OK, so just what is "Cold Heading" anyway? - January 4, 2012
We conducted a very successful online auction of Qualtech Pins & Fasteners, a cold heading shop that specialized in manufacturing precision dowl pins. We thought we would take this opportunity to explain the pretty nifty ability cold heading equipment has to transform a simple wire into an intricately shaped part, such as a screw, bolt, nut, rivet, or specialized fastener. Although their function seems so basic, these small metal parts play a huge role in keeping some industries afloat, and few people know how they’re made.
Cold heading is a process that starts with metal wire (often steel, aluminum, copper, nickel, or a precious metal, such as gold, silver or platinum) that is formed into a blank. Then, a high-speed automated cold header applies force to the blank with a punch and a die. When the force applied by the die exceeds the metal blank’s yield strength, the material gives and takes on the shape of the die. All this is done without the addition of heat; hence the “cold” heading.
The process is so effective, first, because it allows a supplier to make many extremely precise parts (up to 400 a minute) in innumerable different shapes, including custom designs. Second, the cold forming process strengthens the metal through deformation. This makes cold headed parts far more durable and resistant to shock and fatigue than small metal parts created through other processes. Third, no scrap metal is produced because the metal is shaped, rather than cut or otherwise removed. All these elements lead to speed, efficiency, and low costs, always appreciated by the customer!
About Precast Concrete - October 24, 2011
Last week we conducted an auction at a precast concrete forming facility in Troy, Missouri. The auction went really well with strong prices across all asset classes. We had great participation with over 100 registered on site and over 200 online. Combined, these bidders came from over 30 states and 7 countries internationally.
If you’re like most folks, then you haven’t spent too much time thinking about precast concrete. But if you’re in the building and construction industry, you spend a lot of time thinking about it. Heck, in light of the woeful economy, it’s likely that you are even losing sleep over it. For those who might not be too familiar with precast concrete, we thought we would share a bit about it
Precast concrete, as opposed to standard concrete, is a construction product produced by casting concrete in a reusable mold or "form." It is then cured in a controlled environment, transported to the construction site and lifted into place. In contrast, standard concrete is poured into site-specific forms and cured on site.
It rivals traditional concrete in a bunch of ways:
· Precast concrete actually gets stronger over time, while other materials can deteriorate, experience creep and stress relaxation, lose strength and deflect over time.
· Installation is quicker, easier, and less costly. It also requires less maintenance over time, reducing the likelihood of future problems.
· Precast concrete products are ready to install when they arrive at the job site. This can reduce the labor time by weeks and also reduces the need for skilled labor on site.
· Precast products generally exhibit higher quality and uniformity because they are produced in a controlled environment. Variables typically affecting quality on a job site – temperature, humidity, craftsmanship – are closely controlled in a plant environment.
Along with the rolling stock and support equipment, our auction had all kinds of molds. The majority were for water drainage, septic and those kinds of things. We also had some really nice panel molds used for walls.
Although the benefits of precast concrete seem endless, it’s still a tough sell when the construction industry is as depressed as it is today. In a recent blog, Ty Gable, president of the National Precast Concrete Association, speaks about the continued struggles for precasters.
"'We are now five years past the peak of the construction industry, and folks, things are still not looking that great. One indicator this week provides a ray of hope for 2012, but you’ve got to squint to see it. The American Institute of Architects announced that it has trimmed its forecast on nonresidential construction for 2011 and expects the sector to lose 5.6% this year. For 2012, AIA is forecasting a 6.5% gain. In other words, with a little luck, we’ll recover what we lost this year and maybe add 0.9% to that meager figure.
Construction spending has continued to lag across the board, but it has been steadily down this year on the public side, where so many precasters make a living. We are now at an 11-year low, which puts the industry roughly at the level of 1999-2000. According to Ken Simonson, AGC chief economist, highway construction is down 11.3% this year. Oh, and since Congress failed to reauthorize the Federal Aviation Administration, an additional 70,000 construction and related jobs are at risk this summer, along with $2.5 billion in airport construction projects.
