Category: Blog

Manufacturers see improving economy ahead

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BOSTON/NEW YORK (Reuters) – A pair of top U.S. manufacturers beat Wall Street’s profit expectations, as a recovering global economy drives demand for products ranging from air conditioners to truck transmissions.

United Technologies Corp and Eaton Corp also raised their full-year earnings forecasts, saying that they were becoming more confident in the economy’s direction.

Textron Inc, the world’s biggest maker of corporate jets, missed analysts’ expectations on weakness at its Cessna aircraft unit, but held its full-year forecast steady.

“The rest of the year is going to be very positive,” said Oliver Pursche, president of Gary Goldberg Financial Services in Suffern, New York, which holds United Tech and Textron shares.

The first-quarter results show that strong demand from China, India and other emerging markets had offset the disruptions to supplies of some electronic components after Japan’s March 11 tsunami and ensuing nuclear crisis, Pursche said.

The U.S. manufacturing sector, which accounts for about 11 percent of the economy, has expanded for 20 consecutive months, outpacing other sectors, according to data from the Institute for Supply Management (ISM).

Activity in manufacturing grew at its fastest pace in nearly seven years in February this year, before slowing slightly in March, ISM data showed.

United Tech posted sales growth across its six divisions, whose products range from Otis elevators to Black Hawk military helicopters, and said it now sees strong global demand.

The world’s biggest maker of air conditioners and elevators earned $1.01 billion, or $1.11 per share, with strong demand for Carrier air conditioners. Analysts had forecast a profit of $1.07 per share, according to Thomson Reuters I/B/E/S.

The company raised its full-year profit forecast to a range of $5.25 per share to $5.40 per share, representing growth of 11 percent to 14 percent and marking the second increase since United Tech first issued its outlook.

When the Hartford, Connecticut-based company laid out its initial 2011 profit forecast in December, it had warned investors that U.S. and European economies looked “sluggish” and that a drop in the value of the euro versus the dollar could drag down earnings.

“The risks that we saw earlier in the year just don’t seem to be materializing,” United Tech Chief Financial Officer Greg Hayes said in an interview.

United Tech shares were up 4.1 percent to $85.74 in afternoon trading, after earlier reaching a lifetime high.

HIGH EXPECTATIONS

Industrials have outperformed the broader market over the past year, with the Standard & Poor’s capital goods index up 13 percent, while the full S&P 500 is up 9.5 percent. That rise has raised investors’ expectations heading into earnings season.

“They have to beat strong,” said analyst Brian Langenberg of Langenberg & Co in Chicago. “They have to surprise.”

Eaton, which makes truck transmissions, and hydraulic and electrical systems, earned 84 cents a share, 4 cents ahead of analyst estimates, and raised its 2011 forecast for the second time this year.

Energy and mining investment is lifting electrical sales. Hydraulics markets are being helped by demand for farm equipment, amid high food prices, and for construction machinery used in emerging markets, said Eaton Chief Executive Sandy Cutler, who also cited a recovery in truck production.

“Now that the economy is coming back, freight companies are having more success pushing prices through,” Cutler said in an interview. “They’re becoming more profitable.”

Eaton shares rose 1.3 percent to $53.34. Textron fell 2.2 percent to $25.09.

The three companies kick off a wave of earnings reports from blue-chip U.S. manufacturers. Honeywell International Inc plans to report after Wednesday’s market close and General Electric Co is due on Thursday. 3M Co and Caterpillar Inc report next week.

The sector faces a few major risks this year, including rising energy prices and the aftermath of Japan’s nuclear crisis, which threatens to curtail supplies of electronic components.

Textron, which also makes industrial components used by auto-parts makers, said it expects second-quarter sales to be hurt by lower demand from Japanese customers, but said production slowdowns will be substantially made up later in the year.

Textron’s first-quarter earnings of 10 cents per share missed Wall Street’s 17-cent forecast, reflecting still-lackluster demand for its Cessna corporate jets.

United Technologies, meanwhile, could face short supplies of key components including flash memory chips used in air conditioner controllers.

