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The tough and ugly streets of the fastener industry always love acquisition rumors.  Kind of like sports junkies look forward to trade deadlines or draft day.  Who’s getting who?  Over the last several years, a few companies have stood out as newsmakers in the mergers and acquisitions area.  You got Brighton Best, Wurth, the Elgin Group, just to name a few.  People are always wondering what those companies are doing next.  Many companies are very direct about their intent to grow, and grow quickly, and acquisitions are often the only way to make that happen.  Quietly we have seen Fastenal gobble up a couple manufacturers including Holokrom and Cardinal Fasteners (via Wurth).  Lindstrom acquired Titan, and there are others.

Last week, one particular acquisition caught my eye…the Berkshire Hathaway acquisition of Precision Castparts.  Certainly, that acquisition involves a lot more companies than just fastener companies.  And, PCC (Precision Castparts) might be a name better known to those in the aerospace industry.  But, just in case you missed this, the sale was for $37.2 billion cash. Yes, billion…in cash!!  Can you imagine the companies you could buy in the fastener industry with $37.2 billion in cash??  Heck, with that kind of money you might be able to get Solution Industries or maybe even the Fully Threaded Radio franchise.

In case you have forgotten, this is not Berkshire Hathaway’s fist dabbling in the fastener industry.  A few years ago they purchased the Marmon Group which netted them Nylok, Pan American Screw and Atlas Bolt & Screw.  With the acquisition of PCC they add AVK Industrial Products, Cherry Aerospace, Avibank, SPS Technologies, SPS – Greer Locknut, Shur-Lok International, and several other aerospace related fastener companies.  Those are some good, longstanding fastener companies.  Lots of history there.  Again, the folks at Berkshire Hathaway (did I mention a guy named Warren Buffet works there) do not seem to be gravitating towards the commodity, imported keg product but rather towards the higher end, engineered parts.  But they have made enough acquisitions to make you realize they know a thing or two about the fastener market and certainly have their eye on us.

Wonder if we could get Warren Buffet to speak at the Vegas Fastener Show?

Mike McGuire kindly copied me on his press release you can read below.  Mike has certainly made an impact on the fastener industry and continues to do so with his work with Jim Bannister on the Vegas Fastener Show and in many other ways.  I’m sure it is hard to let go of some things but good for the industry that succession plans are put in place.  It sounds like he is handing off the AFJ into capable, experienced hands.

American Fastener Journal and Fastener Store acquired

Scottsdale, Arizona; September 1, 2015

Mike McGuire, President of McGuire Fasteners, Inc. announced today that the American Fastener Journal trade magazine and the Fastener Journal Store have been acquired by Tom Massar.   McGuire stated, “I am very pleased that Tom, my sales manager for 25 years, has acquired these properties and will continue their operations in Columbus, Ohio. With 25 years of experience with the AFJ, Tom has hundreds of contacts and the support of numerous advertisers to continue to make the AFJ the leading source of information for fastener professionals.”

Cyndi Daines, well known as the AFJ graphic designer, will continue with the design and layout of the publication. Jennifer Judy will handle the Editorial position and will work to continue to reach the goals the AFJ are known for and that are technical and educational fastener articles, fastener company profiles, economic, imported fasteners and publicly traded fastener stocks reports.

The Fastener Store, known for its wide selection of thread gauges, fastener training posters and fastener reference books will also be headquartered in Columbus, Ohio.

The transition is already taking place and is ahead of schedule. The September/October issue is schedule for mailing in mid-September and will include all the information and registration information for the up-coming National Industrial Fastener and Mill Supply Expo in Las Vegas, Nevada, October 21-23, 2015.

I heard about this on Friday and googled all over to see if I could verify what I had heard.  Sunday morning and the Global Fastener News crew have put it in print – Dokka is closing it’s Michigan facility after just four years.  The state of the art facility just opened in 2010 but the article says the uncertainty of the wind energy industry has cause them to decide to close.  Oddly enough, when Wurth closed Cardinal Fastener they had initially said they were moving the machinery to Dokka.  Today, it you google Cardinal, it takes you to the Cardinal site but also let you know that “as of April 1, 2015, Cardinal Fastener has been acquired by Fastenal Company”.

When Dokka opened it was touted as a state of the art facility.  There had to be a huge investment of money into that place and to see it closing is a little shocking.  I’ll be curious to hear why they were not able to cross over and produce other parts in addition to wind energy related parts.  But, sad to say, another domestic manufacturer of fasteners is closing its doors.

