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Conversions, Reshoring and Public Policy

Doug Kurkul

About 10 years ago, while I was serving as the CEO of the Reno-Sparks Chamber of Commerce in Nevada, I met a local activist who had a long list of civic complaints, all of which he attributed to what he saw as the evils of economic growth.

I ran into that same activist at an event a couple of years later, in the midst of the recession. Unemployment was surging. Local businesses were closing. Neighborhoods were racked by foreclosures. I couldn’t help but ask him how he liked the absence of growth.

Economic growth is vital. One of the key roles of AFS is encouraging growth in the $30.3 billion metalcasting industry. When we released the annual Metalcasting Forecast & Trends last winter, we projected 3% growth in our industry in 2017. That projection looks to be on target so far. More foundries are busy, and many are aggressively hiring more workers. While not every foundry is as busy as it would like to be, the uptick over 2016 has been good news for much of our industry.

Growth is important because in a flat market, a foundry can only expand its book of business by taking customers from other foundries (often by offering lower pricing) or by picking up business in the unfortunate case of a foundry closing. Conversely, when the demand for castings is growing, there are more opportunities.

Three of the best ways to encourage growth of the casting business are conversions, reshoring and public policy.

Throughout the year, Modern Casting highlights stories where complex assembled parts have been converted to castings, for an example, see the article in this issue on page 26. Often, our Casting of the Year award honors go to conversions. The economic benefit of conversions is that they are new revenue to the foundry doing the work, and to the casting industry. 

A second way to expand the market is through reshoring. Modern Casting recently ran a cover story about Osco Industries in Portsmouth, Ohio, which is among the foundries that has experienced reshoring success. AFS hosted Harry Moser, founder of the Reshoring Initiative, at the 2017 Metalcasting Congress to further encourage this trend.

The third factor affecting growth is public policy. When policymakers allocate more funding for vital infrastructure programs, more castings are sold. Vigorous enforcement of trade policies can protect against foreign subsidies and dumping, which also is good for domestic production. Conversely, ill-advised tax policies and overly restrictive regulations tend to choke off investment in new plants and equipment, which restricts the demand for castings. AFS advocates aggressively for public policies conducive to a strong metalcasting market. Corporate membership dues are pivotal in making these efforts possible.

So the next time you see or hear AFS communicating about conversions, reshoring or public policy objectives, remember what we are really doing is advocating the growth of the metalcasting industry.    

Click here to see this story as it appears in the October 2017 issue of Modern Casting