When in doubt, blame the Canadians first, research later

I found this very interesting post, in my drafts folder, from 2005. It seems even more appropriate now, so I thought I’d finally publish it.

When I was a kid, I remember a sign in a hardware store

“We have an agreement with the bank.
They don’t manufacture hardware.
We don’t offer credit”
In a similar vein, I wish I could put this sign on this blog:
This is a stamping BLOG. We don’t do politics here
But the reality, at least for the moment, is that politics is already in stamping, or at least in the sourcing decisions that are bread and butter for most job-shop stamping shops. So today there is politics in the stamping BLOG. When it leaves my arena, I’ll leave its.
Today I was a bit steamed under the collar (and not just by the heat wave). Yet another case of “blame the Canadians” has come to light.
For those who don’t know what I mean, consider the following:
  1. After the Sept 11 hijackings, “everyone knew” that the hijackers came from Canada. Despite the fact that it was not true. Not even one of them came from Canada. But 4 years later there are still people who believe it. It seems it’s easier to blame Canada first, and do the research later (if ever). Newt Gingrich, former speaker of the US House of Representatives, who repeated the story recently now is sorry for comments about Canada and deeply regrets” what has become a “widespread inaccuracy.” How did it become widespread inaccuracy? Because of people like Newt Gingrich.
  2. The power failure in 2002 was blamed, within hours, on the Canadian grid. Not true. A commission said it was a cascade failure (the electrical equivalent of one domino falling and knocking over a bunch more) traced back to a problem with the EastLake plant of FirstEnergy Corp. of Ohio. The commission took 3 months to determine, with certainty, the cause. In the early hours, Michael Bloomberg, mayor of New York, said “For some reason or other, there was a power failure in northern New York or southern Canada. “ But that was wrong – the failure was in neither New York nor Canada.
  3. The war on drugs – man am I tired of hearing that Canada is the culprit here. John Walters, director of the White House Office of National Drug Control Policy, after saying “huge quantities of marijuana are grown domestically“, goes on to say “perhaps one-third of the total U.S. marijuana supply — come[s] from Canada.” Of course, we all grow it up here in our long, luxurious growing season (for those of you unfamiliar with Canadian climate, here in southern Ontario, easily the best growing season in the country, we can barely grow special short-season tomatoes in our condensed summers). Or, for the indoor growers amongst us, our especially low hydro electric rates (higher than most of the US except California). According to the DEA, marijuana produced in Mexico remains the most widely available in the US, but Canada is edging into the US market with a higher-potency marijuana. From the White Houses own drug policy web site and specifically the marijuana page , The primary foreign sources for marijuana in the United States are Mexico, Canada, Colombia, and Jamaica. During 2002, Mexico produced about 7,900 metric tons and Colombia produced 4,000 metric tons of marijuana. The Royal Canadian Mounted Police estimates that 800 metric tons of cannabis are produced annually in Canada. Some 214 metric tons were produced in Jamaica in 1997 (the most recent data available). So let’s get out our calculators. Would you believe the Canadian proportion, using those same numbers, is 6.2%? So why is Canada the big problem here?
  4. Mad Cows – the thing that set me off tonight. One mad cow was discovered in the US 2 years ago, and in it’s infancy it came from Canada, at a time when neither the US nor Canada had abandoned the practice of feeding cow byproducts to cows (both have, in the mean time, stopped this practice). That one cow has closed the Canada/US border for the last 2 years. Today they found a US cow (as it turns out, they found it last November, but it was a very well kept secret for a long time) that was provably born in Texas, that also has BSE (“Mad Cow” disease). Wanna bet the border will stay closed?

2 Ontario firms allege Chinese steel sinks violate trade rules, probes launched – Yahoo! Canada Finance

2 Ontario firms allege Chinese steel sinks violate trade rules, probes launched – Yahoo! Canada Finance

The Canadian International Trade Tribunal will begin a preliminary inquiry to determine whether the imports are harming Canadian producers and hand down a decision by Dec. 28.

The border services agency will investigate whether the imports are being dumped and/or subsidized and will make a decision by Jan. 25.

Last April, the Canadian International Trade Tribunal announced imports of steel grating from China will be hit with anti-dumping and countervailing duties. The tribunal found the dumping and subsidizing of non-stainless steel grating from China had harmed Canadian companies.

I’d say it’s about time. It’s been going on a long time. Many companies have gone out of business waiting for their complaints to be heard.

China coal mine accident kills 13, 66 missing

Via Yahoo! Canada News

A coal mine accident early on Tuesday killed 13 people and 66 others were missing in central China’s Henan Province, the Xinhua news agency reported, citing the state work safety watchdog.

