Attendees and exhibitors implement strategies for economic recovery
December 2, 2010
At this year’s show, many attendees said they expected significant growth ahead. Some companies have acquired previous competitors, and the recession’s survivors are gearing up for growth.
On election morning Chris Scripsick stood outside Hall B inside Atlanta’s Georgia World Congress Center, ready to tread the show floor of this year’s FABTECH®, which attracted some 22,000 attendees Nov. 2-4. Congressional races and the shift of political power in Washington weren’t top of mind. That day it was all business. As the sales engineer for Humboldt, Kan.-based B&W Trailer Hitches put it, “We just had our best month ever.”
The company, which makes hitches for the RV industry and custom truck beds, has expanded into the job shop business, providing custom components for agriculture equipment and other sectors.
“We’re in a good cash position,” Scripsick said. “We’ve gained quite a bit of market share from our competitors during the past year.”
That story set the theme for this year’s show. At this stage of the recovery, those companies that carefully managed their cash have emerged healthy and now are on the hunt to gain market share and broaden customer bases. In Atlanta this was a priority for exhibitors and attendees alike.
FABTECH 2010 was the first to feature a Finishing Pavilion, sponsored by the Chemical Coaters Association International. CCAI joined the show’s list of sponsors: the American Welding Society, Fabricators & Manufacturers Association International, Precision Metalforming Association, and the Society of Manufacturing Engineers. The show was billed as a one-stop shop for sheet metal and plate manufacturing, offering cutting, bending, welding, stamping, tube and pipe work, stamping, and—thanks to CCAI’s involvement—finishing.
Overall floor activity looked decidedly different this year. Exhibitors introduced more products, and at the show entrance attendees heard the consistent beat of several fully functional stamping presses—all welcome signs after a few tough years.
On the first day, keynote panel speakers exemplified how diverse the expo’s audience has become. One owns a contract metal fabrication shop, one is CEO of a controls manufacturer, one is in the tool and die business, and another is a major player in the finishing sector. All were there to talk about what has become so important for so many: diversification.
Sam Strausbaugh, managing partner of Defiance Metal Products, said that to diversify, the Defiance, Ohio, contract fabricator has sought new customers, acquired companies, and expanded offerings. During the past decade the strategy helped reduce the company’s reliance on the heavy-truck business. Previously heavy-truck customers made up almost 60 percent of the company’s revenue; it’s now only 35 percent.
Roy Verstraete, president and CEO of Anchor Danly, Farmington Hills, Mich., spoke of challenges too familiar to many during the downturn: an overreliance on the automotive business. The company supplies tooling to the metal stamping business, which meant the firm was anchored (so to speak) heavily to the automotive industry. So managers did something about it. They acquired several other makers of die sets to broaden their customer base and acquired a metal fabrication job shop to break into a new business. Its foray into fabrication has been successful, but Verstraete stressed a chief hurdle. “Sales was the most challenging aspect,” he said.
Today the company has dedicated a sales force to its new fabrication and assembly division; trained them on the company’s capabilities; and focused on obtaining sought-after, targeted sales leads.
Sitting next to Verstraete was Brent Schwartz, vice president of engineering at MetoKote Corp., a Lima, Ohio, finisher with more than 30 facilities worldwide. As Schwartz explained, the company completely redesigned its business strategy, and the results showed that offering unique services can open the door to new markets.
Over the years manufacturers have brought coating lines in-house, and MetoKote managers knew the reasons: It gave companies control of the overall manufacturing process and reduced shipping costs.
Knowing this, managers asked, Why not take the company’s finishing expertise to the customer? To that end, MetoKote now designs, builds, and operates coating lines that are connected directly to customer facilities. This gives the customer the benefits of having in-house coating capabilities but without the capital equipment costs or the headaches from managing a new manufacturing operation.
Panelist Mike Haug, CEO of Kasa Companies, Salina, Kan., described how the organization diversified both its capability and its knowledge. The original company founded in 1973 manufactured industrial controls; in 1988 it purchased a small fabrication shop; and in 2007 it leveraged its knowledge when it launched a consultancy, KSolutions. This year the company launched IntelliFinishing, which provides turnkey processing facilities.
When it comes to diversification, all panelists stressed the importance of planning. Still, strategies should never be set in stone either. “Don’t fall in love with your strategy,” Haug warned. “You have to be ready to make changes. The strategy must evolve.”
Jon DeWys, president of DeWys Manufacturing, sat on a panel during Wednesday morning’s Make Green by Going Green keynote, and like many fab shop owners at the show, has implemented sustainability initiatives. The fab shop underwent an EPA Green Suppliers Network green audit to identify green initiatives, and focused primarily on reducing material waste, including paint and steel scrap. The fabricator reticulates much of the water it uses via reverse osmosis. Wasted heat generated from air compressors is redirected toward other processes needing heat, such as water heating.
