(April 26) - Last week the Metal Treating Institute (MTI) held their annual spring meeting in Fort Myers, Florida. It sounds as though attendance was good and that much fun was had - and much learned - by those who attended. Below we have a photo from the opening night party...uh...reception. Pictured are D.L., T.J. and Joe from Wirco and Yvonne from Marathon.
Do We Really Need OSHA? (or "life before OSHA")
(April 25) - Today we are pleased to feature an article from Ken Hinckley - long time time heat treater. Ken has been spending lots of time in Thailand and seeing heat treat done the old fashioned way. That gave him the idea to contrast safety before and after OSHA. Have a read:
DO WE REALLY NEED OSHA
A HEAT TREAT SHOP THAT IS NOT REGULATED BY OSHA
Everybody whines about OSHA and considers them a detriment to manufacturing. Although OSHA seems to have become a fine generating agency lately, stop and think what manufacturing was like prior to OSHA.
If you think OSHA is not needed, think again. Does anybody remember the days prior to OSHA when Fatalities were a common occurrence in industry. I can remember when there were at least a couple of fatalities per year in the small city I lived in. I remember a person falling in the melt at a Steel Mill because the catwalk was unsafe; a crane operator getting electrocuted because there was no cover on the instrument panel of his crane, another crane operator falling off his crane because there was no protection when he walked on top, a welder killed when he cut into a live natural gas line (it was supposed to be off), a worker killed when a cable on a wrecking ball broke (it landed on him), and a man cut in half when the hot wire in a wire mill broke. Now days we have safety guards on all catwalks, instrument panels must be secure, gas lines have to be broken prior to cutting into them, cables must be inspected regularly and documented, and areas of danger clearly marked off. We say we follow these rules and many other rules because we do not want to get fined, but in reality aren’t we just doing what is right for our workers. Would your concise let you get away with killing a worker due to poor safety practices? We still have accidents, but they have been drastically reduced.
Here are some interesting facts:
The three most dangerous industries in the US are Mining, Farming, and Construction. All industries that are difficult for OSHA to monitor.
Farm workers comprise 3% of the American workforce but account for 10% of work related fatalities.
The fatality rate for US workers in 1970 when the OSHA Act was passes were 18 per 100,000 employees.
In 2002 that figure was 4 per 100,000 employees.
Occupational injuries were 10.9 per 100,000 employees in 1970.
Occupational injuries were 6.1 per 100,000 workers in 1992.
It is evident that OSHA has had a significant impact on the safety of workers in America.
PowerMax Furnaces General Manager Gone
(April 24) - PowerMax Furnaces is the Shanghai-based manufacturer of AFC/ALD furnaces (as well as their own designs) and the Chinese distributor for SSI products that was established in 2003 by Taiwan-based Marstate. We recently heard from sources in China that their General Manager left the company. We honestly have no idea if this was a resignation or firing or when he will be replaced, but we're looking into it.
Timken Flying Higher Still
(April 24) - Big news out of Timken last week as they announce their dividend and an increase in their Q1 and full-year earnings estimates. Here's a snippet:
Timken Raises First Quarter, Full Year 2006 Earnings Estimates
Company to announce quarterly results April 27
CANTON, Ohio, April 18 /PRNewswire-FirstCall/ -- The Timken Company (NYSE: TKR) today announced estimated 2006 first quarter earnings per diluted share of approximately $0.70, up from $0.63 per diluted share for the same period a year ago. Excluding the impact of special items, the company estimates 2006 first quarter earnings per diluted share of $0.71, compared to $0.64 for last year's first quarter. This compares favorably with the company's previous estimate for the first quarter of 2006 of $0.55 to $0.60 per diluted share, excluding special items. The difference between reported and adjusted earnings is due primarily to manufacturing rationalization charges. "We are seeing continued strong demand from industrial markets. This has translated into better-than-expected first quarter performance in our steel business. The steel group benefited from a combination of strength in aerospace and energy-related markets, high capacity utilization and productivity and a lower-than-expected increase in natural gas costs," said James W. Griffith, Timken president and chief executive officer.
