Ask Congress to Support Permanent Bonus Depreciation

 

During the week of July 7, the House of Representatives is expected to vote on a bill – H.R. 4718, sponsored by Rep. Pat Tiberi (R-OH) – that would restore and make permanent the 50 percent first year expensing provisions that have been in effect for the past several years (until they expired at the end of 2013). Allowing companies to write off half of the cost of their capital investments in the same year that the investment is made will go a long way towards ensuring that companies of all sizes can make the best business decisions for their specific business situation and not be paralyzed by constant on-again off-again pro-investment tax policies.

For example, let’s say that a manufacturer needed to invest a significant amount of their budget into the acquisition of some fixed assets (such as automated manufacturing equipment) in order to remain competitive with foreign competitors. H.R. 4718 would make it easier for such a company to make that investment so that they can stay competitive and continue to add new jobs.

In fact, that’s exactly the kind of investment our company, Marlin Steel, made when we acquired the automated manufacturing machines we use to precision engineer wire forms such as material handling and parts washing wire baskets. With this investment, we were able to open up new markets and grow jobs at a time when we were faced with the very real threat of extinction.

If passed, this resolution can help countless other small businesses make similar investments more readily, growing jobs and keeping American companies competitive.

Other Benefits of H.R. 4718

H.R. 4718 also allows companies that have Alternative Minimum Tax (AMT) credits to use those in lieu of taking the 50 percent first-year expensing. In the absence of comprehensive tax reform, manufacturers need critical pro-investment tax policies enacted permanently to allow them to plan for future investments based on business need and not on temporary tax policy.

Expensing is not just a matter of timing. By reducing the after-tax cost of investments, policies like H.R. 4718 allow manufacturers to stretch critical resources and make the investments they need to compete in today’s competitive global economy.

Capital investment is the key to economic growth, job creation and competitiveness. Pro-investment tax policies like this will allow manufacturers to better compete, invest and grow as well as helping to drive increased sales of capital equipment. Please contact your Member of Congress today and urge them to vote in favor of H.R. 4718 and support permanent 50 percent first year expensing.

Marlin Steel Featured in Robot Report

 

Marlin Steel RoboticsAs a publication that promotes the use of advanced robotics, The Robot Report’s online site often features businesses that make an impact in their industry through the use of top of the line robots.

Recently, our company was featured in an article on The Robot Report for the way in which we integrated advanced robotics into our manufacturing process to remain competitive with foreign manufacturers who traditionally held an advantage over U.S.-based manufacturers in terms of labor cost to output ratio.

See the article by Frank Tobe on The Robot Report’s website now.

2,000 Days of Safety and Counting at Marlin Steel

 

Marlin Steel Manufacturing SafetyRecently, we made a blog post about how workplace automation improved safety among manufacturers. In that post, we mentioned that thanks to the adoption of automated manufacturing techniques, we have gone more than 2,000 days without a safety incident on our factory floor.

Well, we’re proud to state that we’re still more than 2,030 days without an accident (and counting)!

We would like to take this opportunity to congratulate all of the people on our team who have diligently removed chances for accidents. Our team has an exceptional safety committee headed up by our Production Manager (Andy Croniser) and several key employees in maintenance and leaders in our sheet metal fabrication department and our custom wire basket department.

People ask how did you get such a long streak? Here are five approaches that have helped our safety success at Marlin:

  1. Empowered Safety Committee – they meet monthly and get what they want
  2. Creative Safety Committee – come up with outside of the box ideas to improve safety
  3. Inquisitive Safety Committee – They took tours to other phenomenal safe facilities (Acadia Doors and Windows in Baltimore County, MD) to cross pollinate and model some of their ideas.
  4. 80/20 – follow up with solutions the most likely problems that will cause future accidents.
  5. Embrace Suggestions – Marlin invited in OSHA (Thank You Allen Stump) and our worker’s compensation insurance company (Thank you CNA) for suggestions. They gave great ideas. We followed each idea and they made us better.

This safety committee has for years met monthly, grappled with near misses, promoted clever ideas to make a safe environment for their colleagues. They have shown tremendous tenacity – never giving up making a better and safer work environment.

Everyone at Marlin Steel is proud to be a part of the resurgence of American manufacturing. Through the use of innovative technologies combined with training and experience, our engineers are able to craft custom wire forms for all of your materials and parts handling needs.