China’s mines are the deadliest in the world, due to lax safety standards and a rush to feed demand from a robust economy. More than 3,000 people died in coal mine accidents in 2008 alone.

MEPS FORECASTS GRADUAL UPTURN IN WORLD STEEL PRICES OVER NEXT TWELVE MONTHS

From MEPS, a steel consultancy in the UK.

The MEPS – World Composite All Products carbon steel price peaked in July 2008 at $US1160 per tonne. In the subsequent ten months the value fell by more than 50 percent to $US562. However, the production curbs are beginning to bite as customers start to rebuild inventories in most regions of the world.

There are now clear signs that steel producers internationally will be increasing output to meet the anticipated higher market demand. This has, in fact, already started. Global production of steel in July 2009 was approximately 11 percent down on the equivalent month in 2008. In comparison, steelmaking in the first six months of this year was almost 20 percent below the figures recorded in the same period of 2008.

Since May, most steel prices have increased steadily – with the MEPS – World Composite figure rising by $US49 per tonne (8 percent) over the past three months. Further growth in transaction values is forecast for the next twelve months.

Some manufacturers find California cheaper than China

From the San Francisco Business Times:

Four Northern California companies in the past five months have reshored products from China to Wright Engineered Plastics, said President and CEO Barbara Roberts. Their reasons range from costs to vicinity to market and from quality to finance.

Chinese manufacturers, for example, won’t ship until a product is completely paid for, Roberts said, and then transportation could add another 30 days or more.

“That’s a double-whammy,” she said.

This is something I commented on already a few years back. As some jobs go to China, others come back. And I think this “onshoring” trend, if anything, is increasing recently, as health and safety concerns raise their heads.

Auto suppliers brace for uncertain summer

More coverage of suppliers, now from Detroit, where a lot of parts suppliers are, and where the press has clearly been thinking about this.

From the Detroit Free Press

A fragile automotive supply base will be tested even more as suppliers wait to see if they will be part of General Motors Corp.’s future after the company’s historic bankruptcy filing.

Last week, local suppliers Visteon Corp. and Metaldyne Corp. filed for Chapter 11 protection. More are expected to follow […]

[…] analysts say GM seemed as prepared as possible to deal with strains in the supplier industry as it headed into bankruptcy.

That includes paying suppliers last Thursday instead of today, when payments for parts shipped in April could have been caught up in the court process.

The Detroit News has also been writing about the economic impact. Under the headline
Michigan feels brunt of GM’s bankruptcy, they write

Michigan’s share of the total job loss: 42 percent. And that doesn’t count the trickle-down impact on suppliers, stores, real estate and other segments of the state’s economy.

All Dressed Up, and No Place to Blog

This was originally posted Tuesday, April 14, 2009 and is being reposted today with the proper blogger tools. All’s well, I suppose, that ends well.

Well, I don’t know if this blog is going to go out. It’s certainly not going to go out well. Google has decided, in their wisdom, to force my blogger account to be upgraded to a Google account. I acquiesced, since I didn’t seem to have any choice.

The net result was, I now can not access my Blog. Neither by the old account nor the new one. Thankfully, I have access to my own web server, where this blog lives, and so I can get around Bloggers road block, at least for the nonce.

I am posting this by the simple expedient of hacking the blogger-generated output using a 9 year old tool (HoTMetaL, by the way – great tool, which is why they discontinued it, I’m sure).

I had a post researched and ready to go. Alas, doing it this way is like driving on a superhighway with a golf cart. The ride is not pleasant.

I’ll wait a while longer then, if they haven’t figured out how to fix my accounts, I’ll actually post using these stone-age tools.

A taste of things to come

It could hardly have been a worse 6 months to miss. So much to summarize.
Here’s what I plan to talk about over the next while.

Direct influences on the Metalstamping industry

  • Raw material pricing
  • Raw material availability
  • Lowered demand
  • The changing face of labor

Larger economic indirect influences

  • The bailout: If you’re in the automotive supply chain, what’s it all mean?
  • The bailout: If you’re not, what does that mean?
  • Recession/depression/inflation?

Sometimes it takes a while to get back in the saddle

In December I wrote that I’d be restarting the blog soon. I guess I spoke too soon. It’s now April, and the fallout from the death in the family has taken longer to resolve than I expected.

I plan to start blogging again soon. I’ve already started my research.

My goodness, it’s hard to imagine a more eventful time in the history of metal stamping than the last 6 months. I’m going to try to summarize what has happened and make some educated guesses about what at least the near future might look like, over the next few weeks.