Global Fastener News

2006 FIN – NFDA Panelists: No Question About Globalization

July 31
00:00 2014

China isn’t just about supplying fasteners to North America, Joel Roseman told the National Fastener Distributors Association autumn meeting. “There is a growing trend of being told you need to be there,” said the moderator of a panel on “Globalization – Is Our World Flat?” When your customer outsources to Asia “you have to follow that business,” the one-time importer turned distributor said.

That can be accomplished in a variety of ways, including consolidation, contracting with manufacturers or partnering with distributors offshore, Roseman of Arnold Industries Inc. noted.
Roseman suggested that symbolic of the “world is flat” reality is the multi-generation Italian Agrati family starting to manufacture fasteners in Asia and changing the name from Agrati Corp. to Global Fastener Solutions Inc. “Even five years ago it would be an unequivocal ‘no’ to manufacturing in China,” Roseman reflected.
It isn’t just about China either, Roseman added. Though Taiwan has given up much of the low-end fastener production, there are still 1,700 fastener factories and the Taiwan Industrial Fastener Institute anticipates fastener exports will grow at a 10% per annum rate to two million tons.
Taiwan is developing more multi-station formers, educating the next generation of engineers and building strategic alliance partners, Roseman noted. Taiwan is even becoming qualified to produce aerospace fasteners.

Grabner: Embrace – Don’t Fight – Globalization
U.S. manufacturer John Grabner suggested the world became flat with “growing economic independence” following World War II. The “wave from overseas is very strong and can’t be stopped,” the president of Cleveland-based Cardinal Fastener & Specialty Co. declared. “The U.S. is at the forefront of globalization with open markets,” he added. U.S. fastener manufacturers “have to find ways to move up the chain,” Grabner advised. Just 20 years ago Cardinal “sold primarily based on trust relationships to get orders. Ten years ago our production became related to price.”
Today manufacturers “need to sell service” and offer “something no one else can do.” He cited an example of receiving a call on Sunday morning about an automotive assembly line being down and producing and shipping fasteners that afternoon.
Flat market competition may be difficult but “step forward. Embrace globalization, don’t fight it.” Succeed with the “best talent,” Grabner advised.

Schwind: “No Lowest Price”
“There is no such thing as the ‘lowest price’,” Dick Schwind of Assembly Component Systems Inc. declared. “There is always somebody who will sell for less.”
“Don’t rule out any of the channels you need,” Schwind advised. North American distributors cannot “rely totally on overseas suppliers, ” Schwind suggested. Distributors need to use both domestic and imported fasteners and “build your price on blended cost.”
“You’ll never survive with only one channel.” “You better know who you are buying from,” Schwind advised importers. A lot of trading companies have labs and importers are important in sourcing quality product, he noted.
Schwind emphasized that “relationships, relationships and relationships” are still the three most important sales tools and admonished NFDA members to take the “time and effort to develop relationships.”

Cohn: Customers Calling You to China
Southern California-based distributor Andy Cohn recently opened Shanghai Duncan Bolt when two “good-size customers moved over there.”
It isn’t easy for small distributor to set up shop in China, Cohn acknowledged. Opening a branch in China requires hiring lawyers, accountants and a manager.
However, after opening in China, you will find an advantage to selling to China is that “the playing field is wide open,” Cohn noted.
Back home, Cohn warned that the “U.S. is not educating its students to compete in the world economy.”
Cohn questioned if globalization can go too far. There is the political question of what is fair.
“There is still a need for domestic suppliers, Cohn said. He noted the GM/Toyota joint venture in Northern California relied on an eight-hour window of supply. That is difficult when fasteners may be on a container ship. The West Coast port strike forced some production to “move to Mexico.”

Hebert: Fasteners Still Headed West
Jay Hebert, who spent 27 years with domestic manufacturer Lake Erie Screw before joining importer Porteous Fastener Co. eight years ago, pointed out the history of fastener production moving west from Port Chester, NY, to Cleveland to Rockford, IL, to Japan to Taiwan and to China. The westward movement may continue through Southeast Asian countries of Thailand, Malaysia and Vietnam. Some seriously beautiful plants are being built, Hebert noted from Porteous’ Asian sourcing trips.
Hebert even predicted “Africa is going to be a major player some day.”
Business has changed here too, Hebert noted. Porteous has grown from Southern California to having regional warehouses throughout the U.S. “The shift is complete to Porteous becoming a national company.”

Several NFDA members commenting during the discussion noted the cultural differences between countries.
In Brazil “you don’t talk about business in the first 15 minutes,” Nilo Urbani of Nylok Corporation explained. Urbani cited the example of one salesperson asking business questions within a moment after meeting a potential customer. After the sales call the supplier was told they could have the business as long as “you never bring this man here again.”
Barry Porteous finds Asians “willingly adapt to us.” The Porteous company has been importing from Asia throughout its 40-year company history and has “built relationships over a long period of time” and on a “one to one basis.”
In addition to developing relationships, Porteous has spent decades finding potential fastener sources and “training factories to produce good stuff. You have to develop those sources,” Porteous said. ©2003/2012 Fastener Industry News.
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