BUSINESS NEWS | COMING EVENTS | PEOPLE NEWS | MERGERS UNIVERSITY, INDUSTRY EXPERTS RECOMMEND STEPS TO ‘INVIGORATE’ U.S. MANUFACTURING A new report by a national committee of U.S. industry and university leaders details 16 recommendations “aimed at reinventing manufacturing in a way that ensures U.S. competitiveness, feeds into the nation’s innovation economy, and invigorates the domestic manufacturing base.” The report was prepared by the 18-member steering committee of the Advanced Manufacturing Partnership (AMP) that was launched by President Obama in June 2011 and co-chaired by Susan Hockfield, now president emerita of the Massachusetts Institute of Technology, and Andrew Liveris, president, chairman and chief executive officer of The Dow Chemical Co. The AMP Steering Committee Report to the President on Capturing Competitive Advantage in Advanced Manufacturing was formally adopted today by the President’s Council of Advisors on Science and Technology. It addresses needs in three broad categories: • Enabling innovation; • Securing the talent pipeline; and • Improving the business climate. The recommendations include a call to establish a national network of manufacturing innovation institutes; an emphasis on investment in community college training of the advanced manufacturing workforce; an approach to evaluate platform manufacturing technologies for collaborative investment; a plan to reinvigorate the image of manufacturing in America; and proposals for trade, tax, regulatory, and energy policies that would level the global playing field for domestic manufacturers. The Administration has already begun taking action on strong-consensus recommendations, many of them consistent with those put forward by a wide range of other experts and organizations. For example, an interagency Advanced Manufacturing National Program Office (AMNPO) has been established to coordinate federal manufacturing resources and programs and to foster the creation of private-public partnerships focused on manufacturing innovation. The new office, which is hosted by the National Institute of Standards and Technology, is acting on the AMP Steering Committee recommendation to establish a national network of manufacturing innovation institutes. In his budget for fiscal year 2013, President Obama proposed a one-time, $1 billion investment to build the National Network for Manufacturing Innovation, consisting of up to 15 regional innovation institutes. Through regional workshops and other means, the AMNPO is now gathering public input on the design of the proposed network. A key goal of the envisioned network is to close the gap between U.S. research-and-development (R&D) efforts and the scale-up of R&Dspawned technological innovations in domestic production of goods. To access the new report and supporting documents, go to: www.whitehouse.gov/administration/eop/ostp/pcast . BUSINESS CONDITIONS REPORT: JULY 2012 CLEVELAND, OH—According to the July 2012 Precision Metalforming Association (PMA) Business Conditions Report, metalforming companies expect a slight uptick in business conditions during the next three months. Conducted monthly, the report is an economic indicator for manufacturing, sampling 129 metalforming companies in the United States and Canada. The July report shows that 19% of participants anticipate economic activity will improve during the next three months (up from 11% in June), 45% predict that activity will remain unchanged (down from 57% last month) and 36% report that activity will decline (compared to 32% in June). Metalforming companies also forecast a slight increase in incoming orders during the next three months, with 26% anticipating an increase in orders (compared to 15% in June), 40% expecting no change (down from 52% in June) and 34% predicting a decrease in orders (up from 33% last month). Average daily shipping levels declined somewhat in July. Twenty-six percent of participants report that shipping levels are above levels of three months ago (down from 31% in June), 43% report that shipping levels are the same as three months ago (compared to 39% last month), and 31% report a decrease in shipping levels (up from 30% in June). The percentage of metalforming companies with a portion of their workforce on short time or layoff decreased to 12% in July, down from 14% in June. The July figure remains more positive than one year ago when 18% of metalformers reported workers on short time or layoff. “While there is a growing level of uncertainty among many in the metalforming industry, business conditions remain generally positive, with approximately 70% reporting orders and shipments will be the same or higher for the period ahead,” said William E. Gaskin, PMA president. “Economic uncertainties in Europe, slower growth