is part of the Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

A 3300-tonner, installed in 48 hours

Van Dorn Demag delivered and completed all of the heavy installation work for this 3500-ton Caliber press at Guardian's facility in Evansville, IN in just 48 hours.
Guardian's Automotive Products Group (APG) availed itself of Van Dorn Demag's BLT2 onsite machine installation service for a big 3300-ton Caliber press it bought for its Evansville, IN facility last summer. There was one small problem, though. It was unlawful for VDD to endanger any of Guardian's employees when moving the big machine components into place, particularly when lifting heavy subassemblies with an overhead crane.

The solution was simple. VDD came in at 7:00 am on a Saturday. By 8:00 am Monday, Guardian had its new 3300-ton Caliber waiting for it. All of the heavy installation labor was accomplished in 48 hours. And the first test shots were fired in about 10 days.

Guardian's APG is one of the world's largest Tier One automotive suppliers. It is the only company that manufactures both glass and exterior trim products. Guardian does the whole exterior of vehicles—everything but the body panels. With more than a dozen manufacturing sites around the world, Guardian's APG is one of three business units of the privately held Guardian Industries Corp., a global firm based in Auburn Hills, MI. Together with its other business units, the Guardian companies operate more than 80 facilities in 20 countries.

Using a hybrid electro-hydraulic QMC system of its own design, Guardian intends to perform lean changeovers in less than 30 minutes, even on molds weighing more than 30 tons.
Guardian's APG also has the distinction of being the first molder to order BLT2 takeouts from VDD. The first one may have gone into the Guardian plant in Morehead, KY—sources are unsure whether Morehead or Evansville was first. Regardless, with the success of its weekend delivery and with an aggressive machine replacement program in action, Evansville has more Caliber BLT2s on order.

Lean Renovation
David Bacon is a lean-thinking plastics industry vet who came on board as Guardian Evansville's plant manager two years ago. Since that time, he has overseen the lean transformation of the 452,000-sq-ft ISO 9000/QS 9000/ISO 14001 Evansville facility, which started 37 years ago as the Windsor Plastics custom molding plant. A 1956 model-year 1100-ton Natco still runs in one area of the plant, but it may not be there much longer.

In less than two years' time, Guardian Evansville has brought in 15 new machines, 500 tons and up. It operates 32 horizontal and vertical molding machines in total, from 250 to 3300 tons, and seven more are on order. The plant employs about 745 (about 200 in injection molding), has almost 1000 active molds up to 66,000 lb, does about 300 mold changes/month, and runs a variety of ETPs, 24/7, moving 42 trucks full of parts every day to customers like GM, Ford, DaimlerChrysler, BMW, Freightliner, and International.

Chrome electroplating is another Guardian Evansville specialty. In fact, Guardian Industries sources say the Evansville plating line is one of the largest that chrome plates plastics in the world. Eighteen months ago Bacon and his electroplating team oversaw the construction of this fully automated, state-of-the-art chrome plating line at the Evansville plant.

Guardian believes standardization reduces the waste involved in retraining and in stocking spares. Una-Dyn materials conditioning systems are used in its big machine bay.
Believe it or not, construction of the plating line was done at the same time the plant was putting up a brand-new, 30,000-sq-ft molding bay for its big Caliber molding machines—home of the BLT2 3300-tonner. Bacon is a big believer in standardization as a means of eliminating the waste involved in such things as stocking spares and retraining. That becomes evident the moment you walk into the Caliber bay.

Caliber Central
Called the C-bay, the fully air-conditioned room houses eight Calibers from 1100 to 3300 tons. Each press is equipped with a blender from Maguire Products Inc. (Aston, PA) and an articulating-arm parts removal robot, either from Fanuc Robotics North America Inc. (Rochester Hills, MI) or from ABB Flexible Automation (New Berlin, WI). Bacon says these types of robots are needed because they are versatile enough to remove big, complex molded parts from big, complex molds. Guardian Evansville outsources all of its tooling.

The central drying and materials handling system is in a room off the mezzanine surrounding the shop floor. Secluding the materials conditioning and conveying system helps keep the noise in the bay at a minimum. This system is from Universal Dynamics (Woodbridge, VA). The chillers are up on the mezzanine, too, saving floor space. A 40-ton crane spans the length of the shop floor, which has a 40-ft ceiling.

Articulating-arm robots are used on Guardian's eight Calibers. They have the freedom of motion to remove big, complex parts from big, complex molds.

Guardian Evansville is presently standardized on hot runner systems from Plastics Engineering & Technical Services (Auburn Hills, MI) and hot runner controllers from American MSI Corp. (Moorpark, CA). One of the big molds that runs on the 3300-tonner has sequential valve gating on 23 gates run by the machine's Pathfinder 5000 controller.

The company's goal is to perform changeovers of this big mold and others in less than 30 minutes. The QMC system Guardian Evansville uses has custom-built electromagnetic platens from Tecnomagnete Inc. (Troy, MI) and electrical, water, and hydraulic hookups from StaŸbli Corp. (Duncan, SC). Mold preheating speeds along the changeovers. Bacon says fully automated parts handling and press-side assembly systems make molding on the 3300-ton Caliber cell a true shoot-and-ship process. There's a truck-loading bay right in back of the machine for the lean deliveries of parts as fast as the lean delivery and installation was for the press itself.

Molded in precolored ASA, a GMT 610 truck grille cover molded on the 3300-ton Caliber is snapfit in this assembly fixture onto a prefinished grille molded and electroplated in-house.
The BLT2 program at a glance
Once upon a time, Van Dorn Demag just shipped its large-tonnage machines. Its customers were responsible for contracting the riggers, for the installation, reassembly, debugging, and verification. That's after the big press got there, of course—there was also the long wait for the big iron to arrive. That's how it was way back in the 20th century.

Today VDD can have a big press delivered, built onsite, and running—complete with testing, calibration, and QA inspection—in just three to four weeks from shipment, 10 to 12 weeks from receipt of the machine order, depending on the options specified. What's more, VDD brings in its own specialists, including a certified and fully trained installation contractor.

Next, VDD's project manager and sales rep go into the customer's facility for an initial project review and site inspection. They examine logistics and administrative concerns and develop an understanding of the expected requirements for delivery and installation, including whether or not the customer has a big enough door for the big press to fit through.

Caliber two-platen presses (2750 tons and up) are key to VDD's BLT2 program. They are modular machines built from four major components: clamp base, movable platen, stationary platen, and injection base. To smooth the reassembly process at the customer's facility, the machine is prebuilt at VDD's facility, pretested, and verified before being shipped in five trucks—one for each major component and another for the supplies.

About a dozen big machines have been installed using the BLT2 program since its inception less than three years ago. The goal of the BLT2 program is simple: to make deliveries and installations go as quickly and smoothly as possible.

