A busy summer and job fears

Memorial Day has come and gone and that means summer is now in full swing. Anyone ready for a vacation? For most people that may seem like a loaded question. “Of course I am ready,” you say, “but who has the time?”
As we have said before, the industry is continuing its slow gradual trek back to prosperity, but the latest report coming out today from the Conference Board is saying consumer confidence for May was not as positive as in previous months as fears abounded about the economy’s future and the job outlook.
The consumer confidence index fell over six points to 103.2, down from the revised 109.8 in April.
''Consumer confidence, which reached a four-year high in April, lost ground in May,'' said Lynn Franco, director of the New York-based Conference Board Consumer Research Center. ''Apprehension about the short-term outlook for the economy, the labor market and consumers' earning potential has driven the Expectations Index down to levels not seen since the aftermath of the hurricanes last summer.''
Still, Franco said, consumers rate current conditions favorably.
Manufacturers remain busy, but the report said job fears are a top reason for the lack of confidence.
Where does the job outlook stand with you?
Talk to me.

Manufacturing numbers yo-yo

Just who can you believe? A survey from the Institute for Supply Management shows growth over the previous month. The research group’s manufacturing activity index posted a reading of 57.3 compared to March’s 55.2. Readings above 50 indicate expanding manufacturing activity.
But if you look at the numbers coming from the Commerce Department, durable-goods orders fell by 4.8% last month to a seasonally adjusted $210.16 billion. That April number comes after it climbed by 6.6% in March.
The durables report showed transportation orders decreased 12.7% in April, after increasing 13.9% in March. Orders for commercial planes fell 32.2%, while military aircraft orders decreased 24.4%. Motor vehicles and parts fell by 1.6% last month.
Depending on your proclivity, you can see positives or negatives out of this latest batch of numbers. When it really comes down to it, it just feels like business is continuing to get better no matter what to doomsayers say.
End users say they remain busy and continue to have a hard time even thinking about taking vacation. And suppliers continue to run around trying to push their product. All are good signs.
How is your company doing these days? Talk to me.

Autos go to Washington

As if the auto companies don’t have enough problems of their own, now Washington’s lawmakers are pledging their help. When politicians get involved, look out.
Heads of the Big Three U.S. automakers met with lawmakers who promised to help the industry compete against foreign carmakers.
Senate Minority Leader Harry Reid, D-Nev., said in an Associated Press report the Congress members and auto executives were confident they could work together to ''bring back the American automobile industry where we think it should be and they think it should be.''
''We recognize that there are problems and we are going to work as partners with them,'' Reid said. ''Perhaps in the last many years we have not worked together as well as we should have.''
General Motors Corp. Chairman and Chief Executive Rick Wagoner, Ford Motor Co. Chairman and Chief Executive Bill Ford, and Tom LaSorda, president and chief executive of DaimlerChrysler AG’s Chrysler Group, held a series of meetings with congressional leaders.
Reid said it was the first of many meetings to develop a better partnership between government and industry, according to the The AP report.
Sen. Carl Levin, a Democrat who represents auto workers in Michigan, said the nation needs to be aggressive ''in giving them support to level the playing field.''
While the auto industry needs as much help as it can get, the main thing U.S. automakers need to do is eliminate the perception the foreign car makers are making a better product. As soon as U.S. carmakers can prove they make a quality vehicle that won’t fall apart after a couple of years, then their problems will start to go away. It always comes down to ensuring the company has a quality product. How can Washington work on that?
Talk to me.

Auto company growth: Honda plans new plants

Continuing my auto rant from Tuesday, one of the more profitable auto companies, Honda, is now looking at opening up three plants across the globe.
One would be in Japan, one in Canada and one in the United States. The company said it would spend $400 million to build the U.S. plant, creating 1,500 jobs. The U.S. plant would be Honda’s sixth North American assembly plant.
Honda President Takeo Fakui said the company would also spend $639 million to build its first new plant in Japan since 1976, and $140 million on an engine plant in Canada.
Tuesday, we learned about unions authorizing a strike vote at Delphi that could shut down the auto parts supplier and cripple General Motors.
Today, we learn about an auto company with plans to expand.
What a difference.
Honda ranks second among Japanese auto companies in American sales, behind Toyota.
The new U.S. plant will most likely build the Honda Civic, which the automaker already produces in East Liberty, Ohio, and the Fit, a subcompact that Honda sells in Japan and just offered for sale here.
Honda introduced a new version of the Civic last fall and the Fit is reaching the market along with new small fuel-efficient cars from Toyota, Nissan and Chrysler.
What should the U.S.-based auto companies do to survive and grow? Talk to me.

Auto industry turmoil

This is not an anti-union rant at all, but after reading about the United Auto Workers saying U.S. hourly workers voted to authorize a strike if bankrupt auto parts maker Delphi Corp. tosses out its labor contracts as part of its reorganization, my only question is, are they serious?
It is very apparent the major auto companies and their suppliers have been hamstrung by union contracts over the past few years. Good for the unions. They negotiated a great deal for their constituents. Now the problem is, they are paying the price for their success and the auto companies complete lack of management skill.
Obviously, there is no easy answer to the problems besetting the auto industry, but voting to strike a bankrupt company in an industry facing incredibly tough times, seems to be like trying to put out a forest fire with an eye dropper.
Delphi management wants the union to agree to givebacks, but union officials are saying not so fast.
Unions have threatened to strike if Delphi voids the labor contracts. A strike could halt North American production at the parts maker, and at General Motors, and other auto and truck manufacturers.
GM Chairman and Chief Executive Rick Wagoner, who is facing rough times at his company, called resolving the dispute between Delphi and the unions an urgent priority.
In an effort to get to a positive bottom line, Delphi wants to slash wages by two-thirds, cut benefits, close U.S. union plants and trim thousands of jobs.
The idea here is these two factions—management and the union—need to work together for a positive outcome, not clash in a battle of wills. One way, they will win, the other way, say good bye to Delphi.
Talk to me.