in Asia and political gridlock in the United States are not positive indicators; however, PMA’s member companies have experienced 11% growth in orders and 10% higher shipments for the first half of 2012. There continues to be strong demand for hiring skilled workers, which are in short supply in most areas of the country. If the White House and Congress would come together to address tax issues critical to the future of manufacturing in the United States, such as providing clarity on long-term tax rates for owners of Sub-S companies and reforming corporate tax policy so companies can make long-term decisions in areas such as R&D spending, it would be very helpful to continued economic recovery.” PWC: U.S. INDUSTRIAL MANUFACTURERS SHOW WEAKENING SENTIMENT TOWARD WORLD ECONOMY NEW YORK, NY—The majority of U.S. industrial manufacturers who were surveyed remain optimistic regarding prospects for the U.S. economy, but sentiment about the global economic outlook continues to weaken, according to the Q2 2012 Manufacturing Barometer released today by PwC US. According to the survey, overall revenue projections among U. S. industrial manufacturers remain positive, with 88% of respondents expecting revenue growth at their own companies and only five percent expecting negative results. In addition, 87% of respondents said they were planning increases in operational spending in the year ahead. “Despite the perception by some of the increasing challenges globally, sentiment regarding the direction of the U. S. economy among U.S. industrial manufacturers remained positive during the second quarter,” says Bobby Bono, U.S. industrial manufacturing leader for PwC. “Overall spending plans remain healthy with a focus on new product introductions in the face of a competitive environment across multiple sectors. However, we are seeing some moderation in planned outlays for R&D, as well as geographic expansion, which may portend a more conservative approach given worldwide economic conditions.” Although optimism towards the U.S. economy dropped from 70% in the first quarter of 2012 to 52% in the second quarter, U.S. industrial manufacturers remain largely positive, recording only 7% being pessimistic and 41% uncertain. In contrast, only 13% of those selling abroad are optimistic about the world economy, a decline of 31 points from the first quarter. In addition, 20% are pessimistic and 67% are uncertain about worldwide business prospects. Notwithstanding the respondents’ comments on the global economy, the projected average revenue growth for the year ahead among those surveyed remained at 5.6%, consistent with the first quarter survey, but below last year’s 6.5% estimate. The respondents identified three key barriers to growth during the next 12 months, including legislative/regulatory pressures (58%, up 18 points from last quarter), lack of demand (48%) and oil/energy prices (48%). In addition, the projected contribution from international sales among companies marketing abroad was 37%, relatively constant with the first quarter of 2012. The majority (55%) of U.S. industrial manufacturers surveyed plan major new capital investments in the year ahead, up slightly from the first quarter of 2012. The mean investment as a percentage of total sales remained moderately high at 5.3% but below last quarter’s 6%. In addition, 87% of respondents plan to increase operational spending, led by investment in new products or service introductions (52%) and information technology (50%). However, only 35% forecast increased spending on research and development, the lowest level since the second quarter of 2010. “While U.S. industrial manufacturers are strengthening their spending plans, fewer are planning net new hiring during the next 12 months, slightly below last quarter,” continued Bono. “However, the next 12-month workforce projection is a slightly higher 0.9%, a sign that some companies will be adding at slightly higher rates.” Gross margins constricted considerably in the second quarter of 2012, as only 27% of respondents reported higher gross margins, off 18 points from the first quarter. Cost pressures declined during the second quarter with 30% of respondents noting that costs rose, down 20 points from 50% during the first quarter. At the same time, pricing increases have also narrowed. Only 18%of respondents reported price increases during the second quarter, down 25 points from the previous quarter. This was the lowest level of reported price increases since the second quarter of 2010. Looking ahead, 28% of respondents now view decreased profitability as a barrier to growth during the next 12 months, up six points from the first quarter. “Gross margins tightened during the quarter and both costs and prices decreased,” says PwC’s Bono. “If