Contact information
Guardian Industries Corp.
Auburn Hills, MI
Gayle Joseph
(248) 340-2109

Van Dorn Demag Corp.
Strongsville, OH
(440) 876-8960

The Materials Analyst, Part 53: Where does the moisture go? (Part 3)

This series of articles is designed to help molders understand how a few analytical tools can help diagnose a part failure. Michael Sepe is our analyst and author. He is the technical director at Dickten & Masch Mfg., a molder of thermoset and thermoplastic materials in Nashotah, WI. Mike has provided analytical services to material suppliers, molders, and end users for 15-plus years.
The original purpose of this third segment was to follow various levels of moisture in a material through the molding process to provide an understanding of moisture's role in property development. However, the first two articles in this series generated such an interesting mixture of responses that a detour seemed advisable. Instead, this month's segment will be devoted to clarifying some of the comparisons that have been made between various moisture measurement techniques.

The essential argument for using simpler moisture measurement techniques such as loss-in-weight is that the more rigorous chemical methods are simply too difficult for most molders. It is a curious line of reasoning since it essentially puts forth the notion that a fundamentally inaccurate method of measuring moisture can substitute for a fundamentally accurate one simply because it is easier to perform.

To repeat a point from the March article, a system that heats a material and considers the entire resulting weight loss as moisture lacks the ability to distinguish between water and other volatile materials that are driven off by the heating process. If the heating process is conducted in an oxygen-containing atmosphere such as ambient air, then this mixture can also include degradation byproducts if the test temperature is sufficiently high. The amount of the weight loss that can be attributed to water is unknown unless a method that is moisture specific is also run for corroboration. This method is Karl Fischer, a chemical technique that is moisture specific. Every manufacturer of an alternative moisture measurement system makes use of Karl Fischer as a verification of its instrument.

Mr. Fischer: Myth and Reality
The warnings against Karl Fischer are familiar, and we have seen them in the responses from some of the manufacturers of alternative instruments. The most common is that the Karl Fischer method employs toxic chemicals. The reference to toxic chemicals is actually a holdover from the composition of the original Karl Fischer reagents, which contained pyridine—definitely toxic. But about 20 years ago, chemical manufacturers began to introduce pyridine-free Karl Fischer reagents and today, they are the industry standard.

The second adjective mentioned regarding chemicals is "expensive." The expense is somewhat dependent on how much the instrument is used. Our system gets very heavy use because, in addition to the technicians on each of the three shifts, the lab staff uses it to verify the moisture content of the materials that must be dried prior to melt-flow-rate testing. Even with this around-the-clock duty, the annual cost is approximately $1000. In contrast, our moisture-specific loss-in-weight system that was purchased several years ago as a backup uses a disposable septum that costs $.85 and must be replaced every three to five tests. If this instrument were used to the same degree as the Karl Fischer analyzer, the annual costs for the septums would be just more than $2000.

The third assertion is that Karl Fischer instruments are fussy, demand constant attention to work properly, and require a trained chemist on staff. Most of this is again a throwback to the days of the older instruments. But some of it comes from a problem with method of operation. Karl Fischer instruments work best when they are in continuous operation. When the instrument is on, the reagents are constantly being stirred and equilibrium is maintained with the surroundings. If the instrument is turned off every night, it takes a while in the morning before everything comes back into balance.

But in a production setting that runs around the clock this should not be an issue. In our facility, there are at least 20 people who can come into the lab with a sample at any time and run a test. In the 16 years that we've had the instrument, it has been down for a total of six days. The routine maintenance of the instrument is handled by one of our lab technicians (who is not a trained chemist), just as the injection molding machine maintenance in our manufacturing facility is handled by technicians trained in hydraulic and electrical circuitry.

The fourth argument against Karl Fischer is all that glassware. It is true that Karl Fischer instruments are lab instruments. You cannot wheel the apparatus around the plant, and you have to leave the "use a bigger wrench" mentality at the door. But the idea of portability for the alternate systems is oversold. The reality is that the accuracy of any instrument is affected if placed in an area where the ambient air humidity and temperature vary. Our moisture-specific loss-in-weight instrument was initially used in the general plant environment with very poor results. It is now located in an office on the plant floor with a controlled relative humidity, and the results are much improved.

Test temperatures for commonly tested materials, C
PET polyester230230155
Nylon 6/6230230195
Problems with Preprogramming
A point has also been made that with simple loss-in-weight systems the user does not need to worry about method development; everything comes preprogrammed. Unfortunately, it is not that simple. For whatever reason, the list of test conditions provided by moisture analyzer instrument suppliers does not meet the test of reality, and this includes suppliers of Karl Fischer systems. Often temperatures are too high or too low, and some specifications seem to ignore the fact that many materials do not absorb enough moisture to warrant testing.

The other problem with predetermined test temperatures goes back to something we discussed in the first section of this series. An inert atmosphere is essential to accurate measurements because a temperature that removes all the moisture from a material will also remove a lot of other volatile components and may begin to degrade the material. Loss-in-weight systems that run in air attempt to get around this problem by reducing the test temperature.

For instance, consider the table above. Under these test conditions, the three instruments provide reasonably good agreement with each other with a couple of exceptions. The ABS results for the moisture-specific loss-in-weight system come in consistently high by a factor of two or three, suggesting that the 230C condition might be a bit aggressive for ABS. But the real concern comes in the results for the PET. The standard loss-in-weight instrument finds only 68 ppm using the reduced temperature of 155C while the Karl Fischer detects 126 ppm, almost twice the amount.

It is easy to conceive of a situation where the actual moisture content for the PET could rise higher than the critical threshold of 200 ppm (.02 percent) and still test as dry using the loss-in-weight system. And this is precisely the problem we see when we review these instruments. In order to compensate for the fact that loss-in-weight systems count all volatiles and that the presence of oxygen results in some degradation, test temperatures must be turned down on these instruments. But the reduced temperature does not ensure that only moisture is being monitored. It simply reduces the total volatile content to the point where it agrees with the actual moisture content. If you are working with noncritical materials like ABS and PPO, this is probably an uncertainty you can live with. If you are running materials that can hydrolyze such as polyurethane (PUR), PET, or PC, then you cannot.

Field Reports of Inaccuracies
In working on processing and part performance problems with various clients, we have encountered loss-in-weight systems that were reporting both high and low values. In one case, a molder was convinced that its PUR was being dried to 30 ppm based on the results from a loss-in-weight system. In spite of this, the molded parts were degraded. A Karl Fischer measurement showed that the actual moisture content was more than 300 ppm.

In another case, a company was actually using TGA (thermogravimetric analysis) to determine the moisture content of mineral-filled nylon parts that were brittle and failing during assembly. TGA is a very sophisticated technique compared to a moisture analyzer. But for all its sophistication, it is still a loss-in-weight system. The TGA was measuring a weight loss of 1.53 percent, and the end user was using this value to conclude that the parts had been fully moisturized and therefore must be breaking because of poor molding practices. A Karl Fischer determination showed that moisture content was actually only .40 percent, and with proper moisture conditioning the parts achieved their required ductility.

