Well, your humble correspondent has grown his staff from 3 to 10 in a bit under 2 years. And although that is pretty damn proactive and a huge investment in resources on the part of the Company, we still cannot keep up with demand. Thus the lack of posting.
But it has been damn interesting seeing this industry through this current up cycle. The lack of materials and concurrent increase in prices is both frightening and fascinating to be a part of.
As I am deeply involved with manufacturing, I get to see firsthand the consequences of ridiculous regulation by our wonderful government.
For example, Castings and Forgings.
If you are a manufacturer working in metal, basic services are critical to manufacturing. A diversified domestic foundry and forge base is necessary for a healthy market. That existed only two sweet years ago. But then the EPA got involved. They decided that a forge or a foundry that produced above a certain tonnage of output a year was a major emitter and would now be required to install some pretty onerous emissions controls. The regulation allowed for a two year(?) compliance window.
Well guess what happened. None (to my knowledge) of the forges and foundries required by law to install emissions equipment by the drop dead date did (I'm sure the really large facilities had the economies of scale to do this but I do not know. Make me do detailed research and I will). They shut their doors instead.
Let's see. We are in a huge demand market for castings and forgings. And because of a regulatory agency which did not grasp the economic consequences, our domestic metals industry has taken a severe blow. Foundries and forges closing on a daily basis across the country.
Well guess what that does now? We get to travel the world to find what we need, establish quality assurance to make sure what we are purchasing is within tolerance and ship it in raw form across the planet. Yeah, that will bring prices of our products down.
And so the dominos fall. I work for a domestic manufacturer that employs thousands. Let's see. No metal available domestically (or available so far out in time due to demand on the exempt smaller facilities). Shipping costs crushing our margins, making us uncompetitive in the world marketplace (that free trade thing)? Goodbye manufacturing jobs. It has not happened yet. But I see the writing on the wall.
