Dana Corp./Kalamazoo, Michigan, USA. If you were to talk about the largest captive heat treaters in North America the name Dana (auto parts) would be sure to come up. Dana has a strong presence in Canada, the US and a rapidly growing presence in Mexico where a lot of work is being shifted to. While this does not directly impact their heat treating locations the company announced today that it will consolidate its heavy vehicle products operations in Kalamazoo, Michigan and Statesville, NC into 2 locations in the Toledo, Ohio area. Included in this move is the Dana Tech centre which will be moved to Maumee, Ohio. January 29/10

Odds & Ends. Nucor Corporation (Steel Products) has construction underway at their North Carolina, USA plate mill on their multimillion dollar heat treating facility. American Showa in Sunbury, Ohio, USA (powdered metal automotive components) is exiting the vacuum carburizing business. Along the same lines Gates Canada in Mississauga, Ontario, Canada (also vacuum carburizing of powdered metal automotive components and the real pioneer in vacuum carburizing of automotive gears) which was scheduled to close early this year will now be closing the plant September of 2010. However a major North American helicopter manufacturer is soliciting bids for a large vacuum carburizing system. Want to know how important heat treating is? Ford Motor is recalling all front-wheel drive versions of the gasoline-electric 2006 Ford Escape hybrid SUVs which were manufactured from July 28, 2005, through April 21, 2006. The reason given is a reported possibility of drivetrain shaft fracture due to the wrong installation and improper heat treatment. January 28/10

“Wisconsin Oven designed and manufactured a gas fired batch oven and non-powered load cart to age aluminum tubes for the aerospace industry. The aluminum tubes range in size from ½” to 3-1/2” diameter and 24’ to 30’ long with a maximum weight of 1000lbs. The tubes are loaded onto the non-powered load cart and wheeled into the oven. Wisconsin Oven was selected for this project because of their ability to manufacture an end flow oven and guarantee its performance. This aluminum aging oven has chamber dimensions of 6’0” wide x 33’0” long x 6’0” high and a maximum operating temperature of 800º F. One vertical lift, pneumatically operated door is located at each end of the oven. The oven is constructed with 8” thick tongue and groove panel assemblies and 18 gauge aluminized steel interiors and ductwork. The heating system features a 1,500,000 BTU per hour air heat burner including a motorized gas control valve, flame detector and flame relay with alarm horn. The recirculation system provides end airflow (where 100% of the heated air is supplied at 1 end of the work chamber, and it flows horizontally to a return duct located on the opposite end).  The recirculation system utilizes a 37,200 CFM @ 30 HP blower. The customer required a 9-point temperature uniformity of +/-10° F at 350° F. Actual temperature uniformity results were +5.5/-3.5 @ 375°F. The oven has a NEMA 12 control enclosure with IEC style motor starters, push buttons, and pilot lights. The temperature for the oven is controlled by a Honeywell DCP100 programmable controller and recorded by a Honeywell DR4300 recorder. The customer also added Wisconsin Oven’s energy efficient E-Pack™ oven upgrade which includes thicker wall panels, higher efficient motors, a door limit switch, and a few other energy saving items, that will reduce their operating costs. For further details on this equipment, or if you would like to work with us on another application, call our sales office at (262) 642-3938, or by email at sales@wisoven.com.” January 28/10

Flowserve/ Captive Heat Treating. I would expect that most of our readers know our position on outsourcing of heat treating, basically manufacturers need a great deal of heat treating to justify doing heat treating in house, a real turn around issue where the work can’t be sent out because of time constraints or a desire to have complete control of the manufacturing cycle. One company that decided some time ago to bring heat treating in house and implemented this plan recently was Flowserve, a manufacturer of pumping systems with several locations around the US. The company started looking at this idea some time ago and over the past year has purchased six single chamber furnaces for various plants around the US, most recently their plant in Greer, SC. All the furnaces were purchased from Lucifer and are electrically heated and capable of 2,300 F. The reason for this desire to bring the heat treating in house was that it is part of their “Continuous Improvement Project” which I would assume to mean this was a quality control decision. January 27/10

Rafal Walczak/Seco Warwick. New furnace builder Seco Warwick based in Meadville, PA, USA has now made Rafal Walczak head of their vacuum team for the Mexico, US and Canadian region. January 27/10

“Meadville, PA - Keith Boeckenhauer, President of SECO/WARWICK Corporation has appointed Rafal Walczak as Vacuum Team Leader for the NAFTA Region.  Mr. Walczak began working for SECO/WARWICK S. A. (Poland) in 2002, and has served the company as Field Service Engineer, Sales Engineer, Service Manager and Project Manager for Vacuum Technologies.  He earned a Masters of Science in Electrical Engineering specializing in Automation and Power Electronics from the Technical University of Zielona Gora.   Mr. Walczak speaks English, Russian and Polish, and has served as USA Project Manager since 2008. As Vacuum Team Leader, Mr. Walczak is responsible for the sales, design, manufacturing and service of vacuum furnace heat treatment equipment.”

To Heat Treat or Not To Heat Treat, Is That the Question? The “Heat Treat Doctor”, Mr. Dan Herring this past week offered forth his thoughts on why heat treating should be done in house. This week in his counterpoint Dan gives us his thoughts on why a manufacturer would want to retain heat treating in house. January 26/10

"Counterpoint

What cost quality? Given the performance demands placed on today’s products by our customers, and the damage to a company’s reputation should a product fail, how can anyone contemplate the loss of control associated with sending the products outside for such a critical manufacturing step as heat treating?

The Model of Material Science is an important tool in expressing the concerns over outsourcing of heat treatment. The key elements are represented by a series of interlocking rings making up the product chain and underscoring the interdependence of each element in the model. As we all know, a chain is only as strong as its weakest link!

The model can be interpreted two ways as indicated by the arrows. The downward direction achieves product/process development by first defining end user requirements, while the upward direction achieves product/process development by making the most of current equipment and technology.

The engineering or scientific based methodology (down arrow) applies this model by first considering the performance demands of the end user. The design engineer is then responsible for selecting a material to achieve specific mechanical, physical, and metallurgical properties so that the product will perform to expectation. These properties can only be developed in the selected material by producing a specific microstructure understood and controlled by the metallurgist which in turn defines a particular heat treatment process or series of processes to be run by the heat treater in carefully selected and controlled equipment that maintenance personnel service. So almost all disciplines within a company are involved. Total quality control must be maintained and constantly supervised. To remove these functions from direct oversight is a risk many feel is not worth taking. Today, more and more heat treating operations are dependent on this methodology.

The discovery or empirical based methodology (up arrow) begins with operations chosen to take advantage of a specific piece of equipment that exists in a facility. A process or series of processes are then performed on the selected material producing a microstructure in that material with certain mechanical, physical, and metallurgical properties. These ultimately define the end use performance capability of the product. This methodology has lead to many of the products in use today but is considered risky by some in its approach to high performance products."