These failures do not discount the fact that for a given grade of material, careful correlation of results between techniques can result in usable test values. But loss-in-weight systems cannot be moisture specific, and, consequently, the agreement has to be established for every grade of material using the time-tested chemical techniques as the final arbiter.

Capable Processors
The statement has been made that loss-in-weight systems were created to answer a demand in the market for something simpler than chemical techniques like Karl Fischer. This is a bit of rewriting of history, because it suggests that the plastics industry, after struggling with the more sophisticated chemical techniques for years, finally turned to the simpler methods. In fact, most companies that use loss-in-weight systems had probably not even heard of Karl Fischer, much less tried it. If they had, and if they had received the proper training and support, they would have discovered what we learned in the mid-1980s: It is less challenging than learning how to operate an injection molding machine or programming your VCR.

The notion that processors cannot master the principles of scientifically correct moisture measurement underestimates the technical acumen of processors and strengthens the belief that they represent the weak link in the supply chain.

In addition, in a world where the threat of job migration is a constant, it should be understood that technological awareness is one of the best defenses against becoming a commodity. If something that is technologically sound looks a little harder or more challenging than what everyone else is doing, then it should be thought of as a potential competitive advantage, and not a cost line item to be avoided.

Contact information
Dickten & Masch Mfg. Co.
Nashotah, WI
Mike Sepe; (262) 369-5555, ext. 572
[email protected]

The Troubleshooter, Part 55: Thick-wall parts

This article continues our series of troubleshooting reports from one of the leading on-the-spot problem solvers in the molding industry. Bob Hatch is manager of technical service and customer support for Prime Alliance, the Des Moines-based resin distributor. Before his present assignment, Bob managed a molding operation for 25 years.

For such a thick part, this pulley had surprisingly few problems for the Troubleshooter to correct. Made of glass-filled nylon 6, it molded without voids but did require some modifications to the runner system to increase flow. (see photo below)
Things had been slow for a couple of days when, out of the blue, I got a phone call from Mike Gebel, who runs the toolroom for Midwest Industries in Ida Grove, IA. You might know the company best for the ShoreLand'r boat trailers and ShoreStation boat hoists it produces. Mike has been a moldmaker for quite a few years, and has come up with some interesting innovations for the ShoreLand'r and ShoreStation product lines.

He said he had a new idea for gating a very thick pulley they were getting ready to use in conjunction with their ShoreStation boat hoist product line. He wanted me to take a look at his concept and see if I could find any problems with the design and production development for this new pulley.

To say the least, I was intrigued by the opportunity to look at a new design for a thick-wall pulley, so I told him I had a couple of days free the following week and would stop in to see him. Being able to mold thick-wall parts without any voids is something all molders wish they could do.

When I got there, it didn't take Mike long to pull up the designs on the Pro/E screen that he uses for almost everything he does these days. Then I started asking questions about whether he could explode some of the drawings we had just reviewed so I could get a better look at how the different components go together to make the molded pulley.

After a few minutes, I could see what Mike was up to and had to admit I had not seen anything like it in my many years on the job. Mike said he had not seen anything like this either and that was why he wanted me to check out this new design.

Mike has built pulley molds before, but this was uncharted territory for him because of the thicker walls, the molded-in insert, and his desire to use a disk gate. He had used a similar design previously, but not one in which the disk gate fed in material around a brass insert. Mike's number one issue was that he could not have any voids under the grooved section of the pulley. A high-tensile aircraft cable goes around these pulleys to lift big, heavy boats out of the water and then support that weight for days, weeks, or even months at a time.

One Tough Part
The material used in this application was a glass-filled, impact-modified nylon 6 that required a good surface finish to maintain the quality standards of the product line and still be strong enough to perform the function needed by the part. The advantage of that material in this application was the good cold weather impact strength and the better surface gloss compared with most of the glass-filled 6/6 nylons.

Mike and I reviewed the samples they had molded a few days before, and I could see why he was concerned. Some of the sections were 1.450 inches thick, and even though he had cored out some sections between the spokes, it still left a lot of room for problems with voids. To have voids in the 1.450-inch-thick sections directly under the .650-inch groove that the cable rides in during the boat hoist's lifting and holding function would be totally unacceptable. The boat's weight would force the groove to cave in on these voids, destroying the pulley.

Sprue O-diameter.275 inch.343 inch
Sprue at disk gate.335 inch.403 inch
Disk gate wall at sprue.220 inch.300 inch
Feed point width.125 inch.175 inch
Middle of disk.180 inch.240 inch
Top of skirt.100 inch.140 inch
Bottom of skirt.060 inch.090 inch
Mike had already sectioned several of the molded parts with his trusty band saw and neither of us could find any voids or other forms of porosity in the part's thick sections. The key to molding thick parts void-free is to use a pack pressure at least as high as the injection pressure and most often just a little higher. All this sounds well and good, but it means the flow path has to stay open for material to flow for as long as it takes to get the part filled and packed; then pack pressure has to be used to fill any voids that might form in the thick sections.

I told Mike that, in my opinion, he could not have done a better job molding these parts. He said that a sister company of Midwest Industries was doing the molding. The molding manager, Ron Schirrmacher, is one of the best molders he has ever worked with, so Mike didn't want me to give him all the credit when Ron did the work. I know Ron well so I have to agree with Mike. It takes a good relationship between a molding person and an equally good toolmaker to make a molding shop hum.

Eliminating Warpage
I went on to ask Mike about any post-mold warpage that he might be getting due to the thick sections of the part. Mike said it was funny I should ask because he was getting some warpage that wasn't acceptable for the function of the part. It was the type of warpage that causes the center hub of the pulley to cool in a position that makes it wobble when it turns.

My guess was that he had a couple of choices here. He could drop the parts in water to set up the surface and just let the material in the thick areas take as long to cool as they needed, but that often causes shrinkage voids. I'm not talking about packing voids in this case—just thermal shrinkage voids—but all voids are unacceptable for this application.

Another approach was to cool the parts in stages. The 2-minute cycle time was long enough to take the parts right out of the mold and put them into a water tank heated to 150F. Then, after a few minutes, the parts could be moved into 100F water, and then into room temperature or slightly cooler water for final cooling. This is a good way to keep the surface of the part from cooling quickly and trapping the hot material in the center of the walls. It basically lets the part cool more evenly from the center of the thick walls to the outer surface of the pulley. However, this method requires a lot of extra handling, so most molders don't like to use it.

Another approach, and perhaps my favorite, is to open the flow path in the mold to allow the glass-filled nylon to flow at a lower temperature than the typical 540F or higher temperatures that many molders use for glass-filled nylons. The temperature shouldn't be so low that the nylon sets up and twists the nose cone off the end of the screw, but low enough so we don't have to remove as much heat from the molded part after it is ejected. Using stainless or D-2 steel in the gate area to eliminate abrasive wear from the glass filler in the material was also a good idea.