My point? The tail of a construction recession is always a desperate time for manufacturers, and this recession has a very long tail. We’re still bumping along the on the bottom, and if our source for optimism is a forecast that shows us clawing back 0.9% in 2012, it’s a serious sign that we’re in for a long, slow slog. There’s a lot of fear and outright panic in the industry. It’s understandable. But this not the time to abandon your core business principles. Quality, safety, intense knowledge of costs and appropriate pricing are more important than ever, and those companies that continue to pursue lean manufacturing without compromising those core principles will survive and be well positioned for the future.'"
Why Auctioneer-Appraisers are Better Suited for Work in Todays World - Sept 13, 2011
As I departed the 15 HR USPAP Class sponsored by AMEA in Milwaukee today it occurred to me that now more than ever, an appraiser needs to be out there in the market place every day. With the growth of internet based data, an appraiser MUST have the experience and confidence to filter through all the data that’s out there that might be ‘less than reliable.’
E-Bay results are the best example of questionable data sources. Sales data from single bid sales or those where only two or three bidders are in the bid history must be scrutinized for validity. Similarly, looking at auction results from commercial sources without contacting the auctioneer to confirm the validity of the sale might not be a reliable source as ‘buy backs’ are often listed in published results. Sale attendance and bidder volume for onsite or online sales is a good indicator of whether or not your comp is a good one.
Sales with low bidder volume might not be good choices. It’s my take that an auctioneer-appraiser has more exposure to a wider variety of assets on a regular basis. This gives the auctioneer-appraiser a greater experience pool from which to draw from when filtering through the data when researching values of comparable sales. Blackbird fits that description to a tee.
Workout Bank Dealflow to increase soon? - Sept 08, 2011
There seems to be a trend developing with workout bankers to move their credits along a little faster than they had been in the recent past. According to panelists at the Northeast Regional TMA event in Saratoga Springs, NY on September 1, 2011, many workout bankers are compressing their timelines to resolve issues with difficult credits. This is very different from the early days of the recession and the post-Lehman days when workout officers were more inclined to ‘amend and extend’ or otherwise give their troubled borrowers lots of leeway if they were out of covenant. “With the dismal outlook for our economy, it makes sense to take the charge off and liquidate” said one banker. His thinking is that if they were not able to stabilize the balance sheet or sell the business quickly, it just made sense to move for liquidation rather than risk losing value waiting for an alternative resolution in an uncertain economy.
I guess that means that auction firms should see an increase in bank referred business in the coming quarters. Blackbird specializes in secured creditor work, and welcomes your troubled loans.
NY Manufacturing Survey Shows Steep Drop - Aug 16, 2011
The August Empire State Manufacturing Survey indicates that conditions for New York manufacturers continued to worsen. The general business conditions index fell four points to -7.7, its third consecutive negative reading. The new orders index also remained below zero, at -7.8, while the shipments index was positive at 3.0. The unfilled orders and inventories indexes dropped further into negative territory. Price indexes continued to retreat, with the prices paid index falling fifteen points to 28.3 and the prices received index falling three points to 2.2. The index for number of employees was slightly positive, while the average workweek index was slightly negative. Future indexes weakened significantly. The future general business conditions index plummeted twenty-four points to 8.7, its lowest level since February 2009, and the future new orders and shipments indexes, while positive, fell to near-record lows, exceeded only by their September 2001 readings. The capital expenditures index was also down sharply.
In a series of supplementary questions, respondents were queried about difficulties in finding workers proficient in certain types of skills; they were also asked to estimate training costs to bring new hires up to speed. Manufacturers’ responses to the August survey were not substantially different from those recorded in March 2007, when these questions were last asked. The workers seen as most difficult to find were those with advanced computer skills, followed by those who were punctual and reliable. Training costs to bring a typical new hire up to speed were estimated at 6½ percent of annual compensation, on average. Firms also reported that the wage or salary of a typical worker was expected to rise by about 2½ percent, on average, over the next twelve months.
Read the entire report at http://www.newyorkfed.org/survey/empire/empiresurvey_overview.html
A Few Thoughts about Powder Coating - August 15, 2011
On Thursday, August 11, Blackbird Asset Services conducted an auction at a powder coat paint facility in Horseheads, New York.
Because we think that powder coating is pretty cool, we wanted to impart some of our knowledge about the process, so that you will think it’s cool too.
Powder coating is the process of applying dry powder paint to something; a part, a piece of equipment, an automobile - you name it and it can probably be powder coated. A fairly young finishing technique, powder coating made its debut in Australia in the 1960s.
