The orders keep coming

October 21, 2008
By: Tim Heston

Jerry Sadler didn"t look like the news from Wall Street really bothered him. Walking the aisles at the FABTECH International® & AWS Welding Show earlier this month, the quality manager at Ameron International had other things on his mind, like customer orders that have been placed through 2011.

That"s right: through 2011.

Ameron builds, among other things, the massive wind towers that have become today"s poster children for green energy. The 1,000-employee company has 280 working at its wind tower fabrication plant in Fontana, Calif. The facility has two 900-foot-long bays where workers roll and weld sections between 40 and 110 ft. long. A typical tower is conical, about 15 ft. in diameter at the bottom and 9 ft. across on top. Thicknesses range from a little more than a half inch to more than 2 in.

We have companies who want us to supply wind towers through 2011, and right now we"re running 24 hours a day, six days a week, Sadler said. We can"t keep up.

Sadler was the first show attendee I spoke with on, as it turned out, the busiest opening day of any FABTECH on record, with 12,200 treading the Las Vegas Convention Center halls. Total attendance was 21,700 over three days, the third largest FABTECH crowd ever. All this happened during a week when the Dow performed its most dramatic free-fall in recent memory.

During the show, I frequently scurried back to the press room to log on, check my news feeds, and see how dire things were on Wall Street. I then trudged out a tad depressed, only to be perked up again by talking with vendors and, especially, attendees who told stories of brisk business. It"s not as brisk as last year, they said, but it"s busy all the same. Many, in fact, said they planned to expand.

We"re trying to launch a pipe fabrication facility, said John Clark of Central Air Conditioning Co., a 150-employee firm in Wichita, Kan., that builds ductwork and other ventilation equipment for aircraft plants. After 9/11 the business plummeted as the aerospace sector struggled. We about starved to death for four years, Clark said.

Today the company has diversified. About 60 percent remains with the aircraft building business, but the remaining serves other sectors that include oil and ethanol refineries. That"s why, Clark said, we"re getting into piping.

Steve Rico found diversification in, among other things, light towers. The plant manager of Mid-West Machine Products, Golden, Colo., said the company had built solid revenue streams from the computers and electronics industry.

But we took a real beating after 9/11, because we were so heavy into the electronics industry, he said. That"s what caused us to diversify.

Today the company fabricates mild steel for companies ranging from manufacturers making signs and light towers for nighttime construction, to OEMs who make carpet cleaning systems.

In fact, the company is even branching out away from fabrication. Mid-West engineers have gotten good at developing automation systemsfor instance, tying a press brake and cutting system into one automated cell. So today, Rico said, company managers are looking to sell such automated integration as a separate service and provide yet another revenue stream.

This gave some anecdotal evidence to some of Chris Kuehl"s observations. He"s an economist for the Fabricators & Manufacturers Association and managing director at Armada Corporate Intelligence, Lawrence, Kan. As part of a lunchtime talk at the show, Kuehl described the current recession as one vastly different than the last one. The trouble isn"t in manufacturing, which had already shed 3 million jobs during the last recession.

This time, it"s a one-sector downturn, Kuehl told me before his talk. That"s good news and bad news. We still have an economy that"s fundamentally pretty solid. That said, it is not going to stay solid much longer if the banking system doesn"t get organized.

We have an atmosphere of frenzy, he continued. We"re looking at a fairly odd recession, assuming we"re in a recessionary period of some kind. We haven"t gotten something that builds from the bottom up. Instead, it"s the banking sector that went berserk, and it"s trickling down.

Going back and forth between online Wall Street news and the show floor, I felt there were two separate realities. Attendees didn"t look like those iconic images of NYSE traders sitting shell-shocked with their faces in their hands. Nor were they continually checking their dwindling net worth on their Blackberrys. Instead, they looked for new equipment to grow their businesses.

And back at home, they said, the orders kept coming.

Tim Heston

Tim Heston

Senior Editor
FMA Communications Inc.
2135 Point Blvd
Elgin, IL 60123
Phone: 815-381-1314