We would have to use a pyrometer to verify the actual melt temperature, but setpoints of 460F or so would do a pretty good job for this material. Factor in the shear heat generated by the screw as it recovers and the 460F setpoint typically reads an actual melt temperature of 490F. Since nylon 6 sets up at 475F it's important to have a little difference in melt temperature as a cushion.

This is a good time to explain the difference between nylon 6 and 6/6 when it comes to cycle time. Nylon 6 sets up at 475F and 6/6 at 500F. If you are trying to take heat out of the barrel, it is easier to do with nylon 6 than with 6/6. The less heat we put into the part, the less time it takes to get to a decent demolding temperature.
In this drawing of the pulley mold, the molder's spreader insert (gray) is used to mold around the brass insert.
A Whole Lot of Flow
The next question was how Mike was going to increase the flow path of the material through the disk gate. First, he needed to increase the diameter of the sprue from .275 inch at the sprue O-diameter and .335 inch where it attached to the disk portion of the gate to something bigger. I estimated that .343 inch at the sprue and .403 inch where it attached to the disk gate would be about right. We needed to increase this diameter so the sprue could handle the added volume requirements we would need when we thickened the walls of the disk gate. Needless to say, the general purpose nozzle orifice would need to be increased to an orifice diameter of .325 inch after we opened up the sprue.

In addition to making the sprue bigger, we needed to increase the wall thickness of the disk gate to handle the increased volume of material that would be running through the sprue. The disk gate wall was .220 inch thick where the sprue attached to the disk; then the wall thickness gradually tapered down to the skirt portion of the disk gate where the wall thickness was .100 inch. The wall thickness at the top of the skirt was .100 inch, and the skirt wall gradually tapered down to .060 inch where the skirt attached to the part.

This follows the rule of flowing material from thick to thin, but this entire design was on the thin side for a part with 1.450-inch-thick walls. Think of this as a material starvation problem for the cavity due to this flow restriction.

The top portion of the disk gate, where the sprue attached to the disk, needed to be increased to .300 inch from .220 inch. The middle portion of the disk had to be bumped up to .240 inch from .180 inch, and the top of the skirt needed to be changed from .100 inch to .140 inch. The .060-inch wall thickness of the skirt, where it attached to the part, could be increased to .090 inch to finish the changes needed to open up the restricted flow path.

I explained to Mike that I thought these changes would allow them to run the material a little cooler and thus avoid the warpage issues. I also told him he might want to use staged cooling or put the parts on stainless steel fixtures and cool them under water to get rid of every last bit of warpage.

Mike then asked about the memory problem if he used fixtures to hold a part flat until the thick sections set up. He was mostly concerned about molded-in stress. I reminded him that the interior of thick walls is still molten for some length of time after the outer walls set up.

The memory he was talking about begins when the molten material finally sets up. If the part walls set up while in the fixture, then it is that dimension that will become its memory position. It is the little points, like this one, that make thick-wall part molding a whole different ball game, at least when compared to more normal injection molding projects.

I suggested to Mike that he not only thicken the disk gate walls, but also increase the cross section of the points in the disk gates that transition the material from the sprue to the disk gate walls. These points were only .125 inch or so in width and would need to be increased to at least .175 inch at each of the four points to handle the extra volume of material when the sprue diameter was increased.

Spreader Inserts
Now, we got to the meat of the visit. How was Mike spreading out the material in the disk gate and still molding around the brass insert that served as the pulley's hub? The real question was how to do it without filling the seal groove in the brass insert with nylon. Mike set up the mold so the press operator would place the brass insert over a core in the center of the mold (see drawing, above). This holds the insert in place. Then a spreader insert would be placed on the end of the brass insert so that when the mold closes, the modified sprue bushing just touches the spreader insert to hold the spreader in place. Then the material would be injected through the sprue bushing, through the four feed points, and onto the spreader insert, which in turn feeds the material through the disk gate into the pulley's cavity.

After filling and packing out the pulley, the hold pressure setting would be responsible for packing out any voids that formed in the part's thick sections. This was the unique part of this design because the spreader insert would now be trapped between the molded-in brass insert and the disk gate. This posed no problem, though, because as soon as the operator cut the gate away from the part, the spreader insert would be set free, to be returned to the operator's table and used again.

Mike has a half dozen or so of these spreader inserts made up to allow for the 2-minute cycle, gate cutting time, and a little extra time for the spreader insert to cool before being used again. When he opens the flow path and brings the barrel heats down, he'll have to make more spreader inserts just to keep up with the new, faster cycle times.

Molding thick-wall parts is not extremely difficult. It's just that sometimes you have to use your imagination and, of course, you want to draw on past experience when you can. Mike does this all the time. I have to admit, I feel fortunate to have been a part of this new and interesting technique for molding void-free, thick-wall parts.

American toolmakers take data, testimony to the ITC

Armed with a bevy of survey results and individual testimonies, a contingency of 22 people comprised of suppliers, business owners, and trade groups stated their case for the ailing mold and die business to the International Trade Commission (ITC) in Washington, DC on May 21. The hearing, called as part of a Section 332 investigation into the current status of domestic mold- and diemaking, provided an outlet for the American toolmaking industry, including the National Tooling & Machining Assn. (NTMA) and the American Mold Builders Assn. (AMBA), to voice its concerns about this struggling segment of American manufacturing.

Moldmakers' Plight
Over the course of the one-day hearing, the mold- and diemaking group revealed devastating details of an industry that since 1997, according to a survey organized by mold component and material supplier D-M-E Co., has seen more than 200 shops close and overall sales drop 28.1 percent, or $3.3 billion.

D-M-E's survey garnered responses from approximately 1000 companies or more than 20 percent of the estimated 4200 moldmaking companies in the U.S. Of those respondents, 85 percent said they fabricated molds for plastics, 10 percent make dies for metal casting, and 5 percent build dies for metal stamping.

Using 4200 as the estimated total number of moldmaking companies in the U.S., D-M-E extrapolated the survey results from the respondents to reflect industry-wide data. While the group used these and other survey data to paint an alarming picture for the ITC, Scott Harris, president of Harris Precision Mold Inc. and the AMBA, says those involved didn't use the session to wallow in self pity.

"I think everyone in this industry is getting so hard hit that they want to complain, and whine, and whimper," Harris says, "but that really didn't come out." Instead, hard facts and figures came out that reveal an industry on a downward slide that has become much steeper and faster over the course of the last year.

"We've seen a tremendous velocity of change in the moldbuilding industry, so much so that the government can't keep up with it," Harris says. "There's a serious change happening very, very quickly, and I hope that that gives a sense of urgency to [the government] to make some positive changes to help our industry."

Among the negative transitions, moldmakers' profits before taxes as a percentage of their sales have dropped from 16.6 percent in 1997 to 1.4 percent in 2001 for a total decline of more than 90 percent. Employment dropped 23.8 percent in the same time period, which equates to roughly 46,000 jobs. This jumps to 98,800 jobs if you count the number of work hours lost since 1997, which equate to 46,800 full-time equivalent jobs.

