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Can Trump, Republicans Usher in New “Golden Era” of Manufacturing in U.S.?

By: Tony Deligio 13. January 2017

The Plastics Industry Association believes the potential good (business friendly tax policy + relaxed regulation) of the pending Trump administration will outweigh any potential bad (new checks on trade).

 

Reviewing two new reports, Bill Carteaux, president and CEO of the Plastics Industry Association, sounded an optimistic tone on the immediate future of the plastics sector, believing a combination of a Republican Congress and Trump administration could usher in a “new golden era” for American manufacturing.

 

“When I got to Washington D.C. 10 years ago,” Carteaux said, “it was difficult to get people on the Hill or in the administration to talk about manufacturing.” In recent weeks, including after meetings with President-Elect Trump’s transition team, Carteaux believes the overall regulatory environment and level of government assistance to industry could return to the “1980s, in terms of how things are governed from a business perspective.”

 

Carteaux did say that the association has discussed the importance of trade to Trump’s team, noting plastics sizable surplus, which we discussed here. In particular, the association has brought up the importance of NAFTA and the fact that Mexico and Canada are our two largest trading partners for plastics.  

 

“[The transition team] certainly is hearing from all sectors of manufacturing as to how important trade is,” Carteaux said, adding that the feedback he’s gotten from transition team members has been that Trump will seek to tweak deals like NAFTA, as opposed to completely throwing them aside.

 

Carteaux reported that the 2015 trade surplus stood at $7.1 billion, with total exports just shy of $60 billion. While 2015 exports of resin (down 8% to $32.4 billion) and machinery (down 9.7% to $1.4 billion) fell, mold exports were quite strong, rising 10% to $582.2 million.

 

 

Carteaux’s final take: things are looking up for plastics in terms of regulatory burden, while it will be “wait-and-see” when it comes to trade. 

 

How Many New All-Electric Machines Does It Take to Equal an Older Hydraulic Machine?

By: Tony Deligio 6. January 2017

If you’re looking at energy consumption, quite a few.

 

For February’s upcoming Processor Edge feature, I spoke with Cleveland-area custom molder Automation Plastics Corp., about its use of EnerNOC’s energy information software. EnerNOC works by measuring power intake of a plant at the main meter and then sending that data to the Cloud for analysis. In addition to consumption figures, it includes the ability to set alarms and compare/contrast overall energy usage to previous periods.

 

Apart from real-time insights into plantwide energy usage, Jerome Smith and Chris Miller of Automation explained to me that the EnerNOC data let them see how much energy specific machines use as that total plant power consumption figure adjusts during startups.

 

Those disparate levels of consumption came into clearer focus when a job had to be moved from an electric press to an older hydraulic machine, and Automation had to temporarily reshuffle its machine deck.

 

“We found that we had to shut down—I think it was like three electric presses—to kind of equal that one hydraulic press,” Miller said. “It was kind of a neat experiment to see how much difference there is in the technology from ‘70s and ‘80s, to a lot of the electric machines we have today that use hardly any electricity at all.”

 

Miller noted this gap is especially apparent when molding thicker parts that require longer-than-usual cooling times, during which the pumps on an older hydraulic machine keep on running.

 

To gain further insights into the power consumption of various cells in its plant, Miller and Smith said Automation is planning a test event where it will stage its start ups—basically start up a cell; note power levels; wait 15 minutes; and then start up another cell to see how the power level changes. This, in turn, could inform its pricing for machine time.

 

“One thing we’d like to know what is the cost to run that that cell,” Miller said. “What energy does it take to run that cell. That would help us with costing as far as, ‘What does it cost to run that cell if we were to sell it to someone to make parts for them?’”

 

As a EnerNOC spokesman told me, this level of insight can allow processors to more accurately quote machine time based on a specific press and its power consumption vs. simply dividing plant-wide power consumption by the total number of machines.

 

“Instead of spreading energy like peanut butter across all the product lines, shops will actually be able to understand it more accurately and more competitively price some of the different products,” the representative said. “It’s actually a pretty cool indirect benefit to gain that more competitive knowledge into their actual costs.”

 

Automation Plastics shop floor in Aurora, Oh.

Video: Peter Neumann's Exit Interview

By: Tony Deligio 19. December 2016

After 35 years (and 12 K Shows), Dr. Peter Neumann stepped down as chairman of injection molding machinery and automation supplier, Engel, on Dec. 1.

