US MACHINE-TOOL SECTOR COLLAPSE SIGNS ECONOMIC DEBACLE

by Harbinger of Depression Monday, Nov. 24, 2003 at 9:23 PM

Machine Tools Manufacturers produce what Economists refer to as "Producer Goods" meaning that they produce the goods that manufacturers purchase to produce their goods. If Machine Tool Sales are going down the toilet that means the Manufacturing Sector, and associated jobs, are already dead. Care for a nice Slave Collar? Cheap.

[source: Walmart Street Journal A1, Timothy Aeppel, Nov. 21]

"WALMART" STREET JOURNAL FRONT-PAGE ARTICLE
HIGHLIGHTS DECIMATION OF U.S. MACHINE TOOL SECTOR,
at the heart of the nation's once-mighty industrial economy.

The National Tooling and Machining Association estimates
that 30% of U.S. tool-and-die shops have shut down
in just the past three years,
and expects many more to close in the next few years.

Manufacturers' orders for machine tools have plummeted 63% during 1997-2002;
and in the first nine months of 2003, have fallen 16%
from the level in the same period last year.

Machine tool makers produce the metal-cutting and -forming machines
(such as dies and molds),
used by manufacturers to make everything from televisions to cups,
from car doors to surgical devices.

The collapse of the machine tool sector,
the Wall Street rag warns,
also endangers national security.

Unmanned drones and body armor for troops in Iraq,
consist of composite materials made using special molds
and advanced machine tools.

Ingersoll, which recently declared bankruptcy,
was one of only two U.S. companies that made tools needed
to produce components of stealth aircraft.

As an example of the destruction,
the Journal cites the case of Ernst Buchmayer,
the head of Western Industrial Tooling in Redmond, Washington state,
who is depleting personal savings in order to keep his machine shop operating.

He has already slashed more than 50% of his workforce, from 55 workers to 25.
Sales have plunged 70% from their peak in the 1990s
to just over $3 million in 2002, when the company lost $500,000.

The plunge in machine tool orders reflects factory bankruptcies
and manufacturers' moving of production to countries such as China,
under the paradigm down-shift to a predatory consumer society
dependent on cheap labor overseas.

Manufacturers are demanding low-cost machine tools,
some under pressure from Wal-Mart.

As a result, some U.S. toolmakers, Buchmayer notes, are
forming joint ventures with companies in China. Buchmayer's
newest company client, has outsourced manufacturing to Singapore.