Over this same time period, as they watched their sales drop by more than $3 billion, U.S. moldmakers pumped more than $3 billion back into their plants in a bid to become more efficient and competitive. This had the adverse effect of adding capacity to an industry already in a capacity glut. But D-M-E president Jerry Lirette, who testified before the commission, says these investments show the commitment of a world leader looking to stick with the leading edge of technology.

Moldmakers Request Help
Given the current clamor surrounding the recently imposed steel tariffs that have trading partners around the globe crying "protectionism," both Harris and Lirette say punitive tariffs aren't what they're recommending.

Harris prefers giving his U.S. customers a carrot rather than the stick and recommends investment tax credits for domestic companies that buy U.S. molds to level the playing field of international trade. If that's considered protectionism, paint him a protectionist, Harris says.

"I feel very strongly that you want to be a protectionist on things that are worth protecting," Harris says. "If our industry is worth protecting, you should damn well be protecting it."

Both Harris and Lirette say countries like China thrive on a trade scenario in which their exports to the U.S. receive a 3.1 percent duty, while American exports to their country are punished with a 12 percent duty and an additional 17 percent value-added tax. Lirette says something must be done to equalize this, and he's not looking for the kind of heavy-handed actions the government took against international steel industry rivals—he just wants a fighting chance.

"Steelmakers said, 'Give us an advantage while we recover,'" Lirette explains. "What we're saying from the tooling side is, 'Don't give us a disadvantage while we attempt to recover,' and that's an entirely different thing."

One card played repeatedly with the ITC was the fact that, although U.S. moldmaking contributed a relatively humble $8.4 billion to the U.S. economy in 2001, it is an integral component of the U.S. plastics industry as a whole, which employs 1.5 million and represents a $330 billion segment of the American economy.

"[The tooling exodus] is going to have a trickle-down effect that's going to be major on the U.S. as a whole," Lirette says. "That's an issue that people feel is too big for them to deal with, so they don't want to consider it a reality. But there's a huge issue relative to the United State's position of strength in the world, and whether or not it can be maintained with an eroding manufacturing base. I contend that it can't."

Editor's note: American moldmakers now must wait for the ITC to present its findings to Congress in October. As a Section 332 investigation, only facts can be given, with no recommendations for action. The website D-M-E set up to conduct its survey and provide information on the hearings,, remains live and contains data from its questionnaire and testimony from the hearings. 

RP rides the roller coaster

Among a number of new methods for creating prototypes quickly is the Zcast process, which involves printing a mold on a 3-D printer and pouring metal directly into the mold, producing parts like the manifold above.

Rapid prototyping continues to be a growth industry. Terry Wohlers of Wohlers Assoc. Inc. reported at the Rapid Prototyping & Mfg. 2002 conference and trade show in April that 2001 saw more systems installed, more material consumed, and more applications for the technology uncovered. Yet, in spite of this activity, revenues for 2001 showed different numbers.

"An almost unbelievable number of new technologies, materials, and enhancements are under development in corporate, university, and government laboratories around the world," Wohlers says. However, he adds, "Revenues from products and services were down significantly and machine unit sales were flat."

Wohlers believes that the contrast of growth in part production to the stagnation of system sales is in part due to equipment and material enhancements. "These improvements offer higher throughput from the same number of systems," he says. "Other factors include improved capacity utilization and the growth in the concept modeling segment of the industry."

Although RP and RT technologies would seem to be a natural niche for mold shops and molding companies to adopt to expand capabilities, it hasn't caught on substantially in this group. "Moldmakers tend to be slow to adopt new technologies," Wohlers says.

For example, Wohlers pointed to spiral conformal cooling in molds to improve cycles by more than 30 to 40 percent, which can be achieved using a new method from Solidica. (See "Prototyping Makes Noise With Ultrasonic Fusion Process," June 2002 IMM, p. 52 for a full report.) Other new technologies include ProMetal's new R2-64 that operates like an inkjet printer to lay down material with a 40 percent bronze infiltrant; DMD 5000 from POM, which offers the ability to build large parts; RSP Tooling's Rapid Solidification Process; and EOS's Direct Metal laser sintering process, which builds complex geometries in 20-µm layers.

"Some molds come right out of the machine ready to mold parts if you need a matte finish," says Wohlers of the EOS process. "The hybrid approach means it may make sense to produce the cavity side of the mold using conventional CNC machining technology and the core side using an unconventional approach such as laser sintering. The core side is often the most difficult and time consuming of the two, so the benefits can be realized by building both sides in parallel."

Two new casting methods are being developed as well. Z Corp. is offering the Zcast process for making investment casting shells of a plastic/ceramic composite using MIT's 3DP technology. The other method, for creating aluminum castings, is also in development by a number of companies, and can produce a casting in one to two days.

Wohlers says that 166 new patents were filed in 2001 for RP/RT processes, and some 75 to 100 universities are doing work in RP. "RP has gone from dramatic change to incremental change, but I think we're seeing only the tip of the iceberg. It's my belief that RP and RT will grow exponentially. There are many exciting developments ahead."

Wohlers' Rapid Prototyping Report 2002 is available for purchase. For more information, see

Contact information
Solidica Inc., Ann Arbor, MI

ProMetal Div., Extrude Hone Corp.
Irwin, PA

The POM Group Inc.,
Auburn Hills, MI

RSP Tooling LLC, Solon, OH

EOS GmbH, Munich, Germany

Z Corp., Burlington, MA

Industry Watch

After an investment group led by Firs Atlantic Capital purchased it in 1990, Berry Plastics used a slew of acquisitions over the next decade to help its revenues post 11 straight years of growth.
Berry pick by Goldman Sachs
What's the going price for a market leader in packaging like Berry Plastics Corp., which tallied a company record $462 million in revenue for 2001? Goldman Sachs & Co. recently paid Berry's ownership group of First Atlantic Capital, JP Morgan Partners, and Aetna Life Insurance Co. $837.5 million for the packaging titan. The global investment management and banking firm now hopes that Berry will continue to offer the return on investment it provided First Atlantic. Using funds from its ownership group, Berry adopted an aggressive growth strategy and completed a rash of acquisitions in the packaging market, closing 17 deals in 11 years. During this time the company watched its revenues grow more than 700 percent from $57 million in 1990 to $462 million in 2001.

Originally established in 1967 as Imperial Plastics in Evansville, IN, Berry now represents a global packaging powerhouse with facilities in England, Italy, and Mexico in addition to its 11 domestic plants in 10 states.

Despite being wholly focused on containers and closures, Berry has greatly diversified its customer base within that market to include more than 12,000 clients—many of whom are household names like Procter & Gamble, Gillette, McDonald's, Wal-Mart, and Coca-Cola.