The powder coating process involves three basic steps; part preparation, powder application, and curing.
The first, and most important step, is essential to any good coating. Removal of oil, soil, lubrication greases, metal oxides, and welding scales can be done by a variety of chemical and mechanical methods. Which method is chosen depends on the size and the material of the part to be powder coated, the type of soil to be removed and the level of performance required of the finished product.
In most cases, powder coating is sprayed onto an object through an electrostatic gun, or coronagun. The gun imparts a positive electric charge on the powder, which is then sprayed towards the object by compressed air and then accelerated toward the piece by the powerful electrostatic charge. The object is then heated, which melts the powder into a uniform film, and is then cooled to form a hard coating. It is also common to heat a metal first and then spray the powder onto the hot object.
The curing process, called crosslinking, is the third and final step. When the powder is exposed to high temperatures, it melts, flows out, and then chemically reacts to form a polymerin a network-like structure. This process requires a certain temperature for a specific length of time in order to reach full cure. Normally the powders cure at 200°C (390°F) for 10 minutes.
So why not just use good ol’ fashion liquid paint? Well, for a lot of reasons actually…
Powder coatings emit zero, or near-zero volatile organic compounds, which are hazardous to human health and the environment.
Powder coatings can produce much thicker coatings without running or sagging.
Powder coating overspray can be recycled, making it possible to use nearly 100% of the coating.
Capital equipment and operating costs are generally less than conventional liquid lines.
We found there are a lot of powder coating service providers all across America, big to small, servicing many different industries. We have a pretty good database so if you are looking for a shop that can help you with a coating project give a call and we’ll pass along some names near you.
Pretty cool, huh?
Manufacturing technology consumption up 105.3% in 2011
(Year over Year through April, 2011)
***Below are excerpts from a press release that takes a micro look at the machine tool and metal fabrication space for new machine orders in the US. The statistics in the report compare year-over-year numbers through April, 2011. Comparing this information to the recent macro economic trends also outlined in our blog, we are very curious to see what USMTC reports later in the year for Q2 and Q3, 2011. WIll the micro trend follow the macro trend?***
April U.S. manufacturing technology consumption totaled $396.92 million according to The Association For Manufacturing Technology (AMT) and the American Machine Tool Distributors Association (AMTDA); two trade associations representing the production and distribution of manufacturing technology. This total, as reported by companies participating in the US manufacturing technology consumption program (USMTC), was down 21.0% from March but up 74.9% when compared with the total of $226.99 million reported for April 2010. With a year-to-date total of $1,595.98 million, 2011 is up 105.3% compared with 2010.
These numbers and all data in this report are based on the totals of actual data reported by companies participating in the USMTC program.
“It is very encouraging to see year-to-date orders more than double last year’s pace particularly with the price of oil, unrest in the Middle East, and the disasters in Japan,” said Douglas K. Woods, President of AMT. “Despite April’s numbers being slightly lower than March, recent levels of outstanding order activity are now approaching pre-recession levels which is a positive long-term indicator for our industry.”
The USMTC report, jointly compiled by AMT and AMTDA, provides regional and national U.S. consumption data of domestic and imported machine tools and related equipment. Analysis of manufacturing technology consumption provides a reliable leading economic indicator as manufacturing industries invest in capital metalworking equipment to increase capacity and improve productivity.
Entire report can be found at www.usmtc.com/News.aspx
The Roller Coaster Ride Continues for Machinery and Equipment Values - June 15, 2011
In the last two and a half years, the market for surplus machinery and equipment has been challenging, to say the least. Industries that track with the overall health of the economy struggled early in the recession, enjoyed an upturn in the second half of 2010, and are now wondering what to expect next.
The “rollercoaster” can be paralleled directly to the state of the US Gross Domestic Product (GDP), a crucial measure of economic performance. In the fourth quarter of 2008, the GDP shrank at an annual rate of 6.3%. Similarly, the first two quarters of 2009 showed decreases of 6.4% and .07% respectively. These declines - caused by the contraction in consumer spending, business investment and trade activity - were the largest in a quarter century. With an increase in the volume of used equipment available in the market, resale values declined in many instances.