“Right now we have adequate supply; it’s just a question of making sure that we continue to have access to that,” CFO Hayes said. “We don’t see any material impact, but I think you’ll see bits and drabs of this over the course of the year.”

Scott Malone and Nick Zieminski Reuters
12:19 p.m. CDT, April 20, 2011

Guillotine vs. Swing Beam Shear

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Guillotine Shear

A guillotine shear is a machine that can shear or cut various materials with a guillotine design. The word “guillotine” is associated with a blade that drops along a vertical track. This type of machine was primarily used in familiar history as a method of execution, particularly in the French Revolution, but the modern guillotine shear cutter is a tool used to form and shape products for a market.

The principles of the guillotine shear were incorporated into the design of metal shears and have been the primary design for all of these years. Some of the shortcomings of a guillotine shear are that it must run in gibs and ways and therefore need a certain amount of clearance which has a direct effect on the thinnest sheet than can be cut (see figure 1).

Also, the ram moves down with approximately 1 degree of backward motion. This allows the cut sheet to clear the back gauge and drop, although sometimes even this is not enough and the cut part is wedged between the lower blade and the back gauge.

When a guillotine shear has a throat it must be heavily re-enforced to avoid the deflection that would normally result from a deep throat.  The apron of the upper ram is heavily gusseted to keep the blades parallel to the bottom blades. This system has worked well for hundreds of years however times change and new engineering becomes available.

Swing Beam Shear

On a swing beam shear the ram moves on bearings so there is no play what so ever. This allows the swing beam shear to be able to cut paper as long as the blades are sharp. The ram moves from a fulcrum point in the rear of the side frames giving the shear a massive amount of plate between it and the cutting point (see figure 2). This means almost no detectable deflection.

The back gauge is attached to the bottom of the cutting column and moves up as the blade goes down. This means there will never be a possibility for the material to become stuck between the blade and the back gauge.

Rather than gussets on the apron a swing beam shear wraps the entire ram as one solid gusset making it much stronger than a similarly gusseted ram. It can have a deep throat with no possibility of deflection and can cut even the thickest piece of metal with a very low rake angle.

In my opinion the swing beam shear reviewed the short comings of the guillotine shear and fixed them; however, it is important to remember that before making a decision on purchasing any kind of a shearing machine factors such as the type of shear, required capacity, productivity options, and safety should be carefully evaluated.

One important consideration used in deciding what shear is the right one for any job is the capacity required to perform the job. Most of the shears on the market today list capacities for mild steel and stainless steel. It is advised to compare a fabricator’s requirements to those of the actual machine.

Some shear capacities are rated on mild steel, which may have 60,000 pounds per square inch (PSI) tensile strength, while others are rated for A-36 steel or 80,000 PSI tensile strength. Capacities for stainless steel are almost always less than those for mild or A-36 steel. Surprisingly enough certain grades of aluminum require as much power to shear steel does. As always, when making a decision on any kind of metalworking machinery purchase, it is important to work with a reputable and knowledgeable company that can answer all the questions regarding the performance and capacity for the machine.

From the desk of Cary Marshall

Poll: U.S. economy improving despite global events

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Survey Finds Economists Optimistic On US Growth.

The AP (4/19) reports, “A survey from the National Association for Business Economics finds that economists are hopeful that the broader economy is substantially improving, with rising employment reported for the fifth quarter in a row. … The outlook for employment rose slightly, reaching a 12-year high,” and “nearly all of the 72 economists surveyed, about 94%, now expect the economy to grow at least 2% in 2011.”

From SME Daily Executive Briefing 4/19/2011

Steel hull construction for mega yachts is huge moneymaker

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I’ve recently been spending a disproportionate amount of my time working on a boat. By boat, I mean a 39-ft sail boat (or cruiser, if you prefer) that we are planning to sail to the Caribbean in a few weeks. Anyone who’s owned or worked with boats will tell you that the amount of work that goes into the maintenance and upkeep of one cannot possibly be exaggerated. Re-sanding and re-varnishing the entire interior is just the icing on the cake. The electrical needs rewiring in places, the plumbing needs an overhaul, the hull needs to be scraped and repainted, the windows need to be painted and installed, and the list just keeps going on from there. In fact, it’s kind of depressing just writing about it, considering that our plan is to leave at the end of the month.

