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I got an opportunity to hear the Young Fastener Professionals (YFP) present their case study at the North Coast Fastener Association (NCFA) meeting last evening.  The presenters included Ryan Kertis of Stelfast and Cory Facemire and Kristen Kessler of NSK Industries, a distributor in Northeast Ohio.  I spoke with numerous people after the presentation and I am happy to report that it was a great success. Attendance at the event was somewhere between 45-50 people.

The presentation lasted between 30-45 minutes and had a great deal of data to go along with the talking points.  Perhaps the most interesting part of the presentation was the question & answer session immediately after.  Millennials do not get to do presentations without getting some push back from “older” or legacy employees of our industry.  Questions came up on whether or not millennials were “job hoppers” that could not be counted on to stay committed to a company once they were trained.  The presenters did a very nice job of responding and even got some support from other millennials who were in attendance to hear the presentation.   One audience member made the point that, as an employer,  he did not really care about the needs and wants of millennials versus any other generation.  The presenters skillfully turned the table saying, “that’s fine, but what if a millennial is now your customer and not your employee.  Do you care what they think then?”  The answer was, “of course” and the point was made.  The millennial employee will also be the millennial customer so it is worth taking note of what motivates them.

At one point in the presentation, the presenters even poked fun at themselves a bit.  The results of one survey question suggested that while millennials do like to part of a team, their generation wants personal feedback and they want to be personally recognized for a job well done.  Both Kertis and Facemire concluded with smiles that the data suggested “it’s all about me, me, me”.  While that might be a turnoff to one generation, it also is good information for employers of millennials.  Make sure to provide feedback to your younger employees and do not assume that they get the big picture.  They want to know mores specifically how what they are doing fits into that “big picture”.

At one point during the presentation, Kertis held up his cell phone and said, “I do everything with this.  I text, email, shop, call, make appointments,  schedule…everything.  And I always have it with me”.  While a lot of us use cell phones for a lot of different things, his comments hit home as many of us watch our own kids tethered to the cell phone.  Their generation embraces it completely.

I know the YFP will be presenting their survey results at several other association meetings.  I would encourage anyone who can to attend.  Even if you are not a millennial.

Last week I was sent the January update on the Fastener Distributor Index (FDI):

“The Index took a hit during the month, which was widely expected by many industry operators.  The FDI dropped to 45.6 in January versus 50.8 in December, seasonally adjusted.”

Within a couple days of getting that notification I was sent this story from Industrial Distribution:

“Fastenal – No. 12 on Industrial Distribution‘s 2015 Big 50 List – posted its January 2016 sales figures on Wednesday, and its numbers may provide a glimmer of hope in an otherwise gloomy past year of earnings reporting for large industrial distributors.

The Winona, MN-based company posted January sales of $308.4 million, a 3.3 percent daily sales increase over January 2015. This marks the first month of year-over-year sales growth for Fastenal since August 2015, when it grew 1.6 percent. December 2015’s total sales were $286.6 million.

Fastenal’s previous four months posted yearly sales declines, each bigger than the last:

• December 2015   -3.8 percent
• November 2015   -1.1 percent
• October 2015   -0.8 percent
• September 2015   -0.3 percent
• August 2015   +1.6 percent”

The Fastenal data suggests they had a bump in January after some pretty slow months at the end of 2015.  Again, Fastenal is just one company but out in the fastener marketplace a lot of companies have suggested that January started off very strong, oil & gas being the possible exception.  And, even with oil & gas, there is still be some activity.  Unfortunately, many start up companies or new branches of oil & gas focused suppliers will close due to the decrease in oil prices. But, not all oil production will cease completely.  There will just be a large bubble burst.  More worrisome is the debt that will come due to all the banks that loaned large amounts to the frackers and drillers, but that is another whole topic.

Getting back to fasteners, I wonder if the FDI somehow gets respondents reacting to recent stock market plunges and business sentiments from the end of 2015.

I think the FDI is an interesting measuring tool and could serve our industry well, especially if more companies took the five minutes needed to respond to the few simple questions. Fastener associations and STAFDA pay large amounts to get reports from economic forecasters and I am told the information is  highly valued and often accurate.  It makes me think we could do a better job mining our own information and sharing it with all our industry.

At the end of my email note regarding the FDI was the following information worth passing along:

NOTE: Beginning in January, we are attempting to have all survey data in to BB&T before the first of the month.  They have asked us to do this to more closely publish FDI results with PMI results.  While this is a minor shift for survey respondents, and a small inconvenience for some, I hope everyone will recognize the importance of timing our index with the PMI and appreciate your accommodation to make this happen.

For additional information, and to register for FDI participation, see the FDI website at www.fdisurvey.com, or contact Eric Dudas at eric@fastenersclearinghouse.com.     

Somebody sent this to me.  My wife and I took it as well as my 24 year old son.   Pretty dead on.

http://www.pewresearch.org/quiz/how-millennial-are-you/

By the way, if you do not regularly receive new posts please subscribe by filling in your email address on the top right corner of this page.  Got some interesting stuff coming around the bend.

Wow, it’s January 15 and already there have been several announcements.  Just this morning, I received an update from Global Fastener News that Keller & Kalmbach out of Germany acquired Infinity Fasteners headquartered out of Lenexa, Kansas.  Earlier this week I heard that EFC acquired Technology Components Southwest which now gives EFC a location in Dallas.  Cable Tie Express announced an equity investment by Roman Capital.  Tony Van Hoozer and Char Cooper will continue to lead the company, but it’s still a bit of a shift from the previous set up.  Finally, and this reached back to last year a bit, G.L. Huyett acquired Precision Specialties which was a Tinnerman and AVK stocking distributor.

In some regards, each of these transactions might not be earth shattering news in the marketplace, but I think each one is significant.  Certainly, a couple of these moves will change the Tinnerman marketplace.  And Infinity has a footprint in several states, not just Kansas.

So, welcome to 2016.  Let’s see what else pops up in the coming weeks and months.

So the stock market is tanking and I am seeing a lot of very good orders coming in to start 2016.  Do we in the fastener market see trends before the rest of the market or are these just left over orders that were not placed in 2015?  People buying parts for future production?  What are any of you seeing out there?  If I did not have a 401K and watch the market news, I might have fooled myself into thinking 2016 was starting off with a boom.  I know oil & gas is going to be hurting for a good long time (see previous post for more of that) and China is throwing a wrench into everything.  But are some other markets doing well enough to drag us along?  What are you seeing out there as the new year begins?

Industrial Distribution magazine recently published an article by Mike Hockett, managing editor, that read “Oil Will Rebound to $70, but not until 2020”.   It goes on to explain that OPEC released its World Oil Outlook and it continued by saying that oil will move to $95 per barrel by 2040.  Recently, oil prices have fallen to their lowest levels in 11 years, since July 5, 2004 and oversupply is the culprit.

I saw another article online at Bloomberg.com that read “Oil Bankruptcies Reach Highest Quarterly Level Since Recession”.   The article said that at least nine U.S. oil & gas companies that accounted for more than $2 billion in debt have filed for bankruptcy in the fourth quarter.  Since peaking in October, 2014, U.S. oil & gas employment has fallen by 70,000 jobs, according to analysts for this report.  The article continued, “The Energy Information Administration now predicts that companies operating in U.S. shale formations will cut production by a record 570,000 barrels a day in 2016.  That’s precisely the kind of capitulation that OPEC is seeking as it floods the world with oil, depressing prices and pressuring the world’s high-cost producers”.  The article finishes, “Even a plunge in U.S. output may not be enough to drain a global supply glut that has almost 3 billion barrels of oil and products like gasoline in developed countries’ storage tanks, according to the International Energy Agency.  The world will likely be oversupplied by about 1 million barrels a day through the first half of next year before balancing, Jeffries LLC analysts including Jason Gammel said in a Dec. 18 research note”.

There has been a lot of infrastructure spending on fracking that looks like it will be all for naught.  From the Dakotas to the Ohio/Western PA/West Virginia area to Texas and up in Alaska.  They all thought they hit the lottery.  In Ohio, I saw more Texas and Louisiana license plates than I had ever seen before when I traveled near the Marcellus Shale area.  Companies like Wilson Supply were shipping products from Texas to support the oil drilling and fracking, then more recently local suppliers were enjoying a nice increase due to the fracking.  And it all happened really fast, like within five years or so.  I guess some producers will continue to produce from their best, most cost effective areas.  But, what once was going to be a new gold rush now looks pretty grim.  I recall on one of my first trips into that area someone was explaining how land owners were selling their land to companies like Chesapeake Energy.  I was told, “those farmers are selling their land for ‘Oprah money'”!  I imagine you are kicking yourself right now if you held on to your land hoping for a bigger payday.

How could this all happen so quickly?  It makes you wonder about our entire energy approach to energy.  The coal industry is getting battered in some of the same areas where the oil money is drying up.  I remember reading headlines saying that one day we would be paying $20/gallon for gasoline.  Seems pretty unlikely now.

