No Ad, just a little commentary......

We build things certain ways, OK, we build things MY way......I come from a varied background and have had several distinctly different chapters in my life but the one thing that stands out through it all is, there is ALWAYS room for improvement and you can ALWAYS do better. We strive to do things better everyday and when jobs are going to other countries because someone can do something for less you need to stand back and think, what can I personally do to stop that from happening.

Think Quality in everything you do, don't ever stop at just good enough. Don't buy the junk sold in the big box stores, pay a little more for something made better and made to last. And when you buy something and they offer an extended wharantee ask them what happened to companies being proud of what they made, back when you didn't need an extended wharantee?

This country is facing the biggest problem it has ever faced in offshore competition and you do not want to be batting for the other side, buy American made products, made by people just like you! Keep the manufacturing base we have, when it is gone do you think Chinas products will still be inexpensive? I don't care who's Diff Cover you buy, just buy one made in the US! All of our jobs will ultimately depend on it.......And if you don't like what I say you need to step back and think on it......

4x4 is just about as American as you can get, lets keep it that way.

atriot:

i second that

X 3 million!!!!!

agreed!

damn extreme capitalism!

It's only getting worse.....

Today I got word that steel is going up 14% tommorrow so I started looking a little deeper and based on commodities futures prices it looks like another 9% in June.

At some point very soon our government needs to decide its time to do something to keep all American factories from closing their doors, how would we deal with 20 million suddenly unemployed factory workers due the the high cost of raw materials, prices that are artificially high due to the Chinese demand on our supply. A limit should be imposed or they will simplly win the war economically.......$250 a ton for scrap steel today, it will be $280 tommorrow......just for scrap.

Sounds like copper - it won't hold still either. Since I make cables, I have to keep an eye on it.

I do agree - we should stop this trade imbalance with the Pacific Rim. Cheaper ain't always better, and we're only hurting ourselves.

For the quality bit, it's a simple rule: "Good enough, isn't." Not for me, anyhow. I'm just one guy working out of his garage, but you get the best I can make - and I'm always looking for ways I can improve upon what I'm making.

I'm glad to hear I'm not the only one who thinks that way.

Jon

Way to go fellas!
You helped memake my decision on motor mounts and header!
I have to say it is hard though to not want to buy foreign, but every little bit we do, we slowly take away our future.
"God Bless America"......that is a prayer not just a saying!

Gravel Maker said:

It's only getting worse.....

Today I got word that steel is going up 14% tommorrow so I started looking a little deeper and based on commodities futures prices it looks like another 9% in June.

At some point very soon our government needs to decide its time to do something to keep all American factories from closing their doors, how would we deal with 20 million suddenly unemployed factory workers due the the high cost of raw materials, prices that are artificially high due to the Chinese demand on our supply. A limit should be imposed or they will simplly win the war economically.......$250 a ton for scrap steel today, it will be $280 tommorrow......just for scrap.

Click to expand...

Today?

I was working on Q2 contracts in February and saw the writing on the wall. Distributors were sweating mill contracts even earlier. 14%? that's gotta be for non prime. More like a minimum of a 40% increase, staggered, thru Q2 (July) from the major distributors.

Let me qualify where I see this from. I own and operate a precision metal manufacturing operation. 90% precision sheetmetal. My average ferrous non CRES sheet thruput per week is around 36,0000 pounds. This is just the steel sheet. While not a big league user, it does place us in the top ten customers in SoCal at distributors such as Mac/Ferro, Douglas, and Reliance, the biggest suppliers in the western region. It does give me some leverage on pricing, and, I confirm with other users and buyers on the inside track, so I know I'm paying close to what the big boys pay.

This quarter, as of today, distributors are no longer taking quarterlies. Best you'll get is a 4 week window, with no guarantee on availability. All of the distributors went on allocation from the mills this quarter.

Why is this happening? Commodities yes, but why?

Well, a history lesson: What are the very first 2 things Bush did when first elected? Look it up. Tax cut in the top 10% tier, and steel tariffs.

