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Industry needs educated workers and management flexibility.


The onset of the global economy is rapidly changing the way that foundry executives are running their businesses. The intense competition fostered by the rapid rise of "international business" goes beyond language, culture and physical borders and poses difficult questions for foundries and their suppliers.

How are American foundries to maintain their marketshare in this country? What are the keys to extending their global customer base? How are they to expand technologies and ensure the employee resources necessary to give them an edge in the race toward economic viability into the next decade?

These were some of the questions explored at the three-day AFS Foundry Executive Management Conference held this fall in Williamsburg, Virginia. More than 200 senior foundry managers listened to solutions and debated various "what if" scenarios dealing with the position of the foundry industry now and where and what it will be in the next century.

The consensus that emerged from the conference was that the North American foundry industry can hold its own in virtually any technology contest. The industry has already pioneered many casting and metallurgical break throughs sufficient to make it what it now is-a world metalcasting center.

Emerging Patterns

Speaker after speaker addressed the need to prepare for more aggressive transnational competition. As the world "shrinks," they agreed that barriers separating nations are becoming blurred, skills more diffused and nationalities less important in relation to manufactured goods. Ultimately, the economics of communicating and interpreting customer needs and assuring product availability are what count.

In essence, the conference revealed that there is an explicit requirement that U.S. foundries must first organize themselves to compete more effectively and, second, in the absence of adequate public education, accept the need to train their own employees for foundry service. These goals of defining management and refining operational skills mean allocating operating responsibilities more broadly among employees at all levels.

Widely discussed and universally accepted by the conference attendees is the need to train employees so that they can shoulder a larger share of foundry decision making and take greater responsibility for process quality. Because the supply of trained workers is diminishing and the technical training of young men and women in public institutions is declining, foundries must take more responsibility for sponsoring specialized training that will help assure a steady supply of capable employees.

Casting Demand

Ken Kirgin, president of the International Metalcasters Council, told the assembly that world metalcasting demand will edge up in the next decade, but not in great increments. He predicted world casting production will move up to 77 million metric tons in 1992, up slightly from 76 million in 1990, and reach 83 million in 1994, a far lower figure than the nearly 100 million metric tons posted in 1985.

With more foundries worldwide chasing a diminished casting market, competition will become more intense.

Kirgin estimated that gray and ductile iron casting demand will move ahead gradually, with ductile iron doing far better. The demand for aluminum and ductile iron castings will be stronger in both the short and long term as automakers accelerate their transition to lightness and durability. Ductile iron use will climb to 180 lb per auto here, but demand will grow substantially worldwide as non-auto applications for the metal increase dramatically.

Aluminum usage, Kirgin reported, will improve over the 150 lb per vehicle today as auto manufacturers seek to lighten cars to improve fuel mileage. Further conversions to alumioccur for such items as power tools, motor vehicle components, computers and aircraft. He pegged the annual growth rate for investment castings at 3.9% and predicted that the greatest growth markets will be for ductile iron, aluminum and stainless steel castings.

Kirgin concluded by stating that the Soviet Union and Eastern Bloc countries are 40 years behind the North American casting industry and that both represent significant new market opportunities for not only U.S. foundries but also those in Brazil, India, Mexico, Taiwan and Korea, all of whom can be formidable competitors.

Management Matters

Managing materials substitution in the next decade and beyond is not a new concept but part of an ongoing process, according to Joseph Ponteri, president of Lester B. Knight Cast Metals, Inc.

The search for substitute materials usually starts because of customer demands for lower costs or improved performance of castings. The search also leads to the development of improved products or manufacturing processes. Government regulations can also precipitate substitutions as in the case of environmental laws.

In the next decade, Ponteri said, competitive foundries willing and able to consider alternative materials will prosper, and narrowly focused organizations that resist change will be marginal or forced to close. Two examples of promising substitute materials that are gaining foundry interest are austempered ductile iron and metal matrix composites (MMCS), which are gaining intense interest for automotive applications, he said.

And while most foundry managers are alert to the material changes affecting their business, many were caught off guard by the presentation on the newly passed ADA (Americans with Disabilities Act), which holds wide-ranging implications for nearly every American business and organization.

