http://valvemagazine.com/index.php/web-only/blog/rss description http://valvemagazine.com/index.php/web-only/blog/post/37 http://valvemagazine.com/index.php/web-only/blog/post/36 In an article posted on June 3, “An Upside to the Downturn,” I mentioned a piece by Jeff Klingberg, President/CEO, Mountain Stream Group, Inc. in Product Design & Development entitled “Wake Up Fluid Power Industry Or Prepare For Extinction.” In that article Klingberg suggested electric actuators are making strong inroads into the U.S. fluid power industry largely because that industry has failed to embrace new technology. Environmental considerations (leaking and spilled hydraulic fluid) and energy conservation are the chief drivers, he said.   Klingberg emailed to thank us for the mention, and in replying I mentioned an article I wrote in PD&D for Feb 3, 2006 entitled “What Lies Ahead For Hydraulics?” At that time, I also cited Klingberg as having said the fluid power business seemed to be on a long slide, particularly at the low-power end. The article also pointed out that environmentally friendly hydraulic fluids like water and vegetable oil were little used, and cited Klingberg as saying they had received little publicity.   Well, not much seems to have changed in the past three years: fluid power is still declining. In Klingberg’s words, “The issues are exactly the same for the fluid power industry, but worse. This economic recession has really caused a lot of heartache for many manufacturers in the industry, especially at the mobile hydraulic end. There are a few that are at 1/16 of their sales from just last year. Employees who are being laid off are fed up with decisions of the corporate leaders.”   “If something radical doesn’t happen within the industry in the next 5-10 years,” he predicts, “especially from the pneumatic side of things it will be an extinct industry.”   We have three questions for readers: Is the industry really doomed? Can it be saved? And if so, how?   Email your answers/comments to pcleaveland@earthlink.net http://valvemagazine.com/index.php/web-only/blog/post/35 You may have come here because you just read the article I wrote (VMA Seeks to Fill Education Void with ‘Valve Ed’). If not, why not give it a read now? We welcome your thoughts, ideas and insight into the topic of valve industry education. The more we know about what those working in the valve industry need, the better job we can do as we develop Valve Ed. http://valvemagazine.com/index.php/web-only/blog/post/34 I just received a letter from a reader named Jeff Roberts about an article I wrote (posted Dec. 15, “Green stands for $$”) and would like to take this opportunity to respond. Roberts said: “People in the Midwest states say California is full of people that do not have a good grip on the cost of all their mandates. Then we see California look to the federal government to bail them out. “Now people are [whining] because other states do not buy into their restrictions and the businesses move to those states, costing California jobs and state money. Well, the same is true for the whole USA verses the world. “Look at Wisconsin, the DNR has slowly driven manufacturing out of the state with regulations. “Why don’t you write an article on the biggest scam of all. Green energy, wind turbines and the credits (I mean the subsidy money every American pays to whoever may own them) and carbon credits. “I really do not see the USA industry surviving this next good idea.” Response: I agree, Californians don’t have a good grip on their mandates, and it’s not just in the pollution area. The state’s constitution allows citizen-sponsored initiatives to be put on the ballot, and if they pass they become state law. Many of these mandate certain levels of spending in specific areas, and limit taxation levels, which means the state government is in real fiscal trouble. The regulatory environment is much the same, with too little attention paid to cost-benefit analysis. Yes, complying with the new green regulations will be expensive. But the eventual cost of doing nothing would probably be greater, as I’ll discuss in a moment. Many jobs have been moved overseas, and that’s a real problem. Manufacturing in the U.S. has been badly damaged by lower labor costs and lax (or nonexistent) environmental and safety standards in other countries. Have you tried to buy a pair of U.S.-made shoes lately? I won’t even get into the car industry. But then again, look at the ship-breaking industry: Ships are no longer scrapped in the United States; instead many have been towed to places like Bangladesh, where they’re cut up on the beach by workers making a dollar a day with no protection against asbestos and other hazardous substances. Not a pretty picture. Perhaps in response to adverse publicity, a high court in that country recently ordered the closing of all ship-breaking yards that do not have environmental clearances. We are told to recycle our e-waste, but much of it is shipped to third-world countries where it’s burnt or otherwise stripped for valuable materials by untrained people with no protection against chemical hazards. As for direct costs of pollution to Americans, let’s consider increased healthcare costs due to air pollution (without trying to put a dollar value on quality of life). A recent report, The Benefits of Meeting Federal Clean Air Standards in the South Coast and San Joaquin Valley Air Basins by the Institute for Economics and Environmental Studies at Cal State Fullerton, puts the annual cost to California at $28 billion a year. Other areas (Houston and Texas City, TX, for example) have similar problems. But perhaps the most important long-term problems are climate change and sea level rise. The March 16 edition of Science Daily reports that a number of studies predict rising sea levels will have an especially bad effect on New York City, with increased susceptibility to damage from hurricanes, among