Industry Scuttlebutt

Just got back from the Precision Machining Technology Show (PMTS) in Columbus, Ohio, organized by the Precision Machined Products Association (PMPA). I collected a lot of scuttlebutt and impressions. I’ll share a few that bubble to the top for me.

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The PMPA is a small but surprisingly useful and effective trade organization. It has active members who share information and help out fellow members with valuable, hard won knowledge. The Columbus show has grown into a nice magnet for folks involved with machining. It is not an extravaganza like IMTS, but for the tens of thousands who attended, filling the 70,000 square feet of the downtown Columbus convention center, it made good economic sense. People were looking for little specks of knowledge to bring back to their factories gleaned from exhibitors, presentations and chance encounters in the aisles and hotel lobbies. If folks were open to the event they come back with those crucial tidbits of knowledge that cannot be found online or in courses, because “inside baseball” stuff in any field is derived from personal interaction. The question you would never think to ask comes up when guards are down at a show like Columbus.

It was remarkable the exhibition came off so well, with the PMPA professional leadership a mess for more than a year. I met Mike Duffin, who retired as the head of the organization after a decade of stewardship. He told me about the short stints of his two successors, the first one brought in from outside the group, the second a long-time employee. Both men had good credentials and legitimate track records. Unfortunately, they flunked out of the top job of the PMPA within months.

The group’s Board of Directors is probably a bit in shock after two bad picks in a row following long runs of previous heads. Miles Free and Monte Guitar, two long-time employees of the organization, have held things together, but they have to be getting a little worn out from the turmoil.

Mike Duffin appears happily retired and seems to have no desire to return. It seems like the PMPA is sorely in need of an outside search firm to vet a few legit candidates. An organization can run well only so long without an active, respected leader.

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Just before the show started, a big piece of news came out about the Pfiffner Group in Switzerland, which manufactures Hydromat rotary transfer machines. The company was sold to FFE Group of Taiwan, which owns Leadwell Machine Tools, Feeler, and several other Asian and European builders.

The scuttlebutt was that the banks, who had lent Pfiffner a lot of money through the years, were pressuring the company’s owner Karl Pfiffner to pay it back or sell the company. Karl Pfiffner may not have wanted to sell the firm that he had built, but the FFE deal was one he could not easily refuse.

The Taiwanese firm owns Witzig & Frank, which also makes big transfer machines, so it was familiar with the market. The relationship between Pfiffner and Hydromat has had its ups and downs through the years.

Bruno Schmitter, CEO and President of Hydromat Inc. in St. Louis, relies on Pfiffner to build a good portion of Hydromat components, but Hydromat in St.Louis has established its own engineering and rebuilding capability. The two companies need each other, as Hydromat is Pfiffner’s biggest customer, but their interests do not always converge. Pricing in Swiss Francs can be problematic with that currency so strong. The possibility of some of the manufacturing being done in Taiwan or elsewhere was being discussed by Hydromat users at PMTS, but nobody knows how FFE will run Pfiffner. It does appear likely that significant changes will be coming.

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There were a lot of metal companies at PMTS. There is definitely turmoil in the metals market, though the bar producers put on a good front that they are not discounting heavily. One thing is certain, the scrap market for steel and to a lesser degree, aluminum, has plummeted. The strong dollar, weakness in China’s manufacturing, the oil sell off, and reduction in drilling has really whacked the market. Warehouses are loaded with material, so they are not buying much. Scrap prices for heavy melting steel and cast iron are off 40% from a year ago. The value added producers of extrusions and tubular goods are trying to hold prices, but it seems to be a tough battle for them.

But they are not the only ones who are discounting. Most machine tool builders of lathes and mills are cutting prices to make a deal because they have slack built into their margins with the soft yen and euro. Haas has allegedly cut prices to compete. Business is generally good for machine tool buyers and sellers, but everybody is under pricing pressure in the cut throat world market.

Question: Do you belong to a trade organization? Why?