The third and fourth quarters of 2009 showed modest increases of 2.2% and 5.6% respectively. The figures for 2010 indicated annual rate increases of 3.7%, 1.7%, 2.6%, 3.1% (Q1-Q4), demonstrating that things appeared to be improving slowly. During this time, equipment dealers enjoyed a strong run. But with economic indicators pointing toward another slow-down, prices are likely to further destabilize.
Another metric that correlates directly to consumer spending and thus demand for manufacturing equipment are employment rates and housing sales. Currently, unemployment remains stagnant at just under 9% and housing values continue to drop, averaging 2002 levels nationally. There was a brief reprieve in sales for single family homes last year, but was likely caused by the government rebate program which has since expired. While no one has officially said we are on the way to a double-dip recession, the writing is on the wall.
Despite the discouraging economic forecast, there does appear to be some good news in the machinery and equipment market; used equipment dealers have somewhat depleted their inventories and are still in a buying mode. How long this lasts, however, is subject to the economic conditions going forward into the summer and fall of 2011.
Commercial Construction Industry Notes – April 2011
In general, demand for commercial construction and construction machinery depends heavily on the health of the USeconomy, including corporate profits and local government budgets. The construction sector is expected to contract during the remainder of 2011—down 2.3% from 2010—due in large part to the deep cuts in the public sector’s capital spending.
The following five years, however, should provide a period of robust recovery as the economy improves. Most parties interviewed during the research for this report were optimistic this recovery is beginning. Heightened consumer spending and business investment will fuel growth. Replacement of many industrial facilities, delayed for years, will occur, and other structures whose remodeling has been put off during a down economy will undergo renovation. Replacing and renovating schools, in particular, is expected to energize the market, as government spending on infrastructure projects remains high. A revival in demand from the transportation industry is also expected during that time frame. (“Construction Output Forecast 2011-2015,” marketresearch.com; “Commercial Building Construction,” ibisworld.com, 3/11)
Specifically with regard to the heavy construction equipment rental sector, many in the $22 billion industry agree that 2009 was one of the worst years in recent memory, brought on, as noted by Michael Roth of the Rental Equipment Register, by a “perfect storm of factors producing a catastrophic recession,” which included a dramatic downturn in commercial construction. In 2009, rental companies were forced to downsize their fleets, let go of staff, close branches, and cut costs in every way imaginable, and for the top 100 renters on the Rental Equipment register, 2009 volume still decreased 35.3% compared with 2008, the largest single year drop since 1986. (“Heavy Construction Equipment Rental & Leasing,” ibisworld.com, 2/11; “The Hardest Year,” Rental Equipment Register, printthis.com, 5/10)
Improvement was seen in 2010, when corporate profits, an indicator of corporate demand for equipment rental, jumped approximately 25%, compared to 2009. Additionally, most equipment rental companies reported expectations of an even better year by the end of 2011, when the rental market for construction, earthmoving, and access equipment is forecast to grow 17%, to about $25 billion. Equipment rental companies are expected to build on moderating market conditions, led by non-residential construction spending, the largest user of rental equipment. As contractors attain more project contracts, they still hesitate to purchase and finance new equipment, which can cost in the hundreds of thousands of dollars, so, for at least the short term, the expected new jobs will serve to reinforce rental’s potential.
Additionally, the trend of consolidation in the very fragmented industry is expected to continue; merger and acquisition activity will be seen as companies come to believe economic conditions are improving. The longer term penetration of the rental business in the overall USconstruction industry should continue. (hoovers.com; “A 17 Percent Gain is Good News,” rent-talk.rermag.com, 2/11; “US Construction Equipment Rental Companies Will Continue to Build on Moderating Market Conditions in 2011,” Standard & Poor’s, 2/11; “The State of the Rental Industry,” constructionbusinessowner.com; “Rental Business Booming in America,” roadsbridges.com, 3/11
The Disco - November, 2010
In the midst of imagining the Blackbird logo and design I took a much needed break to attend The Worlds Largest Disco (https://www.worldslargestdisco.com/). I found the Blackbird logo that BlackDog Strategy and Brand had recently created strutting all around me in classic, retro wear! Check out the walking confirmations that I encountered.
Even in polyester BlackBird looked sharp!
“Astute in bankruptcy matters?”
Notice the guy behind her…appraising her assets?
Here are just a few of the other logo concepts that I considered: