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Are you Vegas ready yet?  Next week is October and that is Vegas month.  I’ve made a list of the work days I have left before I leave for the show so I can see exactly how many days I have left to get the things done that I want to get done before the show.  Some people I want to see, some updates I’d like to get before I go to the show.  It is coming fast and furious.

Once again, I expect a lot of people will end up at the Bourbon Room on the Thursday evening after all the hospitality suites close down.  It is quite a competition that happens after the show on Thursday.  Several companies are trying to entice customers to come hang out with their staff, and consequently possibly avoiding other company’s overtures to those same distributors.  Kind of wish they’d all throw their money into a big pile and just have a great big old pool party or something.  STAFDA kind of has that down.  Charge a lot for the show but then throw a reception where everyone comes together.  Instead, fastener people kind of scatter to this party and that party and maybe to a dinner and then maybe head to the Bourbon Room if they have any energy left.

I’d like to come up with an alternative to the Bourbon Room in 2016.  While I like it well enough, the place is really loud, so much so that you can hardly talk.  Also, it is kind of jammed in there.  I still like the idea of a nice pool party.  And while I like classic rock music, we could probably use a change up on the music for a year.  Give it some thought and post some suggestions for 2016.

There have been several articles released recently suggesting that fastener sales have been flat or down recently.  The Fastener Distributor Index has had its lowest numbers in something like a year.  I wrote something similar a month or so ago based upon what I was seeing out on sales calls.  But, sometimes it is hard to generalize about a market because while middle America might be slow, the coasts might be booming because of strong aerospace business.  With some of the articles I have read, they refer to specific companies and their respective results.  Even the FDI is derived based upon the companies that respond and that number can change from month to month.

In my last post I mentioned that I enjoyed the All American Fastener Show because it enabled me to spend some quality time with people I do not get to talk to as much as I might like.  I spent some time with Brian Musker of Fully Threaded Radio and Fasteners Clearing House (FCH).  Brian explained to me that “drill downs” on FCH (the “S” is for scrubber) are down by 15% for the last four months, from May-August.  Brian explained that a “drill down” is when a user finds an item of interest on FCH and then ALSO clicks on the name of the person or company that is listing that particular item.  They are drilling down to see who actually has the item, which suggest they are truly looking for the item to see where they might get it.

I understand from listening to Fully Threaded discussions that there are over a million items listed on Fasteners Clearing House.  The number of users and the number of drill downs are substantial.  I told Brian that I think their tracking of “drill downs” might just be the most accurate indicator of overall commercial activity in the fastener marketplace.  While I think Brian was kind of flattered by my suggestion, he pondered it for a moment and offered, “I think you could be right”.

I’ve suggested before that Brian and Eric (Dudas) should present their drill down information as an indicator of fastener activity on Fully Threaded Radio.  My personal feeling is they have the best data available due to their extensive network of users.  So, the good news is as of the All American Show, Brian said the September numbers looked a little bit stronger.  Just a bit.  But that was early in the month.  Check back later cause those numbers might just be the best thing going.

I just returned from the All American Fastener Show held in Nashville and will report that, although small, the show was terrific.  Really, it was.  Heidi Voltrauer of Volt Plastics does a great job hosting this show and the exhibitors at the show love being there.  What the show lacks in size it makes up in…hmm…let’s call it intimacy.  It boils down to a two or three day event and because it is not a huge show the attendees get a lot of time to spend together.  I know that may sound like an apology for the size of the show, but it should not.  Exhibitors and attendees have time to actually spend time discussing business in a bit more detail. Heidi has a strong core group of exhibitors that support the show and were actively discussing with her where she will hold the next All American Show.  I had never spent time in Nashville till the show and I would be glad to go back and spend more time there again sometime.  But, I’ll just wait and see what Heidi comes up with next.  And, I truly think the show paid for itself which, in the end, is what you hope for from a trade show.

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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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