of Juve supporters to tease about it.”
Well said. I see both sides. Forza USA. Forza Inter.