 

Plastics Technology sat down with Neumann (above, second from right) at his last K as the boss of Engel to discuss what's changed during his tenure; what advice he had for his nephew (above, middle) who's taking the reins; and what he'll do in retirement.

 

Starting at the company in 1982 in procurement, where he learned about all the technologies that go into a press, Neumann moved through sales and into the executive suite. During his time, the company and the industry expanded its reach globally, specifically into Asia, where Engel has multiple manufacturing sites. It also expanded technologically, from the 8-bit microprocessors of the '80s to the Cloud-backed onboard supercomputers of today's machines. 

 

So what's next? Neumann said he plans on visiting countries apart from those where Engel has offices or customers, as well as sailing, sking, and, go figure, jogging. Weather permitting, his plans for the morning of Dec. 1, his first post-Engel? A morning run. 

 

11th Hour Extension to Proposed Lockout/Tagout Rule Changes

By: Tony Deligio 15. December 2016

Deadline extended from Jan. 1 to Jan. 4, 2017 as stakeholders weigh the potential impact on injection machine maintenance and mold changes.

 

On Monday, Dec. 12, the Plastics Industry Assn. (PLASTICS; formerly SPI: The Plastics Industry Trade Association) reported that OSHA had extended a deadline for affected parties to give feedback—including requesting hearings—on changes to lockout/tagout standards for injection molding machines.

 

Back in November, Plastics Technology reported on the proposed changes to the Michigan Occupational Safety and Health Administration (MIOSHA) Part 62 Plastic Molding Safety Standard R408.16234, designed to help it meet OSHA’s General Industry Safety Standard Part 85 “The Control of Hazardous Energy Sources”.

 

This latest move, according to PLASTICS:

 

…would remove “unexpected” from the term “unexpected energization” in the existing general industry standard for the control of hazardous energy, lockout/tagout (LOTO; 29 CFR 1910.147). The standard applies to and establishes requirements during servicing and maintenance operations “in which the unexpected energization or startup of the machines or equipment, or the release of stored energy could cause injury to employees.”

 

According to PLASTICS, the rub, in part, lies in the fact that:

 

OSHA’s proposal would expand the applications in which lockout is required, and would present challenges in demonstrating the efficacy of automated controls that could eliminate the potential for unexpected energization and therefore eliminate the need for LOTO.

 

Molders I’ve spoken with on the topic are understandably reluctant to be quoted on the record regarding these changes, fearful in part of an unexpected safety inspection at their plants. I did receive some input via email from an injection molding professional whose résumé includes time on the shop floor at an injection molding operation in Michigan.

 

That individual noted that his company had discussions about what it would take to perform a complete lockout/tagout on an injection molding machine during mold changeovers. The biggest issue then and now was impact on downtime—specifically downtime related to barrel heating not physical tool changeover.

 

If a molder locks out power on a press, power to barrel heats is also interrupted. Many molders use the time it takes to change tooling to allow the barrel temperatures to “soak to the new material set points”, my contact wrote, adding:

 

Essentially, the new rule means that all that time for barrel heats, mold heats, and the machine’s oil temperature to stabilize will have to be completed in series and not in parallel with the physical mold change. 

 

He went further noting that, estimates of this adding an hour to each mold change could be conservative depending on the material being run and the strictness of the rule interpretation.

 

If one must lockout a machine when performing a changeover, does this at some point mean the machine must be locked out anytime a person needs to put a body part into the clamping area? If this is the case, we are looking at needing to lockout the machine anytime the parting line of the mold needs to be cleaned or a runner gets stuck, or any of the 100s of other different scenarios that happen each day that require worker interaction in the clamping area. 

 

My source said that newer machines have proven, reliable means to prevent the clamps from moving when the operator or non-operator doors are open, but older machines are “the real issue,” specifically the “30-year-old machines that still use limit switches to verify the door is closed.”

 

These switches can be “tricked” into thinking the doors to the clamp are closed, in ill-guided, but nonetheless, real-world attempts to limit downtime.

 

You might ask yourself, ‘Who in their right mind would tie back a door limit switch? that can’t be possible.’ Well it has happened, and people have made bad decisions and paid a horrible price for them. “To err is human” but a person’s punishment for the error should not have to be the ultimate one.   

