2013 State of the Industry: Bill Isaac, MC Machinery Systems

Bill Isaac is the vice president of MC Machinery Systems, Inc., a wholly-owned subsidiary of Mitsubishi Corporation that imports, sells and supports electrical discharge machines, laser and waterjet cutting systems, press brakes and milling machines.

CURRENT STATE OF BUSINESS
The trajectory of the fabricating and metalworking market really is the million dollar question. Though nobody can definitively say what is going to happen, I personally feel the market is stable. We experienced a great first nine months this year in the fabricating market and then a bit of slowdown as of late.

Many of the mid-to-small businesses that make up so much of the manufacturing sector are getting their hands and heads around the new tax codes and healthcare decisions they’ll face going into 2013, and this has delayed some investment decisions – and for good reason. These companies need to have a very good understanding of how the new rules can impact and/or benefit their business.

I feel very strongly that there is a strong and committed focus on manufacturing. That is a good sign. We have all seen the importance of manufacturing and the strength and stability it can provide to our economy. From the studies and reports that I have seen in our industry, we are just returning to a normal business volume and we should expect good stable business for the next two years plus.

That does not mean the landscape isn’t changing. Construction and military business are weakening, while agriculture, power generation, and automotive continues to drive our business. Sheet metal work will continue to be the driver in the fabrication sector, particularly in 10 ga material or higher applications that lend themselves very nicely to laser cutting because of its speed and accuracy in thinner materials.

MAJOR TRENDS
Major trends in the industry include shop owners’ desires to move towards production workflow in their facilities. More shops are considering automation when looking at the laser process, and we continue to see fantastic sales numbers in regards to fully automated systems. This tells me that the newest technologies can now meet the specific and changing demands of fabricators through automated inventory and tracking of material usage, the ability to automatically deliver raw products to the machine and finished parts down the line for the next process.

On the other side, trends I see from machinery manufacturers are increased fiber laser resonator wattages, larger flying optic tables and increased programmer functionality in press brake applications. We continue to see a need for more online programming capability in the machines.

Meanwhile, machinery advancements – particularly in ease of use and ease of maintenance – have made technology more available to every fabricator. As recently as 25 years ago, you had to be a laser expert to keep a machine running how it needed to run to stay profitable. But today, with advancements in technology like crash detection, magnetic heads, auto focusing, lens detection and software with offline diagnostics, almost anyone with some training can not only run the machine, but maintain it.

This has allowed so many more shops to feel comfortable buying the technology. And once they have it, they are able to compete on a much higher level and make their business more profitable. So there are a lot of positives to point to. But there are challenges, too.

CRITICAL ISSUES
The main challenge I see facing our industry is the lack of a skilled labor force. In my travels throughout the country, I frequently hear about the need for workers in this industry. We as an industry really need to look at the past to help us pave for the future.

When I started in this industry in 1979, every customer had apprenticeship programs and ways to grow from within the shop. Those jobs were coveted. Now, as an owner, you can be in big trouble if you lose an experienced employee. I would like to see a commitment to teach skills that pertain to our industry, along with a stronger attempt to make people aware of the opportunities the manufacturing industry affords to have a solid career and make a good wage.

My second worry is the monetary exchange rate. If the dollar begins to get stronger, which everyone seems to think is likely, how will that impact our business from abroad? Will other countries still see the U.S. as an attractive place to manufacture?

Finally, government is a concern due to all of the uncertainty it is creating right now. We have already seen orders being pushed off or spread out due to lack of funds or expected increase in cost. What is our government willing to do to help manufacturing? Big capital equipment benefits from the Bush-era taxes expire Dec. 31, 2012. Will they be replaced?

We need our government to step forward and set a plan for our country and our industry so that it is clear to us what our options are and how best to proceed with business.

MC Machinery Systems, Inc., 1500 Michael Drive, Wood Dale, IL 60191, 630-860-4210, Fax: 630-616-4068, www.mitsubishi-world.com.