Global insight gained at gathering.

Held on October 2628, the 1997 AFS Midwest Regional Conference drew more than 300 metalcasting officials to Indianapolis. With the theme of "Setting Global Strategies by Taking Ownership Challenges at Home," the event featured 15 speakers as well as plant tours of Indianapolis Casting Corp., Electric Steel Castings Co., and Chrysler Foundry.

In addition to the presentations outlined below, the program examined government affairs, labor practices, the acquisition process, spent sand reuse and cleaning room technologies.

Global Forces

Casting marketer Ron Crawford, Southland Marketing, Maumelle, Arkansas, gave attendees his nation-by-nation perspective on the global casting situation.

Taiwan - Still active in value-added castings and finished products, Taiwan is to be credited for learning the U.S. culture. They could not overcome the exchange rate dropping $15NT:$1, however.

China - With 8.6 million tons of iron capacity, China will make every effort to import dollars and technology, which points to increased Chinese exports of raw and finished castings.

Japan - May not pose an increased threat in the immediate future, but the exchange rate plays an important role as transplants move in and out of the casting market.

India - A major factor in the municipal and water works markets, India will pose an increased threat as the number of ductile iron foundries increases and quality improves.

Labor rates and social benefits are lower in Asia, but are offset by higher costs of imported Brazilian pig iron and U.S. steel scrap, plus freight and packaging costs that eliminated the lower-wage advantage in automated foundries.

Brazil - Not currently claiming increased market share, Brazil has some of the world's highest grade and largest deposits of iron ore and produces 5 million tons of pig iron per year. The ability to introduce molten pig iron directly into a melter/holder gives Brazil the opportunity to produce high quality iron at a competitive price. Crawford said Brazil "has the raw materials, technology and foundry culture to be a sleeping giant."

Eastern Europe and CIS nations - These countries have the equipment, technology and raw materials to be a factor, but lack working capital and commercial culture in the short term.

Mexico - With Mexico's current limited capacity, the industry's biggest threat is local content laws.

Crawford also stated that the responsibility of calling trade violations as well as unrealistic regulations to government falls on metalcasters. "The successful foundry in the 21st century will destroy mediocrity and stagnation because it will demand excellence, listen to customer needs, promote change, encourage creativity, maintain flexibility and maintain education," he said.

The Chrysler Operating System 

Dennis Pawley, vice-president of manufacturing for Chrysler Corp., discussed how his firm is competing globally through the Chrysler Operating System (cos).

Talking about the environment Chrysler competes in, Pawley said Toyota and Nissan cut $2.5 billion and $3 billion in costs out of their systems since 1994, and Honda has cut total costs by 5% since 1993.

Key issues for Chrysler are to: focus on the customer and value for the money (accelerate rate of quality improvement and improve total cost structure), continue aggressive long-range product plans (1998 launches, critical plant modernization actions - $800 million in 1998), and continually reinvent how the company operates. After embarking on an 18-month missioning process, Chrysler emerged with its guiding philosophy: "To produce cars and tracks that people want to buy, enjoy driving and want to buy again."

The firm's core beliefs and values are: customer focus, inspired people, continuous improvement, financial success and its reputation. With those beliefs, four subsystems were designated to guide the firm toward meeting its desired results - safety, quality, delivery, cost and morale. These subsystems were human infrastructure, leveled and balanced schedules, value-added activities, and robust, capable and in-control processes. "The four subsystems are tightly linked," Pawley said. "Each affects the others, and together, they dictate results."

Two years after the COS workshops were begun, the firm has found breakthrough improvements of 33% better use of floor space, 50% reductions in work-in-process inventory and a 48% decrease in part travel.