ESF SEMINAR 21st OCTOBER 2009 ATTENDEES

UKSMA Presidents Report for Stratford Upon Avon – October 2009

During 2009 the UK Government has continued to support Financial Institutions in an effort to ease the financial crisis. UK Bank of England Interest rates have been reduced to an historic low of just 0.5%, although banks have failed to pass on such rates to customers, and have often increased interest rates and reduced overdrafts to businesses. The actions of banks have served to make this recession worse for many companies.

UK inflation peaked at over 5% early in 2009, but has subsequently fell back to just under 2%. The growth in GDP has been stubbornly negative for the last several months, although some minor increases in house prices are starting to be noticed. UK unemployment has risen to nearly 2.5 million by July 2009 and looks set to rise to over 3 million in 2010, with 16 -24 year olds in particular being badly affected. It would appear that the UK will lag behind other European countries in emerging from the recession.

Unfortunately little support has been extended by the UK Government at a national level to Manufacturing Industry. There has been lots of talk and schemes proposed, but little help beyond a limited duration car scrappage scheme actually implemented. There has been no Central Government support for short time working etc to avoid redundancies as has been applied in most of Europe. (There has been some more localised regional support, particularly in Wales). LDV Vans have been allowed to go out of business by the Government, and financial support for Tata Jaguar Land Rover and Tata Corus has been discussed but has not yet been delivered. The recent purchase of GM Europe plants (Vauxhall in the UK, and Opel in Germany) by the Canadian car parts manufacturer Magna, which has been largely bankrolled by the German Government is viewed with trepidation in the UK. Magna have indicated that job losses are likely to be around 10,000 (around 35 – 40% of total European group employment). It is expected that a disproportionally large slice of those redundancies will be at Vauxhall, with plants in Germany being preserved as a result of German Government involvement in the deal, whilst the UK Government has provided only minimal support.

The UK will see a general election during May 2010, and with the current ruling Labour party having such a low level of popularity it is hard to see at present how they can hope to cling to power. At present opinion polls indicate by a considerable margin that the next UK Government will be a Conservative one.

So far the majority of UK spring makers seem to be weathering this situation as well as can be expected, with relatively few companies actually closing, although 10 – 30 % falls in revenue are quite common. Almost all companies have adapted to the new reduced levels of business by changing shift patterns, introducing short term working / pay cut measures, redundancies etc.

IST have recruited a number of new members during 2009, meaning that overall membership has increased slightly. These new recruits are largely from non European countries. A couple of IST’s testing areas have been particularly busy during 2009.

IST / UKSMA are hosting the next ESF seminar in Stratford Upon Avon, and the ISO TC227 workgroup meeting in Manchester during 2009.

Brian Edwards

UKSMA President

President letter to ESF   September 09

Jean masselin / Michel guillemet / Catherine LARROQUE

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).

– 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.

– 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

– 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.

– 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)

Creation of added value and innovation generates an increase in financing needs

– Credit insurance companies and banks are cautious

– 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 25^{th 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

Finnish Spring Association

President letter   period: February 2009 –September 2009

Matti Spolander  secretary of FSA

The volumes of spring production have continued to decrease. The market situation in the year 2009 is very challenging as the production volumes of the customer industries has decreased by approximately a third. The production volumes of spring manufacturers have decreased accordingly.

The material prices are on a significantly lower level than one year ago but some signs of higher material prices can be noticed. The availability of spring materials has remained on a reasonably good level.

In Finland the GNP is increased by 0,9 % in the year 2008. According to the recent forecast the GNP may decrease this year by 6,2 %. In the first quarter of 2009 the GNP was 7,6 % and in the second 9,4 % lower than in respective periods of 2008. The value of exports of technology industries increased last year by 1 %. On the first half of 2009 the exports value of technology industries decreased by 41 %. The exports of mechanical engineering decreased by 40 %, electronics and electrotechnical industry by 34 % and metals industry by 57 %.

