Industry Watch 19940

The buck stops (trade) here

Claiming that in its current state, the dollar is overvalued and adds the equivalent of a 20 to 30 percent tax on their goods, a consortium of American manufacturing trade associations held a conference on Sept. 24 in Washington DC on the subject of the dollar. The Institute for International Economics (IIE), a Washington-based think tank, was the primary organizer of the hearing, which, in addition to the trade associations, was attended by more than 200 people representing the financial press, the U.S. Treasury, the Federal Reserve Board, the Bush administration, and Congress.

IIE director Fred Bergsten, former assistant secretary of the treasury, delivered the keynote address, which characterized the dollar’s steady gains on the global currency market and the undermining effect that has on U.S. manufacturing. According to Bergsten, the dollar has appreciated 30 to 50 percent since its low in 1995. It peaked in January and has ebbed lately, dropping 10 percentage points from February to September, but renewed anxieties about the Japanese and European economies surfaced recently and drove the dollar back up (see chart above).

Paul Freedenberg, government relations director with the Assn. for Manufacturing Technology (AMT), which participated in the conference, says the overstated strength of the dollar was largely propped up by Bush administration support of the currency. Freedenberg says that U.S. currency will readjust itself given the opportunity, and the AMT and other trade associations have banded together to form a Sound Dollar Coalition to further the process.

“The first thing is to stop talking up the dollar,” says Freedenberg. “[The Sound Dollar Coalition] thinks that’s a mistake. We think the better approach, which has recently become the theme of the administration, is that the dollar ought to reflect the underlying strength of the American economy.”

Freedenberg says the global currency market plays like an ultrahigh-stakes poker game. Earlier this year, when the Bush administration was promoting the dollar’s strength, it tipped off currency traders that the U.S. might intervene to keep the dollar high by buying dollars off the market, which creates demand and increases their value.

The administration has since toned down its strong-dollar stance somewhat, but Freedenberg says further steps could be taken to bring the dollar back down to earth without flooding the market with dollars to artificially deflate their value.

“At this point, [the Sound Dollar Coalition] isn’t asking for intervention,” Freedenberg says. “We’re asking for [the dollar’s value] to be a more sensible reflection of underlying economic conditions, which aren’t that great in America.”

The administration’s strong-dollar stance hasn’t been the only factor inflating the dollar. Freedenberg says American manufacturing is a victim of its own productivity and subsequent success.

“The betting is that the U.S. economy is going to grow,” says Freedenberg, “because productivity is so high relative to Europe and Japan. In a sense, the success of the machine tool industry and other underlying capital goods industries, such as plastic injection molding, means that people are betting on the American economy, buying dollars, buying U.S. shares, and therefore trading up the dollar.”

But, Freedenberg adds, as the dollar goes up, U.S. manufacturing can only go down. Domestic and international trade is hindered by an overvalued dollar, which creates the equivalent of a tax on U.S. goods.

“There’s no way that American injection mold- or toolmakers can wring enough out of their production to be competitive if you’re talking about overpricing of 20 or 30 percent,” Freedenberg says.

Freedenberg says the Sound Dollar Coalition estimates that the dollar of the last two years has led to the elimination of 150,000 jobs. “That means that there are people affected by the overvalued dollar, and by the fact that you have a currency that’s making U.S. manufacturers less competitive.”

It’s open season for open houses

IN the last two weeks of September, three, count ’em, three injection molding machinery OEMs opened their doors to molders. Once inside, guests were treated to the latest manufacturing solutions their hosts have to offer, up-close and personal introductions to new company officials, and a heaping helping of hospitality. Regarding the latter, no reporter can turn down a free meal. IMM turned up at all three.

Arburg Inc., Newington, CT. The buffet-style spread at Arburg’s Technology Days open house was almost as tempting as the informative presentation given by Friedrich Kanz, president. Kanz says Arburg exports more than 60 percent of its iron. Arburg has a landed base of more than 15,000 Allrounder molding machines after 35 years in the U.S.

Tony Firth, formerly with Sandretto USA Inc. and now Arburg’s new director of sales, showed us around. There were live displays of MuCell technology, LSR molding, precision molding, and micromolding. Arburg’s Multilift robotic systems also were on display.