Bodycote Vacuum Carburizing. Last week Bodycote in Livonia, Michigan announced that they had switched their vacuum carburizing system from using propane gas to acetylene-which has become the norm. In response to this news item Bill Gornicki of ALD-Holcroft (vacuum carburizing furnaces) gave us his thoughts. Of one thing I am personally sure of propane can produce an enormous amount of tar and soot. I have literally seeing it being removed with jack hammers in older vacuum carburizing furnaces. January 26/10

“There’s no practical substitute for acetylene with regards to vacuum carburizing.  Not only is it superior in every aspect of case uniformity and blind hole diameter vs. depth performance, it doesn’t appreciably soot or tar within the vacuum furnace thereby making it the carburizing media of choice.  This has been proven and marketed for more than a decade with absolute success.  Plus, it’s a material every manufacturer is already familiar with and has in-house for welding.”

Bodycote/Low Pressure Carburizing. Several years ago Bodycote (commercial heat treating) entered the LPC or Vacuum Carburizing market mainly for one reason-heat treating of automotive transmission components. At the time the most common carburizing medium being used was propane, however experience by all heat treaters around the world showed that acetylene was a better medium and consequently this has become more popular. It is interesting that a patent is held on using acetylene in vacuum carburizing applications-the details of which I have heard several times but which escape me at the present moment. January 21/10

"Acetylene LPC processing is good news for gear manufacturers.Bodycote has recently added acetylene gas as an alternative to propane for low pressure carburizing at its Livonia, Michigan plant. Acetylene offers many advantages including uniform carburizing of dense loads, blind holes and small parts that may have part-to-part contact. Biji George, General Manager of the Livonia plant, said: “Acetylene allows us to achieve exceptional case depth uniformity for gears. We typically see less than a 20% difference from pitch to root for case depths. In addition to higher hardness deeper into the carburized case depth, acetylene offers the flexibility to carburize blind holes and parts with unusual geometries.” The plant continues to offer propane as an alternative carburizing gas. Low pressure carburizing offers a range of advantages over traditional atmosphere processes, including improved fatigue resistance, part distortion control, uniform case depth and zero surface oxidation. Bodycote Livonia carburizes and neutral hardens gears, shafts and stampings for automotive engines, transmission and drivelines. The plant has two automated furnace lines utilizing high pressure nitrogen gas to quench loads up to 1100 pounds (500 kg). Pressures up to 20 bar are coupled with variable speed and variable pressure controls to minimize dimensional movement while achieving improved metallurgical properties. Case depths up to 2mm are routinely accomplished. Bodycote, the world’s leading thermal processing services provider, operates over 180 facilities in 27 countries. The Group provides heat treatment and metal joining, hot isostatic pressing and surface technology services to a wide range of industries including automotive, aerospace, power generation, oil & gas, military, petrochemical, agricultural, consumer product, medical and construction. For more information please contact: Biji George, General Manager, 3181 Glendale Drive, Livonia, Michigan 48150, USA Tel: +1 734 427 6814 / E-mail: biji.george@bodycote.com www.bodycote.com "

Heat Treating of 410SS. A captive vacuum heat treater posed us the question below about vacuum heat treating of 410SS. In response to this question Dan Herring gave us a very good answer. January 26/10

"410 stainless steel is considered a martensitic grade that has maximum chemistry limits for carbon (0.15%) and manganese (1.25%). However, as you probably know, rapid cooling produces either a completely martensitic or a partially martensitic structure depending on austenitizing temperature and chemical analysis. As the carbon content drops, the severity of quench becomes even more important. Also, depending on whether you are interested in maximum corrosion resistance/strength or ductility/impact resistance properties you will adjust your austenitizing temperature and select the appropriate quench medium (oil or gas). From my experience, if the carbon content drops below 0.12% or the manganese content below 0.90%, or if the section thickness exceeds 0.050" oil quenching should be considered. Some manufacturer use a special 410F stainless steel (0.25% carbon) to enhance their ability to gas quench the material. Even at this carbon level you will need to cool from (approximately) 1900F (1038C) to 900F (482C) in under 90 seconds to develop full hardness and avoid unwanted carbide precipitation in the material. I hope this helps answer your questions. Best personal regards, Dan Herring dherring@heat-treat-doctor.com”

"I have a concern over the chemistry of 410SS.  I feel that if the carbon content, or possibly the carbon and manganese content, gets too low with this material, it can still be designated as 410SS but it will not be air hardenable and will require oil quenching.  Is there some "cut off point" where I can look at a mill cert. and say "yes, this grade is of sufficient chemistry to develop full hardness using gas quenching?"  Thanks, Bill 

Specialty Steel Treating/East Granby, CT, USA. To start off the week let's have a look at one of the plants of one of the largerer commercial heat treaters in North America, Specialty Steel Treating with 3 plants in Fraser, Michigan, Farmington Hills, Michigan and East Granby, CT. The two larger plants in Michigan are as you would expect-largely automotive while the CT plant is the odd man out being a real mixture of heat treating although concentrating on vacuum which means the aerospace industry. While Specialty is a family owned business and the CT plant is part of the group this location has a real budding heat treating dynasty due to the fact that the Vice President is Dennis Kollmorgen, Ryan Kollmorgen, is Quality Manager, Justin Kollmorgen is Maintenance Manager and Jason Kollmorgen is involved in sales. I mentioned the fact that Specialty is heavily vacuum-off the top of my head I can only think of 1 or 2 other commercials that have as many large bottom loading furnaces-they believe they are probably the largest vacuum heat treat in the New England area. The photos below show just a few of the bottom loaders, not shown are any of the horizontal vacuum furnaces. Beyond the vacuum the company has about a half dozen batch IQ lines and several large pit furnaces. With 50 employees (and no layoffs in the past year by the way), a 52 year history and a 40,000-50,000 square foot building this is a very substantial operation. January 25/10

Crio Mexico. Our newest advertiser (banner ad on this page) is a commercial heat treater based in Queretaro, Mexico by the name of Crio and the company deserves a bit of background information. For the past number of years US, Canadian and European manufacturers such as Linamar, Magna, GM, Dana, Arvin Meritor and others have set up shop in Mexico to take advantage of the very attractive labour rates. When this migration first occurred there was very little in the way of commercial heat treating in the country and most manufacturers set up their own in house heat treating departments. A void is always filled and consequently commercial heat treating has grown in the past few years giving companies such as Crio a wonderful opportunity, so much so that an operation like Crio is the equivalent of any commercial heat treat around the world (as you can see from the photo below). Within the next few weeks we at “The Monty” will be visiting Crio and subsequent to that we will give you our impressions of the heat treating industry in Mexico. In the meantime if you are looking for commercial heat treating in Mexico feel free to drop Carlos Torres at Crio an E-mail Esteban.aguilar@crio-qro.com.mx January 25/10

Pete Batche. Last year we included Pete Batche of The Robert Bosch company (auto parts) in our list of the most influential people in the heat treating industry mainly for his enormous contributions to CQI-9, the automotive heat treating specification. Things change and Pete is now working with Akebono Brake Corporation in Elizabethtown, KY. In the photo below taken last year Pete is the individual on the right, Gord Montgomery is on the left. Pete can be reached at pbatche@akebono-usa.com January 25/10