So in order to cheer myself up a bit, I decided to do a little online shopping for mega yachts. I figure if it’s this much work to maintain and prep a 39 foot boat, mega yacht owners must be offering a lot of money just to unload their boats to some poor sucker like me.

I found one that I thought was kind of cute. In case you think this has nothing to do with metal fabrication machinery, think again. This ship’s hull is made entirely of steel. It has 8 decks and platforms. Aluminum alloys are used for the manufacturing process, which are formed of seven modules which in their turn were assembled out of several different sections.

The overall length of the boat is 158 meters. For those of you who don’t know miles from meters, an average city block is about 160 meters. The upper deck also comes fully equipped with a dock hangar providing landing sites for 2 helicopters, as well as 2 locations for refueling them. So yes, that’s a lot of metal right there.

Described as a “jewel of design”, the yacht also features a huge hall with 3-story high columns, a multiple dome arched ceiling, balconies and numerous luxurious staircases, a “winter garden” described as a “real paradise corner” featuring multiple swimming pools, waterfalls, trees and lanais, and a pier for pleasure boats – sort of an island within the boat.

The central part of the yacht is built in the image of an altar and features a Throne Hall, statues of 7 major saints, golden balls which are supposed to reflect the Glory of God, golden halos, and fresco paintings attesting to the Life and Acts of God and the Saints. The main statue is a statue of God with a golden face, which “can easily be rotated around its axis, staying always to face the congregation”.

According to its own listing, “the whole appearance of the yacht is subordinated to one central message: Glory and Grandeur of show-power-Simplicity, availability and proximity to us – our Lord”.

Personally, I don’t have a clue what this is supposed to mean, but by now I’m starting to form a vague idea that the maintenance of this boat might be a little more than I could comfortably handle. I’m also thinking that the cost of filling up her tank would be more than what I earn in an entire year.

Which, of course, makes me even more confident that the owners must be willing to pay a lot of money to someone who’d volunteer for the responsibility of being saddled with this boat.

Not so: they are actually planning on selling it to some poor sucker. Asking price: 277,000,000 Euros.

If that’s what they mean by “availability and proximity to us – our Lord”, then I’d say there might be just a wee bit of false advertising going on here.

The good news for the metal industry is that there seems to be a lot of money to be made in the construction of these monster yachts. Take note, folks: I appear to have stumbled upon an excellent target market for C Marshall Fabrication, as well as metal machinery outfits in general. Think of the amount of steel needed to construct a hull of this size!

The other good news is, I’m feeling a little more comfortable with my 39-foot sailboat.

-Anja Wulf

Leading in the News

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Manufacturers Alliance/MAPI Survey Suggests Continued Growth In Manufacturing.

IndustryWeek (4/14) reports, “The results of the quarterly Manufacturers Alliance/MAPI Survey on the Business Outlook — March 2011 suggest a continued growth trend for manufacturing,” with an index reading of 72, this sixth month it has been above the 50 mark, indicating expansion. However, “the rate of growth may start slowing later this year.” Donald A. Norman, a MAPI economist and the survey’s coordinator, said, “The results of the March survey show the indexes to be strikingly robust and relatively stable. … As such, they paint a clear and consistent picture of continued growth in manufacturing sector activity.”

Manufacturing’s Strong Performance Sets High Expectations. Under the headline “US Manufacturers Face A High Bar This Quarter,” Reuters (4/15, Malone, Zieminski) reports that manufacturing’s strong performance in the past several quarters, when it has taken point in the US economic recovery, has created very high expectations from investors. “It’s easy to satisfy distraction and depression, but now things are better, companies have been reporting rising earnings and it’s harder to impress people,” explained Peter Klein of Fifth Third Asset Management. These heightened expectations are only one difficulty manufacturers must deal with; higher energy and input costs are also pressing on margins.

