2014 International Manufacturing Technology Show

Last week’s International Manufacturing Technology Show (IMTS) in Chicago was fantastic. I’m always cautious about praising the economy, particularly the manufacturing economy, but I’ve got nothing but good things to say about the level of business activity. Don’t get me wrong, business is still hard. At the Horst Engineering Family of Companies and across our industry, costs are high and we have challenges of all types, but at least we have sales to support our effort to overcome these issues and make a profit.

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After years of recession and a tepid recovery, manufacturing is making a comeback. I’m proud to lead a 68 year-old family firm that makes stuff. Our core aerospace and defense business is driving our growth as a wave of new aircraft programs bolsters the industry. The resurgence in manufacturing, particularly USA manufacturing, is vital to the overall economy.

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The costs and challenges in the three states in which we operate (Connecticut, Massachusetts, and Sonora), and elsewhere include high taxes, high labor costs, high health insurance costs, high energy costs, stiff pricing competition, regulations, inflation, and a lack of skilled labor. These are not small issues to deal with, but its much easier to take on these headwinds when you have the benefit of business volume.

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I’ve been repeatedly asked, “How’s business?” I heard the question many times last week at IMTS. My standard answer has been to say that we have good business volume, but that we still face significant challenges and need to drive our own business performance if we are going to capitalize on the opportunities now and ahead. I just can’t be bullish anymore. I’ve seen what bad times look like and we are in a better situation today, but I won’t get too excited because work is work.

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The entire USA economy is growing slowly, but folks are looking for more improvement in the employment rate, but more importantly with wage rates. The subject of wage growth is a difficult one to debate. Real wages may not have grown much in recent years, but the cost to employ people is higher than ever. Health care costs, unemployment insurance costs, payroll taxes, and other benefits, suck up a large and growing portion of overall wage costs. Much of the compensation for today’s employees is indirect and does not go to the employee in the form of pay. For wage driven disposable income to meaningfully grow for middle class manufacturing workers, then our industry has to rein in costs, increase productivity, and strengthen our pricing like never before.

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At Horst Engineering, Thread Rolling Inc., and Sterling Machine, we say that we have a two-pronged approach to stay competitive:

1) Technology

2) Continuous Improvement

A lot of that technology was on display last week in Chicago at McCormick Place. The stats on this year’s show are impressive. There were 114.147 attendees and nearly 2,000 exhibitors from all over the world. The show is massive. The largest booths cost the exhibitors more than $10,000,000. The show is a huge investment for the machine tool, tooling, gaging, supply, software, service, and other vendors, but clearly, they get a return on investment.

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Like any marketplace, IMTS is fertile ground for deal-making, and that was evident. Optimism was the word of the day as vendors cited a “perfect storm” of activity. In addition to the aerospace market, other markets requiring advanced manufactured/high precision products are strong as well. Those include automotive, power generation, oil & gas, and medical. The resurgence of North American manufacturing and reshoring has benefited domestic companies.

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USA, Canadian, and Mexican businesses are some of the most productive in the world. That productivity is a direct result of the technology and continuous improvement (lean enterprise). In New England, we have some of the highest costs in the world, but we also have some of the highest skills in the world. Right now, having skills is an advantage. We need a next generation of skilled workers interested in manufacturing to emerge. That is critical.

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At least the buzz at IMTS helped renew the cry for skills. I saw a lot of youth in attendance, and if more youth could be exposed to IMTS type technology, then they too would be excited about careers in manufacturing. I was stoked to see the automation advancements and 3D printing along with the traditional processes that I know well. We depend on our people. They are our most important asset. We train and we will be training more, especially as we introduce new technology. We are constantly working to be more efficient. We intend to keep the momentum rolling, and with Manufacturing Day on 3 October, we have the opportunity to keep the promotion rolling.

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We are in investment mode at our businesses. Our customers are driving us to build new capabilities and increase capacity. Customers are the key ingredient, but success will only come if we can compete with the world. Business requires risk taking and no one will guarantee that business volume will continue to increase, but after 68 years, we have a track record of investments to lean on. Not all of our moves have paid off, but enough have for us to survive. After a trip to “the show” last week, I’m keen to make a few more moves and see how the game plays out.