"Our customers are experiencing nice growth and will continue to," says Berry president and ceo Ira Boots. "We deal with blue chip customers, and we're very proud of their business as well as ours."

After watching its revenues increase throughout the '90s and into 2000, Boots says Berry will continue to grow within packaging via ongoing strategic investment in the market.

"We will continue to look at plastics packaging opportunities, whether that's internal growth or by acquisition," Boots says. "First Atlantic with its fund allowed us to look at many opportunities that enhanced our growth, but Goldman Sachs will enable us to look at many more opportunities in the future."

Wentworth builds on global tooling presence with Lego acquisition
Wentworth Technologies recently completed a big acquisition of a company that specializes in a very small technology. Wentworth purchased the rights to Lego Werkzeubau of Hohenwestedt, Germany. The company manufactures high-precision molds, some with features as small as 2 to 3 µm, and was formerly a wholly owned subsidiary and captive manufacturer to the Lego Co. of Billund, Denmark. Wentworth president and ceo Walter Kuskowski says the company's name will be changed to Amtec GmbH, and while it will continue to build precision molds for Lego, Wentworth will broaden its customer base to include companies within the medical and electronics markets. The tooling facility is Wentworth's 17th overall, joining shops in North America, Asia, and two other European facilities located in Poland.

Kuskowski says the move is part of Wentworth's overall growth strategy that has targeted central Europe, both for its market presence and affordable labor.

"The united European market is equal in size or slightly larger than the North American market," Kuskowski says. "We are also rapidly growing our central European operations because the toolmaking costs in Poland are not much higher than Chinese costs."

Established in 1990, the Mississauga, ON-based manufacturer has used multiple acquisitions to grow revenues rapidly. In 2000, Wentworth posted revenue of more than $124 million, which was up from $4.8 million in 1995, according to the Canadian business website, Counting the Lego acquisition, the Canada-based moldmaker now has approximately 1000 employees overall—a substantially higher total than the 170 workers it employed in 1995.

Molders to face higher taxes in China
Injection molders and moldmakers who have already set up shop in China or plan to do so now need to be aware of a significant change in tax policy there.

By early 2003, China intends to eliminate special tax rates for foreign firms. On June 2, Chinese finance minister Xiang Huaicheng said, "Income taxes for foreign-funded and domestic firms will be unified next year."

China is, as a new member, required by World Trade Organization (WTO) rules to give foreign firms equal treatment with domestic companies. But rather than lowering barriers to foreign involvement, as the WTO intended, in China's case this actually means raising taxes on foreign companies.

Foreign firms, once fully established, currently enjoy a 15 percent tax rate as compared to a 33 percent tax rate for domestic firms. During a startup a molding plant has a two-year tax-free period followed by three years with just 7.5 percent income tax.

Short shots
Maker of the Ultramax line of injection molding barrels, Inductametals Corp. (Chicago, IL), has changed its name to InductaMetals LP to reflect a new, limited partnership between Louis Berger, the former vp, and Frederick H. Hagedorn, an industry veteran.

Milacron Inc. (Batavia, OH) is now in the consulting business. The plastics machinery and equipment manufacturer announced the launch of Concentric Custom Services—an independent manufacturing consultation firm, which will try to help plastics processors increase profitability through asset utilization.

With long-term plans for flexibility and quick model changeovers, Ford Motor Co. (Dearborn, MI) has announced plans to open a new supplier campus in Chicago. The campus was originally announced as the production hub for Ford's newest SUVs, the CrossTrainer and the Ford Five Hundred. The 155-acre park is scheduled to be operational by 2004, at a cost of $250 million to the automotive giant's suppliers at that facility. Companies that have committed to the campus include Visteon, Summit Polymers, and Plastech.

Macro growth opportunities in micro CIM

The smallest parts Net Shape Components has molded to date are these zirconia opto-electronic parts. Part mass is .030g and part density is 6.0 g/cc. Its plastic equivalent is .005g. The ID spec called for 130 µm, ±3 µm. As-molded ID is 131 µm, ±1µm. The ID/OD concentricity spec was 10 µm—Net Shape's average is 6 µm.

In May, Net Shape Components Inc. (Alpharetta, GA) announced that the U.S. Navy exercised an option to extend a Phase 2 Small Business Innovation Research contract Net Shape was awarded to scale up the development of a low-cost process for the ceramic injection molding (CIM) of zirconia single-mode ferrules for fiber-optic connectors. The original contract was awarded in July 2000 and was worth $600,000 over 18 months. The option component of the contract is for an additional $150,000 over six months.

Ferrules, which are used to terminate fiber-optic fibers, are the critical and most costly components in fiber-optic connectors. They typically weigh .3g or less with ±1-µm tolerances on critical dimensions, such as the 127-µm ID. Net Shape has demonstrated that it can repeatedly produce high volumes of as-molded and fired ferrule blanks to ±.5 µm and ID/OD concentricities of
The ferrule market is growing at nearly 30 percent annually and is expected to reach $1 billion by 2004. Nevertheless, Net Shape has licensed its technology for molding ferrules to another company. It has bigger, or rather, smaller fish to fry.

The market for micromolded components in all materials is projected to reach $26 billion to $42 billion by 2004, according to W. James Corbett Jr., Net Shape's president. Corbett sees more substantial opportunities for growth in markets other than ferrules, particularly those in which micro CIM goes against plastics micromolding, which he considers his major competition.

These .095g, 3.93-g/cu-cm alumina laser components were micromolded with .010-inch walls. Micromolding brings the superior mechanical properties of ceramics to demanding applications, maximizing the strengths of CIM while minimizing its weaknesses, according to Net Shape.
Fierce Ferrule Competition
Conventional ferrule manufacturing involves a number of costly precision diamond grinding processes. Because of the poor precision of the initial extruded ceramic blanks, low yields are the norm. That's why ferrules are the costliest part of a fiber-optic connector. The high labor content in grinding these commodity products is why they are made elsewhere, according to Corbett.

"Virtually all of the single-mode ferrules are now made in Japan, but the Chinese have targeted this market," Corbett says. "The Japanese have driven all of their U.S. competitors out of the business by dropping their prices. With 23 separate finishing steps, ferrules should cost about $1.50 apiece. The Chinese sell them for $.60 apiece with only a 40 percent yield. How?"

Corbett admits that the $200 million ferrule market is growing fast, but there is entrenched competition. He is much more interested in guiding his company into more lucrative ventures where the advantages of micro CIM really shine.

Sizes Decrease, Prices Increase
Net Shape Components is a privately held, "relatively small" company, Corbett jokes. It has been in business since 1997 and operates six low-tonnage presses, mostly Boys, at its 6000-sq-ft facility in Alpharetta. It employs six. The company makes its own recyclable CIM feedstocks with high (65 to 70 percent) solids loadings of micron- and submicron-sized particles.

