John Wolz

The rise in the cost of steel and fasteners, the ability to pass along price increases and then the inventory cost problem following a drop in prices led the list of Top Problems of 2008.
FIN Survey participants noted other cost-related problems: China’s prices, fuel costs, freight costs, fluctuations, market volatility, steel surcharges, steel and fastener inventory after prices drop and surcharges.
Sales also were frequently mentioned as a top problem. Instead of steady or growing sales, FIN Survey respondents found problems with “erratic demand,” reduced size of orders, reduced automotive production, factory direct competition, profits and profit margins.
In addition, problems concerning stability of customers, customers moving production offshore and eroding base of U.S. manufacturing, and increase in quoting activity without accompanying orders were reported.
Other mentioned problems included: the economy, capacity, cash flow, currency fluctuations, factory deliveries, insurance premiums, international taxes and import fees, employee expenses, personnel, sales employees, customer bankruptcies, customers stretching out accounts receivables, tightening credit, warehouse space, residential housing depression and non-residential construction.
One participant mentioned a “happy problem”: “Keeping up with the growth.”
A sampling of comments from FIN Survey participants:
“Companies that have made good decisions in the past few years by strengthening their relationships with their customers and their suppliers and by not acquiring a lot of debt may actually benefit in the long run from this economic downturn.”
“Poorly run companies that have been selling out the bottom end of the market may not survive this difficult period.”
“Difficult year as we could not raise our selling prices as fast as costs were going up and now our customers think we should be lowering our prices as commodity and energy prices decline.”
“Be careful about your customers paying on time.”
“Buy American attitude needs to be revived.”
“Hold your margins. Don”t dump inventory.”
“I am expecting at least one direct competitor to file for bankruptcy in the next 12 months.”
“It is slowest I have ever seen in 34 years.”
“The mega companies do not work on the same margins as smaller companies and don’t much care about their impact on others.”
“We believe that China has been the big wild card in all the commodities this year. If anyone knew what China’s decisions might be, then one might be able to guess how the markets would respond.”
“We need a strong domestic fastener manufacturing as well as domestic steel industry for our national security.”
“The bottom feeders are ruining it for everyone. Those small two-to-five employee companies that are selling at 10% margins to stay alive are making it hard on the reputable people to survive.”
“I see trouble in the future if the USA continues the policy of exporting manufacturing jobs. The future does not look good if we continue the trend of becoming a service economy.”
“The industry needs to be even more cohesive as a lobbying force in North America and not defer on key issues to other manufacturing associations.”
“There is an unfair global playing field due to weak social and environmental laws in developing countries and weak import/export policies in the U.S.”
“What was the ROI on Iraq? Why aren”t we spending on infrastructure here at home?”
“Stop bailing out the banks … start work projects that use fasteners.”
“Quit whining and go back to work.” �2009 FastenerNews.com