As a result of its first quarter performance, the company has increased its earnings estimate for the full year to $2.80 to $2.95 per diluted share, excluding special items. The company's prior earnings estimate for 2006 was $2.65 to $2.80 per diluted share, excluding special items.
(April 21) - We just got a PR from Marathon Sensors about furnace upgrades. No, MMI isn't getting into the heat treating business, but instead, is upgrading their test furnaces. In all, Marathon has 4 test furnaces accommodating some 30+ simultaneous probes for testing and diagnostics. Some of the furnaces are apparently getting long in the tooth so they hired Jeff McLaughlin (maintenance manager of MP Steel) to rebrick, rebuild and replace heating elements, retorts and SCRs. The result is 16 points of ultra-efficient carbon probe testing in furnaces 1 & 2 at the Marathon facility.
Of course it wouldn't be a Marathon press release without mention of one of the "Marathon Mutts":
"Jeff was assisted by Marathon Husky, Oso, who has been recovering nicely from his recent health problems. Of course, as with all furnace work, furnace rebuilds can be a bit dirty..."
Here's a shot of one of the new furnaces:
Sikorsky Awarded $3 Billion to Develop Marine Corps Heavy Lift Helicopter
(April 19) - Not long ago Sikorsky - a fairly large captive heat treater - lost the contract to build presidential helictopters to Lockeed Martin (after 20+ years of it being a Sikorsky build). We also know they just recently ratified a new contract with their Teamsters union workers covering 4 plants. Well today we have word of a nice contract to build the next Marine Corps heavy lift helictopter. Here's a snippet from the PR:
Sikorsky Aircraft announced today that it was awarded a $3.0 billion System Development and Demonstration (SDD) contract for the United States Marine Corps CH-53K heavy-lift helicopter. Sikorsky Aircraft is a subsidiary of United Technologies Corp. ( NYSE:UTX ). Under the terms of the SDD contract, Sikorsky will oversee aircraft development, systems integration, test article production and test and evaluation activities on a sole source basis. The SDD contract could lead to the production of 156 CH-53K aircraft to replace roughly an equal number of CH-53E SUPER STALLION™ in the Marine Corps' current inventory. Development money and production quantities are determined year-by-year over the life of the program based on funding allocations set by Congress and Pentagon acquisition priorities. SDD engineering and program administration activity will be centered at Sikorsky's Stratford facility and begin immediately.
"For more than two decades the Sikorsky CH-53E SUPER STALLION has been the most capable marinized heavy-lift helicopter in the world. The new CH-53K promises a marked improvement in payload, range, and 'hot-high' capabilities and it will be the only aircraft equipped the meet the Marine Corps' unique and demanding requirements. We thank the Marine Corps for showing confidence in Sikorsky to develop and build a new aircraft that is vital to the nation and our armed forces," Sikorsky President Jeffrey Pino said.
(April 18) - Our friends at CHS-Asia have sure been busy. It turns out that they recently delivered a small car bottom curing oven to be used in the production of motorcycles. They tell us that nearly every motorbike manufacturer in Asia is expanding but that the product is almost entirely for local markets (must be why Harley is opening a place over there). The furnace was manufactured by CHS Asia in Thailand.
In this second photo we have Bank (CHS-Asia's Metallurgical Engineer), Tanong and Noy (Instrumentation Engineers).
Finally, just to show how "diverse" the gang at CHS-Aisa is, we have a shot of their latest product line in action...solvent!
Shanghai Automotive to Sell Cars in the UK
(April 14) - Shanghai Automotive Industry Corp. (SAIC) is probably the largest manufacturer of cars in China. It builds cars for or with both Volkswagen AG and General Motors. SAIC has recently outlined plans to start selling its own brand in China and around the world in a move that will put it in direct competition with its partners.