Corbett helped develop a low-pressure, high-solids process for manufacturing fused silica bushings for the space shuttle at another company. He started Net Shape with Chris Schiller and John MacPherson molding parts like spinnerets—thread guides for the textile and fiber industry—but, as he says, "That market went to hell by 1999."
Net Shape Components believes that the future of CIM is in micromolding. "One kg of 10g parts may sell for $1000, but 1 kg of .1g parts may sell for $30,000," says W. James Corbett Jr., who sees plastics micromolding as his biggest competition.
His interest in micromolding was sparked by articles on the topic appearing in IMM. "It occurred to us that a powdered molded part is easier to micromold than a plastic one," Corbett remarks. "So much of our feedstock is an incompressible substance, so there really is no difficulty in controlling shot size. The mold does that. We really are only controlling what would be considered flash."

Plastics micromolding may not require any post-molding processes, but micro CIM makes up for such added costs in raw materials cost savings, according to Corbett. "Our materials costs go down dramatically as we reduce the size of parts. It's not the same in plastics. We can tailor our feedstocks to the application. And we also can produce parts with superior mechanical properties for more demanding applications at injection pressures as low as 800 psi to much higher."

Micro CIM may require post-molding processes like debinding and sintering, but Corbett says the post-molding processing times are very short with such small parts. Micro CIM maximizes the strengths of the PIM process while minimizing its weaknesses.

Contact information
Net Shape Components Inc.
Alpharetta, GA
W. James Corbett Jr.
(770) 753-0808
[email protected]

Molding in Puerto Rico

Diversification in Nypro Puerto Rico's customer base has contributed to its growth and $70 million in sales. The facility operates 72 presses, from 30 to 400 tons.

For more than 20 years, manufacturing in Puerto Rico has presented some attractive advantages. One tax law in particular, IRS Section 936, exempts U.S. companies from paying taxes on profits generated by manufacturing operations in this U.S. territory. Droves of pharmaceutical and medical firms set up shop, including Johnson & Johnson (which has been manufacturing in PR for more than four decades), Wyeth Pharmaceuticals, Abbott Laboratories, Baxter Fenwal Div. and Baxter I.V. Group, Pall Corp. and Pall Biomedical, Medtronic, and Edwards Life Sciences. Hewlett-Packard also has a 68-acre manufacturing site in Aguadilla, which produces 40 percent of the company's inkjet cartridges sold worldwide.

Now, recent changes in the tax law that would phase out this exemption through 2005 appear to threaten the region's growth, but many molders in the territory that followed their OEM customers remain optimistic.

Resurrection of a Molder
"It's a good business climate here, especially now that the government is giving new incentives to businesses to locate manufacturing down here," says Florencio Fernandez, the new owner of SPC Moldings in Rio Grande, PR. Fernandez purchased the facility from bankrupt custom injection molder Security Plastics of Miami Lakes, FL.

As the general manager of Security for 13 years, Fernandez worked to build the molding business serving the electronic and electromechanical industries on the island. In February, an open house was held to celebrate the "new" SPC Moldings. Fernandez notes that the company was able to retain all of its key employees and "didn't lose a single customer" during the rocky phase of Security's bankruptcy and his purchase of the facility.

Currently, SPC operates 32 presses, ranging from 55 to 500 tons, and employs 92 people. SPC continues to serve the electronics and electromechanical industries, but Fernandez emphasizes the company's 6500-sq-ft Class 100,000 cleanroom with 13 presses to attract the medical device and pharmaceutical industries on the island. "That is key for our future success," he says. "We are seeking to partner with companies with cleanroom manufacturing requirements, which will be the main focus for us next year."

Watch for Potholes
One company serving the medical and pharmaceutical industries that is successfully operating in Puerto Rico with a Class 100,000 cleanroom assembly facility is The Tech Group. Eleven years ago, the company sited a plant there at the request of one of its major customers, Baxter. What the company found, says Bill Gerard, managing director of The Tech Group's operations in Cayey, was a good business environment with opportunities to serve its OEM customers that established local manufacturing plants to take advantage of the tax incentives.

Apparently, the move has paid off. The Tech Group recently invested $6 million in building renovations and equipment upgrades, including two material silos to accommodate the 3 million lb of polystyrene consumed annually at the plant. "We're very optimistic about the state of business here," says Gerard.

However, manufacturing in Puerto Rico has its challenges, he notes. "Machinery service is a huge problem, and spare parts are a problem," he says. To solve that, Gerard gives suppliers space in The Tech Group's warehouse to store parts, and then issues POs and pays for the parts as needed. He recommends running primarily the same types of equipment to minimize the number of suppliers needed to provide service.

Alternately, some molders collaborate with competitors to meet challenges. Gerard says there's a "lot of sharing and cooperation between plastics companies here" when parts or materials are critically needed.

Electricity supply is also a challenge. Gerard says it's not unusual to have as many as 22 power interruptions a month, ranging from a power spike to a full outage. To compensate, the company installed three generators at a cost of half a million dollars to provide 100 percent backup power.

Current overcapacity in Puerto Rico has presented difficulties as well, fostering a highly competitive environment. That's why Gerard advises anyone thinking about putting a molding plant in Puerto Rico to "overspend on the infrastructure and underspend on capacity, and then ramp up gradually."

Finally, the area is prone to supply problems. As a provider of extensive contract manufacturing services, The Tech Group keeps two weeks of finished goods inventory and three weeks of raw material inventory to avoid stoppage in its supply chain. "Fifty-five percent of all the parts we mold here are assembled," Gerard notes.

Following its OEM customers looking to take advantage of tax incentives, The Tech Group set up Class 100,000 cleanroom assembly operation in Puerto Rico. The molder remains optimistic about business in the region.
Profitable Markets
Contract manufacturing has been the feather in the cap of another heavy hitter in Puerto Rico. Nypro, which established its first operation outside the continental U.S. on the island in 1973, is the largest custom injection molder in the territory. It plans to expand its building dedicated to contract manufacturing to 150,000 sq ft.

"Custom molders who just mold plastic parts are struggling," says Reynaldo Encarnacion, regional vice president for Nypro's Caribbean and South American operations, adding that contract manufacturing capabilities will help Nypro's growth. "We've been doing contract manufacturing for the health care industry since 1985, and we knew for many years that other business segments were moving in this direction."

Today, Nypro Puerto Rico operates 72 presses ranging from 30 to 400 tons, and has $70 million in sales. Diversification in its customer base has been a major part of this growth, says Encarnacion, adding that business in the region is good. He notes that Nypro's plants occupy seven Puerto Rico Industrial Development Co. buildings in Cayey and Aguadilla and serve a good cross section of clients.

"All of my health care customers are growing after 9/11," he states. "Electronics and telecommunications slowed dramatically last year, but they are now picking up again." Those facilities also contract manufacture inkjet printer cartridges for HP.