More history. In 1996 I worked for Trend Technologies. #3 largest domestic precision sheetmetal and plastics contract manufacturer at the time. Prime steel was 18 cents a pound. The major distributors were brokering steel from mills all over the world. We'd see steel from South Africa, South Korea, Isreal, Japan, and China, along with domestic supply. This was the reality for as long as I've been involved in manufacturing at a level that had me aware of supply, at least back to 1985.

I started out on my own in early 2000. Before I left Trend in 2000, the "scare" had already started. It was a well known thing that probably one of the first things Bush would do when elected is step in on the steel market. Based on that, both domestic and foreign mills started to jack up pricing, but, it wasn't by much. If I remember right, by the beginning of Q2, 2000, steel was up to 26 cents.

If you were stamping, the shit hit the fan. A 1 cent cost basis increase meant big trouble for a dometic manufacturer, especially if you were in the electronic supply chain (ESM) or automotive. The electronics guys figured it out, and fast. If it wasn't out of the country already, get it there now. Cushion in labor and facilities expenses took up the slack. I think it took Trend 4 months to buy up, and establish in Shanghi, we were already in Guadalajara, Singapore/Malasiya and a few other places.

The automotive guys had 2 options, suck it up, and as borne out, eventually lose, or get out. One of the very last tasks I had before leaving Trend to go on my own, was to drop kick NUMMI PO's, transfer equipment back to Johnson Controls, and close up shop in Hayward. In Chicago, we did the same thing with ISCARA, but didn't have to close the facility.

So I started buying my own steel mid 2000. It went at a steady pace along the 26 cent line to just after election, 28-29 cents. Tariffs hit. The very next day domestic mills slapped allocations and surcharges on the distributors. Anything of volume that was being manufactured here domestically, fled overseas over the next quarter. The automotive guys went in the tank, although it was amost 4 years before they started declaring bankruptcy... Remember those headlines? So by Q2 of 2001 all the remaining foreign supply was exhausted domestically, the domestic mills had shrank the supply, and I was paying 37 cents a pound, and passing on the delays to my customers. Some weeks, we only got a fraction of what I had scheduled. Wanna take about a bite out of already strained cash flow...

So what happened to all that overseas material? It went to China, because now they were the only real market. The Bush tariffs guaranteed the domestic mills a closed market they could manipulate at will. And they did. Still do. Supply got better over the last 7 years, but pricing has stayed right below the break out point for overseas mills. Last quarter, I paid on average 39 cents a pound. Corrected value in China is around 28 cents. Without tariffs, that's what we'd be paying, or less without.

So now we get to Feb this year. All my reps are saying, here we go again, but it looks like this: Bush is out. It's possible we may have a democrat administration in place, and playing butt smeller with the top 10% is not what they are known for, nor is protection for the obviously favored segments of known greed producers. The mills are gonna get while the gettings good. Back to allocations, and steep surcharges. Hey, the party may be over in November...

Look at Chinese supply. It has nothing of real consequence to do with the domestic market. Why would the domestic mills sell to China at 28 cents when they can gouge in their own Bush created bubble here? Also, China is a net exporter of low end steels, hell they even dump in the US market at a major net loss.

Scrap? That's not controlled by the mills, it is it's own industry, one that does have China as a market, and China pays good for it.

I sometimes see guys looking for pricing on tube, I saw someone a few weeks ago say the were getting DOM at 2 bucks and change a foot for like inch an a half. Chinese tube. Step right up. It sure the hell didn't have a POSCO stamp or any domestic mill on it. It could have been a retailer that screwed up, but I see it pretty often for that. I also see some 4x4 builders saying the get tube down in those prices.

What I know is that for my customers, I usually have to supply material certs. Domestic quality DOM tube does not cost 2 bucks a foot, not even at my price, not even close.

In the war against China, we are our own worst enemy. The Walmart mentality is what the comsumer has demanded here. Unfortunately from my experiences in the 4x4 market, it is at its worst. Not only is there the cheapest buy contest going on, but folks would happily buy stuff at below value from some guy in a garage that has no concept or care in the world about fair market pricing, sustainability, or being in business. They may think they are in business, but they are not.

--ron

Thanks for your insight Ron, I am not a garage company but I am definately not at your level......

The Walmart mentality is the prime reason I do not sell other companies products, there is always someone that will lose money on things and tell themselves they are making money......Customers don't get support because if the seller has 1 problem they lose money.