Whoops, I got that backwards.  The headline actually read, “Fastener Customers Reject 3D Printers”.  Wow, that’s pretty harsh.  They’re rejecting 3D printers!!  That’s what the headline said!!  Whatever that means exactly.

Listen, I’m no 3D printing guru.  I’m kind of fascinated by 3D printing.  I’ve seen the machines make parts from plastic and from inconel.  But I’d agree with the FMW Fasteners survey that 3D printers do not seem to be a viable option to produce fasteners – for now.  The survey said nearly 60% of those surveyed said they were unlikely or very unlikely to turn to 3D printing as an alternative to purchasing fasteners from specialists.  Well, I’d place a large bet that if, some day, I were able to produce comparable quality parts for a lower cost by doing so with 3D printing, that 60% would drop to about 5%.  Today, that is not possible.  But “rejecting” 3D printing reminds me of the boss who said, “if I ever catch one of my employees texting with a customer I’ll fire their ass”.  People text with customers all the time now and sometimes it is just the most efficient way of communicating and sending pictures of applications.

I saw the article on 3D printing in both Fastener Technology International and in Global Fastener News.  The funny thing about the Global Fastener News article was that if you went a little further down the page you’d see the article, “3D Printing Partnership Enables Fastener Success”.  Both articles were sent at the same time in the same GFN news release.  The article explains, “Using traditional methods, it would normally take Barton Coldform up to 14 weeks to produce tooling to created demonstrator parts and products, but now using 3D printing the process takes just days”. No, the production parts were not being made on 3D printers, but the prototype parts were and it enabled the company to “save time and money in the whole supply chain”.

I have heard visionaries suggest that parts departments will one day have a 3D printer making replacement parts in a warehouse rather than stocking all the replacement parts “just in case” someone needs them someday.  No, we are not yet at a place where it makes any sense to 3D print production parts, but the technology is very young.  And companies, including many, many fastener companies are investing heavily into 3D technology.  Another line from the “rejection” article read “Fasteners have got to be strong – they’ve got to be able to be robust enough to not fail under stress.  Until we can see genuine strength from a fastener produced from a 3D printer, the trust will not be there to go ahead and mass produce”.  C’mon now.  We have labs that test cold and hot formed fasteners everyday!!  We don’t completely trust those parts either and that is why we do so much testing.  That’s why we send parts to labs, we test products to make sure they are what they are supposed to be.  3D parts are going into the engines of airplanes you are going to be flying in so I’m guessing someday someone will figure out a reliable way to test 3D printed fastener parts.

But, for now, our industry has spoken.  We have “REJECTED”.  In fairness, “fastener customers” might have been saying that they do not foresee a time when they will 3D print parts in their own facilities instead of buying them from suppliers.   But if a supplier can economically produce fasteners and is able to guarantee the quality, the industry may not be concerned how they were made.  Just as long as they test out.

A person can hardly pick up a magazine (paper or online) without reading something about “millennials” these days.  Yesterday I read a lengthy article in American Fastener Journal about millenials and the Young Fastener Professionals.  This morning, after I strained my Baby Boomer back (though, I will add, on the later, tail end of the baby boomer generation, lest I be confused for a retirement aged boomer) picking up my morning paper (paper edition, not online) I opened up the “Parade” section where the headline read, “millenials vs. Boomers” which included an article on Chris and Abby Elliott, both in the comedy, entertainment industry.  I have noticed many, many other articles in Industrial Distribution and other magazines that have addresses this large group of individuals we call the millenials.

It’s all kind of interesting to me as my wife has given birth to three of those little buggers.  After reading these articles  I can see all the places we have gone wrong as parents.  Instead of telling my son to clean the three weeks worth of dirty clothes laying on his bedroom floor, I should have explained, ” you are part of a bigger picture son, you see, your room is part of a larger organization we call our HOUSE and when one part is not functioning properly it drags down the whole house for instance when bugs in your room begin to make their way into other rooms”.  Now I get it, let them know how they fit into the big picture!

These articles are really effective and pointing out to me the many ways I have been an ineffective parent.  In AFJ, the article on millenials read, “When you want a project done, they’re the first to jump in and say ‘hey, I’ll do it’.  You can’t keep them busy enough.”  That NEVER happened in my house unless one of my kids wanted to get out of doing what they were already doing.  “Sure Dad, I’ll run to the store for you instead of mowing the lawn.”  None of these articles discusses the communication filter that exists when your kid is busy watching Netflix or busy playing Play Station 4.  They don’t volunteer for anything when that stuff is going on.  And mind you, two of my kids have graduated and have jobs and earn money and pay taxes.  They appear to be pretty “normal”.