What is really tough for us in the fastener industry is the lost opportunity to supply parts into the oil & gas & coal industries.  I know a lot of companies that formed specific business units specifically to go after that type of business.

I’m not sure how all of these bankruptcies affect financial markets but it cannot be good.  Who’d have imagined that we would not need to produce as much energy as possible?  There was a lot of money invested into these fields that is soon just going to disappear.  It’s like money just evaporating, kind of like the value of a large Florida home during the housing market meltdown.  When homes were not being built, sales of building supplies and home appliances got hit pretty hard.  Some industrial suppliers are similarly feeling the oil & gas sting.  And it all happened so quickly.  I guess you have to chase business when the opportunity presents itself but things change so quickly anymore.  Just ask Cardinal about putting all your eggs in one industry basket.

These comments were submitted by Aaron Shushan of Specialty Sales.  Thought they were worth posting as a topic.

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First off, I am very excited to see this acquisition!! So on behalf of Specialty Sales Congratulations! This acquisition can mean new and great things for the “Las Vegas Fastener Show.”

I really just want to jump into talking about the BIG MOVE OF 2017. Apparently the Vegas Fastener Show has found its way over to the Las Vegas Convention Center in 2017. While many of my industry friends are angry, scared, or confused, I look at this as a positive move. While the convention center does not offer direct access to a hotel, it does have many unique benefits.

Year after year I find myself wandering further and further from the Fastener show– during the show!! I get invited to lunches and sales meetings from the Sands Expo Center to Treasure Island across the street (a 20-minute walk if you don’t get lost in the casino). My days are packed with walking from hotel to hotel, and it can be very stressful. All this takes me away from the show.

I have been to several shows at the Las Vegas Convention Center, and it is an entirely different story. Everything is under one roof, and the walking is tolerable. They have rooms/suites to rent for conferences and the venue and show floor itself is nice. (Cell phones actually work inside!!!) They do have a few small places to grab a snack but for the most part, that is it. Some may view this as a negative, but the point is to be at the show during the day and take the customers out at night. However, if you must leave for any reason taxis are aplenty, and the Tram stops right in front of the convention center.

Two items to note: 1) There are not many hotels near the Convention Center, and 2) The monorail stops right in front. I have made a list of all the Hotels along the tram and have put them below for anyone who reads this. My recommendation is to stay at one of these hotels for convenience. A three-day pass on the monorail currently runs $28, and a four-day pass runs $35. Both of which are good for unlimited rides and will beat the price of a taxi for three or four days! Keep in mind if you order your pass online athttps://tickets.lvmonorail.com, you get 10% off. The discount brings the prices to $25 and $32 respectively. The monorail operates Mondays from 7am to midnight and Tuesday-Thursday from 7am-2am and Friday-Sunday 7am-3am.

All-in-all, I think limiting our small show to one large venue might be a good thing. Companies who have booths will see more foot traffic and will spend more time speaking with customers and potential customers on the show floor. I look forward to this change as it will add a new dimension to the show.

HOTELS ALONG THE MONORAIL:

MGM GRAND (Furthest to the South)
BALLY’S/PARIS
Flamingo
Harrah’s
The SLS Hotel
The WestGate Las Vegas (Closest to the Convention Center)
2015 LAS VEGAS STRIP AND MONORAIL MAP: http://www.vegas.com/transportation/las-vegas-monorails/

One of my favorite movie scenes ever is from Night Shift when Michael Keaton first meets his new work colleague, Henry Winkler.   As the character, Billy “Blaze”, Keaton exclaims, “See, I’m an idea man, I get ideas all day long, I can’t control them.  It’s like, they come charging in, I can’t even fight them if I wanted to.”  There are days when I find that I can relate to that character.

So, today I was thinking about how Mark Zuckerberg announced that he plans to give away some $45 billion, give or take a million.  Apparently, he’s one of the group of billionaires that signed “The Giving Pledge” along with folks like Warren Buffet, Bill Gates, Richard Branson, and Rich Cavoto who plan to give away more than half their fortune over their lifetime.  I am embarrassed to admit I know very little about where all the money goes that these people pledge.  I did read a little, little bit about what Zuckerberg intends to do with his money.  I read that his newly formed LLC,  has “the mission of advancing human potential and promoting equality”, and will be administered by the CEO himself. Advancing human potential and promoting equality sound terrific.  Selfishly, I want to know why some of these wildly rich philanthropists don’t donate money to rebuilding our crumbling infrastructure or mundane things like that, but working on human potential has some merit.  A lot of their contributions seem to be geared towards education.  And, that’s when it hit me…the fastener industry needs to hit up Zuckerberg, Buffet and Branson for funding for the Fastener Education Foundation!  You ask, “what is the Fastener Education Foundation”?