To learn more about how automated manufacturing techniques have enabled more than half a decade of accident-free work, check out our blog post on the subject.

Vice President Joe Biden Meets with Marlin Steel and Discusses Manufacturing

 

Joe Biden and Marlin SteelVice President Joe Biden spoke with me and a roomful of US manufacturing leaders last week regarding his optimism about US Manufacturing. He stressed that the USA is the best place to build things because we have several attributes that differentiate us from the rest of the world:

1. Rule of Law
2. Respect Intellectual Property
3. Vast Energy reserves
4. Innovative Universities and Research colleges

He believes by embracing immigration reform we can help manufacturing because we will have a broader pool of labor we can hire that is legitimate.

When shaking my hand, he shared with me that his grandfather was in the steel fabrication business in Baltimore (like Marlin Steel) but they later moved to Pennsylvania. He thanked Marlin for growing jobs in the USA.

The president is right about some of the USA’s strong suits that make our nation great, however we can be better and faster growing. While visiting my Maryland Senator’s last week, Marlin Steel stressed that US Manufacturing has a 20% cost obstacle compared to our biggest economic competitors (like Germany and Canada). US factories are burdened with:

1. Higher taxes (40+% vs 15% in Canada)
2. More regulations
3. An out of control legal system

These costs make our manufacturers less likely to win jobs so we will not hire people and end the recession fast. The natural gas revolution is helping US Manufacturing, but it is being constrained. Approving the Keystone pipeline will help grow jobs in our nation.

Vice President Biden is right that we have strong suits, but let’s rollback these obstacles so we can hire more people.

How Marlin Steel Creates Your Perfect Parts Cleaning Basket

 

Marlin Steel Parts Washing BasketsAs a company, Marlin Steel is famous for its material handling and washing baskets for sensitive parts. Back in the day, Marlin Steel was most well-known for the manufacture of commodity bagel baskets for bakeries to use in the display of their bagels. Much has changed in the intervening years, to say the least.

Now, thanks to heavy investments in advanced robotics and employee improvement, Marlin Steel has the equipment and the expertise needed to craft custom wire forms for innumerable applications.

Traditionally, the biggest challenge in building a parts washing basket is getting a complete grasp of the application for which the basket will be used. It is very important to ask the right questions before attempting to manufacture the basket. By asking the right questions, it is possible to minimize costs, number of design iterations and the time it takes to go from initial design bid to finished product.

Learning to ask the right questions is more than a matter of training, it is a matter of real-world experience and knowledge. Marlin Steel’s engineers have successfully designed countless wire forms for use with a large variety of products, including:

  • Air foils.
  • Pump housings.
  • Valves.
  • Nuts & bolts.
  • Automotive parts.
  • Dental implants.
  • Firearms.

The above are just a few examples of the types of parts that Marlin Steel engineers have designed baskets for over the years. Thanks to their years of experience in designing baskets for all sorts of uses, Marlin’s engineers know just what questions to ask before they start building a basket.

Design Considerations: the Frame

Once the engineer has a complete picture of what the basket will be used for and the types of chemicals and temperatures it will be exposed to, he or she will set to work designing the frame of the basket. While there are innumerable different factors that will affect the design of the basket, such as the dimensions of the object to be held and the nature of the parts washing process, there are a few things which are fairly constant in a well-designed basket.

For example, most Marlin Steel baskets use a diamond-shaped base to reinforce the bottom of the wire mesh basket. This diamond pattern not only helps the wire mesh retain its proper shape when fully loaded, it also helps to prevent the basket from becoming stuck on conveyor belt systems. A square shaped bottom can snag very easily on a flat, wide transitioning surface. The diamond shape minimizes the point of contact between the edge of the conveyor belt and the basket, greatly reducing the chances that it will be caught on the edge of the conveyor.

The specific grade of stainless steel used for the frame, and any coatings that will be applied to it, will be determined largely by the needs of the part and the cleaning process. In washing operations that employ water, alcohol or detergent-based cleaning solutions, grade 304 stainless steel is usually the best material. However, for corrosive chemical bath processes that would eat 304 stainless, grade 316 stainless steel is better. Without knowing the washing process before designing the basket, something as basic as choosing the right alloy for the basket is impossible.