The truth is, I’m teasing a bit.  I love millenials.  I have met a boatload of them through my own children and I find a lot of them fun, thoughtful, ambitious, and independent thinkers.  I feel very good about the next generation coming up behind us Boomers, even if they do want to be company presidents after their six month orientation is completed.

But, I will share a little secret with the millenials.  You are not all the same.  Yes, you have all been raised on the internet and smart phones and us old-er people do envy your technical prowess, but you are not one big easily describable group.  No more than you can say, “Old people are…” or “Irish people all…” or any group you want to lump together.  You might see things differently than many Baby Boomers, but you also very likely see things different from many other millenials.    I get a good laugh when my 20 year old college child starts to share info about musical groups coming to his college to perform in a music festival.  He starts listing the groups and turns to his 26 year old sister and says with a smile, “you wouldn’t know any of these people, you’re too old”.  26 and over the hill.

But, just like us older folks, some of you are great workers, and some of you are lazy.  Some are thoughtful and seek guidance and wisdom.  Some jump to conclusions and talk before they thin.  That is really not much different than any other generation of people.

But, all kidding aside, I think it is great that there is a group within our industry trying to reach out and be heard.  Our industry needs to continue to adopt new technology and the young people learn that stuff very naturally.  Kind of like when we used to hear, “teach a child a 2nd language when they are young because they can learn it so much easier than adults can”.  If nothing else, we older employees should be talking to and listening to the young people who are coming into our industry.  And, they should be doing that with us.  Ryan Kertis of the Young Fastener Professionals recently told me about a networking program that his group is holding in Las Vegas in conjunction with the Vegas Fastener Show and it is one that you might want to consider attending.  The YFP is attempting to promote dialogue.

On Wednesday, October 21, the YFP is holding a Speed Networking event at the Sands Expo Center, Room 404, from 3:15 to 4:45.  There will be a mix of millennial and veteran industry personnel and you must register ahead of time for the event as there is a limit on the number of people who can comfortably fit in this venue.  I hope some of the YFP members will respond to this post and further describe the event but I know they have already had a strong response to their early marketing efforts.  I plan to be there and hope to see you there too.

I’m trying to ignore what people seem to be suggesting.  I’m asking customers, “So, you getting ready for the Vegas Show?  You going to the All American Fastener Show?”   Then there’s always the old reliable, “What are you hearing out there?  Any rumors?”

I do get some responses but eventually we get to, “So, how are you seeing things?  How’s your business?”  I’m unhappy to share these but here are two separate responses I got just today:

“It’s like someone turned the spigot off.  We have just slowed down.”

and,

“We are probably only sending four people to Vegas.  Business has been really soft lately.”

Kiplinger newsletter has suggested since the beginning of the year that business would be soft in the middle and we would see growth in the 3rd & 4th quarters.  ITR reported to the NFDA members that the business climate was in good shape and NFDA members needed to focus on how to grow their business and not worry about any slowdowns.  Let’s hope they are both right and that this is just a momentary blip.

The person whose “spigot” has been turned off has some business tied pretty closely to the oil & gas industry.  That market has been soft, for sure.  On another recent call on a customer heavily tied to the oil & gas pipeline industry, I was told the price of gas is purposely being kept low to hurt the Russian government as they rely heavily on their revenue from oil & gas.  This particular gentleman pretty much suggested the Saudis are over producing to reduce the cost of oil in order to support us in punishing the Russians.  Was an interesting discussion and I don’t know if that’s true or not true, but I do know he is in close touch with business in Houston and with many people in the pipeline supply chain.  I know for sure the low levels of activity in drilling and fracking are having an impact on several of my customers in the Midwest.

I also read an interesting article suggesting that the cost of extracting oil and gas is reducing due to improvements in technology.  The old adage was something like, “if the price of gas is above $2.50 a gallon then it is profitable to keep drilling”.  But, if your technology improves and you drive down the cost of extracting the oil, then maybe you can still make money if the cost of gas dips lower.  At least, that was what the article was suggesting might be happening.  That would be good.

