Skilled labor is hard to find in U.S.

TAKING TOLL ON COMPETITIVENESS

Results of a recent survey conducted by the National Assn. of Manufacturers (NAM) and Deloitte Consulting LLP, shows the serious shortage of qualified employees that a vast majority of U.S. manufacturers are now experiencing is taking an increasingly negative toll on America''s ability to compete in the global economy. The 2005 Skills Gap Report is based on responses from more than 800 manufacturers of all sizes nationwide and is the first new comprehensive survey about the American manufacturing workforce in five years.

"The survey exposes a widening gap between the dwindling supply of skilled workers in America and the growing technical demands of the modern manufacturing workplace," said NAM President John Engler. "It is essential that America close this skills gap if we are to maintain our edge in the global marketplace and remain the world''s leader in innovation."

More than 80% of manufacturers surveyed are experiencing an overall shortage of qualified workers that cuts across industry sectors, reported Richard Kleinert of Deloitte Consulting LLP. "The pain is most acute on the front line, where 90% report a moderate-to-severe shortage of qualified skilled production employees including machinists, operators, craft workers, distributors, and technicians. Engineers and scientists are also in short supply, with 65% of respondents reporting current deficiencies."

Poor skill levels among current employees are also a problem, with 46% of the respondents reporting inadequate problem-solving skills among employees and more than a third citing insufficient reading, writing, and communications skills in the workplace. Eighty-three percent of respondents indicated the talent shortage is currently affecting their ability to meet customer demands, with more than half reporting difficulty achieving necessary production levels and 43% reporting difficulties increasing productivity. The 2005 Skills Gap Report is available at www.nam.org/2005skillsgap.

In BriefErie expands in Hungary Molder Erie Plastics (Erie, PA) recently expanded its facility in Szekesfehérvár, Hungary. From left: Ronald Walters, Erie president/COO; P.C. Hoop Roche, chairman/CEO; Tibor Szanyi, Hungarian political state secretary; George Loranger, managing director of Erie Plastic''s Hungarian partner, Loranger Ipari.

Nypro buys out JVGlobal contract manufacturer Nypro (Clinton, MA) has taken full ownership of its DJ/Nypro joint operations in Louisville and Hazard, KY and El Paso, TX. In August 1997, Nypro acquired a 50% interest in DJ Plastics.

Rexam buys PreciseRexam, the global consumer packaging company and the world''s leading beverage can maker, acquired top-line injection molder Precise Technology Inc. (North Versailles, PA) from Code Hennessy & Simmons LLC for $257.5 million in cash, including debt.

Vicente Fox (l), Mexico''s president, was on hand for the opening of Moll Industries'' (Dallas, TX) third Mexican facility in Ramos Arizpe, Coahuila. Moll invested $13 million in the facility.

Think China is low cost? Try India.A new survey finds that average annual salaries in India are as much as 50% less compared to those in China.

The survey from global business consultant Mercer Human Resource Consulting found that for 95% of the 42 job roles examined, the average annual base pay in China is higher than in India with higher-ranking positions like human resource manager making an average of $32,000 in China compared to $15,100 in India.

The difference in lower-level jobs wasn''t quite as stark, with sales representatives in China making $5100/yr compared to $4700/yr in India; customer service assistants earning $2400/yr in China versus $1600/yr in India; and skilled production workers in China making $2300 a year while Indian equivalents made $1900/yr.

That gap may close quickly however, as India experiences shortages in many skilled labor positions and wages go up accordingly.

Quantum leap for packaging molding?The packaging open house at Husky''s Dudelange, Luxembourg facility provided quite a tease for the firm''s upcoming developments. According to Bruce Catoen, VP packaging at the Bolton, ON-based manufacturer of injection molding machinery, PET molds and hot runners, "In the next year you''re going to see things from Husky that will be the next quantum leap" in thin-walled packaging injection molding.

Pushed for specifics, Catoen says the firm is transferring its knowledge in building thixomolding machinery, which require injection speeds about 10 times that of plastics processing machinery to fill a mold with molten magnesium alloy, to plastics processing, and especially to Catoen''s packaging machinery operation.