Jerry Lennox/Furnace Finders, Inc. We regret to say that one of the most experienced used equipment dealers in the industry, Jerry Lennox of Furnace Finders, Inc. passed away January 16th/2010. At 75 years of age Jerry finally lost the battle with Mesothothelioma. His very good friend and business partner Tim Bolduan has this to say; “Those who knew him would agree to a man that Jerry was one of the most knowledgeable furnace engineers around. He had a deep pool of experience that was shared with many, within our industry when there were needs. He will be greatly missed.” January 25/10

Mark Spector/RBC Bearings, Oxford, CT., USA. When you think of individuals in the heat treating industry you generally think of the Heat Treat Supervisor in a captive shop, the GM or Plant Manager of a commercial heat treat shop or the Heat Treating engineer in a large captive-individuals like Mark Spector, Manager of Global Outsouring for RBC Bearing are generally not in the forefront but they should be. RBC Bearings is a very successfull, publically traded company that manufacturers bearings under a number of different names. The company has grown enormously over the past 20 years primarily through acquisitions but unlike many companies in the industry they have grown intelligently and consequently are in a very strong financial position. I have known Mark for a number of years but it wasn't until recently I had the chance to meet him at the companies headquarters in Connecticut. A brief conversation revealed that Mark has a very strong heat treating background and quietly in the background makes a number of decisions that effect furnace manufacturers, commercial heat treaters and captive heat treaters. A more hospitable, enthusiastic individual would be hard to find. So when you think of heat treating think of people like Mark who are the real decison makers. January 22/10

"CAN-ENG FURNACES INTERNATIONAL LIMITED ANNOUNCES SUCCESSFUL START-UP OF NEW RAILWAY AXLE FORGING PLANT

AXIS LLC (a joint venture between major North American rail car builders and assembly/parts providers) announces the successful start-up of the first new railway axle forging plant in United States in more than 40 years. 

CAN-ENG FURNACES INTERNATIONAL LIMITED supplied, installed and commissioned a 20 tph Rotary Ring Hearth Reheating Furnace, Robotic Manipulator,  High Pressure Descale System and 20 tph Walking Beam Normalize/Temper Furnaces.  In addition, CAN-ENG FURNACES INTERNATIONAL LIMITED provided the Level II Automation for the line, numerous in-line conveyors, and walking beam cooling beds.  The plant is designed for the heating, forging and heat treatment of double length railway axles destined for domestic and global markets.  Located in Paragould, AR on a green field site, the AXIS facility is the most modern plant of its kind in the world.

For more information contact Michael Klauck P.Eng at mklauck@can-eng.com.

Can-Eng Furnaces Ltd. (www.can-eng.com) is a leading North American designer and manufacturer of industrial heat treating equipment. Can-Eng product lines include: Continuous Mesh Belt Furnace Systems, Continuous Steel Long Product Heat Treatment Systems, Rotary Hearth Furnace Systems, Plate Quench and Temper Furnace Systems, Plate Normalizing Furnaces Systems, Basketless Heat Treatment Systems, T4, T5, T6, T7 Heat Treatment Systems, plus a wide array of custom furnaces solutions. Can-Eng also offers a comprehensive After-market Support Team delivering system upgrades, technical support and replacement parts." January 22/10

"Inductoheat, an Inductotherm Group Company, is dedicated to providing customers high-quality induction heat treating and forge heating equipment. Our innovation in induction power supplies more than 40 years ago is the foundation for the development of breakthrough technology today. Our new products incorporate flexible, modular design and are built with lean manufacturing principles. With the constant evolution of our proven, patented products, Inductoheat will continue to bring the best technology to our customers around the globe.

Innovative Induction Systems For 2010

The NEW Single Coil Dual Frequency Induction Gear Hardening System is ideal for high-volume hardening of internal wide-face, gear-like components. The total power exceeds 1,200kW, comprising of medium frequency (10kHz) and high frequency (120kHz – 400kHz) power modules that work not just simultaneously, but in any desirable sequence to minimize part distortion and provide superior hardness patterns. Total heat time can be minimized to about 1.5 seconds.

The NEW Large Gear Hardening System is perfect for hardening medium to large gears and bearing rings. This accurately controlled induction hardening system can selectively harden specific areas of gear teeth and bearing races with minimum shape distortion, improved contact fatigue strength and wear resistance.

Other Market Leading Systems

The CrankPro® System is a non-rotational induction hardening and tempering machine for crankshafts. This equipment utilizes advanced SHarP-C™ technology that eliminates the rotation of the crankshaft and movement of the inductor during heating and quenching cycles. Advantages include robust machined coil, short heat times < 3 seconds, production rates up to 120 parts per hour, low part distortion and convenient changeover from V8 to V6 to 4 cylinder crankshafts.

The InductoScan® Modular Heat Treating System unique design allows for a wide range of power supplies     (50 – 300kW) at (3 – 200 kHz), controls (PLC HMI or Allen Bradley®) and material handling components to be integrated onto a common base to better match production needs. The InductoScan® system is perfect for almost all automotive components. Depending on your part specification, the InductoScan® system can induction heat treat by scanning, single-shot, lift/rotate, pick & place, rotary index or linear transfer.

IROSS™ Low Frequency Systems can be used for a broad range of thermal applications including; preheat for welding, removal and cure of coatings and friction weld and swage stress relieving. FluxManager® systems use a shaped magnetic flux concentrator that provides deep and supreme uniform temperature distribution, ID/OD, laterally, and longitudinally along extended lengths of pipe ends.

The InductoForge® Modular Forge Heating System uses power modules that are capable of running at a wide range of frequencies with minimal change: (500Hz to 6000Hz). Each module is individually controlled using the IHAZ™ Temperature Profile Modeling computer program, which generates optimum-running parameters and set points, resulting in a much finer and more accurate billet temperature." January 21/10

Metallurgical Processing Inc./New Britain, CT, USA. Last week we visited captive and commercial heat treaters in the wilds of Texas, USA this week we visit heat treaters in the North-eastern USA starting with Metallurgical Processing. Meet the team from MPI in the photo below taken in their vacuum brazing department. This is a 52 year old commercial heat treater started by the current owner(Elena Ritoli) father. By the way if the name Elena Ritoli is familiar to you it is most likely because she has been involved in the industry for quite some time and is very involved with Metal Treating Institute. Commercial heat treating in the Northeast US is heavy on aerospace (head quarters for Pratt & Whitney is not that far away), and light on automotive with a broad mix of miscellaneous heat treating thrown in to round out the commercial work available. MPI offers a pretty broad range of heat treating, vacuum, vacuum brazing, batch IQ work, Plasma nitriding and aluminum heat treating. This is a larger than average shop that has weathered the current economic storm reasonably well, especially compared to the largely automotive heat treaters that dominate the Ohio, Michigan, Ontario regions. We came to the conclusion in 2009 and have commented on it many times that commercial shops offering batch heat treating spread over many different types of manufacturing with no single customer amounting to a significant portion of overall sales have weathered the storm far better than those dependant upon one industry and with few customers. http://www.mpimetaltreating.com/     January 20/10

Where Are They Now? From time to time when a reader asks us where a particular individual in the heat treating industry is located we play the “where are they now” game. In this case an individual in the heat treating industry asked what happened to a long time heat treater by the name of Tom Ruglic. Tom was General Manager of the Bodycote (commercial heat treating) plant in Fort Worth, Texas. As it happened we ran across Tom’s name recently and can tell you that he is now the GM at another Bodycote facility in Laconia, New Hampshire, USA. If you have lost touch with an individual within the industry please let us know and we will try and located them for you. January 20/10

The Doctor is In. That Doctor would of course be Dan Herring “The Heat Treat Doctor” giving us his weekly Viewpoint, Counterpoint, this week about whether to heat treat in house or not. Dan always appreciates your comments and can always be reached at dherring@heat-treat-doctor.com January 19/10

"Part manufacturers either perform heat treatment operations themselves (so-called “captive” or in-house heat treaters) or purchase these services from others (so-called “commercial” heat treaters).

