President letter to ESF September 09
Jean masselin / Michel guillemet / Catherine LARROQUE
Conjonctural elements our activity sector (springmanufacturers) :
The year 2009 has been extremely difficult for the springmakers, and more generally in subcontracting industry.
Without taking into account the bankrupt of a few companies, we can notice a decrease of activity equivalent to 28% less than last year (in terms of turnover).
Perspectives (on the side of companies) :
– Large uncertainty for the next months
– Activity should increase slightly to stabilize at -25%
– Large problem of cash flow increasing each month
– Slight uptake since August 2009 (notably in the automotive sector, probably due to renewal of stock)
– Significant number of voluntary liquidations in the industry: reorganization of the industry sub-contracting.
Urgent Measures taken by the companies
– Suppression of short time employees, anticipation of holidays
– Reduction of working hours (4 days a week)
– Economical lay-offs
– Training course programs
– Reduction of production activity (closing of production sites)
– setting up of maintenance
– Storage reduction by 30%
– Reduction of external fees
– Actions aimed at rising productivity in the mid term
– Study of 2010 turnover forecasts so as to think about possible industrial restructuring of units
– General decrease of margins in order to win business against competitors
– Decrease of turnover for similar work load in the industrial unit
Up to now, and considering the different client markets, the companies of our activity sector notice the following economical tendancies :
-automotive industry : light recover of activity since july, due probably to the recover of the level of stocks.
-Rail industry : correct level of activity but high pressure on prices
-Energy : nuclear sector is still dynamic, which is less the case of electrical, oil and gaz sectors which are decreasing.
-Equipment goods (cranes for building industry, handling equipment,..) are the most concerned by the decrease that can reach up to 70%.
-Aeronautic starts an actual decrease, which was not the case up to now.
Visibility on market and working charge of companies at short term is uncertain :
– concerning hot formed springs, companies register work for two months term.
– Concerning little springs, visibility is restricted (very short term, ie. 2 or 3 weeks in the best hypothesis)
Orders are given by case to case by big clients, which is very difficult to manage for our companies, that are not in a position for the time being to dimension their production means.
Steel suppliers have also adapted their activity considering the decrease of orders. They also organised a reduction of working hours and stopped their continue castings.
Thus, springmanufacturers notice today problems in delivery delays.
SNFR and its Federation encourage French government to propose:
– Better access for companies to liquidities so as to finance their treasury and working capital
– More profitable conditions for access to credit inter-entreprises
The law on modernization of Economy has been voted, with a reduction of payment delays from 90 days down to 60 days now. SNFR has updated its professional sales conditions (terms and conditions)
financing = a crucial problem
Creation of added value and innovation generates an increase in financing needs
Industry simultaneously confronted by :
– pressure of clients on prices (less margin for financing projects)
– Credit insurance companies and banks are cautious
News from SNFR:
– Increase of new members in SNFR with the growing interest of French spring manufacturer in the different training courses proposed by SNFR:
– One training courses in calculation of springs (engineer level). this course is ordered by SNFR on the base of a specific request and realized by IST in Paris.
– One training courses concerning raw materials used in spring activity, based on:
§ Knowledge of main steel families used in spring manufacturing,
§ Understanding of the different possibilities of strengthening and corresponding treatments that will enable adapted proprieties for the applications.
§ Discovering of the principal reasons of defective springs and actions to avoid them.
– Organization by SNFR of a technical congress on springs held on September 25th in Lyon, gathering around 65 participants. (springmakers, suppliers of steel and equipments). Next congress planned on September 2010 (place to be determined).
– technical cooperation with CETIM on different subject :
– after forming thermic treatment on springs
– surface treatment (elaboration on recommendation)
– ISO normalisation (participation at TC 227 working groups)
– Damage analysis