Letterbox.

Money Is Key in Foundry Perception Problems

A response to the April 2002 Editorial "'Hanging On' & 'Dying': Perception of U.S. Foundries Is Reality," can be summed up in one word--money. Most foundries have the market savvy, but they have no money to exploit it because key accounts and previous partners have saved money by jumping on the import bandwagon.

Decisions are made to source because the money saved will go straight to the bottom line, making more money for investors. Stock prices and making more money for investors are the focus. When was the last time a major manufacturer, particularly in the automotive group, passed these savings on to the consumer? Never.

Starting with the Jack Welch decree of the '80s to force foundries (suppliers) to lower their prices by 5% and the ensuing demands of a 3% annual price reduction, domestic foundry suppliers have been squeezed dry. No amount of marketing, selling, facility upgrades, innovation or initiative could be expected to keep pace.

What if every foundry followed Kurdziel Industries and made an Asian "partner?" Wouldn't we make more money simply by brokering? Why keep our foundry open and have to fight unions, OSHA, EPA and local governments?

Let's be just like Nike. We could open a large corporate office and not make one single product in the U.S. Some customers who aren't dealing overseas on a direct basis will insist on a U.S. operation for "back-up." If we are perceived as being a "dying" industry, maybe being a back-up is okay.

It is not all the fault of U.S. foundries. Customers must share some of the blame. When all of the smoke and mirrors of partnerships evaporates, only greed remains. American customers that joined the "Asian supplier bandwagon" early on paid for those Korean and Taiwanese booths at the SAE show in U.S. dollars. Given the recent events, the general state of the economy and a dwindling local customer base, many domestic foundries just did not have the money to attend.

Tony Crombie 

Sales Manager 

New England iron, L.L.C.

Springfield, Massachusetts 

Examining Opportunities to Change Perceptions

In response to the April 2002 Editorial, "'Hanging On' & 'Dying': Perception of U.S. Foundries Is Reality," the quote from a "prominent automotive design engineer" left me cold. Was this engineer from one of the automotive companies that continues to shrink its foundry capacity because it cannot compete with the likes of the Intermets, Gredes and Waupacas? Why can't it compete? Is it because the independents aren't saddled with the overhead of large marketing departments or research facilities?

At a recent AFS Chicago Chapter meeting, an officer of a large foundry discussed success found in making conversions for an OEM with its own captive foundries. Granted, the manufacturer's participation in the foundry industry has diminished significantly with the closing of some of its own captive foundries, but shouldn't such an organization have been able to "market castings" internally? How many conversions to castings are being missed in automotive for the same reasons?

The automotive industry views castings as commodities. The Editorial indicates surprise at the few U.S. foundries exhibiting at the Society of Automotive Engineers (SAE) show. How many U.S. foundries have invested in the capital necessary to compete in the commodity market? I discourage foundries from competing in that arena, because if they perceive the casting to be a commodity, price is all that matters. The lower labor costs, the lower environmental and work standard requirements, and government subsidies make competing with offshore foundries on cost very difficult. It is a global market; we need to accept that.

Finally, the Editorial indicates that it is up to the individual foundries to "sell the benefits of American technology, customer service and quality." I've heard this cry for 40 years, and it hasn't happened. Perhaps younger foundry people will be able to either come up with better reasons or better "fixes" for the known reasons why it hasn't happened. I would, however, recommend a better plan than merely saying foundries should be doing it.

Roy Lobenhofer

Lobenhofer Consulting, Inc.

Mt. Prospect, Illinois

Liabilities Article Damages Foundry Beneficial Use Effort

The April 2002 issue of MODERN CASTING featured a disturbing article titled "Managing Environmental Liabilities for Beneficial Reuse." We are writing because we are involved with beneficial use on a daily basis and are upset by the title and the tone of the article, which may lead some foundries into thinking that legitimate beneficial use is a risky business.

The foundry industry, through state associations, groups like FIRST (Foundry Industry Recycling Starts Today), and the AFS Solid Waste and Water Committee (10-F), of which we are all members, has worked diligently over the last several years to convince federal and state regulators, as well as end users, that the risks involved with using spent foundry residuals are minimal. Despite the fact that it may be unintended, articles like this one cast doubt, raise fears, and damage the beneficial use effort by making a mountain out of a mole hill. Much of the information cited by the authors regarding major milestones for reasonable beneficial reuse and disposal is quite dated.

Simply, the article does not focus on today's traditional beneficial use applications as we know them. Rather, it highlights the use of spent sand in landfills (both legal and illegal) as daily or final cover and how these reuse opportunities pose potential liability under CERCLA.

We would like to address several specific issues with this article:

First, the authors miss the mark when it comes to beneficial use realities. The authors suggest that foundries insist on the inclusion of indemnification provisions. Foundries that insist on blanket clauses of indemnification from legitimate end users may eliminate reuse opportunities because they have raised "red flags" about their material. In addition, do not be misled into thinking that obtaining some form of indemnification waives liability of the generator. Foundries remain responsible for their residuals cradle to grave, period.

Second, the authors suggest that foundries sending wastes to a site where residuals generated by other facilities are present should make sure their materials are segregated. The reality is that the most successful and environmentally responsible companies that effectively process foundry residuals have approved sands and slags from multiple foundries on the same site as a matter of economic and processing practicality. Asking your processor to segregate your material from other foundries with approved materials may raise "red flags" and eliminate your foundry by-products from many beneficial use applications. Today, the largest and most successful projects utilize spent sands from several foundries in order to compete in the marketplace and meet volume requirements. Small foundries typically are not able to supply the needs of an asphalt producer by themselves. Processors usually can't segregate small volumes for separate projects, despite the fact that it may make your lawyer happy.

Third, we agree that CERCLA liability is important, complex and expensive. This article gives no scale or gauge of risk, yet shows "potential" for major problems under CERCLA. When CERCLA liability is discussed, it is imperative that the risks be gauged appropriately. Most foundries handle their material totally differently as compared to 20 years ago by segregating materials by waste stream prior to shipment. Hazardous waste streams are handled completely differently than those marked for beneficial use.

Today, reputable processors work intimately with industry groups and foundries to ensure that environmentally responsible beneficial use is the norm. We recognize our responsibility to the foundry industry in only promoting responsible recycling. Articles like this that appear in one of our industry's best known trade publications at a minimum unnecessarily stunt the growth of environmentally responsible beneficial use and take our industry two steps backward for every step forward. Despite the fact that it may be unintended, the casting of stones within our own industry creates unbridled and unnecessary fear and hinders much of the good that our foundries are doing in promoting environmentally responsible recycling. For the sake of our industry, we must do better.

The undersigned have processed several million tons of foundry residuals over the last decade from over 100 foundries throughout the Midwest. All are active members of AFS.

Michael Lenahan

President

Resource Recovery Corp.

Coopersville, Michigan 

John Kurtz

President

Kurtz Bros., Inc.

Cleveland

Tom Hartman

President

Process Recovery Corp.

Sinking Spring, Pennsylvania