By Alfred T. Spada, Publisher/Editor-in-Chief

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I just returned from touring two metalcasting facilities—one aluminum, magnesium and zinc diecaster and one copper-base sand shop. Despite the troubles of the economy as a whole, these facilities are exceeding expectations. Their revenues and profits are up, and business is expanding. They feel like the cat that ate the canary, sitting quietly in the corner hoping no one will notice.

The funny thing is that they aren’t alone in our industry. Many jobbing metalcasters are perfectly happy now with their current level of business. Sure, more orders would be welcome, and the holiday season (as I write this) is always slow, but the world is not crashing in on them as the mass media would lead us to believe.

These two firms attribute their success to diversity in customers and end-use industries. They also cite their exceptional quality, customer service and value-added capabilities compared to the competition. While all of these reasons are part of the answer, I think something more is at work here.

It is generally assumed that the North American metalcasting industry is shrinking. We have 700 fewer plants than 10 years ago and 1,200 fewer than 20 years ago. Production capacity in tons is off 5% compared to 10 years ago and 10% compared to 20 years ago.

But when you take a closer look at our past production, you realize that these figures are based in weight and do not properly represent the growth of lighter weight aluminum and magnesium components (up more than 80% and 450%, respectively, the last 20 years). An argument can be made that today’s 2,130 metalcasters produce more castings than the more than 3,300 plants did 20 years ago.

Is this a shrinking industry? In terms of number of plants, yes, but not in terms of the capabilities of the individual plants still producing. With fewer plants producing more, we have a strong base that appears to have been at least maintaining production levels the last 20 years. In terms of capacity utilization, estimates put the industry at around 80% right now. When the economy picks up in the next year or two, the U.S. may be short on casting capacity.

It also is generally assumed that as a mature industry, we make profits when the overall U.S. economy/GDP/production is booming and capacity is tight, and we hold on to survive when the economy/GDP/production is low and capacity is open.

I can see this theory holding for metalcasters suffocated by one specific market, like those invested heavily in auto or housing right now. But today’s job shop metalcasters, more than ever, are diversified. As a result, with some markets down, others like farm machinery, renewable energy and medical are boosting us up.

It appears that the paradigms that have been in play in manufacturing may be shifting. We can’t always assume that what has happened in the past will happen in the future. Metalcasters must realize the forces at play in our industry and realize what the future might hold. The time is now to take a step back and look at your business plan.

Are you positioned with customers and in markets that are poised for growth?

Are your capabilities positioned to add capacity if necessary to account for future growth opportunities?

Our industry’s future cannot be predicated on the past. The sooner your facility makes that adjustment, the better you will be.