If you work in manufacturing, you’ve probably heard that some government agencies, notably OSHA and the EPA, have been mandated to become self-funding. I heard this in a discussion at a recent conference, and it seems reasonable. The government debt is $14 trillion, so why wouldn’t the administration want more agencies to pull their own weight? The fear, of course, is that OSHA inspectors are suddenly finding more violations and assessing bigger fines in an effort to follow the mandate and become self-funding.
Author Archive
Spiraling out of control
December 8th, 2010
By: Eric Lundin
By: Eric Lundin
Last week I took a trip to Genoa City, Wis., and felt like I had spent a couple hours in 1955 or so. I paid a visit to Ralph Wells, owner of Wells-Osborn Spiral Stairs, a company that specializes in spiral staircases. Founded in 1949 as a welding and repair shop, it expanded its repertoire to include spiral staircases when its founder, Bill Osborn, was asked by a customer if he could build such an item. Never one to shy away from a challenge, Osborn got to work on it. The shop had windows near a street, and curiosity from several passers-by turned into orders from several passers-by. Spiral staircases caught on, and to this day they make up about half the company’s revenue. (more...)
A peek at the X-ray
November 18th, 2010
By: Eric Lundin
By: Eric Lundin
If you didn’t attend FABTECH® 2010 (held in Atlanta Nov. 2-4), you missed quite an expo. As my colleague Vicki Bell described it in a recent blog, “So little time and so much to see.”
That’s an understatement. It had more than 1,000 exhibits; if you had spent five minutes at each booth, it would have taken more than 11 days to see them all. Lots of new products, many educational sessions, a couple of keynote presentations, and a great deal of optimism for 2011 characterized the show. (more...)
The changing American landscape
October 14th, 2010
By: Eric Lundin
By: Eric Lundin
I read Dan Davis’ blog “Rethinking the education-to-employment system,” and I figured I’d chime in with my two cents’ worth. Dan’s blog focused on the future of education, specifically in vocational areas; I’d like to shine the spotlight elsewhere to illuminate a few trends that are distinct but seem to be related, and taken together, beg for more vocational training.
Before going any further, I should mention that data doesn’t always come in neat little bundles, so forgive me if this isn’t quite as seamless as it should be.
Waiting for the first shoe to drop
September 23rd, 2010
By: Eric Lundin
By: Eric Lundin
I looked at my colleagues’ blog posts (or rants as Tim calls them) and noticed that employment is a hot topic, so I figured I’d throw out my two cents’ worth on the topic. I think it’s fair to say that nearly everyone—not just people in manufacturing, but everyone—is wondering when the jobs are going to come back, and while I don’t have an answer, I think I can shed some light on this.
The unemployment rate gets a lot of press during recessions. It’s the main job situation barometer, but it has some drawbacks. It is updated just monthly is subject to several revisions. Another strand of job-related data, the number of claims for unemployment insurance, might be a better indicator. It is tallied weekly and revised just once.
Before I go any further, I should point out that neither of these data sources is a perfect indicator of joblessness.
The number of claims for unemployment insurance is probably the more accurate of the two. It’s based on initial or continued claims for unemployment insurance, which are filed by the unemployed in each state and counted at the federal level. The problem is that some people are unemployed for long periods of time; if they haven’t found employment when the benefits expire, they are no longer counted. In contrast, the unemployment rate is less accurate. It’s based on periodic household telephone surveys, so it’s just a random sampling.
Moving along, how do the two correlate? Not perfectly, but the relationship is clear. The number of initial claims for unemployment insurance rises before the unemployment rate rises, and falls before the unemployment rate falls. In other words, in comparing the two, initial claims for unemployment insurance is pretty reliable as a leading indicator.
That said, the two don’t rise and fall by the same amounts or at the same rate. Throughout the 1990s, for example, the unemployment rate decreased more or less steadily. It fell from 7.1 percent in February 1993 to 3.9 percent in December 2000. During the same time frame, the number of claims had quite a few ups and downs, varying from 266,000 per week to 380,000 per week.
What’s happening now? Initial claims peaked at 663,000 per week in April 2009. It fell to 433,000 per week in January and has bounced around a bit since then, but in the grand scheme of things, it has been flat ever since. The unemployment rate peaked at 10.1 percent six months later (October 2009). It has fallen a bit, but essentially it has held steady and remains at 9.6 percent.
What’s happening next? That’s hard to say, but the number of initial claims is worth watching. The unemployment rate won’t fall until the number of initial claims for unemployment insurance falls, and the unemployment rate will lag by several months.
Much ado about nothing
September 15th, 2010
By: Eric Lundin
By: Eric Lundin
China’s currency is in the news again. It made big news back in the summer of 2005 when the Chinese government unlocked the currency from the fixed exchange rate of 8.2765 yuan per dollar. Change came slowly; a year later it had appreciated just 3 percent, to 7.6055 yuan per dollar. The rate of change picked up for a couple of years, then apparently the Chinese government put on the brakes again:
- July 2007: 7.6055 per dollar (5% change in 12 months)
- July 2008: 6.8608 per dollar (10%)
- July 2009: 6.83307 (0.4%)
- July 2010: 6.78099 (0.8%)
On Monday, Sept. 13, it was 6.76182 per dollar, and it appeared that China was letting it appreciate steadily for a few days on the brink of two days of Congressional hearings on China's policy of currency manipulation.
(more...)
Buyer, beware!
