Editor’s note: Welcome to So That Happened, our editors’ takes on things going on in the manufacturing world that deserve some extra attention. This will appear regularly in the Member’s Only section of the site.
Tariff Responses Start Rolling In
Would supporters of tariffs consider them a success if they led to one in three manufacturing businesses increasing their domestic production capacity? It strikes us as quite likely that they would raise a glass to that outcome.
Would those tariff backers be as buoyant if another one in six manufacturers laid off workers because of the burgeoning trade war? Maybe the toast would be more subdued.
Those two data points—32% and 17%, to be more precise—come courtesy of a hot-off-the-presses survey conducted by executive search firm Stiles Associates. The poll of more than 100 manufacturing executives conducted March 5 through March 8 is headlined by a statistic that echoes statements we’ve heard from dozens of public-company executives since last fall: 70% of respondents said they plan to pass on to customers any tariff-related cost increases.
Among the report’s other findings: The newly imposed tariffs—or at least the ones that were still in effect during the survey window—are “significantly” increasing supply-chain and production costs at 41% of respondents and “moderately” pushing them higher at another 39%.
By the survey’s math, that suggests roughly nine out of 10 companies will ask customers to pay their tariff costs. Little wonder, then, that inflation expectations are turning up.
—Geert De Lombaerde
Lifting Up the Next Generation
Mitsubishi Logisnext Americas has announced the recipient of the 21st Annual Cat Lift Trucks Scholarship Program, which supports a high school senior interested in a four-year degree in a business or technical field related to the material handling industry. This year’s winner of the $5,000 scholarship, Dominique Quellar, maintains a top 1% rank in her class and is a member of her high school’s National Honor Society and Science Club.
“With the funding of the scholarship, the weight of funding college can be lifted off my family’s back, and I can begin my journey to give back to them since they have always helped me pursue my goals,” Quellar says. She plans to become a certified public accountant and has been accepted into the University of Houston’s business program.
"We received applications from many passionate individuals, but Quellar’s dedication to pursuing a career that will support both herself and her family was truly inspiring," says Ross Vanderlaan, vice president, Corporate Planning at Mitsubishi Logisnext Americas.
In the past two decades, the Cat Lift Trucks Scholarship Program has awarded $145,000 to 29 students.
"For 21 years, this scholarship has allowed us to make a meaningful impact in the lives of deserving students, and we are proud to help them continue achieving their goals,” Vanderlaan says.
—Anna Smith
Way Into the Weeds with Auto Manufacturing Data
Automotive Manufacturing Solutions (AMS) and ABB this month released their 2024 Automotive Manufacturing Outlook Survey results. It’s a 66-page monster of a report—the executive summary alone is six pages long. Some of the highlights:
- 40% of respondents said labor costs and skills shortages are their leading concern
- 35% say supply chain disruption, parts shortages and inventory management lead their worries
In Europe, sustainability targets replaced supply chain disruption in the number two spot and in Asia, supply chain was the top concern, followed by a shift to more flexible and modular manufacturing.
The largest concerns around rising costs?
- Labor (60% of respondents)
- Raw materials (51%)
- Energy (47%)
Cost of labor concerns were more pronounced for North American auto manufacturers (67%) than companies in Asia (60%) or Europe (59%).
The challenges responsible for complexity of manufacturing?
- Supply chain disruption (39%)
- Shift to more flexible and modular manufacturing (36%)
- Faster product lifecycles (35%)
Nearly half (49%) of North American companies cited supply chain disruption as a top three concern, whereas only 36% of European companies followed suit and Asian companies didn’t report supply chain as an issue at all. Asia was the only region to report automation and robotics as a Top 3 concern, and in fact the No. 1 concern, reporting at 42%.
Constraints on smart factory implementation?
- 54% report high initial costs
- 35% reported technical challenges
Two-third (66%) of companies in Asia reported high initial costs as the biggest constraint, with North American companies reporting at 53% and European companies reporting at 51%.
North American companies did not list cybersecurity as a Top 3 concern, however, with 38% of Asian companies reporting cybersecurity as their second-largest concern and 34% of European companies reporting cybersecurity as their third-largest concern.
Top labor concerns?
- 56% say specific skills shortages
- Robotics and automation/battery and electric vehicle expertise took the top two slots in all three regions.
More than one-third (34%) of respondents said that meeting EV vehicle production targets would “be a real struggle,” while 31% said it would be “impossible over that timeline.”
Lack of demand and high cost of production were cited as the top barriers to EV production, at 24% and 21% respectively. The next categories, lack of subsidies and government support and raw materials issues, only came in at 8% each.
- Finally (at least for this summary), 54% of respondents believed that trade disputes will affect access to raw materials “severely” or “quite a lot.”
If you’d like to get into the weeds with these results, you can download the full report on the ABB website.
—Dennis Scimeca
Raleigh Recruits Ralliant
Leaders of a $2 billion-plus division of Fortive Corp. that’s preparing to be set up as an independent company have chosen Raleigh, North Carolina, as their future home base.
What will be called Ralliant Corp. makes precision instruments and highly engineered products used in testing and measurement settings as well as in aerospace, defense and space applications. Home to brands that include Anderson-Negele and Hengstler-Dynapar, it booked an operating profit of $500 million on more than $2.2 billion in sales.
Ralliant’s planned move to North Carolina—the spinout from Fortive is expected during the quarter—will involve 180 jobs that will have an average salary of more than $189,000.
“Raleigh is an ideal location with its strong high-tech research presence, top universities, skilled workforce and proximity to our operating companies,” President and CEO Tami Newcombe said in a statement. “We are excited to build our future here—driving breakthroughs, empowering progress and shaping what’s next.”
—Geert De Lombaerde
Be Aware of Your Eyes in March
If you didn’t print this out first, you’re probably reading it on a screen, which means you may be at risk for eye strain. That’s according to the American Academy of Ophthalmology and Prevent Blindness, a volunteer health organization, which have declared March Workplace Eye Wellness Awareness Month.
The AAO offers a list of tips for screen-using professionals like IW staffers and readers, including:
- Take periodic breaks away from your desk to give your eyes time to rest.
- Use the AAO’s “20-20-20” rule by setting a timer every 20 minutes to look at something about 20 feet away for about 20 seconds, to give your eyes a chance to refocus.
- Practice eye ergonomics by situating your computer screen 18 to 25 inches away at an angle that lets your eyes gaze slightly downward at it.
- Keep your eyes moist with a humidifier or eye drops.
- And discuss computer glasses with your eye specialist if you have trouble focusing on your screen. (While Prevent Blindness recommends tinted glasses, UNC’s Department of Ophthalmology notes that “no scientific evidence has shown that blue light from a screen causes digital eye strain.)
Aside from screen-users, eye experts recommend that workers on manufacturing floors and other high-risk sites should be sure to wear protective eyewear. According to the UNC Department of Ophthalmology, protective eyewear prevents more than 90% of serious eye injuries in industrial settings.
—Ryan Secard