In today’s business climate parts producers are focusing on what they do best and as such there is an industry-wide reevaluation taking place of the need for in-house heat treating operations. The question is, does this represents an legitimate opportunity for the commercial heat treating industry?

Viewpoint

Tremendous pressure is being exerted on manufacturing from senior management to reduce work-in-process inventory and shorten the delivery time of orders; in other words, increase product velocity and lower unit cost. In-house heat treating is often seen as an obstacle to accomplishing these goals.

In addition, many parts producers are horizontally integrating – desiring to treat all parts of their business as a service. They are looking to outsource some or all of their heat treating needs and manage the commercial heat treater just as they would any other department within their organization.

Parts producers are implementing lean manufacturing strategies (Fig. 1) and applying them to heat treatment. Efforts are underway to eliminate high labor costs, simplify operations (i.e. reduce the number of manufacturing steps), and adopt “build to order” strategies. Conservation of energy, on-demand part production, shortening of process cycles, and the move toward smaller lot sizes is the order of the day.

Many in-house heat treating operations utilize older equipment and while often well-maintained are burdened with larger than needed capacity. Outsourcing is seen as a viable alternative and the good choice for new product development projects, especially those in high-tech products."

Next Time: Captive versus Commercial Heat Treating, CounterPoint

Borg Warner/Simcoe, Ontario, Canada. In spite of the upturn in the North American auto industry corrections are still taking place. In this case we are talking about the Borg Warner (auto parts) facility in Simcoe, Ontario, Canada. Small by industry standards (61 employees) this plant has been manufacturing and heat treating in house for as long as I can remember. June 30/2010 the plant will be closing taking the heat treating department with it which consists of a couple of rotary retort furnaces and some older batch IQ lines. January 19/10

Koyo Bearings USA/Timken. December 31/09 JTEKT Corporation acquired the needle roller bearings business of Timken Bearings as you can see in the press release below. While I can’t speak for the plants in Europe I can say that the Wuxi, China and North American plants are all large in house heat treaters ranging from Bedford, Quebec which is quite modest up to the larger heat treating departments in the plants in the Carolinas. January 18/10

“JTEKT Corporation has created a new business unit, Koyo Bearings USA LLC, following the acquisition of The Timken Company's Needle Roller Bearings business. The acquisition combines the strength, heritage and intellectual capital of Koyo(R) and Torrington(R) Needle Roller Bearings to create one of the world's largest needle roller bearing manufacturers. Koyo Bearings will manufacture needle roller bearings under the Koyo Torrington Needle Roller Bearings brand, which features an extensive range of radial and thrust needle roller bearings, as well as bearing assemblies and loose needles for automotive and industrial applications. The entire management team and its 3,400 associates will transition into the new business unit. Timken's former president of needle roller bearings, Ken Hopkins, has been named president and chief operating officer of Koyo Bearings USA, which will manage the global business unit. "The creation of Koyo Bearings USA will lift JTEKT to a new level, giving us an extensive global footprint with operations in North America, Europe and Asia," said Tom Takahashi, CEO, Koyo Bearings USA LLC. "The combination of the Koyo and Torrington Needle Roller Bearings brands also brings significant automotive expertise, the world's leading automotive bearings manufacturing capabilities, and provides Koyo cutting-edge products and technology." This $330 million transaction, including receivables retained by the seller, complements and strengthens JTEKT's existing product lineup and manufacturing base. Koyo Bearings USA will provide JTEKT with a global production network of 12 needle roller bearings manufacturing facilities and three engineering technology centers located in:” -- North America: Cairo, Dahlonega and Sylvania, Ga.; Greenville and Walhalla, S.C.; and Bedford, Quebec, Canada -- Europe: Brno and Olomouc, Czech Republic; Maromme, Moult, and Vierzon, France;Kunsebeck, Germany (two); and Bilbao, Spain -- Asia: Wuxi (LiYuan), China"

Nickel Pricing. A reader sent us the chart below showing nickel pricing over the past number of years. I don’t know about you but I get a real kick out of seeing the enormous fluctuations over the years-which obviously have an enormous effect on the price of all alloy components for heat treating furnaces. Note the low of $1.60/pound January of 1987 and the high of $23.66/pound May 2007. I apologize for the fact that the chart is not as clear as I would like. January 18/10

Bodycote. From Bodycote’s website http://www.bodycote.com/ comes this small news item about one of the world’s largest commercial heat treaters. January 18/10

“New Bank Facility executed. Bodycote Plc, the specialist thermal processing company, announces that it has  executed a new £110 million multi-currency revolving credit facility with  existing relationship banks. This replaces the Group's current £225 million  facility which matures in August 2010.  The new facility reflects the Group's funding requirements. It has a maturity date of 31 March 2013, unchanged covenants and is in addition to the Group's Euro 125 million multi-currency facility.”

Modern Heat Treat/Richland Hills, Texas, USA. There is a new player in the world of commercial heat treating in the Dallas/Fort Worth, Texas area-Modern Heat Treat who just this past week ran their first loads of production parts. Co owners of Modern are Rudy Saucedo and Brad Luce. If the names are familiar it is because both have been involved with the heat treating industry for many, many years mainly at Metroplex Heat Treat in Arlington, Texas (which is now part of Bodycote). It’s a tough time to be starting up a commercial heat treating operation because of the economy but as things are looking up perhaps it is a great opportunity. The company at this time is offering batch IQ and vacuum heat treating and depending upon the market other processes will be offered in the future. The two photos below show the company as it now stands and as you can see the size of the building means they have lots of room to expand. If you want to get in touch with the company their phone number is 817 616-0333. January 15/10

Dana/Glasgow, Kentucky, USA. Dana is one of the largest auto parts makers in the USA and a very well known company. Their location in Glasgow, Kentucky is quite well known within the heat treating industry for the fact that a few years back they installed a very large ALD vacuum carburizing system. With the downturn in the US automotive industry it has long been rumored that this plant was slated to close and unfortunatley it has become official. September 2010 this facility will be closed with the equipment being moved to other Dana locations. At this point in time I do not believe there has been a firm decision made as to where the ALD system will be relocated to. January 14/10