“The key is to recycle energy,” DeWys said.
The U.S. EPA Green Suppliers Network (GSN) has helped 161 companies identify green opportunities, according to panelist Kristin Pierre, manager of the EPA program. Altogether they have netted more than $72 million in cost savings, she said.
Also on the panel were John Spangler, Caterpillar® Technical Services, and Mary Ellen Mika, manager, sustainability and energy, Steelcase, based in Grand Rapids, Mich. “Now over 90 percent of requests for quotes from our customers involve environmental issues,” she said, “so we know they are a big deal to our customers.”
Steelcase’s sustainability initiatives include converting from a wet paint to a dry paint system, reducing VOC emissions substantially; solid waste reductions; water consumption reductions; and even designing products for ease of disassembly to simplify recycling. The company also invested in a Texas wind farm, a move it made to reduce the need for the building of another coal-fired power plant to provide electricity. The furniture giant’s goal: to reduce its environmental footprint by 25 percent.
Show-goers saw a number of product introductions, most notably in sheet metal cutting, where an emerging technology is showing its muscle: the solid-state laser.
For years manufacturers have used solid-state lasers for welding, surfacing, additive processes, and other operations. But during the past few years recent developments have brought the technology into the sheet metal cutting space—and it showed at this year’s FABTECH.
“This seems to be the year of the fiber,” said Jeff Arendas, national product manager of laser tube systems at Wixom, Mich.-based BLM Group USA Corp. This year the company introduced a tube cutting laser using fiber laser technology.
TRUMPF, Farmington, Conn., showcased its solid-state disk laser for sheet metal cutting applications, and IPG Photonics, Oxford, Mass., had its fiber laser power source integrated with several cutting machines on display at the show.
Why the push toward the solid-state laser? It’s a combination of reasons, according to sources. Because the lasers are solid-state, they don’t require lasing gas. The laser is delivered to the workpiece via a fiber, simplifying beam delivery. And when cutting thin material, the laser can really move. Because of the fiber’s 1-micron wavelength, it has very high absorption characteristics, which increases cutting efficiency as well as helps the laser process reflective material like brass and copper.
“Another real benefit is the lack of required maintenance,” said Paul Farrell, senior sales engineer at Cy Laser, Chicago. “The operating costs [of the solid-state laser] are significantly less,” he said, “and those costs don’t include downtime [associated with gas-laser maintenance].”
“There are no premix gases to maintain and to provide flow, and there are no turbines to circulate the gases,” said Joe Troiani, applications engineer at TRUMPF. “It’s a very clean design, and that’s what I think intrigues people. It’s an efficient way to develop a beam in a simple way. People are enthralled with this concept. So even for a veteran CO2 guy, I’m impressed with this technology’s capabilities in thinner materials. At this wavelength, it doesn’t make much difference whether we’re dealing with steel, stainless, or aluminum.”
Bill Bossard, president of Hamilton, Ohio-based Salvagnini America, added that “because of that low operating cost, every hour you run that machine, the savings really add up.”
The solid-state laser has potential for combination systems as well. For instance, at the show Hanover, N.H-based Hypertherm introduced its own fiber laser power source. The company is working with channel partners to offer the system in various configurations, including those with both precision plasma arc and fiber laser cutting. According to Tate Picard, general manager of Hypertherm Laser, such systems could add great flexibility. Plasma arc cutting can be ideal for thick plate, while the company’s fiber laser can cut extremely quickly on thin sheet.
Bystronic, Hauppauge, N.Y., also introduced a fiber laser cutting machine at this year’s show. Frank Arteaga, laser product manager, said that the laser cutting market may one day become more evenly divided between CO2 and solid-state technology. But he added the company views CO2 and fiber lasers as complementary, each suited for particular applications.
In other words, the CO2 laser cutting system probably won’t be going away anytime soon. But at this year’s show, attendees had one more significant sheet metal cutting option to consider.
Phillip Fuller was one show attendee weighing his options for sheet metal cutting. His Mocksville, N.C., fab shop, Fuller Welding and Fabricators Inc., has several lasers, and one is 8 years old. He came to the show looking to upgrade, and he kept his mind open to all alternatives, including both CO2 and solid-state laser technology.He said that his company was careful with cash during the downturn, and such cash management is now paying off. “We were lean going into the downturn, and we stayed lean throughout the downturn.
“We’re looking into new industries to grow our revenue,” he added, “and we’re looking forward to a good year.”
