Global Fastener News

FEATURE

As the results of the End of 2014 FIN Survey are being provided to FIN subscribers, here are excerpts from the first Fastener Industry News survey of “Business Conditions in the Fastener Industry” conducted in 1979.
Large majorities reported sales and profits were up during 1979 and a “lack of skilled help” topped the list of industry problems.

Visit GlobalFastenerNews.com on Tuesday for excerpts from the End of 2014 FIN Survey.

Excerpts from results of the first FIN Survey in 1979:
• Sales: 90% of the respondents reported higher sales for the first half of 1979 vs the first half of 1978 and 86% reported higher sales for the first half vs. last half of 1978.
• Profits: 68.1% of the respondents reported higher profits for the first half of 1979 vs. the first half of 1978 and 64.7% reported higher profits for the first half vs. the last half of 1978.
• Inventories: 51% of the fastener manufacturers reported higher raw material inventory level now compared with a year ago; 21% said levels were lower; and 21% said they were the same.
• Problems: The lack of skilled help was the biggest problem for both manufacturers and distributors in the first half. Other major problems were raw materials (availability, cost and deliveries); meeting delivery schedules, lack of production capacity; and the failure to recapture costs.
• Economic Outlook: 45% of the respondents believe we are already in a recession, 34% say we are about to have one.

1979 FIN Survey Participant Comments

Manufacturers:
• Many automotive-orients manufacturers have been hurt severely in recent months. This will have a backlash on other manufacturers that can result in unwarranted price cutting until Detroit begins producing again.
A shakeout may occur with companies – manufacturers and distributors alike – going out of business.
The past 3-5 years manufacturers have been consolidating their positions by reducing broad stocking programs and increasing production order runs. The distributors will be forced into longer range stocking programs and only the fittest will survive. It will become increasingly difficult to start a new business.
• As of today (7/29/79) recession hasn’t affected construction business. We know we lag the economy by many months, and expect the downturn to hit in the 4th quarter of ’79 – but this is hard to measure because cold weather also slows us down.

Distributors:
• The domestic manufacturer who professes to want distributor business does not have the slightest concept of service required today – not does he seem interested in solving his back order problems.
• We would prefer to buy our metric fasteners from domestic sources, but have found nobody is interested. Closest source is Canada.
• We will definitely have to watch costs, salaries, salesmen’s expenses. Better planning, reduce travel and entertainment expenses. More selling on the phones and possible eliminate marginal employees.
• We buy imported primarily because it’s there – we move material rapidly – usually our customer has received his order within 2 or 3 days after phoning the order in Often times the same day.
• It is apparent that the fastener industry (and I man both the importer and domestic producers) are going to have to look at their sales programs and how to sell again. They have had it their own way so long they have forgotten that the customer is the most important commodity they have and they have to serve his total need.

Manufacturer/Distributors:
“The fastener industry (manufacturers and jobbers) is its own worst enemy. Many always feel that in a slow economy it is necessary to reduce prices to get business. Result: A 10% reduction in orders (industrywide) equals a much larger reduction in profits or no profit at all.” ©1979/2015 Fastener Industry News 

For information on permission to reuse or reprint this article please e-mail: FIN@GlobalFastenerNews.com.

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