With the technology transfer, "We''ll be able to reach two to three times faster injection speed than anybody else," said Catoen. He hinted that the NPE trade show in June might be the launch date for the new technology.

In related news, Catoen says Husky is keen to expand its sales into the plastics packaging business, with plans to double sales to that market in the next three years. Husky treats PET preform molding as a separate business unit from plastics packaging.

Hot runner makers add capacityThe two largest hot runner manufacturers, Mold-Masters and Husky, both recently completed extensive expansions. Bolton, ON-based Husky late last year opened a hot runner manufacturing operation at its Brazil Technical Center (Sao Paulo), after selling 135 hot runner systems there in 2004. The company anticipates sizable opportunities in Brazil in packaging, closures, and technical applications. Husky in November officially opened its hot runner manufacturing capacity in Shenzhen, its second hot runner operation in China; it opened one in Shanghai in late 2004.

Mold-Masters (Georgetown, ON), meanwhile, invested more than ?2 million in three new horizontal machining centers for its manufacturing facility in Baden-Baden, Germany. Next year that facility will be expanded yet again; at the Euromold exhibition in Frankfurt last month, the firm was actively seeking new employees, too. In March 2005 the company opened its Kunshan, China manufacturing facility.

Wine drinkers hit the box, not the bottleA market survey by information purveyor ACNielsen (Washington DC) says sales of premium-priced wines packed in 3-liter bag-in-the-box containers rose 71% over the last year to nearly $31 million, the fastest-growing wine segment. The most expensive sector, boxes costing at least $16, saw a whopping growth of 537% to nearly $9 million in sales last year.

The bag is connected to a spigot that keeps air out and prevents wine from oxidizing. The trend could mean increased business for blown polyethylene film producers.

Perspective is needed, though; total U.S. wine sales were about $3.9 billion in 2004. Bag-in-box wines'' appeal most to North Americans and Australians looking for, according to ACNielsen, wines that don''t need to be uncorked and last longer than just a few days.

Wine expert and radio commentator Tom Simoneau says 52% of all wines sold in Australia come in bag-in-a-box. Norway sells 40% of its wine in such packaging and Sweden reportedly sells 22% of all wine boxed.

Nanotubes production commercializedBayer MaterialScience (Leverkusen, Germany) now markets nanosized carbon materials under the trade name Baytubes for plastics applications. Production is at the company''s headquarters and, according to a Bayer spokesman, the company plans to expand production at another, yet-undecided site in Europe. Capacity output is not being revealed.

A new process allowed the company to cut costs but maintain stable production output, says Martin Schmid, head of the carbon nanotubes project. Two disadvantages that existing technologies pose, and a reason for limited nanotube use, are high production costs, with a kilo of nanotubes costing up to ?1000, and fluctuating production quality. Schmid says the new technology eliminates both these problems.

"For the first time, we can achieve consistent material purity of more than 99% and significantly reduce manufacturing costs," Schmid says, although he refrains from revealing the exact savings. The carbon nanotubes can allow surfaces such as vehicle body parts to become so electrically conductive that they can be painted without pretreatment. Other applications could include films for antistatic packaging and electromagnetic interference shielding for cell phone housings and computers.

Sigurd Buchholz, project head at Bayer Technology Services, says the nanotubes are multiwalled tubes of up to 15 graphite layers. They have a maximum mean diameter of 50 nanometers or about 10,000 times thinner than a human hair. They are said to withstand mechanical loads 60 times better than steel at only one-sixth the weight. Bayer can custom manufacture carbon nanotubes with different diameters, lengths, and wall thicknesses, he says.

Biodegradable resin market growsTechnology advances, lower prices, new products, and emerging markets have pushed the growth of biodegradable polymers at multiples of gross domestic product, with the opportunity for the resins to eclipse 200 million lb of global demand by 2010. This according to a new report from Business Communications Co. Inc. (BCC; Norwalk, CT), which estimates the current worldwide market for biodegradable resins at 114 million lb.

