One Guy's Theory
Posted by Traveling Salesman at 4/4/2008 8:37 PM and is filed under uncategorized 
I have a friend in Chicago with some very intersting thoughts about what is happening in our economy and specifically in our industry. We are all reading about the cost of steel and the increase in the world's consumption of steel and fasteners. Scrap prices are also going through the roof. My friend says that as our economy slumps he could see several cold headers/screw manufacturers go out of business. And, if they do, there will not not likely to be a lot of companies buying up the machines that would go on sale because domestic business is slow. He says that it is cheaper for companies overseas to buy the liquidated machines and use them for scrap than to actually go pay for other forms or sources of scrap. So....if we lose all this cold heading machinery and down the road our economy picks back up, where will we go to get new cold heading machinery?? According to him, the screw manufacturing machinery is mostly manufactured in China now. So, if the Chinese buy our machines, melt them down, then when we buy new we will be forced to go to them to buy the new machines.
Now let me say that I have no knowledge of this subject and I cannot begin to tell you whether I think his assessment is accurate. I do know scrap prices are through the roof and I have heard that there are some small screw manufacturers that are hurting. But the whole theory?? Not sure. But it's interesting. Have we sold ourselves out?? I'd be curious to know what you think.
Now let me say that I have no knowledge of this subject and I cannot begin to tell you whether I think his assessment is accurate. I do know scrap prices are through the roof and I have heard that there are some small screw manufacturers that are hurting. But the whole theory?? Not sure. But it's interesting. Have we sold ourselves out?? I'd be curious to know what you think.
TS, Your information is a bit off on this one... National Machinery located in Tiffin, Ohio is the lone cold forming manufacturer who manufactures equipment here in North America. Their specialty is quick change progressive headers.
The true question is not 'will you be able to find a cold forming manufacturer' in the future. The question is - will North America need one? Our government should be doing everything it can to keep manufacturing plants (automotive, industrial, ALL!) here in America.
Instead, we ourselves, are doomed to buying EVERYTHING from where big corporations can exploit people, environment, and human rights all for their own GREED. Think I'm being overbearing? See this article from the NY Times in November of last year:
http://www.nytimes.com/2007/11/26/nyregion/26manhole.html?_r=1&scp=1&sq=India%20Manhole%20Covers&st=nyt&oref=slogin
5DieGuy
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I do stand corrected on this...but let me elaborate. The "guy" who gave me his theory explained that he was referring to single die headers. He explained further that National will certainly build one but it would cost $1MM. The company he was referring to in China is Chun Zu (sp?) and he said their cost is considerably lower.
Youknow more than I do about this area so let me know what you think about this follow up. I will check out the article you referred to.
TS
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TS - single die header work will be exclusive to Asia and more and more companies will go out of business unless the global market shifts dramatically (as we are seeing somewhat with steel).
The "human cost" / labor cost of 1 die parts is between 8-12% of a single die part. The lower "human cost" from asia is not offset by a higher transportation cost, so it makes sense to continue to import these parts.
If the "human cost"/labor goes up, along with the steel and other costs... then you might see a need for 'local' sources. Otherwise these single die parts will always be in "low cost" countries.
5dieguy
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