growth is slowed going forward, U.S. industrial manufacturers may continue to take a measured approach to pursuing growth opportunities with an emphasis on maintaining profitability and healthy cash reserves.” PwC’s Q2 Manufacturing Barometer highlights that 40% of U. S. industrial manufacturers plan for merger and acquisition (M&A) activity during the next 12 months, and new strategic alliances increased seven points from last quarter to 42% in the second quarter of 2012. Expansion to new markets abroad also rose slightly to 37% from 35% in the first quarter, and new joint ventures rose five points from last quarter to 33% in the second quarter. ASIAINSPECTION Q2 BAROMETER: THE POSITIVE MOMENTUM OF CHINA-AFRICA BILATERAL TRADE SHENZRN, CHINA–AsiaInspection, a provider of quality control services for businesses importing from Asia, announces the AsiaInspection Q2 2012 Barometer, a quarterly synopsis of Asia-based manufacturing and the quality control service industry. AsiaInspection’s Q2 figures indicate that Africa is a growing importer of made-in-asia products, particularly Made-in-China. The growth in demand for quality control in Asia from African importers outperformed that of all other regions by more than 20%, increasing 23% from the first half of 2011 to the first half of 2012. According to AsiaInspection data, most active importers are found in North Africa (Morocco, Tunisia, and Egypt), South Africa and Nigeria, with a notable uptick in lesser known countries Botswana, Ghana and Ethiopia. These findings are representative of global data regarding China – Africa trade which saw 2010-2011 imports from China increase 23.7% to $73 billion, according to Standard Bank Group. Throughout the past few years, China has become Africa’s largest individual trading partner, with trade volumes exceeding $160 billion in 2011. AsiaInspection data, based on manufactured products inspected in Asia, shows total African imports from China are dominated by textiles and footwear. In the first half of 2012, these categories made up 80% of all products inspected in China by African importers. While lower in total size compared with textiles and footwear, industrial and construction items have seen triple-digit growth in inspection demand from African importers, reflecting increasing infrastructure demands in Africa. Data suggests a more mature and organized supply chain based on the type of quality control services being requested by African importers sourcing from China. Comparing the first half of 2011 to the first half of 2012, African demand for factory audits, an ISO 9000 assessment of a factory, has more than tripled. Intriguing figures as audits are nearly always performed either when a new supplier is selected, or a new commitment for production is placed. Trade between China and Africa is not only a one way street for madein- china goods. Analysts argue that in 2012 China will become the single largest export destination for Africa, a status driven mainly by natural resource exports (fuel, ores, and metal) that are ultimately used in the production of goods. In growing its export market to more than just natural resources, data from the Organization for Economic Co-operation & Development (OECD) shows a 90% global growth in exports of Africamanufactured products over the last decade. China’s share as a destination market grew by more than 200%; while traditional export markets for Africa, such as the EU and US, have seen their share decline by 20% over the same period. This data corroborates the trends witnessed by AsiaInspection; more and more importers sourcing from Asia are expressing a need for quality control in Africa. “Over the past few years at AsiaInspection, we have witnessed the rise of African sourcing in China as we helped African importers structure their supply chain in Asia” says Sebastien Breteau, CEO of AsiaInspection. “Even though the figures are still comparatively small, we’ve seen data to support that Africa is preparing to become the next sourcing frontier for manufactured goods–which is why we launched our quality control services there.” PRATT & WHITNEY BRINGS AIRBUS A320 FAMILY ASSEMBLY LINE TO UNITED STATES MOBILE, AL—Pratt & Whitney, a division of United Technologies Corp., welcomed an Airbus announcement that it will establish a manufacturing facility in the United States to assemble and deliver A320 family aircraft. The new Airbus plant will be located at the Brookley Aeroplex in Mobile, Alabama, and it will be Airbus’ first U. S.