The report covers materials marketed as fully biodegradable, meaning they convert via microorganisms into carbon dioxide, water, and humus, or, in the case of anaerobic biodegradation, carbon dioxide, methane, and humus. BCC reports that Europe and Japan remain ahead of the U.S, led by producers Novamont and BASF, creating resins that primarily go into packaging, which take up 47% of demand right now.

Congress eyes counterfeitersAfter passing a bill cracking down on counterfeiters that differs little from the House version passed back in May, the Society of the Plastics Industry (SPI; Washington DC) is hopeful that a finished bill can be signed into law by the president soon. The Stop Counterfeiting in Manufactured Goods Act will toughen current anti-counterfeiting laws and work to keep fakes off the shelves by requiring that counterfeit goods, and the assets used to produce, package, and distribute them, be forfeited or destroyed. In addition, it would prohibit the production of counterfeit labels, patches, stickers, hand tags, or other fraudulent means of product identification. Through the Coalition Against Counterfeiting and Piracy, SPI joined 105 other trade associations and companies supporting the measure.

Vinyltech plans Phoenix pipe expansionPVC pipe manufacturer Vinyltech Corp. has plans to add a new blending system and two extrusion lines to its Phoenix, AZ headquarters, increasing the company''s capacity by 40%. The company said construction will begin in early 2006 and be completed by 2007, with new equipment up and running at that point. Vinyltech''s pipe is primarily used by municipal water, wastewater, and reclaimed water systems.

New Euromap leaderThe trade group Euromap (European Committee of Plastics and Rubber Machinery Manufacturers) announced that Bernhard Merki, managing director of injection molding machine maker Netstal (Näfels, Switzerland), will be Euromap general director for the next two years beginning in January 2006.

Merki succeeds Ulrich Reifenhäuser, president of the extruder manufacturer of the same name. Bernd Knörr, director of Germany''s plastics and rubber machinery trade group, continues as Euromap general secretary.

Euromap members account for about 55% of global manufacturing of plastics and rubber processing machinery, according to the group.

SMS to close German injection molding machine siteThe SMS group of companies (Düsseldorf, Germany) will close its Battenfeld Injection Molding Technology facility in Meinerzhagen, Germany in June 2006. SMS derives most of its sales from machinery for metallurgy and rolling mills for metal processing; within its plastics machinery business, extrusion equipment accounts for the bulk of sales.

The Meinerzhagen facility manufactures Battenfeld''s large (above 1000-tonne clamp force) machines. A Battenfeld spokeswoman said the company would continue to offer service and spare parts, though details as to how and from where were not yet decided. Battenfeld Injection Molding already shifted its back-office operations to its other European manufacturing facility in Kottingbrunn, Austria.

In a statement, Heinrich Weiss, chairman of the management board at SMS, minced no words about the viability of the German plant. "The Meinerzhagen facility has caused high losses for many years in a row. All our attempts to make [it] competitive have proved to be unsuccessful." In early 2004 Weiss hired former Krauss-Maffei Kunststofftechnik CEO Wilhelm Schröder to run SMS''s plastics machinery operation, with a mandate to make the injection molding business profitable.

Battenfeld plastics machinery also includes the Battenfeld Gloucester brand of blown- and cast-film lines, and the Battenfeld Extrusionstechnik, Battenfeld Chen, and Cincinnati Extrusion sheet and profile extrusion lines. All of the extrusion businesses have performed well in 2005, said Hans Berlisk, marketing director at Cincinnati Extrusion (Vienna, Austria). His company met its financial goal for calendar year 2005 by October, he said, with sales of PVC sheet and window profile lines in the U.S. especially strong.

Natural gas prices burn U.S. manufacturers

High natural gas prices are beginning to impact U.S. manufacturers, leading to salary freezes and lost market share, according to the results of a recent survey by the National Assn. of Manufacturers (NAM). Nearly 45% of those surveyed said they would be forced to lay off workers or impose wage reductions. About 22% of respondents said their companies would cut healthcare or other benefits. About two-thirds of respondents said natural gas is their primary energy source, while about 15% cited oil, and 3% cited coal. U.S. manufacturers use 33% of the nation''s natural gas, which has doubled in price during the last year and is more than six times higher than prices during the late 1990s.