From SME Daily Executive Briefing 4/15/2011

MG April 2011 Newsletter

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April 2011 NewsletterMG3130V

Another big satisfaction for MG! Larsen & Toubro, one of the largest companies in India purchased a heavy duty 3 roll double pinch plate bending machine.

  • Rolling capacity: 5-1/8″
  • Pre-bending capacity: 4-5/16″
  • Installed power: 220 HP
  • Top roll diameter: 37″
  • Side rolls diameter: 33″
  • Bending force: 264 tons
  • Weight: 192 tons

Click here for full story.

Beige Book shows manufacturers lead activity

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Economic activity improved across the US in March, with manufacturers leading gains and labour markets strengthening, the Federal Reserve said in its latest survey of business contacts.

“While many districts described the improvements as only moderate, most districts stated that gains were widespread across sectors,” the US central bank said in its Beige Book survey released on Wednesday. “Manufacturing continued to lead, with virtually every district citing examples of steady improvement, often with reports of increased hiring.”

Manufacturing activity increased across the board, with strength in industries including auto and auto parts, commercial aircraft and high-tech goods.

Despite the general improvement, “uncertainties remained high” in many districts, the Fed said, with seven regions reporting sales and production disruptions in the wake of Japan’s earthquake and nuclear crisis. Businesses also reported uncertainty over government spending as Congress battled over the 2011 federal budget.

While wage pressures were “weak or subdued” in most of the 12 districts, businesses reported upward pressure on prices due to higher commodity costs, particularly for energy and raw materials.

Input prices rose, especially for petroleum, agricultural commodities including cotton, and industrial metals. The surging cost of oil spurred shippers to impose fuel surcharges in some regions as well. Signs that companies could pass cost increases on to their customers were mixed, the report said, with manufacturers facing less resistance than retailers or builders.

Retail sales improved across most districts as consumers spent more, except in Boston, where sales were mixed, and Richmond, where sales were weak. Car sales increased, except in Richmond and Chicago, but businesses in several regions were worried about the impact of the Japanese crisis on the supply chain.

Job growth was generally stronger, with eight districts reporting increased or modest improvement in employment activity. But hiring was limited or delayed in Philadelphia, Cleveland and San Francisco and conditions were mixed in St Louis.

The weak housing market continued to weigh on the economic recovery, with demand for single-family homes little changed or weaker across all districts. Commercial real estate was also weak, but seven districts did report “slight improvements.”

The Fed’s report follows growing signs of an accelerating recovery on several fronts. The labor department earlier this month reported the economy added a stronger-than-expected 216,000 jobs in March, while the latest purchasing managers’ index showed the manufacturing sector continued to expand over the month.

Published: April 13 2011 20:21 | Last updated: April 13 2011 20:21
By Shannon Bond in New York

FT.com Financial Times

Paul Revere: Large Scale Metal Manufacturer

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Although much can be done to separate the myth from the actual man, here is no question that Paul Revere was a true American patriot. A successful silversmith by trade, Revere also became increasingly active in a political group called the Sons of Liberty, which is best known today for having staged the Boston Tea Party. What is less known about Paul Revere is that he was also one of the very first Americans to recognize the potential for large-scale manufacturing of metal. If anything, Paul Rever seemed to have a real knack for being in the right place at the right time – and for making the most out of it.

When the British arrived on American shores on the night of April 18, 1775, Paul Revere was in fact one of two men sent out to warn others, on his famous “Midnight Ride”. However, he never yelled out “The British are coming!”, for three reasons: one, the success of his mission that night depended on secrecy; two, the American countryside was swarming with British army patrols; and three, at that time, Americans were all still technically British subjects, so the warning, even if called out, wouldn’t have made any sense at all.

The fact of the matter is, Paul Revere performed his “Midnight Ride” in order to warn others of the British troops (then known as the “Regulars”) crossing the Charles River. More specifically, his mission was to warn his Sons of Liberty pals John Hancock and Samuel Adams of the movements of the British Army, which would likely have resulted in Hancock and Adams’ arrest as well as the seizure of their weapon stores in Concord if not forewarned. Protecting these two patriots proved to be a valuable task, since (among many other valuable contributions) Hancock famously went on to sign his name on the Constitution and Sam Adams heroically went on to lend his name to the best American-made beer to date.