September 9th, 2010
By: Eric Lundin
By: Eric Lundin
A colleague recently sent around some photos of the Skydeck at the Willis Tower (formerly the Sears Tower) in Chicago. If you saw these photos too, you probably recall seeing the glass-bottomed ledge. If you’d like an unobstructed view of Chicago from 1,353 feet up, this is for you.
The photos came with a short narrative that said that adults tend to be a lot more cautious than children about stepping onto the ledge. Why would that be? Trying to imagine the mindset of a 10-year-old, I suspect that a child’s perspective is akin to “They wouldn’t have built it if it weren’t safe.”
How great a sacrifice?
August 24th, 2010
By: Eric Lundin
By: Eric Lundin
The world watches, the rescuers drill, and the 33 miners wait. The miners are alive, but the conditions are grim. They’re trapped 2,300 feet underground and have taken refuge in a shelter that measures about 525 sq. ft., which means each person gets an area that measures about 3 by 3 ft. The temperature is estimated to be more than 90 degrees F. So far the only contact the miners have had with the outside world is through a small shaft that operators use to provide supplies and retrieve hand-written notes. (more...)
Green evolution
August 6th, 2010
By: Eric Lundin
By: Eric Lundin
I read Vicki Bell’s blog on green job opportunities and, frankly, wasn’t all that surprised to learn that this is still a small niche. While it’s encouraging that green awareness has taken hold and green jobs are out there, it’s a little disheartening that it has taken this long.
Manufacturing as we know it—the use of machines rather than manual methods, that is—dates back more than 200 years. In the early days many of the machines were steam-powered, and heating water to make steam required burning coal, and that’s anything but clean. Pollution controls were nonexistent, and the big industrial centers were filthy, dreary places. It took us a while, but society finally realized that the side effect of widespread industrial pollution was (quite literally) a dead end. Awareness of our impact on the environment finally gained some traction in the late 1960s and early 1970s:
- Legislative efforts to reduce smog and other air pollution started with the Clean Air Act, which was passed in 1963.
- Earth Day was founded on April 22, 1970, by Gaylord Nelson (at the time, a U.S. senator).
- The EPA was formed Dec. 2, 1970.
- Various bits of legislation intended to clean up U.S. waterways culminated in the Clean Water Act, formally known as the Federal Water Pollution Control Amendments, in 1972.
To be honest, I think we had little more than talk for about four decades after that, so I share Vicki’s frustration with the slow growth of this area. That said, recent signs of progress show that we’re finally serious about using green (or sustainable or renewable or ecological or environmentally friendly) technologies.
- According to the Energy Information Administration (which is part of the Dept. of Energy), electricity generation by wind power tripled from 2003 to 2007. We also capture energy from the sun and methane from landfills to generate electricity, which increased 15 percent and 20 percent, respectively, in the same time frame.
- According to www.green-energy-efficient-homes.com, hybrid car sales grew from 5,000 per month in 2004 to 20,000 per month in 2010.
- Consumables suppliers of every stripe seem to be working relentlessly to remove volatile organic compounds, petroleum derivatives, heavy metals, and other toxins from their products. Of course, some of these actions are responses to specific legislation, but some are voluntary.
- Enter “sustainable manufacturing course” into your browser and see how many results you get. A few schools even offer degrees in sustainable manufacturing.
Need to know more about what you can do to contribute to sustainable manufacturing practices? We have you covered (with yet more signs of progress). Early this year FMAC Inc. rolled out a new magazine, Green Manufacturer, and accompanying Web site.
Go green!
Is it time for the small-business initiative?
July 29th, 2010
By: Eric Lundin
By: Eric Lundin
A small-business initiative working its way through Congress has been making headlines lately. It has the potential to provide $30 billion in new capital for community banks, which would use it as a foundation for lending to small and medium-sized businesses. Whether lawmakers will pass the bill is the main question.
I have a different question: What do you think? Do you want or need a loan right now?
At the risk of oversimplifying things, let’s say the typical markers of a recession are high unemployment, low consumer confidence, low consumer spending, and low business output. A perfect economic policy would put the jobless back to work, thereby rebuilding consumer confidence and kick-starting consumer spending, which would rev up the engine of business.
The government doesn’t have a perfect economic policy at its disposal. In fact, other than creating new positions and hiring people to fill them, the government doesn’t have any way to put the jobless back to work directly. It can do so indirectly by ordering some domestically made goods (for example, some government cars or an aircraft carrier or something like that) or by funding infrastructure (new or repairs).
How else can the government encourage consumers to spend? It has quite a few additional ways. For example, the stimulus package (the American Recovery and Reinvestment Act of 2009) provided federal tax cuts; expanded unemployment benefits; and increased spending on education, health care, and infrastructure. It’s hard to say if the stimulus is working, or how well, but we do have some signs of hope. The PMI has been higher than 50 for nearly a year; capacity utilization in many industries has been on the rise for almost as long; and consumer spending on durable goods has been on the rise too. On the other hand, the unemployment rate isn’t falling very fast at all, and consumer sentiment is improving slowly at best.
So let’s set the data aside and go straight to the source. Anecdotal evidence says that many fab shops are busy, but how busy? If funds were available for borrowing, would you head to the bank for a loan to buy some equipment, or is demand for your products not strong enough yet? In other words, how good or bad is the timing of the small-business initiative? Call me at 815-227-8262 or send me an e-mail (ericl@thefabricator.com). I’d love to hear your thoughts.