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@thecubscouts #pinewoodderby never gets old. Pack 157 Bolton, Connecticut #cubscouts So that little injury caused by my @renocxnats crash on Saturday afternoon wasn’t so little after all. It’s a broken leg (fibula). Prognosis is good, but it hurts like heck. My blog post report with blow by blow details is linked in my profile. #cxnats #teamhorstsports @horsteng #crossspikes #crossisboss - - -

This #lifedeathcyclocross stuff is true!!!! I crashed out of the Singlespeed Championship @renocxnats (on the dreaded off-camber) but not before having more fun. @artroti43 raced on the frosty course ❄️ at day break. 🚴🏽 We met a lot more @horsteng #crossspikes customers. I hung with little bunny hopper 🐰 Miles, the Junior 11-12 year old Silver Medalist.🥈I cheered for Nic, who represented @the_ccap in the Junior 15-16 age group. @sportstert and Iva came down from Tahoe to cheer LOUDLY for me. 🎺 I got my badly sprained ankle taped and iced. I had a beer. 🍺 I’m even looking forward to my red eye flight home ✈️ . Best of all, I’ll see @trailrunningmom and the kids on Sunday. I can’t explain the sensation, but despite the pain, I’m ready for next #Cyclocross season to begin... after some rest. #teamhorstsports #cxnats #horstengineering @parkavebikeshop #crossisboss #lifedeathcyclocross #crossiscoming You could say that at least for this week, I’m married to my #bicycle - - -

@renocxnats #cxnats @seven_cycles #sevencycles #teamhorstsports #horstengineering #crossspikes @horsteng #chapelofthebells #Cyclocross #lifedeathcyclocross Good day representing @horsteng at @renocxnats in the 45-49 age group. It’s a great course. The wind was blowing hard, but the sun finally came out. I’m happy with 37th place but should have made a move to get to 29th, which was 30 seconds ahead. That’s a long way when you are going flat out and cramping. 4,500 foot elevation was a factor. I’m disappointed that they cut one lap of my race when I wasn’t close to getting lapped by the leaders. You train this hard and come all this way; and you want to get the most racing for the $ and time invested. They only let 25 riders do the full six laps. The only positive to come out of that was that I watched fellow New Englander @adammyerson execute a perfect final sprint to win the Stars and Stripes again. Teammate @artroti43 had a good ride too. 
@seven_cycles #sevencycles #horstengineering #teamhorstsports @bicycleseastct #crossspikes #cxnats #renocxnats #Cyclocross #crossisboss @therichardsachs didn’t have the race he hoped for but it was still great to see him @renocxnats and “pit” for him. He said he officially started his second off season, but first of 2018. @artroti43 and I played soigneur/mechanic for 90 minutes, but minus the massage! atmo #renocxnats #richardsachs #teamhorstsports @horsteng #crossspikes #hauteframebuilding #Cyclocross #crossisboss #lifedeathcyclocross I previously hadn’t published this image, but it recently received an Honorable Mention in the 2017 @appalachianmountainclub Photo Contest for the People Outdoors category. Check out my blog (link in profile) for the interesting story of his photo (shot with this iPhone 6s), a trip report from this amazing Maine adventure, and past contest history. I love this image of two of my favorite women. I’m barred from submitting images to the 2018 contest, but I’ll be back in 2019. #appalachianmountainclub #baxterstatepark #katahdin Congratulations to Master Park, the Park Family, and the entire team at Park’s U.S. #Taekwondo at the Grand Opening of the new facility in the former VFW building. Our kids love it! So much better than being next door to the pawn shop and liquor store.😊#tkd 🇺🇸🇰🇷 This morning, the @trinitycollege Main Quad was bathed in beautiful sunshine ☀️but it was frigid and the wind was blowing! ❄️ The chapel was packed with an overflow crowd to celebrate the (shortened) life of a lovely friend. She will be missed. #circleoflife 🌏

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