The Lid

The design of the lid for the basket should receive the same consideration and care that the design of the basket’s frame receives. For many parts washing processes, the lid is what keeps the small, delicate parts being washed from becoming lost or even damaged in the parts washing machine.

When a basket is being designed with a lid, it is vital that the lid is sturdy enough to not open accidentally during the wash cycle, but can be opened without difficulty when not in use. Once again, knowing the specific details of the washing process and of the parts being washed is invaluable to creating the perfect lid. In some processes, a simple shoebox-type lid that wraps the edges will work fine, while other processes might require a more secure latch to prevent the lid from coming open while the basket is being rotated or submerged.

The Wire Mesh

A parts washing basket would be fairy useless if the cleaning solution couldn’t reach the part to be washed inside the basket. Because of this, the open area of the mesh (the space between the wires) is definitely something that needs to be taken into consideration.

The open area of a wire form basket can vary by quite a bit, anywhere from 20 to 80 percent of the total area of the mesh surface. At 20 percent open space, the openings between wires are usually narrower than the wires themselves. At 80 percent open space, the openings are very large, allowing for most cleaning solutions to flow freely through the mesh: however, the thinner wires won’t be as durable and long-lasting.

To achieve the optimum balance of durability and flow, Marlin Steel’s engineers aim for an open area of around 50 percent in their wire form designs. At 50 percent open area, the wires themselves are thick enough to withstand repeated wash cycles, while being open enough to allow most fluid and aerosol cleaning solutions to reach parts easily.

One important caveat for designing a wire mesh basket is that the frame, as well as any other additional parts such as latches and hinges, take up some of the open area on a basket. As a result, the open area of a wire mesh basket that was designed to be 50 percent might actually be 40 percent if you take these space-consuming structural elements into account.

By taking into account the dimensions of the part to be washed and the nature of the washing process, Marlin’s engineers can design the right basket for the job quickly and easily.

The Skilled Labor Shortage in the Manufacturing Industry

 

Marling Steel on Manufacturing IndustryOver the last decade and a half, the manufacturing industry has been subjected to a great many changes and outright upheavals. From riding high through an economic bubble to struggling through the economic challenges brought on by the popping of said bubble, the manufacturing industry as a whole has struggled to adapt to the ever-changing market.

However, a new challenge is looming on the horizon for manufacturing companies all over the country: a significant shortage of skilled labor to perform manufacturing jobs. According to a survey cited by the McKinsey Global Institute, of more than 2,000 U.S. companies surveyed, 43 percent of manufacturing companies had critical positions go unfilled for more than six months at a time.

The trend of having positions that are critical to a manufacturing company’s very survival going unfilled is expected to get much worse before it gets better. Why? Because, of the current pool of skilled manufacturing industry workers, many are close to retirement age. Every time a company loses a skilled worker to retirement, they lose all of that workers accumulated knowledge and experience as well.

While the old workforce is leaving the industry, there just aren’t enough new recruits coming in to cover these losses. Part of the problem is with the perception that younger workers have of the manufacturing industry. According to an FMA (Fabricators & Manufacturers Association) study, 52 percent of teenagers indicated little to no interest in a manufacturing career. When asked why they weren’t interested in manufacturing, the majority said that it was because they were seeking “a professional career.” For these young people, manufacturing doesn’t even count as a career option.

Working to Encourage America’s Youth to Manufacture

Now that this problem of a skilled labor shortage has been identified, how can the manufacturing industry as a whole work to overcome this issue?

The most obvious way of dealing with this challenge is to step up recruitment efforts, to draw the best talents that are graduating from school to your company and deny these invaluable resources to competitors by getting them first. However, this solution is short-sighted at best, as there aren’t enough qualified people entering the workforce to go around, period. Relying on getting to a potential recruit before anyone else can is problematic.

Instead of trying to snap up what few potential recruits there are, it may be better to promote a more thorough understanding of how the manufacturing industry works in a developed industry. Much of the current perception of manufacturing jobs is taken from tales of overseas sweat shops and horror stories from the start of the industrial era.

The best weapon against ignorance of the viability and importance of manufacturing is knowledge. When young minds think of what it’s like to work in a big factory, they need to have real-world knowledge and experience from a real, on-site tour of a modern manufacturing plant, not just pictures from a book about a 1920’s textile factory.