This year SAIC plans to start building and selling cars into the UK based on designs for the Rover 75 that is acquired from the now defunct MG Rover Group - a former partner company. It says it plans to start selling the cars in the UK by the end of 2007.
Now there's a strange idea: UK dominant auto maker stumbles on hard times...goes belly up and then its China partner starts building its models and shipping them into the UK. Who are their other partners? How are VW and GM doing these days? SAIC built more than 300,000 "GM" vehicles for the Chinese market last year...makes you wonder.
VFS President Resigns
(April 13) - Back in 1994 George Carter took over as the president of VFS after eight years with the company. In 2004, his eighteenth year with VFS and tenth as president, he handed the reigns to James Kellogg who had joined VFS in 2003 as their VP and General Manager. Kellogg had spent the last five years with Centorr/Vacuum industries and had some 22 years of experience within the vacuum furnace industry. The photo is of Kellogg.
Today we have news that Kellogg has resigned as president of VFS to take a position in the transportation industry.
Geoffrey Somary has been appointed Acting President of VFS and comes from sister/parent company Ipsen International where he was Vice President of Technology. Somary joined Ipsen in August of 2005 after working at Eisenmann (finishing, material flow, ceramics, environmental and drying systems). We wish both Kellogg and Somary the best in their new endeavors!
**MID-DAY UPDATE** VFS put their official announcement up today (April 13) and here it is along with a mugshot of Mr. Somary:
SOUDERTON, PA - Vacuum Furnace Systems (VFS) Corporation is pleased to welcome Geoffrey Somary as acting president, effective immediately. Jim Kellogg, VFS’s president since 2003, has accepted a new position in the transportation industry.
In making the announcement, Hendrik Grobler, CEO of Ipsen International GMBH, said: “We all want to thank Jim for his past contributions and wish him well in his new venture. Geoffrey Somary comes from within the Ipsen Group, and is leaving his current position as vice president at Ipsen International, Inc. to take on this new responsibility.” Continued Grobler, “We look forward to the continued growth and success of VFS Corporation through our commitment to excellence in vacuum furnace quality, parts and aftermarket support.”
American Axle Breaks Ground in Changshu China
(April 12) - It seems everybody's opening subsidiaries in China and those who aren't are pretending to by signing up distributors using their US namesakes. Today we hear that American Axle and Manufacturing is building a large gear and axle manufacturing facility in Changshu, China that will be 180,000 square feet once completed. Here's the PR:
CHANGSHU, China -- AAM (American Axle & Manufacturing Holdings, Inc. - NYSE: AXL) today broke ground for its Changshu Gear & Axle facility in Jiangsu Province, China.
AAM has acquired land-use rights for approximately 30 acres in an industrial park in the city of Changshu for the construction of a 180,000 square-foot, state-of-the-art, wholly owned manufacturing plant for its highly engineered driveline systems. Products scheduled for manufacture in the facility include independent rear drive axles (IRDA), power transfer units (PTU), integrated oil pan (IOP) front axle module and driveshafts for several customers, including SsangYong Motors, Beijing Benz DaimlerChrysler, General Motors and additional OEMs.
When fully operational, the facility will create approximately 350 engineering and manufacturing positions. William A. Smith has been appointed plant manager to oversee construction, build the organization, and be responsible for the future operation and launch of the products for AAM's customer base.
"We are extremely pleased to celebrate the ground breaking for AAM's first regional manufacturing operation here in Changshu, China," said AAM Executive Vice President, Worldwide Manufacturing Richard F. (Rick) Dauch. "China and Asia represent a large and growing market that we intend to serve with AAM's latest technology products, processes and systems."
Metroplex Upgrades
(April 11) - Word is that one of Heat Treat's more colorful characters is heading up an upgrade at Metroplex Heat Treat in Arlington, Texas. Metroplex is one of, if not the largest commercial shop in Texas with capabilities that include carburizing, vacuum, brazing, induction, flame hardening and ion nitriding. We have word that controls guru Randy Simmons (CHS-Asia) is doing a major upgrade of their atmosphere lines and we're hoping to get some photos in the next week or two.
This Year's Big HT Meeting in England is...
(April 11) - Foundry, Furnaces and Castings is held every two years and is one of the best forums for heat treating applications in the UK. This year's show is being held June 5-7 (or 5-7 June for you Brits) in Harrogate, England. To learn more click the banner.
Delphi Can Offer $35k Buyouts
(April 10) - A bankruptcy judge has ruled that Delphi can offer up to 13,000 hourly employees lump sum payments of $35,000 to retire early. The payments are to be funded by Delphi's former parent company, General Motors. Another 5,000 employees will be eligible to return to GM.
This is the court's first approval of parts of an agreement between Delphi, GM and their largest union (UAW of course) that was agreed to in March. Under that agreement buy-outs were to be offered to up to 113,000 GM workers with incentives of up to $140,000 depending upon seniority and whether they would keep their benefits.
Federal-Mogul Wins 2006 PACE Award from "Automotive News"
(April 10) - Federal-Mogul just won the Automotive News Premier Automotive Suppliers Contribution to Excellence (PACE) award for its Monosteel Piston innovation for heavy-duty diesel engines. Here's a snippet from the PR:
Southfield, Michigan, April 5, 2006 . . . Federal-Mogul Corporation’s (OTCBB: FDMLQ) Monosteel® Piston received the 2006 Automotive News PACE Award during a ceremony held April 3 in Detroit, Michigan. This prestigious award recognizes superior innovation, technological advancement and business performance among suppliers who contribute products, processes, materials or services directly to car and truck manufacturers.
Federal-Mogul’s award-winning Monosteel Piston was recognized in the product category. Federal-Mogul also won two honorable mentions for Sealing Systems products – FLAT-INSTALL® Crankshaft Seal and LEM® (Liquid Elastomer Molded) Gasket.
The Monosteel Piston’s innovative technology addresses the increasing thermal, mechanical, abrasive and corrosive challenges placed on heavy-duty diesel engines resulting from emissions regulations. Federal-Mogul's engineers developed a way to friction-weld lightweight steel components together creating a tough single-assembly piston, known as Monosteel. Federal-Mogul’s manufacturing methods build in generous oil galleries for better cooling, achieving better internal support shapes for high strength.
(April 7) - HTN is happy to welcome Engineered Heat Treat as our newest advertiser! Engineered is a full service heat treat in Madison Heights providing the following services:
Annealing, Carbonitriding (with direct quench or chamber cool), Carburizing (with direct quench or chamber cool), Deep Freezing (-120 F), Gas Nitriding, Grit Blast, Hardening (neutral salt bath, atmosphere), Hot Oil Capabilities, Martemper/Austemper, Normalizing, Plug/Die Quenching, Precipitation (age) Hardening, Straightening, Tempering,Vacuum Heat Treating.
Nitrex Scores Taiwan Win
(April 7) - Nitrex is by far the leader in nitriding processes with both its own systems and numerous licensees around the world. Their latest win is in Taiwan. Here's the PR:
ASSAB Steels (Taiwan) Co. Ltd, a full service supplier of tool steels
offering fabrication as well as machining and heat treating options, has
added nitriding to its range of commercial services. The company houses
a Nitrex system that runs on Nitreg(r) and ONC(r) technologies: the
first is a reliable nitriding process for improving the mechanical
performance of treated parts, while the second is an in-process
post-nitriding oxidation process that has the dual effect of enhancing
wear and corrosion resistance. The furnace has a work zone diameter and
height of 800 mm by 1500 mm (31.5" by 59") and can handle a load
capacity of 1,500-kg (3,300-lb). Production with the new equipment
started in the final quarter of 2005 and is being used for processing
extrusion, forging and die-casting dies as well as feed screws.
ABOUT NITREX METAL INC.