ABB’s partnership connection

Today is the second day for ABB’s Automation World user group meeting and all signs are pointing to one of automation’s major players becoming a bigger force than it has been over the past few years.
Anyone can look at the numbers and see ABB is coming back strong in terms of revenues and profits, but they have something else going for them.
It seems they get it. They understand the new business model that companies have to adopt to get ahead in today’s economic environment. They have to partner with as many customers and even competitors to keep its positive momentum moving forward.
Just listen to Alan Boeckman, chairman and chief executive at Fluor Corp.
“Collaboration is so vital today,” he said. “The old way of doing business would never work today.”
He also offered some key points when making the decision to collaborate with partners.
There should be risk allocation; partners should work even more closely than they have before; and there should be greater use of partnerships and alliances. But most of all, he said, there has to be trust between partners. If you don’t have that, then don’t bother attempting to work together.
He pointed out there are times Fluor is a fierce competitor of ABB’s, but they have to clearly draw the boundaries when they decide to work together.
Dinesh Paliwal, chairman and chief executive of ABB North America and president of ABB’s global markets and technology agrees.
“We must trust each other.”
ABB does not appear to be giving lip service to the collaboration/partnership effort. They genuinely appear to be working hard at achieving a true industry connection. Of course, only time will tell, but it appears they are headed in the right direction.
Talk to me.

Growth all in the numbers

If you are a numbers person, the second quarter has some great momentum going as new orders jumped in March.
Take a look at the Commerce Department as they reported new orders placed with manufacturers jumped 4.2% in March. If you compare that to February (an increase of .4%) the sector is looking great.
The manufacturing strength in March was fairly broad-based. Orders rose for a wide variety of durable goods, relatively costly items expected to last at least three years, including commercial aircraft, machinery, metals, cars and computers. Demand also picked up for nondurable items, including food and apparel.
Or if you want to see some other numbers take a look at the Institute for Supply Management. They reported its index of service sector activity stood at 63 in April, up from a reading of 60.5 in March. (A reading of 50 and above points to a growing service sector, while a figure below 50 signals contraction.) April's showing was better than analysts expected; they were forecasting a score of 59.2.
What does all of this mean? It means the industry is continuing is upward climb and growth is blossoming like the spring flowers.
Talk to me.

Partnering to success

Collaboration—that is the key to the next generation of innovation. Not just people at one company working together as a team to create and then launch a product, but rather a team of experts from differing organizations that will look to launch a truly innovative product for the marketplace.
Take the latest sensor initiative from Princeton University.
In an effort to engineer sensors that have the ability to detect minute amounts of chemicals found in the atmosphere, emitted from factories or exhaled from humans, the National Science Foundation (NSF) will fund a multimillion-dollar engineering research center at Princeton University.
The goal is to produce devices low in cost and so easy to use they transform the way agencies monitor air quality, governments guard against attack, and scientists understand the evolution of greenhouse gases in the atmosphere.
Partners with Princeton are the University of Maryland, Baltimore County, Rice University, Johns Hopkins University, Texas A&M University, and the City College of New York. Funding for the center, which will include industrial support in addition to the NSF funding, could exceed $40 million over 10 years. NSF funding started 1 May with $2.97 million for the first year.
The center, called Mid-Infrared Technologies for Health and the Environment (MIRTHE), will combine the work of 40 faculty members, 30 graduate students, and 30 undergraduates from the six universities. The center is also collaborating with industrial partners to turn the technology into commercial products. While you may think these are universities with a goal of conducting research, they also compete against each other for quality faculty, students, and grant money, among other things. So, the idea of collaborating on such a huge endeavor is a big deal.
Each of MIRTHE's research teams will be able to capitalize on each other's advances, said Anthony Johnson, professor of physics and professor of computer science and electrical engineering and director of the Center for Advanced Studies in Photonics Research at University of Maryland, Baltimore County and a deputy director of the research center. "We make use of established technologies while also pursuing novel high-risk approaches," he said. "The potential payoff is enormous."
A key mission of MIRTHE is to help ensure a competitive U.S. workforce by educating students who carry forward the center's knowledge to industry, government, and academia.
"Collaborations that transcend individual departments and institutions are the wave of the future," said H. Vincent Poor, the incoming dean of Princeton’s School of Engineering and Applied Science. "Bringing together people of diverse expertise to work on important and very complex problems creates a highly effective environment for research."
This is all about innovation for the sake of making a better product or helping industry move forward. A naive concept? Maybe. In a world where organizations have scaled back to bare bones and finding time to initiate any type of creative thought is a joke, partnering to find a quality solution is the only way to go.
What do you think? Talk to me.