 

In its Dec. 6, 2016 email newsletter, MIOSHA reported that the 41st death of a Michigan worker for the year occurred on Nov. 30. There were 29 MIOSHA-related deaths in 2015, with the fewest back in 2009—24. As MIOSHA said in the article, and every party in this current discussion can agree, “Every life is precious. Our mutual goal must be that every employee goes home at the end of their shift every day.”

 

Do you have questions/feedback/information regarding this topic? Please log in and comment or send it my way: tonyd@ptonline.com.

 

NAFTA, Plastics & President Trump

By: Tony Deligio 2. December 2016

The build-up and hype around the election of a U.S. president are ultimately a bit anticlimactic given yawning gap between the confetti and balloons of election night and the hand-on-the-Bible of an inauguration.

 

The 73 days between Donald Trump’s stunning Nov. 8 victory and his assumption of the presidency on Jan. 20 feels even longer than its two months and 12 days, mostly because of the amount of uncertainty in the country.

 

That November to January gap is usually filled with speculation about how the new administration, assuming there’s no incumbent, will run the country. As much as any speculation is informed, the guesswork here draws on what a candidate campaigned on and the early makeup of his or her cabinet.

 

Taken at his word, President-elect Trump, among other things, has issued a consistently hard line on free-trade agreements, promising renegotiation for existing ones, like NAFTA, and abandonment of new ones, like the Trans Pacific Partnership. In the case of NAFTA, the potential impact on plastics can’t be understated.

 

According to SPI: The Plastics Industry Trade Association’s December 2015 Global Trends Report, the U.S.’s largest trade surpluses in resin, plastic products, plastics machinery and molds were with Mexico. Per the report:

 

In 2014, as in previous years, the U.S. plastics industry had its largest surplus with Mexico. The surplus with Mexico is attributable to the North American Free Trade Agreement (NAFTA). U.S. plastics companies are taking advantage of duty-free access into Mexico’s market given the country’s close proximity.

 

In 2014, the U.S. plastics industry exported a total of $15.8 billion in plastics-related goods to Mexico, with a total trade surplus of $11.1 billion. Again, for each of the major categories, Mexico was the No. 1 market in terms of surplus.

 

Resin: $6.7 billion surplus with Mexico.

 

Plastic products: $4.0 billion surplus with Mexico.


Moldmaking: $283 million surplus with Mexico.

 

Machinery: $215 million surplus with Mexico.

 

As far as plastics goods and equipment are concerned, NAFTA has been beneficial to U.S. companies if you judge the “winner” in a trade deal by the direction trade predominantly flows. An argument against the deal could be made on behalf of plastics workers whose jobs have been displaced by NAFTA, but on the whole, employment in the plastics industry has been on the rise over the last two decades, according to SPI.

 

On Nov. 23, the German Plastics and Rubber Machinery Assn. (VDMA) released its latest report noting that in 2015, the U.S. had overtaken China to regain first place among the most important markets for German machinery.

 

U.S. imports reached a record 719 million euro in 2015—almost three times the level of 2009’s market nadir. VDMA also used the release to call out strong growth in Mexico and tie it to America’s resurgence.

 

In 2015, VDMA reported that exports of German plastics and rubber machinery to our southerly neighbor were nearly 50% higher than 2014, pushing Mexico to fourth place among Germany’s most important markets.

 

The VDMA went further, editorializing as much as is possible in such a report, noting:

 

The Mexican market’s strong rate of growth may also be explained by the North American Free Trade Agreement (NAFTA), which has dismantled trade barriers in the region.
 

It went further yet in a paragraph under the head, “U.S. and Mexico will continue to be important markets in the future”, leaving no doubt where it stands on NAFTA.

 

Owing to the high level of demand for plastics, plastic packaging in particular, German plastics and rubber machinery manufacturers expect sales to the U.S. and Mexico to remain strong. Existing free trade agreements are of fundamental importance for this; any form of protectionism on the other hand will be damaging to the business activities of all concerned.— Thorsten Kühmann, VDMA Managing Director

 

I recently completed a swing through Chicago and Milwaukee, visiting six companies over two days. Every single company on the trip had ties to Mexico, most of those with physical operations there. Every company spoke about the strength of their current business, but they were also unanimous in their uncertainty about the future.

 

With one month and 18 days until Donald Trump stands across from Chief Justice John Roberts, lots of people in plastics are wondering what differences, if any, they’ll see in regards to trade policy between candidate Trump and President Trump. 

 




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