The Fastener Education Foundation (FEF) is a non-profit foundation developed to help fund fastener related education.  On their website, it continues, “The vision of FEF is to assist the fastener industry to insure long-term sustainability in Human Resources”.   Let me channel my inner Billy Blaze and try to put it into other terms that someone like I can understand (and, I sure hope I don’t poorly misrepresent this):

“Look, somebody’s got to run those header machines.  And sure, you can google anything, but young people still need to know a nut from a bolt.  And, who wakes up one morning and says, ‘gee, I think I want to work in the fastener industry?’…yeah, no one.  We’ve got to recruit people, train people and show them how to make, use and sell the right bolts for the right job.  And you know, at the end of the day it’s not a bad way to make a living.”

On a more serious note, an industry friend who runs a manufacturing plant recently shared with me, “if my company is out of business in ten years it will be because I cannot find capable people to run my machines”.  Wow, not foreign competition, not pricing pressure, not government intervention, but people.  I think this is the kind of situation that the Fastener Education Foundation hopes to address.

Honestly, I know just a little about the FEF, but I think it is a fairly new organization still getting the word out.  If this sounds interesting to you, take a look at their website at www.fastenereducationfound.org.  I’m no more an expert on the FEF than I am on the Gates Foundation.  However, I am an active member of the fastener community and through this industry I have manged to make a living.  For that reason alone, I want to take some time to learn more about their mission.

If anyone wants to correct or speak further on anything I’ve mentioned regarding the FEF, please respond.   If you’d like revisit Michael Keaton’s role in Night Shift, here you go.

Congratulations on your recent acquisition of the National Industrial Fastener & Mill Supply Expo. Please don’t be offended if we affectionately refer to your new acquisition as “The Vegas Show” as it’s just an old habit we developed when we used to distinguish it from “The Columbus Show”.  Yeah, I realize that reference may not mean much to you, but there is a long history to the show that still has some meaning to us “legacy” members of the industry.

You bought yourselves quite a show.  A lot of great business connections can be traced back to this show. A lot of people managed to use this show to sell a lot of fasteners and, for this, many of us are very grateful to the show organizers.  You’ve purchased an asset with a lot of history.

I looked at the list of exhibitions currently run by Emerald Expositions.  It’s a very diverse list though not a lot in the industrial arena.  All the same, you clearly have a lot of experience with trade shows.  I can’t speak for the entire fastener industry, but I will tell you I hope your bring some exciting new ideas the the NIFSME.  It’s been a great show, but there is ALWAYS room to grow and get better.  I’m happy to share a few observations with you that on some things that I would not mind seeing added to the show.

First of all, each year there is an cocktail party that is the official opening to the show.  It lasts one hour. So, hundreds of fastener people from coast to coast all gather into one room or around a pool and then in just one hour the party shuts down.  Keep it open! Whether it is an open bar or a cash bar, this should be a longer event.  The STAFDA show makes a whole evening of their opening celebration.  At this point, people are in the habit of skipping out after an hour and going out to dinner or going off to gamble. I’ve always thought this gathering had greater potential.  At this point I’m not sure how you keep people there for the evening.  Maybe have a live band.  One of the best parts of the old Columbus Show was that people gathered at the bar at the 2nd floor of the Hyatt where a lot of social networking took place.  It has always been a challenge to duplicate that atmosphere in Vegas.

Do you have nationally known speakers at any of your other trade show?  Get one of them to speak to an assembly of fastener industry people.  Did anyone tell you yet that among Warren Buffet’s many holdings are a number of fastener companies?  He might be good.  Isn’t Tesla located out west?  Elon Musk would be interesting and I know his companies use a bunch of fasteners.  Might as well aim high as long as I’m asking, right?  One of them just might be a cousin or something.

I know the Vegas Show is moving over to the Las Vegas Conventions Center in 2017.  After several years at the Sands, this will be a big change for the many people who are used to stumbling out of the show right into a casino.  Let us know what your plans are for the 2017 show so we can get excited about why we are leaving our old comfortable home to move further away from the strip.  You have held other shows at that location so fill us in.

The Vegas Show has always been a great show and hopefully it will continue to be.  But, as long as there is some fresh blood getting involved, now might be a good opportunity for people to share their ideas on how it might be bigger and better for the fastener industry.  Comments welcomed!