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Steelmakers cautiously optimistic.

As with other sectors of the North American metalcasting industry, steel foundrymen are experiencing the same trials and tribulations as are their ferrous and nonferrous casting brothers. Too much competition chasing a smaller market share, slumping casting prices, operating costs that keep edging up, too much government regulation and seemingly endless streams of paperwork are major concerns.

Backing this up, much of the conversation at the recent Steel Founders' Society of America (SFSA) 1991 annual meeting (September, Niagara-On-The-Lake, Ontario, Canada) centered on past and present foundry business activity compared to the prospects for steel castings for the near term. The consensus was that the future of the industry is clouded by such nettlesome factors as over-capacity, conversions to fabrications and the substitution of ductile iron for steel castings.

But there was also optimism for some areas of the industry. A number of participants pointed to the fact that there is some upward movement in rail car construction, and despite some market weaknesses, steel castings are still the material of choice for a number of applications because of price, strength, availability and delivery.

Neil A. Forsyth, immediate past president of SFSA and an executive with Dofasco, Inc., in his President's Report said that clean steel castings and high alloys form the basis of a new marketing strategy that will accentuate the advantages of steel castings as practical, economical and durable. He said that the 68 companies in SFSA are contributing more dollars for steel casting research than ever before in a combined effort to attract greater design engineering attention to the economies and versatility of the material. Forsyth added that a consultant has been retained to aid marketing direction and to increase membership recruitment efforts.

Marketing, 1992

In his 1992 SFSA market forecast, marketing committee chairman M.D. "Duke" DeLong, Delray Steel Castings, also reported on the problems of too many bidders going after too few casting jobs and the corrosive pressure from price cutting. He stressed the need for individual foundries to compete with more value-added services, to sell conversions and superior product quality, and to pursue niche markets.

DeLong said that the 1991 orders for steel castings were down 9%, with demand for high alloys mixed, and he noted that market share decline may carry over into 1992. He reported that 35-40% of the total market for steel castings comes from the rail car industry, but said that market is off 10%, and new rail car designs are using fewer steel castings. Mining, another traditional market for steel castings, is lower by about 10%, and the outlook for next year is weak. Ductile iron is gaining ground on steel as a substitute material in mining equipment construction, DeLong said.

Motor vehicles offer no short term relief, but he reported that the forecast is up 10% for 1992. Again, ductile iron is replacing steel in many applications in this market. With the conclusion of the gulf war, ordnance demand is down as is the demand for steel castings in the oil field and farm equipment markets. A bright spot exists, however, in the demand for high alloys used to make pumps and valves where DeLong forecast a gain of 5%.

Change of Pace

With many North American foundries closing for lack of work or management savvy, the experience of Bay Cast, Inc., of Bay City, Michigan, shows that enlightened management and involved employees can combine to make a difference and build success where there was none. Bay Cast was formed to take over a defunct steel casting foundry that had seemed to defy viability under several owners even in the best of conditions.

After buying the company at public auction, Scott Holman, Bay Cast president and CEO, hired temporary help to finish castings started by the previous management and made them ready for shipment to customers who had ordered them. Those few castings, completed with part-time labor, produced the start-up capital necessary to allow a nonfoundryman to realize his dream of running a successful business based on intense employee input and set of quality guidelines that aimed at--and hit 995 of the time--zero defects.

Using only internally-generated capital, Holman and his band of dedicated employees gradually transformed an aging steel boundary into an internationally recognized on-time producer of highgrade, engineered, steel castings of unquestioned quality. First, the company concentrated on making clean steel and followed this by determining what additional services the foundry could perform to make Bay Cast into a contributing partner with each customer's manufacturing process. Both objectives worked, and in less than a decade, the foundry's sales rose from zero to over $10 million.

"It can be done even in today's tough casting market, but running a successful foundry means total concentration and mastering what you do best. Then, and only then, it requires seeking additional services that are compatible and profitable. High quality and unexcelled service levels can only be achieved with the cooperation of everyone in the foundry, from the worker on the foundry floor to management. Only then can a foundry transform its work force into a mission-oriented, unified team of winners," Holman said.

All Politics Is Local

Diana L. Waterman of Waterman & Assoc., a Washington, D.C. consultant, spoke of the importance of being in local contact with senators and congressmen to influence legislation impacting the cast metal industry. Her work, together with the SFSA, the American Foundrymen's Society and the North American Die Casting Assoc., united as the Cast Metal Coalition, was instrumental in affecting the recent legislation establishing the metalcasting research program now passed into law and funded for implementation. In tracing the mechanics of the legislative process, Waterman said that the activities of lobbyists are important for isolating issues, but the attention of a congressman's constituents is what really forms the legislative conscience at all levels of government.

The Environment

"Environmental Crimes and the Sentencing Guidelines: The time has come . . . and it is hard time." That is a quote cited by Gregory B. Abeln, an attorney with the Syracuse, New York, law firm of Devorsetz Stinziano Gilberti & Smith, as coming from the title of a recent article by the former chief of the environmental crime section of the Department of Justice.

Abeln said that the Environmental Protection Agency, the Department of Justice and the state offices of the Attorney General, not to mention the local District Attorney's offices, are more and more turning their attention to the criminal enforcement of the various environmental laws.

It should be clear to everyone, he said, that the broad purpose adopted by the government in bringing these environmental criminal penalties is represented by a single theory--deterrence. It is evident that the imposition of a civil fine will not affect environmental compliance but will simply pass on the costs to the consumer. Hence, the criminal prosecution route--"using the whip to achieve future compliance."

Abeln warned that foundries should have an established legal strategy in place that will serve not only to protect their constitutional privileges, but also preserve the confidentiality of valuable company information. He concluded that trying to respond to environmental emergencies when the agents are at the doorstep may just be too late.
COPYRIGHT 1991 American Foundry Society, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:SFSA Industry Meeting
Author:Bex, Tom
Publication:Modern Casting
Date:Nov 1, 1991
Previous Article:Central NY Chapter notes close supplier-foundry link.
Next Article:Metals associations.

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