The cost increases I have seen this year were 28% YTD on 3/8" plate with 14% additionally this morning and the looming June increases, over the last 2 1/2 years I don't even want to think about it.......

What I am seeing is a net result future that may see some real change come January but I am afraid many large businesses will not be able to retain market share until that point. Short-term price increases may drive away too many customers, further eroding their chances of survival.

The problem with all the steel coming back /out/ of China is that most of it isn't worth a bent dick. They still haven't gotten the hang of heat-treat - unless it's on major stuff.

That's why the HF press I'd gotten years ago - while thicker and actually heavier than the OTC I ended up getting - /bent/.

That's why I've had Chinese jacks fail outright, while a 40-year-old jack (made in Japan, actually. Got it at a yard sale) keeps kicking.

I prefer to not buy from overseas where possible. If I do, I have some countries that I /will/ buy from (usually if I can't find anything useful for the application made here, or I just don't have a choice,) and countries I will /not/. China is invariably on the "Do Not Buy" list - as I said, just about all their stuff isn't worth the cardboard they pack it in (and even their cardboard sucks.) It's less to do with "human rights issues" or anything like that - two simple reasons. 1) Their stuff blows. Period. 2) It's not doing our economy any good for me to buy it. Put those in any order you like (they're actually equally important to me.)

That's why I drive a 20-year-old truck - because it was made (mostly) in Ohio, some parts in New Jersey, and I've built the rest with me own two hands. It's just getting harder to find Made in USA parts anymore...

Gravel Maker said:

The cost increases I have seen this year were 28% YTD on 3/8" plate with 14% additionally this morning and the looming June increases, over the last 2 1/2 years I don't even want to think about it.......

Click to expand...

maybe its time to make diff covers out of 1/4" instead of 3/8"...

though something tells me that the average jeeper that envys the guys with 3/8" frame plates and laughs at my 12gauge plating sections wouldnt buy the 1/4" ones for fear of it not being strong enough...

my 1/4" guard has held up to more than enough punishment... hell, my 10ga rear housing plateing is working out just fine... and im not 'easy' on my rig - nor do I know how to drive :rof:

Great read, thanks for your time to post. Not that my business revolves around steel prices but still a very informative post!

Captain Ron said:

Today?

I was working on Q2 contracts in February and saw the writing on the wall. Distributors were sweating mill contracts even earlier. 14%? that's gotta be for non prime. More like a minimum of a 40% increase, staggered, thru Q2 (July) from the major distributors.

Let me qualify where I see this from. I own and operate a precision metal manufacturing operation. 90% precision sheetmetal. My average ferrous non CRES sheet thruput per week is around 36,0000 pounds. This is just the steel sheet. While not a big league user, it does place us in the top ten customers in SoCal at distributors such as Mac/Ferro, Douglas, and Reliance, the biggest suppliers in the western region. It does give me some leverage on pricing, and, I confirm with other users and buyers on the inside track, so I know I'm paying close to what the big boys pay.

This quarter, as of today, distributors are no longer taking quarterlies. Best you'll get is a 4 week window, with no guarantee on availability. All of the distributors went on allocation from the mills this quarter.

Why is this happening? Commodities yes, but why?

Well, a history lesson: What are the very first 2 things Bush did when first elected? Look it up. Tax cut in the top 10% tier, and steel tariffs.

More history. In 1996 I worked for Trend Technologies. #3 largest domestic precision sheetmetal and plastics contract manufacturer at the time. Prime steel was 18 cents a pound. The major distributors were brokering steel from mills all over the world. We'd see steel from South Africa, South Korea, Isreal, Japan, and China, along with domestic supply. This was the reality for as long as I've been involved in manufacturing at a level that had me aware of supply, at least back to 1985.

I started out on my own in early 2000. Before I left Trend in 2000, the "scare" had already started. It was a well known thing that probably one of the first things Bush would do when elected is step in on the steel market. Based on that, both domestic and foreign mills started to jack up pricing, but, it wasn't by much. If I remember right, by the beginning of Q2, 2000, steel was up to 26 cents.