other things. The EPA has a whole section on line dealing with the effects of sea level rise on the United States. A 2008 MIT report entitled Estimating the Economic Cost of Sea-Level Rise puts the cost of a one-meter rise in sea level over the next century to the U.S. at several hundred billion dollars for the loss of wetlands, loss of capital, and the cost to provide protection (dikes and so forth). Other areas at risk include low-lying areas in Florida, Western Europe and various third-world countries. Several island nations in the Pacific are making plans for the time when their countries will cease to exist. What about climate-related problems, like the loss of farmland due to worsening droughts and related effects? Parts of the Midwest just experienced severe flooding due to unusual weather conditions. How unusual will those conditions be in the future? The solutions, if they can be found, will be very expensive. Béla Lipták, long-time process control guru and winner of an ISA Lifetime Achievement Award, recently wrote “If Global Carbon Emissions Were Cut by 15% by 2050 by the Increased Use of Nuclear Power, 1,070 Plants Would Need to Be Built at a Cost of $5 Trillion.” That’s expensive, and it has environmental and security issues that have still not been dealt with adequately. The windmills you dismiss may turn out to be a good investment. On April 6 the Associated Press reported that Interior Secretary Ken Salazar said there is enough wind energy available off the East Coast to equal 3,000 coal-fired power plants, although fossil fuels would still be required. Oilman T. Boone Pickens has been advertising his Pickens Plan to cut U.S. reliance on imported fossil fuel and make more use of wind energy. Boone may be old, but he’s no fool. Bottom line: Yes, pollution abatement is, and will be, expensive. The alternative is worse. http://valvemagazine.com/index.php/web-only/blog/post/33 You really can find everything and anything on YouTube. This clip is from a British show called The Secret Life of Machines. Here, a man uses several solenoid valves to spell out the word: UTOPIA. http://valvemagazine.com/index.php/web-only/blog/post/32 The internet is an invaluable source of information for manufacturers. It's importance can't really be measured, but that doesn't mean you can't get lost. For news, resources, and other information, you've got the essentials like Industrial Info or the Houston Chronicle. But blogs pick up the slack by finding some great stories that often fall through the cracks. For example... VMA member Emerson Process Control has their very own blog called Emerson Process Experts. For smaller businesses, try the aptly named Small Business Trends. Fabrictor.com has their very own, what else?... Fabricator Blog.   ThomasNet is maybe the best resource on the World Wide Web for manufacturing and industrial information. Their official blog, Industrial Market Trends, doesn’t disappoint.   If you want to keep up to speed on lean manufacturing, check out the Operational Excellence Tools Blog and Lean Blog. US News & World Report keeps tabs on what goes on inside the beltway at Capital Commerce. NAM has a blog that’s recently undergone a renovation, Shopfloor. Association Inc is a site that’s all about the world of, you guessed it, associations. If it’s a search engine you’re looking for, a “Google” for manufacturers, try Global Spec. The ARC Advisory Group does comprehensive research on sensor technology, automation, production, design, and business systems. They have tons of info on manufacturing, energy, and supply chains. Control Global gives you the who, what, when, where, and how of everything in the world of process automation. And when you go to VMA.org, you have to check out our Valve Product Finder and Valve & Actuator Industry Online Guide to Suppliers. http://valvemagazine.com/index.php/web-only/blog/post/30 Unresolved Economic Crisis Could Destabilize Governments That was the ABC News headline that summed up a warning Hillary Clinton delivered while on her first trip overseas as Secretary of State. But if you look at other headlines, both here and abroad, one has to wonder if these words of caution are too little too late. Wall Street Journal: Russia's Industry Slows Far Faster Than Expected Financial Times of London: Manufacturers Blame Woes on Demand Not Credit The Globe and Mail: U.S. Crisis Batters Canadian Manufacturing Los Angeles Times: Japanese Downturn Is Worst In 35 Years The people of Japan have their work cut out for them. While in the Land of the Rising Sun, Secretary Clinton, like the rest of us,was informed that the country’s Financial Minister was resigning amidst scandal. In related news, President Obama will visit Canada tomorrow to discuss trade issues. http://valvemagazine.com/index.php/web-only/blog/post/31 The Associated Press is reporting that several large labor unions could be on the verge of putting aside past differences, with the political winds currently at their backs: Union leaders are talking about reuniting under a single, more powerful federation, nearly four years after a nasty breakup split organized labor. Leaders from 12 of the largest unions, along with rival federations AFL-CIO and Change to Win, have held three meetings since January aimed at setting aside differences and taking advantage of the most favorable political climate for unions in 15 years. This comes days after the U.S. Senate officially confirmed Hilda Solis as Secretary of Labor. Solis’ past support of organized labor has excited many activists on the left the way no other cabinet member appointed by President Obama has. During her long, drawn-out confirmation process, BeyondChron wrote: Hilda Solis would be the greatest Labor Secretary since FDR’s Francis Perkins. She has spent her career fighting for economic justice, and now deserves progressive support. As for the Employee Free Choice Act? President Obama has a lot on