Learning to smile.

Despite the recovery of our industry the last two years and the forecasted growth in shipments expected to occur through 2008-09, I don't sense an overwhelming feeling of happiness among North American metalcasters. Despite the high capacity levels at which our plants are operating (including the ability by some to turn away quotes and/or jobs), I don't see a lot of confident, puffy-chested metalcasters walking around.

Sure, I hear of the occasional facility raising prices to gain profits (to their customers' dismay). But, on the flip side, I still hear of other casters slashing prices by 20-30% to pull work away from domestic competitors. Can somebody explain this to me?

During my tenure with MODERN CASTING magazine, I have tried to understand the business mentality of U.S. metalcasters. But the truth is that after close to ten years in this industry, I am more confused today than when I entered it.

When demand is high, some metalcasters believe they should be cutting prices to ensure mold lines are filled. This seems to follow along the same lines as the theory that when sales go down, you should reduce your sales and marketing budget. Or how about the idea that training and/or continuous improvement for employees and your operation should be eliminated when business levels aren't as profitable. Last, but not least, is the idea that capital improvements and new technology installations only can occur when production is at its highest so the pay back for the investment will occur in less than six months and you won't have any debt.

Many metalcasters in the U.S. run good, sound businesses. However, I am not writing this editorial for the 50% of you that do things right, I am writing it for the 50% that don't. Which group does your plant fall into? When you think about your plant, be honest in your assessment.

* Do you use forecasts as a tool for business and production planning?

* Do you know the true cost to your plant of every casting shipped?

* Are you regularly reinvesting in technology and your people to improve operations?

* Are your quality levels at or above the minimum necessary for your customers?

* Are your profit levels acceptable to ensure success today and tomorrow?

This leads me back to my original point. The industry is humming right now. If your metalcasting facility is not achieving a good profit level and you aren't whistling with a smile on your face, then something is wrong. If you are sitting around waiting for 'the proverbial "other shoe to drop" (whether it is foreign competition, OSHA, EPA or something else), you need a swift kick in the backside. The time is now to be confident and build a strong foundation for your business. The time is now to reposition your facility for extended periods of prosperity--the kind that makes everyone smile.

This isn't a new message on this editorial page. In fact, I probably repeat something similar every couple of months. But this repetition is necessary because I do not see a lot of progress. Instead, I see an industry (as a whole) satisifed with the status quo. The problem is that the status quo won't keep us in the game anymore.

For those of you that are smiling right now, I applaud your efforts because you have figured it out. For those of you who have scowls on your faces, take some time (no matter how hard it is to find) and work to find oportunities for improvement. Maybe, with a little luck, you can turn that frown upside down.

Alfred T. Spada, Editor-in-chief