Bloomberg News
July 20, 2009
By Mark Drajem
(PMA member quoted)

July 20 (Bloomberg) — The Obama administration is seeking ways to aid auto-parts suppliers unable to obtain credit, Commerce Secretary Gary Locke said.

“We are holding discussions with the White House about this liquidity issue,” Locke told a Commerce Department advisory panel of factory owners today in Washington today.

“The tight credit markets make it very, very difficult for you to operate.”

A crunch for the suppliers is coming within the next 100 days, he said. Unavailability of credit and plant shutdowns by General Motors Corp. and Chrysler LLC added to the strain after a 37 percent drop in U.S. auto sales through May, lobbying groups for parts makers said in appealing for $10 billion in new aid. The Treasury rejected that request last month.

Even as factory orders rise and the economy starts to pull out of the recession, banks are reluctant to finance the suppliers, pinching their ability to buy raw materials or parts, said Fred Keller, chief executive officer of Cascade Engineering in Grand Rapids, Michigan, and chairman of the Commerce Department’s Manufacturing Council.

“Orders are starting to come back up, and they need credit to fill them,” Keller said. “If they don’t get credit within the next four months, they are going to be gone.”

Request for Help

Two U.S. auto-parts supplier trade groups last month asked the U.S. Treasury for help by expanding current loan guarantee programs, incentives for bank lending and a study of long-term initiatives for parts makers, the Motor & Equipment Manufacturers Association and the Original Equipment Suppliers Association said then.

The Treasury rejected the lobby groups’ request in June, saying it would consider more help should supplier failures threaten automaker production. Neil De Koker, president of the Original Equipment Suppliers Association, warned of “chaos” after the rejection.

Locke solicited ideas from the factory owners today to see what the administration could do to help the companies. In their meeting the factory owners told Locke that President Barack Obama should prod banks to lend more.

“We just need a bridge so that we can pay our suppliers,” James McGregor, the president of Morgal Machine Tool Co. in Springfield, Ohio, said today. “We have all been put through some very, very trying times from the financial standpoint.”

All of us that support the manufacturing sector and feeling the pinch of decreased volume in our cnc mill and lathe departments.

KLH Industries: Waterjet Department

Since 1987, KLH Industries, Inc. has utilized continuous improvement to provide customers with the best supplier/vendor experience possible.

The professionals at KLH can manufacture parts to your specifications, but truly value opportunities to share ideas, answers questions, improve designs, and build relationships. It is important to KLH that our relationship with you and your company remain trustworthy and valuable.

KLH utilizes multiple abrasive Waterjets and over 12 years of Waterjet (WJ) experience to provide accuracy, fast delivery, and high-volume turnaround, all resulting in the most cost-effective process available.

KLH provides cost-effective cutting on virtually any type of material: rubber, cork, glass, marble, silicon, granite, metals, and even concrete. With cutting streams pressurized to 60,000 pounds per square inch (psi), the material could be solid titanium (click for video) and still not put up much of a fight.

Unlike both plasma and laser cutting, the Waterjet process does not destroy (burn) the cut edge, eliminating the need for additional annealing. The Waterjet department comfortably handles parts that are 72” x 144” x 8” thick, but can accommodate special parameters even beyond those dimensions.

Typical tolerances are +/- .005”, however, tighter tolerances can be held as parts get thinner.  Due to the Dynamic Cutting Heads, these tolerances can be held even in complex, three-dimensional geometry.

WATERJET CUTTING:

• X-axis and Y-axis up to 6′ x 12′

• Motorized 8″ Z-axis, capable of cutting upwards of 16″

• Cuts virtually any material

• Reduces mechanical stress and heat distortion

• FlowMaster Software: Intelligent PC Control and Programming

• Import virtually any CAD file, or scan drawings directly

• Dynamic Waterjet head cuts parts 25-400% faster than conventional flat stock Waterjet cutting machines

• Valuable for prototyping, short and extended run applications

Matt Stefanski

KLH Industries, Inc.

www.klhindustries.com

There is a lot of buzz and speculation about the introduction of the cap and trade laws.  Many speculate that it will be a job killer and open up the necessity for deep cuts in manufacturing, which in turn will impact the machining industry.  Here’s a recent article that may be of interest to you.  Is your machine shop at risk?

On June 26, the House passed a cap and trade bill that is expected to dramatically increase the cost of energy. The American Clean Energy and Security Act (H.R. 2454) establishes an economy-wide cap on carbon emissions and creates emissions credits. Companies would then buy and sell credits to emit more carbon. The goal is to force the economy to use renewable energy sources by increasing the cost of traditional sources. Many of the alternative sources have yet to be invented or discovered.

Manufacturers are concerned about the impact of skyrocketing energy prices in America. Many fear that the energy tax would force companies to outsource work to low-cost Asian countries such as China and India.

NTMA/PMA One Voice lobbied aggressively to prevent the passage of cap and trade, however, it passed by a narrow margin, with more than 40 Democrats voting against the bill. To see how members of Congress voted on this legislation, click here.

The Senate is expected to consider cap and trade this summer. One Voice will continue to lobby against this job-killing legislation. You can tell your Senators to vote against cap and trade by clicking here.