'It's gonna be painful' Metal industry players note little to reassure them in days ahead

November 15, 2001
By: Lincoln Brunner

Manufacturers were hurting before September. How do things look now? Well ... they could be better, industry players say.

Ask people in the trenches of the metals industry, job shops and equipment manufacturers alike, what lies down the road, and you might as well paint their windshields black and tell them to drive home — they know where they want to go, but how and when they'll get there remain big question marks.

Even with Chicago Federal Reserve Bank President and CEO Michael Moskow encouraging manufacturers at his FABTECH® Intl. keynote address this week to take heart in the U.S. economy's productivity increases and ability to withstand shocks such as Sept. 11, many metals industry players see themselves sandwiched between recent gloom and deep uncertainty about the future.

"It's gonna be painful," said Peter Badovinac, vice president of Horizon Die, Schaumburg, Ill., which does a lot of business with the wounded electronics and telecommunications sectors. "A lot of people are saying 'second half of next year,' but they're saying that because they don't see anything in the first half."

Nick Bach, product manager of Amada America's Bending Division in Buena Park, Calif., agrees.

"Back when thing started [early this year], second quarter of next year was the thought going around," said Bach, whose company is an OEM of laser, turret punch press, and press brake equipment. "It might be a little longer. It's really hard to tell. It's a buyer's market right now; definitely, everybody's getting best pricing.

"That's what it takes right now."

Even Moskow was forced to admit publicly that the turnaround is not going to happen as soon as people in his realm of influence had hoped or predicted.

"Generally speaking, the economic recover originally expected to begin later this year will be delayed, and although it is likely that the economy will improve next year, the timing is uncertain."

Even though his sales have been off 35 percent this year, Richard Ziehm, president of Precision Extrusions Inc., Bensenville, Ill., says his gut and his incoming orders tell him that things are looking up.

"We are really quite convinced it bottomed out in late August or early September," said Ziehm, whose company extrudes aluminum parts for a wide variety of industries. "Shipments have been pretty constant [lately]. It would appear that that was the floor.

Bach noted that the turret punch press market is feeling an extra measure of pain because of the ill fortunes of the information technology (IT) industry and related equipment manufacturers. Suffering with them are fabricators that supply precision-cut metal and who are laying off people in droves, especially in the San Francisco Bay/Silicon Valley region.

"They're dying," Bach said of IT hardware providers. "They've got excess inventory, and it's taken a chunk out of everybody's business. It's just deader than a doornail.

"I don't know if anyone's turret punch press business is going to come back way it's been," he added.

And what of the stamping die industry's future?

"No visibility. Don't know," Badovinac said. "None of our customers are giving any indication of when things are going to turn around. Nobody's invested any money in capital tooling or programs."

Like Moskow noted in his question-and-answer session following his FABTECH keynote speech, Ziehm said things have to turn around at some point soon.

"I think manufacturing is starting to come around a little bit," he added. "We're seeing orders on parts and from customers we haven't heard from in a long, long time. Sooner or later these guys that got hung with high inventory ... run out of inventory, and they have to start buying again. We just hope it's sooner than later."

Lincoln Brunner

Contributing Writer

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