So is attendee Billy Petru, technical support specialist at Shiner, Texas-based Kaspar Wire Works Inc. and its sister company Ranch Hand, which manufactures guard and front-end replacements for pickup trucks. The guard business, in fact, has had a 30 percent jump in sales in recent months, he said. To handle the increased business, Petru walked the show floor in search of a new plasma cutting system.
“In a roundabout way, the bad economy helped us,” he said. “Some of our competitors went by the wayside, and we took market share.”
He added that many truck enthusiasts buy the guards for looks, not necessarily for function. The fact that sales are up may point to increases in discretionary spending, which is another positive sign.
Jason Kosmann of Joy Mining Machinery, Warrendale, Pa., walked the floor with co-workers looking for new welding equipment. Like other manufacturers, the machinery-maker is enjoying an uptick in business. The company had “record growth,” Kosmann said. “We’re sold out through the end of the year already.” But with the increased business also comes competition, he said, adding that new players have entered the market.
Overall, attendees said the recession eliminated a few competitors, which means today the market is in flux. Established companies want to increase market share, while new companies are moving in to grab their piece of the pie.
The whirring, clanging, and grinding of machinery at FABTECH made it easy to forget that productivity can’t happen without people, and on the floor were hints of what the next generation of manufacturing workers may look like. For one, they’re technology-savvy and used to on-screen graphics, as evidenced by the plethora of graphical user interfaces seen on machine controllers, especially on press brakes.
High-end graphics have also entered the welding field, with virtual training systems gaining more of a market presence this year. Both Fronius USA, Brighton, Mich., and The Lincoln Electric Co., Cleveland, demonstrated virtual reality training units in which the student wears a helmet with a visor showing a virtual reality environment. The student grasps a welding gun and moves it just as if he’s really welding, only without using wire or actually welding plate.
“We want to train the young welders and do it in a green fashion,” said Fronius’ Phil Goyetche. “This way, you don’t have to consume all of the shielding gases, plate, and welding wire.”
Virtual welding likely will never replace that initial act of putting bead on plate, but exhibitors do see it as being a useful complement, particularly since virtual systems can give students immediate feedback. For instance, in Lincoln’s virtual welding simulator, the software performs a virtual root or face bend test—or both, which of course would never be possible in the real world.
As Carl Peters, Lincoln’s director of training, explained, “When you go through this type of virtual welding, you now have the opportunity to see if it’s a good weld because of the virtual bend test.”
Plenty of real welding arcs buzzed at the show too, of course. As always, the event hosted a student welding competition, this year tied to the SkillsUSA organization. The three finalists—Zack Brown of Leakesville, Miss., and Bradley Clink and Alex Pazkowski of Saline, Mich.—will continue on to compete again at the SkillsUSA national competition in June. The winner of that event will receive a $40,000 scholarship from the American Welding Society Foundation and travel to the WorldSkills competition, to be held in London in October.
Welding literally changed the life of one previous Skills-USA competitor, Nick Peterson, a participant in the 1993 WorldSkills competition and now a welding engineer at Miller Electric Mfg. Co. At one point Peterson was on the verge of dropping out of high school. Fortunately, the school’s vocational instructor introduced him to welding and got him involved in SkillsUSA. Peterson’s success on the national and international level earned him a $40,000 scholarship and an offer to attend college to pursue a degree in welding engineering.
“[Welding] took me in an entirely different direction and opened a lot of doors for me,” he said.
Joseph Ciaramitaro knows how a career in manufacturing can change lives. The AWS certified welding inspector and certified welding educator also was searching for new welding equipment—and judging by the local job market near his school, Withlacoochee Technical Institute in Inverness, Fla., northeast of Tampa, he has reason to be shopping.
“If you want to get a job welding, there’s plenty of work out there,” he said, explaining that a major nuclear plant is being planned in Levy County, just north of Inverness. “There will be welding work out there for years.”
Scripsick of B&W Trailer Hitches knows how important skilled people are in this business. Waiting for the show doors to open that election morning, he told an insightful story. Because the company’s finances were in order prior to the downturn, managers were able to make a bold move during the depths of the recession. They avoided any significant downsizing and instead sent workers out into the community, and even to work on employees’ houses.
“It was an employee appreciation,” he said. “People had a four-person crew come to their houses for eight hours to do whatever they needed around the house.”
The commitment to employee retention apparently has paid off. “We’ve acquired a few companies and have a very good cash flow standing,” he said, “and we’ve gained quite a bit of market share from our competitors. All in all, we’ve had a very, very good year.”
FABTECH will return to Chicago Nov. 13-16, 2011.