According to actual eye-witness accounts, rather than yell out his famous (and totally false) phrase, Paul Revere most likely whispered, “The Regulars are coming out.” This information was then passed on to other “midnight riders” until about 40 of them were riding about, spreading the news as fast as their horses’ legs could carry them. This was not something that Paul Revere gained a lot of notoriety for at the time. However, about 40 years later, a very famous poet named Longfellow decided to immortalize the Midnight Ride with a poem titled “Paul Revere’s Ride”, which guaranteed Mr. Revere permanent celebrity status in the annals of American patriot history.

After the American Revolution, times were tough in the brand-new United States – in fact, a depression ensued. Realizing that his silver trade wasn’t cutting it anymore, Paul Revere opened a hardware and home goods store, meanwhile also extending his interest in metal work beyond silver and gold. 11 years after the revolution, he opened an iron and brass foundry in Boston and tapped into a very hot market for church bells. A religious revival called the Second Great Awakening was sweeping the country at the time, and if nothing else, Paul was one to recognize an opportunity. Working with two of his many sons, Paul Jr. and Joseph Warren, he created a firm called Paul Revere & Sons, which also did a substantial amount of business by supplying shipyards with iron bolts and fittings for the new naval fleet (“Old Ironsides”) and other ships.

Ultimately, Paul Revere’s firm produced over 900 bells, for which castings he became very well-known for in the industry of his day. In 1801 he opened North America’s first copper mill, and became a pioneer in copper plating production. Although his plans for business were slowed down by a shortage of adequate money in circulation, his copper and brass works eventually grew, through sale and corporate merger, into a large national corporation, Revere Copper and Brass, Inc., which still operates to this day.

Paul Revere died at the age of 83 in 1818, in his home in Boston. He fathered a total 13 living children during his life, and he himself was one of 12 siblings. With that many children, it seems almost surprising that only two ended up going into business with him – but it also may help to explain his drive to continue to flourish even in the middle of this country’s first real depression.

When it comes to Paul Revere, the man is even better than the myth.

-Anja Wulf

Economic News

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Unemployment Rates Falling In Most Metro Areas.

The AP (4/7, Rugaber) reports, “Unemployment rates are falling in most metro areas across the country, suggesting that recent nationwide gains in hiring are widespread and not limited to a few healthy regions.” According to the Labor Department, “more than three-quarters of the nation’s 372 largest metro areas reported lower unemployment rates in February than the previous month,” while “more than 300 areas added jobs in February compared to the previous month.” Moody’s economist Marisa DiNatale said the rise in employment opportunity is “definitely becoming a lot more broad-based.”

UK Manufacturing Growth Unexpectedly Stalls.

Bloomberg News (4/7, Ryan) reports, “UK manufacturing growth unexpectedly stalled in February as declining production of goods from chemicals to plastics dented the industrial recovery.” This is according to a report from the Office for National Statistics, the text of which “casts doubt on the strength of the economy’s rebound from a contraction in the fourth quarter at a time when higher raw-material costs threaten to squeeze manufacturers’ margins,” according to the article. “We’ve been skeptical that the recovery in manufacturing can continue at the pace it has been,” one analyst said, adding, “It will still have a good year. This outturn probably reflects monthly volatility.”

The AP (4/7) reports, “British industrial production fell 1.2 percent in February from January, an official report said Wednesday, marking the largest monthly fall since August 2009 and far worse than analyst expectations for an increase of 0.2 percent. The Office for National Statistics said a 7.8 percent drop in oil and gas extraction was the main reason for the fall, while the manufacturing sector was flat.”

The Financial Times (4/6, Pimlott, Subscription Publication) quotes Simon Kirby of the National Institute of Economic and Social Research, who said, “We had the opening salvo of a VAT rise [in January] and that’s it so far, and inflation is likely to dampen spending from now on.” Kirby added, “That’s why the figures are worrying, because of what the recovery will look like for the rest of the year.”