The misconception that all manufacturing-related jobs involve back-breaking or repetitive work needs to be addressed. Potential recruits need to know what kind of skilled jobs are needed by the manufacturing industry and what each job really entails. For example, many manufacturing jobs require a working knowledge of how to program and repair robotics. Such work is highly skilled and may require certifications in software programming and mechanical engineering.

Manufacturing is no longer the work of an unskilled labor force that just bends wire around a post over and over for hours on end. It is the foundation of a strong economy and a rewarding career path for those with the drive to continually master exciting new skills and technology.

How Marlin Steel Filled Skilled Jobs

Another way to fill needed skilled jobs is to create incentives for your existing workers to learn new job skills to increase operational redundancy and build up your company from within.

Not long ago, Marlin Steel was featured in the pages of FABRICATOR Magazine for the way in which employees were encouraged to take additional training and certifications. By doing this, Marlin Steel was able to fill many critical roles using existing employees.

Taking the time and effort to nurture existing workers can prove to be a great way to not only fill skill gaps, but to demonstrate that any manufacturing job is not the “dead end” job many people who are considering their careers may think.

With some effort and education, we can show the youth of this country that manufacturing jobs are a viable career path, and maybe even stave off the shortage of skilled labor that is being projected by many.

A Manufacturers’ Perspective: What Marlin Steel suggested to Federal Reserve Chairwoman Janet Yellen On Monetary Policy

 

I had the honor to meet Federal Reserve Chairwoman Janet Yellen and several manufacturing leaders to discuss manufacturers’ perspective on the state of the economy. Several manufacturers stressed there was an improved degree of optimism and some new-found confidence because Washington seemed less dysfunctional (no Government shut downs looming, etc), however everyone was concerned with  the negative GDP growth in the first quarter.

Marlin Steel and Janet Yellen

Was this decline indicative of a loss of momentum or was it a nasty winter that depressed activity, activity that will bounce back in the second quarter?

The general theme was that housing is a concern and the world is becoming increasingly globally competitive.

One consistent theme was that stronger USA factories were exporting, but Europe remained a weak market (this is the same week that Europe announced Negative Interest Rates as a way to jump-start their economies!)

Marlin Steel’s Suggestions on Monetary Policy

I shared with the Chairwoman that Marlin Steel makes wire baskets for industry (Automotive, Aerospace, Pharmaceutical, Medical and Industrial powerhouses) and our material handling baskets are used to clean parts for clients like Toyota and Caterpillar, so we are exposed to a broad cross section of the US economy.  I suggested two ways to get the economy firing on all cylinders:

First, cut taxes because most factories were at competitive disadvantage with formidable economic rivals (Germany and Canada, especially) because our companies pay more taxes. As a result, we are losing jobs that Germans are winning and this means fewer jobs in the US. These are crucial jobs we need now to reduce unemployment.

Secondly, I said we should RAISE interest rates because this will be a psychological boost for the economy. Our country is on such sound footing now that we do not need the economic crutch coming from the Federal Reserve any more. In addition, our county is seeing some bubbles form (junk bond market) and that is an ominous sign. Lastly, raising interest rates will get consumers and business people off the sidelines and start borrowing money now to buy things that will improve their business and grow the economy. In our case, we bought the biggest robot in company history this week to capture the historically low rates (we received a financing deal for 10-year money @4.97%!) That is too good to stay valid; low interest rates mean a low hurdle for new investments, so poorly-thought-out ventures get funded.

I insisted to the Chairwoman that she should provide the  profound psychological mind shift we need – it’s time to get moving. The economy is rolling again and it is time to get off the sidelines. Raising interest rates will embolden business people to act – which is what our job seekers desperately need. It will provide the needed confidence we have turned the corner. Gentlemen and ladies, start your engines.

Response to Marlin Steel’s Manufacturer Perspective

The Chairwoman listened intensely but challenged me when she said that when we revised rates recently, it hurt the housing market. She believes that interest rate increases are off the table if unemployment is equal to 6.5%.

It was refreshing to see Federal Reserve leadership engaging with manufacturing leadership to understand the trends in the market and pulsing people in the trenches to get a feeling of the future growth trends from job creators.