Private consumption increased last year by 1,9 % according to the figures provided by the Research Institute of the Finnish Economy ETLA. They forecast a decrease of 4,0 % for this year. The total investments (machines, devices, buildings) increased last year by 0,3 % by ETLA’s statistics. For this year a decrease of 15,0 % is forecasted.

The turnover of technology industries increased in January-November by 5,1 %. The turnover of mechanical engineering companies increased by 11,1 % and of electronics and electrotechnical companies by 4,0 %. The turnover of technology industries dropped during the first half of 2009 by 28 %: mechanical engineering -20 %, electronics and electrotechnical industries -31 % and metals industry -57 %.

The number of employees in the companies within technology industry is expected to have increased last year by 1,2 %. For this year a decrease of 3,4 % is expected.

According to the order books survey of the Technology Industries of Finland, the companies in the sector in Finland obtained in April-June 39 % less new orders, measured in euros, than during the same period in 2008. The received new orders decreased in the mechanical engineering by 53 % and in electronics and electrotechnical industry by 30 % compared to the same period in the year 2008. The value of open orders in the technology industries at the end of June was 25 % lower than at the end of June 2008.

Letter from Associated Member Denmark, HAGENS FJEDRE A/S – September 2009

The financial crisis and the economic setback are still being reflected in the demand for springs here. However, we are expecting the demand to rise slightly in the end of the year.

ASF – Austrian Spring Manufacture Association

Report from the President Dr. Hans Heinz

ITALY 18 September  2009

PRESIDENT’S REPORT  to  ESF                                    

Mr Angelo Cortesi

The Italian spring industry ended 2008 with a 5-10% drop with respect to 2007. 2009 will close with sales below those recorded in 2008. The significant drop in turnover which began in September 2008 continued until June 2009. In the second half of 2009 sales have not dropped further and the hope is that in December 2009 the average decrease in turnover for the year will be around 25-30% with respect to 2007, the year before the start of the crisis.

The concerns that have arisen in this last period of 2009 include:

· the contraction of orders which forces our industry to work with delivery schedules of just 1 week

· the drop in prices which are often lower than the actual costs

· the delays in payment which have become a type of speculation. For example, a large telephone company is delaying payments to suppliers even after having presented a 2008 final balance with high profits and a strong demand for 2009.

· the solvency of many customers is decreasing and it forces our industry to freeze resources that are critical for the survival of our companies.

The price of raw materials, in the first quarter of 2009 was stable but the steel mills will increase their prices by 50-100 Euros as of October. An increase in raw materials prices seems to be close.

In 2010, with the information available today, the forecasts predict that sales will not improve with respect to 2009.

The dramatic situation resulting from the lack of credit to companies by the banks continues. It generated a serious increase in payment delays. In addition, leasing companies have stopped issuing medium-long term financing for equipment and investments are frozen. 

Our events for 2009 are:

· 12 February 2009, the First Tech Spring Seminar 2009, presented by Mr M. Hayes of IST at the President Conferences Centre of Brescia.

· 25 April-2 May, trip to China by 21 ANCCEM Group representatives to visit 7 spring factories and meet with the China Spring Specialty Association representatives.

· 15 May 2009, national Assembly with a «Round Table» on the economy and the market situation.

· Second Anonymous Survey among associate members regarding methods used for the calculation of the Costs/Prices of springs and the elaboration of a Report to be presented at the ANCCEM Meeting to be held on 20 November 2009.

· The ANCCEM Technical Committee worked on the revision of the EN 13906-3 Torsion Springs Standard and on the elaboration of a Quality Guide (tolerances) for torsion springs modifying some formulas for the calculation of the tolerances of torsion springs foreseen by DIN 2194/2002

· 28 September 2009, Second Tech Spring Seminar to be presented by Mr M. Hayes of IST.

· 20 November 2009, ANCCEM Professional Meeting with a lesson by Prof. C.S. Romanelli, President of Net Working srl, on «How to improve the personal resistance to stress».

The ANCCEM Board decided to help its associates by absorbing the costs of the information-training (training handbooks and technical documents) services which will be supplied free of charge during 2009 and 2010.