Anyways, some kids started back to school this week, and that means you’d better start making you reservations for Vegas.  We are still expecting a large group of people to show up at the Bourbon Room at the end of the night after the first day of the Vegas show.  I have spoken to a lot of people about trying to move our hundreds of fastener people to another venue where we might be able to actually hold a conversation, but I’m not sure we can pull that off in two months.  Maybe a pool party?  A party at Margaritaville?  Or, if the weather is nice we can hang outside at some open air bar.  For now, the Bourbon Room is just such an easy venue as it is so close to the show, the hotels and the other after show parties.  But, going somewhere else is worth discussing.

The FCH Sourcing Network has teamed up with the Fastener Training Institute for a second year to announce its participation in the promotion and selection of a scholarship candidate who will be awarded full tuition to the Fastener Training Institute course, “Fastener Training Week”. Once completed, the course qualifies students to sit for the Certified Fastener Specialist exam, a distinguished industry credential.

To qualify for selection, candidates must work within the fastener industry and must submit a brief essay, approximately 250 words in length. The essay should address the importance of training in the fastener industry, and the impact of training on the candidate’s career. Candidates can be nominated by owners or managers, who are welcome to submit an essay on behalf of a nominated candidate. There is a limit of one nominated candidate per company, however there is no limit to the number of individual candidates from any given company who submit an essay on their own behalf.

The deadline to submit scholarship candidate essays is September 30th, 2015, and the winner will be announced during the Las Vegas fastener show after-event, known as the “Bourbon Room Bash”, October 22, 2015.

Last year, the FTI also provided vouchers to all scholarship applicants to attend an online training webinar, so there is no reason not to get applications in ahead of the deadline.

Scholarship essays become property of the Fastener Training Institute. Applications may be submitted via email to: ftr@fullythreaded.com

About the FCH Sourcing Network: The FCH Sourcing Network serves the industrial and commercial fastener industry, providing online services related to inventory sales and fastener sourcing on the Internet, as well as the online fastener industry talk show,  Fully Threaded Radio.  Located at the website www.fastenersclearinghouse.com, FCH was founded in October, 2006, and is based in Naperville, Illinois.

About the Fastener Training Institute: The purpose of the FTI is to enhance fastener use, reliability and safety by providing the highest quality fastener product and technical training at all levels through classes held throughout the country and via online webinars. Based in Long Beach, California, class schedules and details can be found at their website, www.fastenertraininginstitute.org.

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Has anyone out there used the services of www.fiverr.com?  I recently heard about it and have checked out the site briefly.  I have not hired anyone to do anything yet.  But, there are loads of people willing and capable of doing a lot of different services for $5.  Yep, $5.

There are people who claim they can do deep internet searches for you on any topic.  I’m tempted to forgo a morning coffee at the local coffee joint and hire someone to do a search just to see what comes back.  Maybe, a search of all fastener distributors in a certain geographic location?  That search is not a terribly difficult one to do but maybe they’ll know more search engines than I do.  The different services include graphic designs, voice over work, musical composition and all kinds of random talents.

Let me know if anyone out there has ever used this.  I know one college administrator that uses them to collect data pertinent to their recruitment needs.  For about $40/month they get a ton of information and do not tie up their own personnel.  Just one example I know of, I’m sure you can find others on the site.

I’m in the middle of reading a book about Elon Musk, written by Ashlee Vance.  Fascinating book in a lot of different ways.  Of course, Elon Musk’s name is associated with PayPal, Tesla Motors and SpaceX.

On page 257 there is a description of a spacecraft called the Dragon 2 which will be able to dock with the International Space Station without the intervention of robotic arms.  It will run on a “SuperDraco” engine, a thruster made by SpaceX.  And, get this…it will be “the first engine ever built completely by a 3-D printer to go into space.  This means that a machine guided by a computer formed the engine out of a single piece of metal – in this case the high-strength alloy Inconel – so that its strength and performance should exceed anything built by humans by welding various parts together.”

Wow.  That is kind of mind blowing.  I guess some industries see some advantage to using 3-D printing.

If you want to nominate someone (or yourself) for the “30 Under 30” contest, the online nomination form is now available on the Young Fastener Professionals website, www.youngfastenerprofessionals.com

The “30 Under 30” program was designed to recognize 30 fastener industry employees, 30 years or younger, who are making significant contributions to their companies and show promise of being fastener industry leaders in the coming years.  The Young Fastener Professionals and Fastener Industry Coalition (www.fastenercoalition.org) worked jointly on the first 30/30 program last year and are once again partnering this year on the program.  The Young Fastener Professionals will be presenting the results of their year long study on Attracting and Retaining Employees at the fastener show in Las Vegas in October and winners of the 30/30 competition will be announced and recognized at that program.