Rockmore International/Judenburg, Austria. I have only a passing knowledge of Rockmore however I do know them to be a large manufacturer of rock drilling tools very similar to Boart who I know quite well.  The company recently that they are building a new 30,000 square foot facility in Judenburg, Austria which will feature in addition to manufacturing equipment a very advanced heat treat department. The investment in this plant is roughly $12 million USD and will be ready in July 2010. Equipment at their current location in Austria will be moved to this new location. January 14/10

Bodycote/Fort Worth, Texas, USA. Over the years I have been fortunate enough to see a number of Bodycote (commercial heat treating) plants around the world. One that I had not yet seen was the Fort Worth, Texas operation. Bodycote plants run the gauntlet from brand new, no expense spared to older more modest facilities. The Fort Worth operation is one of their older plants dating back to the 1940's (obviously it was not Bodycote originally) and while it is older somebody has put quite a bit into this plant recently. Reasonably large by commercial heat treat standards the facility concentrates on aerospace work and features a number of impressive vacuums, batch IQ equipment, pit furnaces and some equipment dedicated to aluminum work. The Plant Manager Rick Fleming I have met before as he was originaly with Metroplex HT in Arlington, TX (now part of Bodycote) the General Manager, Ilya Soroka has been at this facility for approximately 1 year and was previously with the company at their Ipswich, MA, USA plant. In the photo below taken in the vacuum department you see from left to right Rick Fleming, Marty Benegalia (Southern Thermal Systems), Ilya Soroka, Gord Montgomery and Matt Benegalia (Southern Thermal Systems). January 13/10

"New Plant Manager Joins Heatbath/Park Metallurgical Staff. Heatbath/Park Metallurgical announces the appointment of Gary Geiger to the position of Plant Manager for the Indian Orchard, Massachusetts facility.  Gary holds a bachelors degree in Business Management from Westfield State College and was recently the Operations Manager for a wire forming and plastics extruding company.  Gary will be in charge of both purchasing and production operations for the Indian Orchard plant.  When not at work, Gary enjoys both fishing and boating and has been involved in coaching high school sports for over 25 years.  www.heatbath.com Gary can be reached at (413) 452-2000 extension 332." January 13/10

"Heatbath/Park Metallurgical Appoints New Technical Sales Representative. Heatbath/Park Metallurgical, manufacturer of specialty heat treating and metal finishing chemistries, has named Robert Anderson as Technical Sales Representative for its Illinois/Wisconsin/Iowa territory.  Anderson has a Bachelors degree in Chemistry from Eastern Michigan University with special emphasis on polymer science and electro/electroless plating.  He has several years experience working in the metal finishing industry.  When not calling on customers, Robert enjoys spending time with his two young sons and playing the drums. Robert Anderson can be reached at (413) 452-2000 extension 472." January 13/10

Flame Metals/Rogers, MN, USA. We have often commented that a potential boom for the captive and commercial heat treating industry in North America will be the heat treating of gearing components for the wind energy industry. The rather interesting news item below concerns a commercial heat treater, Flame Metals who early on recognized the potential market and who has consequently been investing heavily in new equipment. January 12/10

"Winners Listed for $2.3 Billion in Clean Energy Manufacturing Tax Credits President Obama announced awardees for $2.3 billion in clean energy manufacturing tax credits from the American Recovery and Reinvestment Act.  In order to foster investment and job creation in clean energy manufacturing, the American Recovery and Reinvestment Act included a tax credit for investments in manufacturing facilities for clean energy technologies.  The Section 48C program will provide a 30 percent tax credit for investments in 183 manufacturing facilities for clean energy products across 43 states. Flame Metals Processing; $1,350,000.  Flame Metals will purchase equipment used in heat treatment of gears for the gear assembly used in wind turbines."

Dan Herring "The Heat Treat Doctor". Our regular blogger, Mr. Dan Herring provided us last week with his viewpoint on R & D and how it pertains to the heat treating industry. This week he gives us his Counterpoint which includes some rather provocative comments. January 12/10

"This blog is intended to be interactive, so please contribute your thoughts …

Counterpoint

R&D? Forget about it; ship it overseas with the rest of manufacturing.

As you may have expected, the industry sectors with the lowest R&D support are the traditional “smokestack industries” that we serve, you know, the ones that once played a dominant role in the U. S. and Canadian economy. These include:

1. Nonferrous metals and products;

2. Petroleum refining and extraction;

3. Ferrous metals and products;

4. Food, kindred, and tobacco products;

5. Electric, gas, and sanitary services.

By contrast, the industrial sectors with the highest R&D intensities are:

1. Research, development, and testing services;

2. Computer and data processing services;

3. Drugs and medicines;

4. Office, computing, and accounting machines;

5. Optical, surgical, photographic, and other instruments;

6. Electronic components;

7. Communication equipment; and

8. Scientific and mechanical measuring instruments.

The Case for Outsourcing

Outsourcing is the driver of change. On-site or near-site technological support for manufacturing makes a great deal of sense and allows for easier adaptability of products to their location since it will be easier to understand content, design, and function.

On the supply side, the expansion of the education system in 3rd world countries and the sheer number of individuals that go through the system is creating a rapidly growing population of scientists and engineers that can be employed locally – except in the United States where nearly 40% of science and engineering doctorates are granted to foreign students that can use the knowledge they’ve gained in their local countries.

On the demand side, relaxation of policies, openness of markets, and links to global economy make access to overseas markets and technology easier than ever.

Where Should We Put Our Emphasis?

Throughout the countries covered by the OECD statistics (which exclude China and India) almost all governments provide support to higher education, basic research, industrial technology, human health and agriculture.  However, the priorities shift from one country to another. For example, the UK, France, and US list defense as their highest priority.  Surprisingly, the field of energy research received only one reference as a priority item (from Poland), and in fact was found to be at the bottom of the list of five priority R&D concentrations for the 27 countries who participated in the survey. 

In the United States, human health is of greatest importance to the R&D community, followed by non-orientated research, social structures and relationships, and finally, industrial production and technology. By comparison, in Canada, the priorities are non-orientated research, agriculture, industrial production and technology, human health and university funding. So it makes sense to concentrate our efforts on the top one or two and outsource the rest.

What will the future hold?

Globalization of R&D will continue, so why fight it? Competition for R&D funds will become even more intense. Emphasis on long-term effectiveness of research activities is what is really important, regardless of where the money comes from. The practice of off-shoring has been driven by a number of different factors, including:

1. As markets expand in response to demands so has the desirability of having on-site or near-site technological support for manufacturing and distribution centers.

2. Products developed for specific environments may need to be modified so as to accommodate local cultures, customs, regulations, raw materials and manufacturing, and/or distribution support structures.

3. Local conditions related to manufacturing and other operating licenses may contain local content clauses which extend to the intellectual input to the manufacturing or distribution process, i.e., a requirement that includes the establishment of local technical support or research facilities.

4. In some locales, there may be significant cost savings that accrue from using resident talent, even if the associated technical and research support is not directed toward products for local consumption.

