by clicking the arrows at the side of the page, or by using the toolbar.
by clicking anywhere on the page.
by dragging the page around when zoomed in.
by clicking anywhere on the page when zoomed in.
web sites or send emails by clicking on hyperlinks.
Email this page to a friend
Search this issue
Index - jump to page or section
Archive - view past issues
button in toolbar for more information.
Metal Casting Technologies : September 2006
www.metals.rala.com.au 34 AUSTRALIA Significant change in automotive sector By Ken Foulke Another year past, another year older, and time once again to take stock in what we have, where we are going, how we are getting there, and where that will lead us. The purpose of this article is to review the past year in Australia's foundry industry (metal casting industry?). Of course, the purpose of a review is to see where we have been, in hopes of determining where we are going. So, we take stock in what has happened over the year, then get out our crystal balls, gaze intently into them -- and then take a punt. This is, after all, the only course of action that we can follow. For every economist that tells you things are rosy, you can always find one who will tell you that things are lousy. Australia appears to be on the downward side of some very robust business times in the foundry industry. Where everyone was flat out 12 months ago, it now appears that there is a "calming" of business activities. Of course, this is always a double-edged sword. When you are flat out, there is less time for in depth business evaluation, less time for those projects needed to expand the business, less margin for error in the every day activities of a business. A company can afford to be choosy on who they do business with, often developing unofficial customer lists designating "A" and "B" customers. The good payers with bright futures may go on the "A" list. The ones that are a little more work (or a little slower in paying) go on the "B" list. Of course, the problem with this scenario is that when things settle back down to a more normal activity level, you may wish to sell again to those "B" listers, and they may be taking their business to the guys who were there for them when they had to pick and choose. Conversely, there is generally more cash around when you are flat out, and of course, that makes everyone's lives easier. When things start to turn down, as they seem to be doing now, it's time to reevaluate your situation, put those projects that take a little time to spin out, back into place. So what is happening out there? The price of oil is still at an extremely elevated level. It appears, however, that the world seems to be adjusting to high oil prices, and the high prices that accompany the products whose prices rise and fall along with oil. The price of scrap seems to be a little more sensible than it was a year ago. And frankly, it seems that we have adjusted to other high prices within the industry, particularly as applies to raw materials for foundries. It appears that China has cooled down a bit, or perhaps just settled into a groove, allowing everyone a chance to take a deep breath or two. Make no mistake, China is here to stay, and India is probably not going to be far behind. Our foundry landscape is changing constantly, and we all have to make sure that we fit into the new one. On the Australian foundry scene, we continue to lose players. The closures we are seeing encompass both large and small foundries. The most significant area of change, however, seems to be in the automotive sector. If you look back at last year's review, you will see that the article alludes to this. As we all know, foundry closures are a part of life. However, the closures of major automotive plants tend to be cataclysmic. As someone who has a lot of experience working in Asia, I can tell you that the Asian foundries that compete with Australian foundries do not fear us the way that we fear them. I believe that most Asian companies respect the quality of castings we can produce, but the high cost reputation we have tilts things the other way for them. The foundries that compete directly with Australian foundries more often point at other Asian companies, US companies or South American companies as their major competitive focus with regard to the supply of castings. We need to continue to smarten up our act. We need to be embracing the challenge and working to meet it, not crying about it and running away. We need to continue to work on overcoming the training issues that we face. Obviously, we are going to have change the way we do our training, because the apprenticeship approach may never again be viable. Aussie battlers to the fore! We need to take the hand we have been dealt, and see what can be done with it to improve our lot. Let's make next year's review a good news feature. AsianFoundryOverview