German Factory Orders Skyrocketing.

Bloomberg News (4/7, Black) reports, “German factory orders rose almost five times as much as economists forecast in February, indicating growth in Europe’s largest economy gathered pace in the first quarter.” The German Economy Ministry said that “orders, adjusted for seasonal swings and inflation, gained 2.4 percent from January, when they jumped 3.1 percent.” Experts had predicted a gain of 0.5 percent. “With German companies stepping up investment and hiring to meet booming export orders, the European Central Bank is poised to raise interest rates tomorrow to keep a lid on inflation.” Economist Klaus Baader said, “This points to continued strong growth momentum in manufacturing output for the next several months.”

From SME Daily Executive Briefing 4/7/2011

Iron: “Metal of Heaven”

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Iron is the most-used metal on this planet. It is also the most common element on this planet. It forms much of the earth’s inner and outer core as well as its crust. Iron is a prevalent and necessary element for life on this planet, including human life. Ironically (no pun intended by use of this word), iron deficiency is the most common nutritional deficiency known to humans. Iron deficiencies can cause anemia, slowed motor and mental function, slow physical growth and development in children, and premature births in pregnant mothers.

The prevalence of iron is not limited to Planet Earth. It is, in fact, the sixth most abundant element in the entire universe. Don’t ask me how they figured that out; but according to the Powers That Be, this is a scientifically proven fact.

The earliest archaeological evidence of man-made iron items go back over 6000 years. Iron tools and beaded jewelry daring back to 4000 BC have been found in the tombs of ancient Egyptians. Iron was also a preferred choice of metal for ancient weaponry.

Most interestingly, the first source of iron did not come from this planet. It came from outer space.

That’s right: it’s called meteoric iron. In fact, in spite of the abundance of iron on this planet, humans first worked meteoric iron before they ever realized that an abundance of more “locally grown” supplies was also available. In fact, because they observed the meteorites falling from the sky, the Egyptian name for iron is ba-na-pe, meaning “metal of heaven”.

Iron comes to our planet from the heavens in the form of highly recognizable meteorites. Iron meteorites are thought to be the fragments of the cores of larger ancient asteroids that have been shattered by impacts. Because iron meteorites are very distinctive and easy to recognize, they can be readily identified even if they are not a hugely abundant item on this planet. It would take humans quite a few more years before they realized that the same element which came down from the heavens already existed in significant, if less easily identifiable quantities all over Planet Earth.

The fact that the first iron used by humans came from the sky is accurately reflected in a number of well-known myths and legends. Probably the most famous of all is the tale of Excalibur’s brother sword, Clarent – more commonly known as the Sword in the Stone. According to this legend, a meteor, in the shape of a red dragon’s head, fell to earth, conveniently landing at the precise moment when Uther, Arthur’s father, was given command of an army after its last commander had fallen. A red dragon’s head also happens to be the symbol of Briton, which may help to explain why witnesses present thought it looked a lot like a dragon’s head. The meteor’s appearance was taken by Merlin as a sign that Uther’s destiny was to become King of All the Britons. Merlin had the meteoric metal forged into Clarent, the magic Sword in the Stone, and gave Uther the surname Pendragon, which is Welsh for “dragon’s head”.

Let’s not forget about Zeus’ thunderbolt, which was made by our good old friend Hephaestus (see last week’s blog article, “Hephaestus: the original Man of Steel”). Hephaestus made everything out of iron, including Zeus’ super-powered thunderbolt. Considering that Zeus’ power was attributed to come directly from the Heavens, meteoric iron would be the most fitting material for the earthly symbol of his power.

In the sense that our entire way of life would be threatened if not destroyed if we didn’t have iron, this humble and abundant metal really should be viewed as the most precious of all on this planet. And – who knows – based on its abundance throughout the known universe, maybe there’s some other intergalactic blogger out there who’s writing the same thing right now.

-Anja Wulf