Next Time: Energy Matters

References

1. Batelle Memorial Institute, 2009 (www.battelle.org)

2. National Science Foundation (www.nsf.gov)

3. 2009 Global R&D Funding Forecast, R&D Magazine, December 2008 (www.rdmag.com)

4. Tassey, G., R&D Trends in the U.S. Economy: Strategies and Policy Implications. U.S. Department of Commerce, Technology Administration, National Institute of Standards and Technology. April 1999."

Vac Aero/Poland. To the news release below we can provide some additional details. Vac Aero based in Oakville, Ontario, Canada is Canada's largest commercial heat treater (specalizing in vacuum heat treating) and also a very large builder of new vacuum furnaces. As you can see their operations in Poland were established in 2003 and have turned into a real success story for the company. January 12/10

"OAKVILLE, Ontario, (January 11, 2010) - VAC AERO's Kalisz, Poland-based operation recently installed a fully integrated High Velocity Oxygen Fuel (HVOF) system based on a new generation Carbide Jet System (CJS) produced by Dortmund, Germany-based Thermico.The system's specially designed combustion chamber is fed by hydrogen, kerosene and oxygen fuel and optimized for spraying MCrAlY coatings on turbine engine components, tungsten carbide coatings on landing gear components and can perform many other coating applications. Precise combustion and fuel configuration settings control particle temperature and velocity to achieve optimal coating efficiency in less time and lower fuel consumption than other HVOF systems. The system was installed in a 13'X13'X 10' high (4X4X3 meters) soundproof booth. The CJS torch is set in motion by a new Fanuc M20 robot with 8 axis movement (6 axes on the robot and 2 axes on a tilting turn-table integrated into and controlled by the robot). The torch's wide range of spraying temperatures prevents part overheating and an ID torch allows for spraying of parts with inner diameters as small as 6 inches (150mm). This versatile system can also operate with the following HVOF torches: CJS K5.2, ID Coolflow (mono), JP-5000, Jet Kote and Diamond Jet. The system is equipped with a CPF2 powder feeder that can achieve reproducibility in powder flow lower than 1% and accuracy of (+/-)2%. It can also feed very fine (even nano) powder measured by mass-flow-controllers. The new HVOF system complements VAC AERO's existing plasma spray and inorganic paint coating capabilities. The company continues to invest in new special processing technologies to provide customers with a wider scope of services. Established in 2003, VAC AERO Kalisz also provides heat treating and brazing and metallurgical laboratory services to the burgeoning aerospace industry in Poland and other parts of Europe."

Lone Star Heat Treat/Houston, Texas. We've mentioned this Texas commercial heat treater in the past and described what they do, however last week we had the opportunity to visit this operation again and they probably deserve a mention again. At the risk of repeating ourselves (but we will keep it brief) Lone Star is undoubtedly in the top 20 commercial heat treaters in North America in terms of sales dollars, this is a third generation company still owned by the Van Dorfy family, it has two locations (the second in Denver, Colorado) and while not unique to Texas it is very unique compared to other commercial shops around the world. Why you may or may not ask? The Texas heat treat industry revolves around the oil and gas industry which means heat treating of large bar stock and pipe is the staple of virtually all captive and commercial heat treaters in Texas; this leads to very unique furnaces.  With this brief background we will mention their latest endeavour-deep hole drilling which involves taking large bar stock and drilling a hole end to end to produce a product essential to the oil and gas industries. This added value service to their customers is one that we have harped upon in the past-it never hurts to be able to offer customers the entire package as opposed to just heat treating. In the photos below you see the brand new building Lone Star has just constructed which will house their deep hole drilling equipment, capable of handling up to a 26" diameter bar, 45' long with very accurate tolerances. Of the three photos below the one that I find most interesting personally (for obvious reasons) is the group photo taken this past weekend while Lone Star people and their customers were indulging in their favourite pastime-hunting. The photo shows from left to right, Gord Montgomery (themonty.com), Mike Van Dorfy, Sr., Jordan Montgomery, Todd Pritchard (Lone Star), Danny Bierman (Lone Star), Mike Van Dorfy, Jr. and Bud  Van Rooyen (Lone Star). January 11/10

Holcroft Increases Sales Representative Network. January 11/10

"January 2010 – Wixom, Michigan – ALD-Holcroft, a leading industrial heat treat equipment provider and systems integrator to the heat treating market, is pleased to announce the addition of two new sales representatives in North America.

MetalPro Resources LLC of West Chester, Ohio will be covering all of Ohio and the western portion of Pennsylvania.  The main company contact is Jim Senne.  Jim can be reached at 513-543-2450, or via email at jim@metalproresources.com .  The company website (while currently under construction) will be www.metalproresources.com.   Jim has a long heat treating history in the Midwest.

Torrid Enterprises, of Bolton, Massachusetts will cover Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont, as well as the Eastern portion of New York.  David Burke is the primary contact.  Their telephone number is 978-779-0317, email is david@torridenterprises.com, and website is www.torridenterprises.com.   Torrid has been in operation for approximately 10 years focusing on capital equipment specific to heat treating.

“We’re happy to sign both David and Jim as they each bring solid histories in the Heat Treat Equipment and Heat Treating industries” says Bill Gornicki, Vice President Sales & Marketing at ALD-Holcroft. “These companies further enhance our already well established representative network and enable ALD-Holcroft to better service our customer base”.

ALD-Holcroft offers MonoTherm®, DualTherm® and ModulTherm® vacuum-based heat treating systems for the NAFTA market.  For free literature on vacuum-based heat treating systems, call ALD-Holcroft Vacuum Technologies Co., Inc. at (248) 668-4130, or visit our website at www.ALD-Holcroft.com.

"Ipsen Announces 2010 Ipsen-U Training Schedule. (January 7, 2010, Rockford, IL)  Ipsen, Inc. announced today that it has scheduled five Ipsen-U classes for 2010. Now is a  terrific time for thermal processing professionals to take advantage of the opportunity to upgrade their skills in vacuum thermal processing before the market really heats up again. Ipsen-U Education is a practical, hands-on method for refreshing users' knowledge of heat processing equipment. Our professional and experienced instructors teach the basics of pumps and pumping systems; demonstrate step-by-step the proper procedures for operating and maintaining vacuum furnace equipment; answer participants’ questions; and help to solve furnace or process-related problems.