Nitrex Metal is a key supplier of automated, turnkey heat treating
systems for nitriding and nitrocarburizing applications and operates a
network of commercial heat treating facilities across North America. To
date, the company has over 200 installations in plants worldwide and has
licensed its technology to commercial heat treating companies in
Australia, Brazil, UK, France, Italy, New Zealand, Poland, South Africa,
Spain, Taiwan, UAE, UK, and USA.
Ford to Force US Working Standards On Foreign Suppliers
(April 7) - Every so often you come across some news that make you think 'it's about time!' and this is one of those things. In a world where much of the cost advantage of foreign parts comes from poor working conditions, Ford is saying it will now enforce work conditions similar to its own plants upon its foreign suppliers. While this won't eliminate work relocation it sure is a step in the right director for leveling the playing field. If benefit packages were to follow suit we'd guess that playing field would look a whole heck of a lot less tilted.
Impact of Delphi Shutdowns, Dana, GM, etc.
(April 6) - Folks are starting to speculate on the impact of the 21 Delphi plant closures and downsizing at GM, Ford, Visteon and others. Some people are mainly concerned about a glut of used furnaces (these are the folks who sell used furnaces of course), but we have a different take on things.
Here at HTN we foresee a spike in automotive heat treat outsourcing to the commercial heat treaters between now and 2008. By 2008 we expect to see the "big boys" successfully relocated to India, China, Thailand, etc., at which point we think the outsourcing will move to facilities over yonder a bit at a time.
In the meantime the new equipment vendors will take a hit. Knowing the short term for this opportunity window, heat treaters will focus on value or rebuilt furnaces and will scavenge parts/instruments & sensors.
The upside is that the next 2-3 years will be extremely profitable for resourcefull U.S. heat treaters but less so for equipment providers (how's that for a turn-around!). We think the heat treaters who find partners or open subsidiaries in Eastern Europe/China/India between now and 2009 will be the long-term success stories. After all, we still have more know-how then these regions.
Don't take this the wrong way: shops that provide high-value will continue to prosper and those that can do "boutique" work on high-end parts will do very well. The Delphi/GM/Ford/Visteon/Dana outsourcing bubble, however, will eventually migrate back to the big boys once they're established overseas. Some of their top technical people will make out well if they're willing to learn new languages too.
Of course we might be totally full of beans, but that's our take on the near-term future.
Furnace Controls & Sensors 2006
(April 6) - It looks like Industrial Heating's new conference on controls and sensors may turn out to be a winner. In our informal polls it appears that a surprising number of companies are planning on attending. Don't get us wrong, this is no ASM heat treat show, but it looks like a good portion of the companies looking to invest in modernizing controls are planning on attending this show. See you there!
Timken Supplies Two-Millionth Bearing Assembly to ZF
(April 5) - Over on Timken's site they're crowing about supplying their two-millionth two-row flanged pinion bearing assembly to ZF (Germany). Definitely an achievement worthy of some crowing! Here's part of the PR:
CANTON, Ohio, The Timken Company (NYSE: TKR) recently delivered its two millionth special bearing assembly to the Saarbruecken, Germany, production plant of ZF, a leading global supplier for automotive driveline and chassis technology. The milestone marks a long- standing collaboration between the two companies on the design of sophisticated bearing solutions for automatic transaxles.
Developed specifically for ZF automatic transaxles, the product is a two- row flanged pinion bearing assembly, referred to as a "TDOF." Over time, ZF and Timken worked together to refine the product, providing higher performance with fewer components in the assembly. The result was greater precision at a reduced cost.
(April 5) - Yvonne Spooner over at Marathon sure seems to to have fun with her dogs at the Marathon plant. She's posted a couple new photos of them "working" around the facility. Cute. You can see them in our forums by clicking here.
Delphi Downsizing Plan
(April 4) - Delphi will shed 21 of its 29 US plants as part of its downsizing plan filed last week. In addition, Delphi has filed a court motion to rejects its outstanding union contracts and plans to cut 8,500 white-collar jobs and a forty percent of its executives.
