May 13, 2014
Developments affecting the spring/stamping industry; something to consider when opening a plant in a new location Highlights for fabricators from the past week’s Web articles— Praise for a tool and diemaker’s 50 years’ service highlights a reason for the worker shortage; A spring/stamping company VP lists 5 developments he believes will affect the industry; a stamping company’s move to El Paso has paid off, despite some difficulties; lawmakers attempt to make it less lucrative for companies to leave the U.S.; and this summer job is a blue-print for teaching entrepreneurship.
An article about Donald Sommer, a 70-year-old tool and diemaker at Tottser Tool & Manufacturing, Southhampton, Penn., for the last 50 years, is interesting to say the least. It describes how Sommer began as an apprentice at the company just days after the Beatles made their landmark television appearance on the Ed Sullivan Show on Feb. 9, 1964. He started out at $1.50 an hour.
Speaking about this job that enabled him to raise four children, Sommer said, “I liked this job on the first day and I still like it now.” But, by the time you reach the end of the article, you learn that none of Sommer’s four children, all college graduates, work in manufacturing, and he’s glad they don’t. “It’s a dirty job. They all work in air-conditioned offices. It’s dangerous, too. I didn’t want my kids to do this.” And there you have it, a glaring example of young people being discouraged from seeking manufacturing careers.
Steve Dicke, vice president of marketing, Connecticut Spring & Stamping recently went on record naming five developments he believes will affect the spring and stamping industry for the foreseeable future: Expanding assembly capabilities to support customers seeking to reduce their vendor base; supplementing machining capabilities to be able to Swiss machine complicated small parts from bar stock at reduced costs; moving toward providing clean room environments; continuing lean initiatives to decrease waste and become more efficient; and broadened apprenticeship programs to train skilled manufacturing workers to replace an aging workforce.
Regarding the latter, Dicke said, “largely due to the decline in state-supported manufacturing sciences programs at local colleges and technical schools to train technical workers, CSS had to replace formerly state-funded training with its own in-house apprenticeship program to be able to meet our capacity and continue to grow.
”While a successful in-house program definitely offers a pipeline of skilled workers key to growth and expansion, and helps CSS attract and retain skilled employees, the 2014 trend I’d like to see is states going back to providing educational services, so companies can focus on what they do best – hiring and manufacturing.”
Twenty years ago, Chicago-based Keats Manufacturing opened a factory in El Paso, Texas, to attract more business from the maquiladora industry in Juarez and other parts of Mexico. Keats Southwest has grown from about $1 million in sales and eight employees when it opened in 1994 to $10 million in annual sales and 50 employees.
Matt Keats said the growth has been good, but slower than expected because the company hasn’t been able to get all the manufacturing services and suppliers it needs in the area to allow it to grow even larger. For example, the company makes many parts that need heat treatment. Because the service is not available in the El Paso area, parts that need the process have to be made in the Chicago factory.The availability of secondary services and suppliers definitely is something to consider when thinking about opening in a new location.
Efforts are being ramped up by the U.S. government to stem the tide of companies leaving the U.S. for lower taxes. The impetus for the hard press seems to be proposed mergers between major American companies and foreign rivals that could end up reducing these companies’ U.S. tax bill.
As it stands now, a U.S. company can move to a more tax-friendly country in a process known as “inversion” if several requirements are met, including the foreign entity owning more than 20 percent of the stock in the merged company.
The Senate’s chief tax writer, Democrat Ron Wyden, wants to raise the percentage to 50 percent and to make the provision retroactive to May 8, 2014.
While Republicans also are concerned about the potential for more U.S. companies leaving, they have their own ideas about how to stop the trend. Senator Orrin Hatch, the top Republican tax writer, said, “There are two different ways to address the problem of inversions: make it more difficult … or make the U.S. a more desirable location to headquarter one’s business.” Hatch favors the latter and proposes lowering corporate tax rates and changing the way the U.S. taxes U.S. multinationals.
If these discussions proceed at Congress’s typical pace, don’t look for action anytime soon.
Finally, summer jobs can do much more than line a young person’s wallet for the upcoming school year. In some cases, they can increase job prospects post-college. At least that’s what Matt Stewart, founder and co-CEO of College Works Painting, says about his program and its alumni.
According to Stewart, among the roughly 20,000 veterans of his company’s internships, 90 percent have found college-grad-level jobs within three months of graduating, significantly higher than the general population.
More than 50,000 students reportedly apply for CWP internships each year. CWP, which is headquartered in in Irvine, Calif., and operates in 19 states, accepts just 2,000. Those who make it through CWP's spring training spend the summer months running their own house painting business: Marketing their services, selling paint jobs, hiring crews, supervising their work, and making sure customers are satisfied—entrepreneurship 101. Who couldn’t stand to have a leg up on landing a decent job these days?