The Ipsen-U 3-day course teaches:

• Introduction to Vacuum Furnaces

• Terminology

• Subsystems & Components

• Operation

• Maintenance & Troubleshooting

To check the schedule and register for an upcoming class, go to: http://www.ipsenusa.com/ipsen-u.shtml." January 08/10

Metall Technologie Holding/ Shanghai Huisen Industrial Furnaces Company Limited. In late November of 2009 we had a news item about Metall Technologie in Germany in which we asked whether this is the largest new furnace builder in Europe. To date we don’t know whether this is the case however according to the press release below they just got a heck of a lot larger. January 07/10

"ST. PETER PORT, Guernsey, Jan. 5 /PRNewswire/ -- European Capital Limited ("European Capital") announced today that its portfolio company Metall Technologie Holding ("Metall Technologie"), a leading European manufacturer of high-end heat treatment industrial furnaces, has established a sino-foreign joint venture with Shanghai Huisen Industrial Furnaces Company Limited, one of the fastest growing manufacturers of heat treatment industrial furnaces in the People's Republic of China ("China"). Post-closing, Metall Technologie holds a 70% stake in newly established Shanghai Huisen-MTH Industrial Furnaces Company Limited (the "JV"). "The managers of Metall Technologie, one of our portfolio companies with the largest geographical footprints, chose to partner with European Capital back in 2006 primarily because of our willingness and capability to deal with international external growth," said Etienne Haubold, Director of European Capital Financial Services. "We now expect Metall Technologie to further consolidate an already long-established leading position in the Chinese heat treatment furnaces market." "The Chinese market has been the third largest market of Metall Technologie over the recent years, as long-time European clients have been setting up or supporting operations in China," said Olivier Meline, Manager, European Capital Financial Services. "Metall Technologie -- through the establishment of the JV and a wider product offering -- will now be in a position to better address the extremely dynamic domestic market in China." European Capital originally invested euro 104 million in the One Stop Buyout(TM) of Metall Technologie in December 2006. With main offices in France and Germany, and headquartered in Menden, Germany, Metall Technologie consists of four operating entities all trading under their own brand names: BMI in France and IVA, Mahler, and Schmetz in Germany. Metall Technologie focuses exclusively on high-end furnaces requiring an advanced level of technology to meet strict specifications such as high temperatures, control accuracy and consistent heat application in all areas of the furnace chambers. Industrial heat treatment furnaces are used by a broad range of industries to modify a material's surface or physical characteristics in order to increase flexibility, wear-resistance or hardness. Metall Technologie designs, assembles and markets furnaces and also performs after-market services to its installed base of approximately 4,000 units. In addition to its four main European subsidiaries, the Company also operates a joint-venture in Poland. Its products are sold to blue-chip customers in more than 35 industries, including heat treatment service, aerospace, automotive, machinery and energy.

Founded in 2006, Shanghai Huisen Industrial Furnaces Company Limited designs, manufactures and distributes atmospheric heat-treatment furnaces primarily in China and is one of the fastest growing heat-treatment furnace manufacturers in China. Shanghai Huisen Industrial Furnaces Company Limited operates a modern, recently extended 4,400 square meter production site located in the Minhang district of Shanghai. "We are confident that we have chosen the best possible partner for our initiative," said Stefan Blum, Metall Technologie Managing Director. "Dr Zeng, founder of Shanghai Huisen Industrial Furnaces Company Limited, is not only a successful entrepreneur and manager, he also has a significant experience of working with Europe -- he holds a German PhD in Engineering and headed the Chinese subsidiary of a Germany-based international company for 9 years -- and he is perfectly trilingual." "In addition to the expected growth in the Chinese market, we are delighted that the JV will enable us to offer a closer and more efficient service center to our long-time clients in China," said Luigi Dall'o, Metall Technologie Managing Director. "Among other items, we're in the process of starting to stock spare parts on the JV's premises to dramatically reduce lead-time for our clients who have maintenance needs." "Shanghai Huisen Industrial Furnaces Company Limited's integration with Metall Technologie will further help to strengthen our position in China," said Dr. Aiqun Zeng, Managing Director of Shanghai Huisen-MTH Industrial Furnaces Company Limited. "We are confident that our partnership has been very carefully prepared prior to the establishment of the JV, as our teams took the time to get to know each other and review all potential commercial and technical opportunities to develop. As a result, the synergies between both Chinese and European teams have been effective from day one."

Gas Or Electric Heating? Earlier this week in our “Lessons learned in 2009” comments we made the statement that for most areas of North it made far more sense to heat furnaces with natural gas as opposed to electricity. While I stand by these comments Bill Jones of Solar Atmospheres brings up some very valid points. January 07/10

“For the past 75 years there are argued justifications for one fuel v/s another. My input, price is secondary to process and performance. Most gas fired furnaces are brick, often with heavy retorts to heat and cool, if a batch process. This means inefficient slow heating and slow cooling, often not acceptable to the metallurgy of the process. Gas fired furnaces are often “banked” over holidays or slow periods. Electric furnaces by contract can heat and cool fast and shut down cold whenever desired, even from shift to shift. It is true the price of electricity is set to rise as of the first of this year. However with the use of a good energy broker one can hold these increases to under 10%. Some suppliers, notable unnamed air reduction plants, have threatened 40% sales price increases as a result of “electric rate increases”. This is absurd and piracy at best. Solar Atmospheres Inc. Souderton, PA.”

“SECO/WARWICK Allied has recently commissioned a 7 base Hydrogen atmosphere annealing installation with a capacity of 98,000 MTPA for Corpacero, Barranquilla - Colombia which has its main office in Bogota. The order was received through CMI FPE who supplied the rolling mill and galvanizing line. The charge material for the annealing plant is cold rolled strip coils of grade CQ/DQ / DDQ /EDDQ having outer diameter 2,000 mm and width of 1,250 mm. Each annealing base is designed for a maximum load of 108 MT and reference charge load of 86.4 MT. The designed overall stack height is 5,300 mm for 4 coils per batch which are stacked using intermediate convectors between the coils.  The scope of supply for the installation included (4) natural gas fired heating hoods based, (7)  annealing bases, each with base valve stands, (7) corrugated inner covers, (3) mist cooling hoods, a single common pressure reducing station for utilities,  and complete PLC-based control and monitoring system. The control system is composed of PLCs for control and safeties, with a PC operator station for supervision. The control system allows the control, monitoring as well as all required safeties for the equipment. About Corpacero; Corpacero includes a division for sheets and pipes that supplies the domestic and international market. Corpacero SA has two plants that are strategically located at two points in Colombia to meet international markets - one in the city of Barranquilla and the other in Bogota. Visit http://www.corpacero.com USA Contact Matt Druciak, Project Sales Engineer - Heat Treat & Primary Steel Products SECO/WARWICK CORPORATION mdruciak@secowarwick.com” January 07/10

Lewis Lance/Bodycote, Arlington, Texas, USA. In December of 2007 Metroplex HT, a very large commercial shop in Arlington, Texas started by Jerry Luce was purchased by Bodycote International. Jerry has remained with the company since as President however he will be stepping down in 2010. His replacement will be Lewis Lance who started with the company mid December of 2009. Lewis is an experienced long time heat treater who most recently was General Manager of Texas Heat Treating Inc., in Round Rock, Texas. January 06/10

Odds & Ends. One of the largest captive heat treaters in North America-Caterpillar is predicting a sales increase in 2010 of 25% over 2009. A reader recently asked us about where they could get Plasma Nitriding done in South Africa. Some quick research told us the only commercial heat treater in the country that can do this is Bohler-Uddeholm who also claims to have the most advanced commercial heat treating facility in the Southern Hemisphere-an impressive claim. Furnaces North America (which will be the largest heat treat show in North America in 2010 in Orlando, Florida October 5-6) is mentioning in their advertising for the show that the heat treating products & services market in North America is $1.28 Billion. This number caught our eye and we asked one of the sponsors of the show-Metal Treating Institute what this number represented. Apparently this is the annual sales figure for MTI members in North America (most commercial heat treaters in North America belong to MTI). Going to India we see that one of the larger shows in that country Heat Treat Show 2010 will be held in Mumbai January 29th to 31. EFD Induction has appointed Gunner Poschmann of Synergetic Technologies in Burlington, Ontario, Canada as their Canadian rep for their line of Induction Heating Systems. January 06/10