his plate, to say the least, and he’s going to have to choose his battles. There’s a good chance that card check won’t make it to the floor of Congress this year, in part because Democrats aren’t totally convinced they have the votes to overcome a filibuster in the Senate. http://valvemagazine.com/index.php/web-only/blog/post/29 With cabinet nominees to confirm and a stimulus package to negotiate, one of the most contentious upcoming fights in Congress has, temporarily, been put on the back burner; The Employee Free Choice Act (EFCA). Labor unions, and their Democratic allies in the Senate, will need 60 votes to avoid a Republican filibuster and make “card check” the law of the land. Democrats have a 58-41 seat advantage in the Senate, with the Minnesota Senate race still tied up in the courts. If Al Franken, who leads by 225 votes, prevails in that race, then the 59 Democratic Senators would only need one Republican to pass the EFCA. That one Republican who might break ranks is Pennsylvania’s Arlen Specter, a longtime ally of organized labor in the Keystone State. Specter is up for re-election in 2010, and some anticipated that he might have to vote with the rest of his party in order to avoid a primary challenge on his right. In 2004 Specter narrowly defeated Club for Growth President Pat Toomey 51%-49% in the GOP Senate primary. But recently Toomey decided to run for Governor in 2010 instead. That means that Specter might be free to vote with the Democrats without fear of alienating his base. But odds are some other Pennsylvania Republican will step up in the coming months. But even if Specter votes for the EFCA and Franken gets seated, there’s still hope. There’s one Democratic Senator who has refused to say where he stands on the issue, and that’s freshman Sen. Mark Warner (D-VA). NAM President John Engler spoke very highly of the Senator when Warner addressed the association last month. On Jan. 19 Warner spoke to NAM members about the importance of lean manufacturing. The former Governor has a reputation as a savvy business man and under his leadership, Virginia flourished economically from 2002-2006. The other Democrat who’s expressed some reservations over card check is Sen. Blanche Lincoln (D-AR). But if Maine’s two GOP Senators, who voted with Specter and the Democratic Caucus on the stimulus package, once again cross party lines, even Warner and Lincoln won’t stop the EFCA from being signed into law. http://valvemagazine.com/index.php/web-only/blog/post/28 Normal 0 false false false MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman"; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;} The world economic paroxysms since October have more than upset the prices of commodities. These had begun to sink before the major U. S. banking crisis but since have slumped into steep decline. The Commodities Metals Price Index was around 192 in May and 132 in October. Such shifts have caused headaches. The mining company Rio Tinto announced it is moving away from long-term contracts with customers and instead selling iron ore through the spot market or hybrid securities contracts. The commodities drop brings relief to purchasers of metals, but no one is saying we are entering months of good fortune. Indeed, one of the reasons given for the drop in commodities prices is the prediction of world recession, meaning lower demand, meaning lower prices. But metals prices, and commodities in general, are still high by historic standards, and analysts are divided on where they think commodities   prices are headed from here. The Economic Times was reporting that analysts believed if copper dropped under $3,100/tonne - the average cost of production -- then the "the copper economy around the globe would go into a tailspin." The London Metal Exchange price on Nov. 19 was $3,500/tonne. Much of last year, and as recently as July, copper was trading at close to $9,000/tonne. Gayle Berry, base metals analyst for Barclays Capital, predicted that base metals prices will continue to slide into the first quarter of next year, but that there they might find a bottom. David Croson, associate professor of strategy and entrepreneurship at the Cox School of Business at Southern Methodist University, believes the drop in metals prices does not bode well for U. S. valve makers - in two ways. "The drop owes to a decline in demand, which means there will be less demand for valves, which means lower revenue. Second, lower metals prices means valve purchasers will be looking for lower prices, which will tend to lead them to offshore producers whose labor and overhead costs are lower than those of U. S. manufacturers. It's a psychological but very real effect on how buyers make decisions." Where are prices headed? A posting on Mineweb early in November noted that most analysts believed the world economy would continue to grow, even if just barely [the "western" economies in recession being offset by the "developing country" economies growing] and that this being the case, "when the real picture is understood, there could be a fast and dramatic rise in commodity prices - perhaps not back to the recent bubble-driven highs, but high enough to pull the mining sector out of the current gloom." Frank Hemsley writing in the Contrarian Profits believes commodities are merely in a correction that is part of a secular bull market. He believes much of the selling of commodities was forced owing to the need to "finance the mess in other sectors." He sides with legendary commodities investor Jim Rogers, who he says, believes this sell-off will only make the commodities bull market longer. Ultimately, much depends on the Chinese and Indian economies. And China recently announced a two-year $586 billion economic stimulus plan to boost domestic demand. If China can keep growing despite a fall-off in exports to the United States, then commodities prices will remain under pressure to stay high.