"This act is designed to swing the doors of the courtroom open wide for the disabled," said Sen. Tom Harken (D-Iowa) in a recent speech defending ADA. He might have added that it also slams the doors on the fingers of small businesses already struggling to operate at a profit, countered conference speaker Diana Waterman, a partner in the government relations firm of Waterman & Assoc.

She outlined a host of new ADA mandated responsibilities of employers to accommodate employees with regard to hiring and firing, job performance, work environment, work schedules, promotion, discipline and the like. Waterman said there is little room for the employer to manage labor relations, compensation or foundry discipline, since the act encourages legal action rather than arbitration and consensus.

Citation Corp. Chairman T. Morris Hackney, using his company as an example, explained that two key management goals should be to first build a solid financial control system that centralizes administrative and accounting procedures and, second, to decentralize the management structure to maximize the operational skills of the individual employee. One maintains strong control of operating costs while the other builds a highly versatile workforce able to assume a maximum amount of operating responsibility.

Citation Corp. relies heavily on employee training sessions, like those offered by CMI and in-plant seminars and education programs, to assure a pool of workers capable of assuming a broad spectrum of management or operational assignments, Hackney said.

Crisis in Education

Where is the U.S. headed as a nation? Hugh Sims, Vulcan Engineering Co. vice president and past AFS president, said that the lack of educational direction and quality has cast whole generations adrift.

Sims spoke at length about this dilemma that has put the well-being of the United States at risk. He said that the educational establishment's commitment to technical curriculums is all but abandoned and its loss has deeply wounded the nation's universal competitive position.

In the past, the foundry industry was able to use society's uneducated or the under educated, but today it is being held back by workers capable of only menial tasks. Foundry technology has moved well past the point when it could afford to take the undereducated. More than 65 million Americans adults do not have the basic skills to read a map, total their lunch bill or look up the phone number of a hospital in case of an emergency.

Sims said it is critical to a foundry's success that it take the time and make the commitment to educate its workers to do the job not being done in U.S. schools. But that isn't enough, he said. Foundrymen should get involved with their local schools to voice their views on the weaknesses of high school graduates. America simply can't complete with a half-educated work force. There won't be any second chance if we continue to tolerate another generation of

untrained children, and we can't afford to wait too long to do what must be done, he concluded.

Beth Van Voorhees, director of Eastern Michigan University's corporate services program, continued Sims' call for an educated work force. She championed workplace literacy programs as a means to enhance both the self-esteem and work skills of individuals. This can be done in small groups that incorporate job-related skills into the lesson plans.

Van Voorhees said that it is essential for managers to acknowledge the importance of learning and to integrate basic skills teaching into all plant training programs. Since employee education programs carry the same importance as other personnel improvement activities, they should not be relegated to add-on status only for the disadvantaged, she said.

On the positive side of the education issue is the fact that some foundries have already initiated on-going continuous education programs. Three foundry executives shared the details of their programs with the conferees. They were Carl Weigel, Motor Castings Co., Milwaukee; Dwight Barnhard, Superior Aluminum Castings, Inc.; Independence, Missouri; and Joe Robinson, Robinson Foundry, Alexander City, Alabama.

Edward Donley, chairman of the U.S. Chamber of Commerce's Center for Workplace Preparation and Quality Education, said the reduced rate of capital investment and the disaffection with school systems that fail to educate are symptoms of the deep problems facing American industry. These two factors are eroding the nation's economic power base.

In another vein, Donley revealed that the average age of a Japanese machine tool is 9.6 years, compared to 13.3 years in the U.S. This reflects the shortage of capital investment, a shortage based in part on the high cost of strict humanitarian laws in this country compared to other nations. He acknowledged that we can't as a nation turn our backs on the social needs of our people, but he called for supplemental financing methods, perhaps like the European value-added tax, rather than letting industry share the burden alone.

Donley also called for restructured, slimmer legislative and educational systems. He concluded his remarks by quoting a letter written by Thomas Jefferson to James Madison in 1787, that called for changes in our economic and educational structures (in order) to preserve our liberty."
COPYRIGHT 1991 American Foundry Society, Inc.
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Author:Kanicki, David P.
Publication:Modern Casting
Date:Dec 1, 1991
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