"The Doctor's Viewpoint, Counterpoint". As promised we are very pleased to have the famous Dan Herring “The Heat Treat Doctor” providing us with a weekly blog about the heat treating industry. To start off the year Dan have provided us with these thoughts and comments about R & D and how it pertains to the heat treating industry. January 05/10

“Annual Global Research and Development (R&D) Report Reveals Growing Equalization of R&D Activity, Reduction of U.S. Dominance” [1]p;         - Batelle Memorial Institute, 2009

The (Sad) State of Industrial R&D

In North America there is a concern over loss of manufacturing and the infrastructure that supports it. Are we really surprised? Ask yourself, how much money your company spends on R&D, and in particular, what percentage of company sales is R&D related? For most companies associated with heat-treating, the number is 2% or less. That’s not very much. Irrespective of the amount, are we innovating? Are we creating the next generation of products, materials and processes? Is what we do helping the heat treatment industry remain competitive? In other words, are we spending our money wisely and, if not, what can we do to change?

They tell us that more R&D is performed by the world’s industrial companies than the combined total emanating from government funded programs and academia. On average, about two thirds or more of any country’s R&D work is performed in an industrial setting. For example, in the U.S., it is 72% and in China it’s 70%. But do these statistics tell the real picture? For example, fabricated metal products (Table 1) accounted for only 1.375 million of the total R&D dollars or, so far less than 1% it’s hardly worth mentioning!

Three industries—pharmaceutical, automotive, and information & communication technologies (ICT)— constitute 24 of the top 25 global R&D expenditures. ICT companies are the most dominant with 10 of the top 25 companies and 36% of the overall R&D spending. Pharmaceutical companies follow close behind with eight of the top 25 and a 32% share. There are six automotive manufacturers on the list.

Japan and the U.S. account for about two-thirds of the overall spending in the top 25 list, since most of the leading pharmaceutical and automotive manufacturers reside in these countries. Nearly 85% of automotive spending is principally dedicated to the development of tooling for the year’s new models. These development funds have historically been included in a company’s general R&D funding program and difficult for analysts to financially separate from the company’s total research effort.

In any given year, small-to-medium sized companies, those with fewer than 25,000 employees, performed about 60% of industrial R&D in the United States. More specifically, companies with at least 5 but fewer than 500 employees represent 9% of R&D performing firms and employ 24% of the scientists and engineers who worked on R&D. By contrast, large firms with 25,000 or more employees represent 42% R&D, performed and employ 29% of R&D scientists and engineers.[2]

Next Time… CounterPoint!

References

1. Batelle Memorial Institute, 2009 (www.battelle.org)

2. National Science Foundation (www.nsf.gov)

3. 2009 Global R&D Funding Forecast, R&D Magazine, December 2008 (www.rdmag.com)

4. Tassey, G., R&D Trends in the U.S. Economy: Strategies and Policy Implications. U.S. Department of Commerce, Technology Administration, National Institute of Standards and Technology. April 1999.”

Heat Treat Shops For Sale. A service we have offered for many years is putting buyers and sellers of commercial heat treating shops together. We have just added a very interesting, profitable shop in the Western USA that is looking for potential buyers. January 05/10

10 Things I Learned (or Re-Learned) About the Heat Treating Industry in 2009. In a year of turmoil that saw the heat treating industry turned on it’s head many lessons were learned and forgotten lessons relearned-the hard way; January 04/10

1) Bigger is not always better. It is an absolute given that processing parts in a large continuous furnace is the most cost effective way to go. So why then in 2009 did we see large furnaces being shut down and batch furnaces picking up the slack? Running a large continuous furnace less than full? I would suggest a vacation in Mexico is a far better investment of your money.

2) Natural gas fired furnaces are beating electrically heated furnaces hands down. Combine shale gas drilling techniques and a recession and you end up with a formula for plummeting natural gas prices. Throw into the mix rising electrical rates and voila you end up with a prescription for gas fired furnaces. We will add that there are some exceptions; areas that choose to subsidize electricity rates such as Quebec, Canada, areas where natural gas is not readily available and vacuum furnaces. Everybody else-go with gas.

3) Cash is King. The oldest lesson of all-keeping debt low was a lesson relearned by many in 2009. Look no further than Bodycote International (commercial heat treating) who sold their testing division, reduced their debt and were able to take advantage of opportunities other companies couldn’t.

4) Don’t put all your eggs in one basket. Show me a commercial heat treater with lots of small customers, none accounting for more than 5% of their overall business and I will show you a company that weathered the downturn better than most.

5) ISO, CQI-9 and NADCAP accreditations are the best way to grow a heat treat. Expensive, painful, time consuming and a waste of time sums up accreditations. Whether you agree with this deliberately provocative statement is a mute point-without at least some of these accreditations the amount of potential business growth will always be limited and the more time that goes by the more this statement will hold true. Suck it up, invest the time and money and you will never regret it.

6) What goes up must come down. Convential wisdom had commodity prices on a never ending increase-2009 showed us that there is nothing like a good recession to kick the heck out of commodities such as nickel, molybdenum and natural gas.

7) It’s awfully hard to beat a batch IQ furnace. While pusher furnaces were being cut up for scrap right, left and centre, the heated demand for large mesh belt lines dried up and cast link belt furnaces pretty much went the way of the dinosaur batch IQ furnaces kept selling (albeit at a reduced rate). Who would have thought a simple, basic technology 60 or 70 years old would have enjoyed such longevity?

8) There is no limit to the stupidity of man kind. Copenhagen and Green House Gas emissions hysteria showed us that the stupidity of mankind can be truly shocking. Steel Firm Corus (owned by Tata of India) announced plans recently to close down a plant in the UK laying off 1700 people. The kicker is that they are now eligible for over $100 million in carbon credits and production could be moved to India which at this point has no limits on greenhouse gas emissions. Over $100 million in carbon credits with no reduction in emissions when production is moved? Coming soon to North America.

9) Cheap is good (downsizing is not as painful as you think). In late 2008 I would have bet good money that we would see the death of many large commercial heat treaters and captive heat treaters. While a number of large captives did indeed disappear this was not the case with commercials-they all just got smaller. Shut down furnaces, get furnaces operators to do the landscaping, reduce the heat, turn down the air conditioning, shut off a few lights, reduce payroll and by golly all of sudden you are back to making a profit (although sneezing the wrong way can put you back into a loss situation).

10) Stick with what you know (otherwise known as core competencies). There is a darn good reason the auto companies largely got out of in house heat treating; with commercial heat treaters operating on razor thin margins why on earth would most manufacturers insist on keeping this fixed cost in house? I can hear the screaming already about poor quality from commercials (refer back to point 5-above). Stick with what you know and if it’s not heat treating don’t do it.