The Time to Shine is Now.

The long-expected industry slowdown has arrived. Beyond the economic indicators and forecasts of reduced production in the automotive, construction and railroad industries, I know this because foundries aren't making a lot of news. By looking at the industry news pages of modern casting for the last 6 months, I know that the number of foundries securing new casting orders, buying equipment, modernizing or expanding their plants, or acquiring other facilities is down dramatically as compared to the activity from 1998 to early 2000.

This is enough to tell me the slowdown is here.

This also is enough to tell me that much of this industry may not be thinking enough about the future. The focus of foundries appears to be to just "stay afloat" during this downturn, not push through it. This also is evident by the reduced turnout at AFS conferences.

During recession times, a tightening of the belt is crucial to ensure there is adequate cashflow. Production is by far the most important consideration, but, it shouldn't be the only one. This mode of operation--to grow and shrink with the business cycles--has become part of the foundry industry's way of life. We must find a new way to attack a downturn.

"If we make marginal responses, we will always make marginal changes," said Robert Sherwood of the American Management Assn. at the recent AFS Marketing Conference in November (see p. 50). "We must look to make bigger changes and change the rules of engagement ourselves."

I believe this advice speaks volumes about how our industry should act in the face of a downturn. Opportunities to make your foundry more efficient or more attractive to current and potential customers exist, and this is the time when your actions can speak loudest. The supplier that steps up to offer new opportunities when times are rough is the best-remembered foundry.

An example of a foundry taking action during this downturn is Benton Foundry, Benton, Pennsylvania. Although Benton is a 250-employee, family-owned, single plant operation--not a large foundry group that could absorb losses for an extended period of time--it has undergone an impressive series of capital expansion projects with the latest modernization ramped up in December. How? By diversifying its customer base so its life doesn't depend on any one industry. By understanding its casting costs so it is making a decent profit on every single engineered component that leaves its plant. By making proactive decisions instead of reactive ones so its business is always moving forward. The foundry's new equipment offers another niche to sell to its current and potential customers. Benton has taken a step forward to provide its customers with more services and, as a result, will stand out.

According to Benton's Alfred "Fritz" Hall (see p. 52), if a foundry is only dealing with the slowdown now, it is in trouble. "The industry must take a step back today and focus on the economy it is going to be working with 5 years from now," said Hall. "Nothing a foundry does today is going to affect how it survives the slowdown period tomorrow. That must have been addressed 5 years ago."

Another example is Robinson Foundry, a 250-employee, family-owned casting facility in Alexander City, Alabama. This foundry is in the midst of expanding its plant for its first full-production vertically-parted, green sand molding line for aluminum. Robinson, which also was the first jobbing foundry to make a significant commitment to lost foam casting in the mid-'80s, understands the importance of standing out from the pack and providing the customer with something new.

The time for foundries to catch the eyes of customers is now. If the installation of new technology to attract new cost-competitive business isn't possible, maybe you can present a customer with a cost savings through converting fabrications to a single engineered cast component. According to John Keough, Applied Process, Inc., "The first attempt to convert from a weldment or forging is terribly hard... But if you succeed, there can be 10 more applications waiting."

Another option is to offer to teach a "Metalcasting 101" class for your customer's engineering and purchasing personnel. Not only would this bring you face-to-face with your customers to present the metalcasting message, but your foundry would have the opportunity to earn the "metal components expert" label in the eyes of that customer. One such exercise was conducted at Boeing's Commercial Aircraft Div. in January, which brought several casting suppliers and AFS together with Boeing engineers. The goal is to show you are a valuable partner in both good times and bad.

The only option to avoid at the outset of a downturn is to maintain the status quo. If this is your decision, then maybe Fritz Hall was right: "This (reduction in casting demand) isn't doom and gloom for those foundries that have planned effectively. As an industry, we will be stronger. The foundries that remain will be survivors."

The foundries that remain also will understand the importance of standing out from the crowd.

Alfred T. Spada

Managing Editor