-based production facility. Pratt & Whitney provides engines for the entire Airbus A320 family of aircraft - the PurePower PW1100G-JM engine and the V2500 engine through IAE International Aero Engines. To date, Pratt & Whitney has announced 976 firm engine orders for the PurePower PW1100G-JM engines for the A320neo family of aircraft. The PW1100G-JM engine will be the first engine to power the world’s best-selling narrow-body aircraft when it enters service in 2015. IAE is a multinational aero engine consortium whose shareholders consist of Pratt & Whitney, Pratt & Whitney Aero Engines International GmbH, Japanese Aero Engines Corporation (JAEC) and MTU Aero Engines GmbH (MTU). To date, over 5,000 V2500 engines have been delivered and nearly 2,000 more engines are on order for the Airbus A320 family of aircraft. Pratt & Whitney is a world leader in the design, manufacture and service of aircraft engines, space propulsion systems and industrial gas turbines. United Technologies, based in Hartford, CT, is a diversified company providing high technology products and services to the global aerospace and commercial building industries. COMING EVENTS SEPTEMBER 25-26 THE 8TH NORTHEAST SHINGO PRIZE CONFERENCE GBMP, Worcester, MA (617) 287-7630 www.neshingoprize.org OCTOBER 17-19 ISO/IEC STANDARD 17035 TRAINING IAS, Upper Marlboro, MD firstname.lastname@example.org www.iasonline.org 29-11/1 ASNT FALL CONFERENCE ASNT, Orlando, FL (614) 274-6003 www.asnt.org/events/conferences/fc12/fc12.htm PEOPLE NEWS InfinityQS International Inc. (Chantilly, VA), a manufacturing intelligence and enterprise quality company, announces SIMON ELLIS, practice director, supply chain strategies, IDC Manufacturing Insights, as the keynote speaker for its 6th annual user conference, Infusion 2012. Ellis will offer his insight on the role of real-time manufacturing intelligence in improving product quality, reducing costs and making better business decisions. While sharing results from the recent supply chain survey, “Business Strategy: 2012 Supply Chain Survey Results and Insights, July 2012,” Ellis will lend his expertise to assist manufacturer attendees—at all levels, from engineers to executives—in understanding the importance of finding, analyzing and utilizing data to improve operations both on the plant floor and throughout the supply chain. In a ceremony at Mahr Federal headquarters in Providence, RI, long-time Mahr Federal employee FREDERICK G. PARSONS was honored by The American Society of Mechanical Engineers (ASME) with the Patrick Higgins Medal. This recognition is for outstanding dedication and effectiveness in developing and promoting a broad range of standards in dimensional metrology, surface metrology and engineering specifications. The Patrick Higgins Medal was established in 2007 in remembrance of Patrick Higgins, a past vice president of the Standardization department for ASME. The award recognizes consensus building leadership in working to align national and international standards development in these areas ROY D’ARDENNE has been appointed to the U. S. delegation of the international body responsible for the global system of quality management standards. The ISO9001 standard, introduced in 1987, has been adopted in 91 countries. D’Ardenne, president of D’Ardenne Associates (Roanoke, VA), a leader in ISO management standard services and training, will be among a select few reviewing the standards in 2013 as part of US TAG to TC 176. View the latest in quality industry news by visiting our headlines at qualitymag.com—updated daily. Just click the tag now and see what you’re missing. If you don’t have the mobile app on your smart phone, visit http://gettag.mobi to get started. JOHN RADICE has joined Sartomer USA (Exton, PA) as a technical sales representative. Radice will be responsible for marketing products to customers in New England and Canada, and assisting in developing sales strategy and implementing the sales plan for Sartomer. He reports to Mike Rose, director of sales, Americas. ASSOCIATION NEWS Mike James, managing director of Lloyd’s Register Quality Assurance Ltd (LRQA), has been elected chairman of the INDEPENDENT INTERNATIONAL ORGANISATION FOR CERTIFICATION (IIOC), with immediate effect. The chair of IIOC is elected annually by all IIOC members. IIOC is an independent organization, committed to drawing together the worlds of standardization, certification and accreditation to benefit the business community. “From our inception back in 1993, IIOC has grown in both size and influence,” notes Marcus Long, chief executive of IIOC. “One of the primary aims of IIOC is to create a strong, credible industry network that genuinely represents the certification industry to support the IIOC’s commitment to certification excellence. Mike’s appointment is a testament to this commitment and will bring additional technical insight and expertise to enable us to further promote global awareness on the benefits of accredited certification.”
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