Change in Tax Laws
Part of the optimism that molders in Puerto Rico are feeling comes from a provision in the new IRS Section 956 tax law, which will be fully enacted in 2006, that allows multinational companies to send profits to the U.S. for reinvestment and receive a reduced tax rate. Nypro's Encarnacion, who also represents the plastics industry sector of the Puerto Rico Manufacturers Assn. board of directors, notes that the proposed changes to 956 will present advantages for manufacturing in Puerto Rico over controlled foreign corporations (CFCs) established in Ireland, Singapore, and other countries.

The Tech Group's Gerard agrees that there are advantages to the new tax law, adding that "[IRS Section] 956 allows us to repatriate part of our profits back to the U.S. and not get hit too hard with taxes."

SPC's Fernandez adds that it's really about benefiting all of Puerto Rico's manufacturing sector. "It is good that the local government also provides incentives for local companies that buy components made in Puerto Rico for their worldwide facilities," he says. "The idea is to promote local business growth."

Contact information
SPC Moldings
Rio Grande, Puerto Rico
Florencio Fernandez
(787) 888-4545, ext. 230
[email protected]

Tech Group PR, Cayey, Puerto Rico
Bill Gerard;
(787) 747-4900, ext. 222
[email protected]

Nypro PR, Cayey, Puerto Rico
Reynaldo Encarnacion
(787) 738-4211
[email protected]

Molders Economic Index: Weaker dollar, stronger molding market?

In the flood of economic news in the first half of 2002, probably the most significant development for injection molders was a slight weakening in the value of the U.S. dollar.

The net effect will be a bolstering of the still rather fragile recovery in all manufacturing sectors. The currency's value change will make U.S. products more competitive in world markets while at the same time boost prices of low-cost imports.

The change in value is relatively minor for now. But almost all central bankers anticipate a further weakening of the value of the dollar over the next few months, with long-lasting effects for molders.

Mixed Messages in the Data
With April housing starts down and retail sales way up, the economic data are sending somewhat mixed messages. But these are typical cyclical adjustments. The basic manufacturing recovery remains on track.

Optimism is strong. "We do believe that [the] economy is strong and growing stronger," U.S. Deputy Treasury Secretary Kenneth Dam said in May. "All told, we continue to expect growth over the four quarters of this year to come in at a healthy 3-plus percent."

More important than this are recent data. In Q1 the GDP grew at a 5.4 percent rate. Other data show Canada's economy expanding at a 6 percent clip in Q1 2002, bolstered in part by orders for goods from the U.S. And northern Mexico's economy grew well over 5 percent in the same time period.

For injection molders in the U.S., we still project average growth for all of 2002 to reach about 3.1 percent. The NAFTA territory will see growth in injection molding well in excess of 3.7 percent. Barring new terrorism or a disastrous war in Asia, the outlook now is for very strong growth in 2003.

This past April consumers pushed retail sales up by 1.2 percent, the biggest increase in six months. This report from the Commerce Dept. means that May and June will have seen the start of rebuilding inventories.

Molders tell us that orders for all types of consumer goods are "way up," in particular for items such as small household appliances, garden supplies, cars and trucks, and health care and beauty products.

How strong consumer spending will be later this year is uncertain. The continued malaise of Wall Street and war-like conditions between Pakistan and India may spook consumers and thus throttle the most vital engine of growth, consumer spending. On the other hand, U.S., Canadian, and Mexican consumers have shrugged off prior crises. After a sharp spending dip following Sept. 11, consumer spending came right back. In October 2001 consumer spending jumped 6.2 percent.

However, in April housing construction declined for the second month in a row. Builders broke ground on 1.56 million units, a 5.4 percent decline from the March level, the Commerce Dept. reported. In March the decline was an even bigger 8.1 percent.

Yet, sales of existing homes surged 7.0 percent in April on low interest rates and resilient consumer confidence, a national real estate trade association reported. Sales of previously owned homes, the largest category of home sales, rose to a seasonally adjusted annual rate of 5.79 million units from an upwardly revised 5.41 million in March, the National Assn. of Realtors said.

Similarly, construction spending edged up in April, with much of the strength coming from commercial projects. The Commerce Dept. reported that the value of all construction projects around the country rose to a seasonally adjusted annual rate of $871.9 billion, representing a .2 percent increase over March's level. Some analysts claim that this is the first concrete sign that capital spending across the board may be coming back.

For now, there is little evidence that manufacturers have boosted capital spending. Orders for new machines are still down among molders. However, orders for new molds—manufactured in the U.S. or abroad for North American applications—are up for the first three months of the year by 13.7 percent compared to the same period in 2001. Those data are based on our own survey of key moldmakers and suppliers of mold components.

Manufacturing Growth
U.S. manufacturing activity expanded at its fastest pace in more than two years in May, according to a report from the Institute for Supply Management (Tempe, AZ). The Institute's monthly manufacturing index rose more than expected in May to 55.7—its highest level since hitting 56.7 in February 2000—from 53.9 in the prior month. After an 18-month slump driven by a record runoff of inventories, factories this year have boosted production to meet rising new orders, the Institute said.

"The second quarter is going to be strong and we can start thinking about this spilling over into the third [quarter]," said Norbert Ore, chairman of the Institute's business survey committee. The Institute's New Orders Index, a measure of pipeline demand for goods, rose in May to 63.1 from 59.0 in April.

Note here that for April the Commerce Dept. reported that factory orders grew 1.2 percent, driven by strength across sectors from appliances to computers and electronic parts. With April's increase, orders for costly manufactured goods have gone up for five straight months.

A Weaker Dollar
Currency movements are glacial in these days of rapid intervention by powerful central bankers. Yet at the same time, U.S. bankers and major manufacturing associations have pushed Washington to let the value of the dollar slide somewhat.

While the Bush Administration (at least publicly) still endorses a strong dollar, the reality is somewhat different. In the past 12 months the dollar's value vs. the euro's has declined and we project an even stronger decline by the end of the year. Europe is showing sudden signs of growth and interest rates are poised to increase across the European Union. By contrast, the U.S. Federal Reserve will probably keep interest rates unchanged until there are very clear signs of a rebound in capital investment.

The disparity in interest rates boosts the value of the euro. Currencies of other key trading partners are also showing strength vs. the dollar. (See table below.)

Exchange rates of key foreign currencies vs. U.S. dollar
6/1/011/1/026/5/02Dec. 2002
Australian dollar$1.96 $1.95 $1.83 $1.78
British pounds$.70 $.68 $.69 $.66
Canadian dollar$1.53 $1.59 $1.56 $1.49
Euro$1.18 $1.12 $1.11 $1.07
Japanese yen$118.10 $131.60 $129.44 $122.40
Taiwan new dollar$34.01 $35.10 $34.77 $33.80

The change in dollar values is slow. Yet the impact on import and export levels can be far quicker as retailers rapidly adjust prices. Several molders have already reported an upswing in export orders for high-value molded items such as medical products, consumer electronics, and telecom gear.

Agostino von Hassell of The Repton Group, New York, NY, prepares this index. Contact him at [email protected].