If you were stamping, the shit hit the fan. A 1 cent cost basis increase meant big trouble for a dometic manufacturer, especially if you were in the electronic supply chain (ESM) or automotive. The electronics guys figured it out, and fast. If it wasn't out of the country already, get it there now. Cushion in labor and facilities expenses took up the slack. I think it took Trend 4 months to buy up, and establish in Shanghi, we were already in Guadalajara, Singapore/Malasiya and a few other places.

The automotive guys had 2 options, suck it up, and as borne out, eventually lose, or get out. One of the very last tasks I had before leaving Trend to go on my own, was to drop kick NUMMI PO's, transfer equipment back to Johnson Controls, and close up shop in Hayward. In Chicago, we did the same thing with ISCARA, but didn't have to close the facility.

So I started buying my own steel mid 2000. It went at a steady pace along the 26 cent line to just after election, 28-29 cents. Tariffs hit. The very next day domestic mills slapped allocations and surcharges on the distributors. Anything of volume that was being manufactured here domestically, fled overseas over the next quarter. The automotive guys went in the tank, although it was amost 4 years before they started declaring bankruptcy... Remember those headlines? So by Q2 of 2001 all the remaining foreign supply was exhausted domestically, the domestic mills had shrank the supply, and I was paying 37 cents a pound, and passing on the delays to my customers. Some weeks, we only got a fraction of what I had scheduled. Wanna take about a bite out of already strained cash flow...

So what happened to all that overseas material? It went to China, because now they were the only real market. The Bush tariffs guaranteed the domestic mills a closed market they could manipulate at will. And they did. Still do. Supply got better over the last 7 years, but pricing has stayed right below the break out point for overseas mills. Last quarter, I paid on average 39 cents a pound. Corrected value in China is around 28 cents. Without tariffs, that's what we'd be paying, or less without.

So now we get to Feb this year. All my reps are saying, here we go again, but it looks like this: Bush is out. It's possible we may have a democrat administration in place, and playing butt smeller with the top 10% is not what they are known for, nor is protection for the obviously favored segments of known greed producers. The mills are gonna get while the gettings good. Back to allocations, and steep surcharges. Hey, the party may be over in November...

Look at Chinese supply. It has nothing of real consequence to do with the domestic market. Why would the domestic mills sell to China at 28 cents when they can gouge in their own Bush created bubble here? Also, China is a net exporter of low end steels, hell they even dump in the US market at a major net loss.

Scrap? That's not controlled by the mills, it is it's own industry, one that does have China as a market, and China pays good for it.

I sometimes see guys looking for pricing on tube, I saw someone a few weeks ago say the were getting DOM at 2 bucks and change a foot for like inch an a half. Chinese tube. Step right up. It sure the hell didn't have a POSCO stamp or any domestic mill on it. It could have been a retailer that screwed up, but I see it pretty often for that. I also see some 4x4 builders saying the get tube down in those prices.

What I know is that for my customers, I usually have to supply material certs. Domestic quality DOM tube does not cost 2 bucks a foot, not even at my price, not even close.

In the war against China, we are our own worst enemy. The Walmart mentality is what the comsumer has demanded here. Unfortunately from my experiences in the 4x4 market, it is at its worst. Not only is there the cheapest buy contest going on, but folks would happily buy stuff at below value from some guy in a garage that has no concept or care in the world about fair market pricing, sustainability, or being in business. They may think they are in business, but they are not.

--ron

Click to expand...

Being a small manufacturer I can relate to what both Dan and Ron are saying. Some days your on the edge of failure. Keeping strong and providing the service level is the key. Trying to provide good quality products built in America with American man power from American materials isn't easy by any means. Especially when theres somone around the corner ready to take your ideas and ship it off to China to be built.. I'm sure Both Ron and Dan both have experienced this situation and can appreciate the hard work it takes to keep business running in America..

Be Proud Buy USA!
Dave
480-288-4213

http://www.financialweek.com/apps/pbcs.dll/article?AID=/20080609/REG/806090303

Two distributors on the West Coast canceled all existing contracts last week. The Mills are selling all existing contracts on the commodities market now.

Investors (read that as the large financial institutions...) now fully control the price of domestic steel, just like oil.