The filings come after a number of proposals were rejected by the UAW and make the likelihood of a strike by UAW workers likely. Essentially, these filings have ratcheted up the pressure on both sides of the negotiation for jobs and cost savings at Delphi.
Both the UAW and the IUE-CWA, Delphi's second largest union, have painted the filings as intimidation and expressed regret at what they are calling Delphi's unwillingness to work within the collective bargaining process.
As bad as Delphi's proposals seem, union strikes could actually have even more far-reaching impact as they would cascade to Ford, Chrysler& Nissan as Delphi supplies these companies and a shortage of parts would slow or even stop production at such companies and their smaller suppliers.
Another part of the filings asks the courts to reject some of Delphi's unprofitable contracts with its former parent company, GM. Approximately half of Delphi's business with GM is covered by this filing. Obviously this would impact GM significantly.
Process-Electronic/Nitrex Lands Canadian Job
(April 4) - Process-Electronic (PE) is a German manufacturer of SCADA systems, modeling software and heat treatment sensors. They are the sister company to Nitrex. It appears that PE has landed a nice job for both modeling software and oxygen sensors at Thermetco in Canada. Here's the PR:
Thermetco Inc. (Montreal, Quebec) has acquired HT Tools, a powerful
simulation tool from Process-Electronic (www.process-electronic.com), to
design and optimize carburizing processes. HT Tools will significantly
reduce Thermetco's lead time for process development, replacing
time-consuming calculation analysis and trials to design processes for
large-scale gears. This software package determines the most efficient
process based on user input of the application and its heat treating
specifications, and models the carbon content and hardness profiles for
the required case depth. Parameters taken from the virtual process are
then transferred to the carburizing furnace's control system.
With HT Tools maximizing the design efficiency of carburizing processes
for Thermetco, the company also chose the ultra-precise CS 87 oxygen
sensor to improve the accuracy of real-time process control of its new
pit carburizing furnace. The CS 87 delivers low drift performance and is
characterized by a patented self-cleaning mechanism that ensures
accurate signal detection by keeping the contact between the zirconium
dioxide and external electrode permanently clean. As a result, the
sensor has no need for periodic maintenance or calibration. Its modular
design makes component replacement easy and, at the same time, reduces
costly production downtime.
Borg Warner Forecasts and Plans
(April 3) - Borg Warner is a $4.3 billion dollar automotive components manufacturer headquartered in Auburn Hills, Michigan. Business is going well for Borg Warner with forecasts calling for $1.6 billion in growth from 2006-2008. Of this growth an estimated 15% is expected to come from Asian markets.
This is most likely a driving reason why Borg Warner will open a new facility in Ningbo, China to add to the 62 facilities it operates in some 17 countries. The new plant in Ningbo will assemble both turbochargers and transmission solenoids.
SECO/WARWICK Wins Job for Three Plate Aging Furnaces
(April 3) - SECO/WARWICK just scored another win. This one was from a Russian aluminum plant making plate for aerospace applications. In all, the new contract is for three new furnaces: one for age/aneal the other two for aging. Here's the PR:
The SECO/WARWICK Aluminum Group has received a contract for the delivery of two (2) new Age Furnaces and one (1) new Age/Anneal furnace to process loads of aluminum plate for aerospace applications for an aluminum plant in Russia. This is the third order for plate lines offered by SECO/WARWICK this year.
The SECO/WARWICK furnaces produce tight uniformity by utilizing reversing airflow to eliminate the formation of a "hot side" and a "cold side" on the load. By automatically reversing the airflow at regular intervals, the entire load is brought up to temperature at a more uniform rate. Thus, the amount of temperature spread within the load is reduced, and the resulting metallurgical properties are more uniform.
The electric heating system for the furnace is divided into six equal zones of PID temperature control. Each zone will incorporate SECO/WARWICK bayonet resistance heating elements. SECO/WARWICK will provide equipment including the furnaces, loading machine, load stacking tables, and load trays. Installation is scheduled for fall 2006.
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