But the spotlights were on three machines new to these shores, two of which feature Arburg’s evolving, modular-drive technology. Modular drive was originally displayed at K 2001, and at the March 2002 Technology Days Arburg held at its 1.4-million-sq-ft global headquarters in Lossburg, Germany. The third newbie was the Allrounder 720 S—a 350-ton machine. (For more on the Lossburg open house, see May 2002 IMM)

Toshiba Machine Co. America, Elk Grove Village, IL. Toshiba’s been selling Stateside since 1974, fielding more than 9000 presses equipped with more and more domestic content to ensure a quick turnaround on spares. Its open house/seminar was called IT, which stands for Innovative Technology.

Like Arburg, Toshiba demonstrated its latest all-electrics and full hydraulics running some of the latest and greatest value-adding processes like MuCell, Twinshot/Spirex coinjection, all-electric two-material multimolding, and all-electric LSR molding with the help of meter-mix machinery from Fluid Automation.

Toshiba’s EC series of all-electrics is growing. The company has an entire plant dedicated to manufacturing all-electric molding machines. A 610-tonner is its largest all-electric press built, featuring Toshiba’s synchronous a-c servomotors, which require zero cooling, among other things. But it’s already taking orders for a 950-ton EC machine it plans to introduce next year. A 1750-tonner is next.

Its servomolding machines are also growing in the other direction. A model EC5 was demonstrated. It’s a 5-tonner designed for servo-micromolding. In other news, Toshiba also plans to introduce an Internet/intranet-friendly, Windows-based production monitoring system for its presses in 2003.

Netstal Machinery Inc., Devens, MA. Netstal officially celebrated its 20th year of sales and service in North America in grand style. Dieter Klug, president and CEO, and Benhard Merki, director of sales, both flew over from the company’s headquarters in Naefels, Switzerland to introduce open house invitees to Netstal USA’s newly designated president, Rick Shaffer. Formerly of Demag-Ergotech USA, Shaffer will be taking over the helm in January from Werner Christinger.

Since it opened shop in Clinton, MA, moved to Fitchburg, MA in 1988, and settled into its 25,000-sq-ft facility in Devens in 1997, Netstal USA (NUSA) has put more than 1500 molding machines into North America. It had a record sales year in 2000, but like many other OEMs, it is facing challenges today. Klug says one of the company’s main goals is stabilizing its Stateside market share and then pushing its larger-tonnage hybrid SynErgy Series machines, particularly in the packaging market. They range up to 660 tons.

Growing its business for its PETLine systems is another challenge, and a formidable one. NUSA’s up against Husky in that arena, whose name is synonymous with PET. Klug’s hopeful that PET molding system customers here will start crying out for a second source, as, he says, they have begun to do in Europe. He will be content to see NUSA become a strong number two.

Klug also admits that Netstal brought its stylish e-Jet all-electric optical disk press to market too late. Sumitomo and Singulus/Fanuc were there already, and it’s tough making headway against them. Nevertheless, all-electric versions of its baseline SynErgy presses are definitely on the drawing board. Expect to see them roll out at K 2004.

Drying out, moving on

Cooperation with suppliers, around-the-clock work, and a feverish cleanup effort have enabled Austrian machinery manufacturer Engel to bring its central assembly, paint shop, and machine assembly line back online only four weeks after twin floods ravaged its Schwertberg facility on Aug. 8 and 12. Engel’s top priority now is to rebuild the 130 machines that were in various stages of completion at the time of the floods. The machines are being dismantled, cleaned, and reassembled. Components and assembly units that are sensitive to water (hydraulics and electronics) are being totally replaced. By late September, Engel had shipped 10 of these rebuilt machines, and had another 15 ready to go. The company’s goal was to have all the machines that endured the flood delivered to their appointed customers by the end of October.

To meet these ambitious goals, Engel took several steps. The first was to ensure uninterrupted parts supply. Engel’s European St. Valentin and Dietach plants have added capacity by adopting a grueling five-shift, 24/7 work schedule. Engel says this move covers approximately 25 percent of the additional capacity requirements. The rest come from cooperative suppliers who have signed agreements ensuring continual flow of parts and supplies.

In addition to completing all of its previous orders, from the onset Engel was intent on maintaining a strong showing at major upcoming trade shows. Engel says it will be able to accomplish this, and would be present for Interplas in Birmingham, England and the Fakuma show in Friedrichshafen, Germany, both in October. The company plans to appear at four more international shows in the near future in what it calls “customary Engel style.”