When a customer like GM loses control of the supply chain at this magnitude, it says something, and GM is damn close to being on it's last legs.

--ron

PS: Don't believe everything you read in that article.

Captain Ron said:

http://www.financialweek.com/apps/pbcs.dll/article?AID=/20080609/REG/806090303

Two distributors on the West Coast canceled all existing contracts last week. The Mills are selling all existing contracts on the commodities market now.

Investors (read that as the large financial institutions...) now fully control the price of domestic steel, just like oil.

When a customer like GM loses control of the supply chain at this magnitude, it says something, and GM is damn close to being on it's last legs.

--ron

PS: Don't believe everything you read in that article.

Click to expand...

That blows.........

Thats the reality of it........

We saw only 9% increase in steel prices in June but July got back on the bandwagon with 11%........


Our Government is ignorring the calls for help and watching the entire American manufacturing base fall by the wayside.....We are at the mercy of the world when we can no longer produce for ourselves.

Dan Fredrickson said:

It's only getting worse.....

Today I got word that steel is going up 14% tommorrow so I started looking a little deeper and based on commodities futures prices it looks like another 9% in June.

At some point very soon our government needs to decide its time to do something to keep all American factories from closing their doors, how would we deal with 20 million suddenly unemployed factory workers due the the high cost of raw materials, prices that are artificially high due to the Chinese demand on our supply. A limit should be imposed or they will simplly win the war economically........

Click to expand...

***Welcome to 'globalization', gents......and, make NO mistake: Your political 'leaders' have, with very few exceptions, sold this nation right down the proverbial toilet.

A dirty little secret, having considerable impact on prices of everything from oil/fuels, food, to all commodities...is, that you have a 'fiat' currency, losing value at a terminal-kill rate. Thus, sellers of commodities need ever-more dollars to realize the same compensation for their goods.

- 'Round about 1972, Mr. Nixon ended the until-then-legal policy of
exchanging a 'dollar' for an ounce of gold. Of course, this was only for
foreigners, and they were exchangin' them at a fast 'n furious pace. The
US holdings were rapidly diminishing, and the policy was abruptly ended.

To replace that foundation/backing, Zbigniew Brzezinski came up with the
scheme to have the middle-east oil producing nations...at least, those
under the control of the West who created the industry there, and some of
the nations involved, such as Kuwait...take a regular and periodic portion
of the dollars they were receiving for their oil, and purchase US treasuries.
That began, in-earnest, your 'dependence on foreign oil'....and put us in a
damned-if-you-do,damned-if-you-don't conundrum, where, if that
arrangement is ended, your dollar tanks and, if you don't, you remain
dependent.
*For further insights into oil, check out:

http://www.youtube.com/watch?v=NbakN7SLdbk (Part 1, of 8)

http://www.youtube.com/watch?v=fgc4S-9fttM&feature=related
( Rep. Ron Paul )


Further: The Bretton Woods accord, 1948, at the Mt. Washington Hotel in NH,
made the USD the global currency, and it also became the global
'petrocurrency', whereby all transactions between any entity were
to be denominated in Dollars, thus giving the USD some foundation
legitimacy. What you haven't been told: For a few years now, oil-
producing nations such as Russia, Iran, Iraq, Venezuela, Bolivia, etc.,
have been shifting over to demand Euros, NOT Dollars, for their oil.
Uh oh...can't have that. A few months ago, Iran finally did establish
their own oil trading 'bourse' / bureau, taking that monopoly away
from the boys in NY and London, and..........enabling them to require,
yes indeed, Euros in payment.

The so-called 'sub-prime' mortgage mess is just the proverbial tip-of-the-iceberg
re the economic state of this nation.

For further insights, please see:

http://video.google.com/videoplay?
docid=5355374476580235299&q=freedom+to+fascism&total=991&start=0&num=10&so=0&type=search&plindex=0

[The above is an excellent documentary by the late Aaron Russo, film
producer/director who did 'The Rose' with Bette Middler and 'Trading
Places' with Eddie Murphy. ]

and,

http://www.youtube.com/watch?v=k3VUsNPTAV0



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Lemme know when you're ready for the really disturbing stuff.....