Global Fastener News

FASTENER HISTORY

By Dick Callahan
September 19, 1983 FIN – The fastener industry may at last have found its “voice” – a big, booming baritone capable of raising the rafters, making itself heard in the business arena, in its relations with local, state and federal agencies and in other areas where its interests are concerned.

In the recent past nobody seemed to be paying much attention to the cacophony of complaints raised sotto voice by a loose confederation of companies in the same business, but appearing to have widely disparate needs.

A giant step in the direction of having the industry heard qua industry was taken last week in New York when the presidents of 10 fastener associations got together to see what they could do in the way of working together – “networking” was the phrase they used – for the industry’s well being. While this group mainly represented the distributor segment, some of the things they accomplish working together may be of benefit to fastener manufacturers and other parts of the industry. The heads of 10 organizations representing more than 1,000 member companies with a total employment of around 30,000 met at the Sheraton LaGuardia in Queens, NY.

The meeting carried the title of: “Networking in the Fastener Industry: An Initial Meeting of the Major U.S. Fastener Organizations to Discuss the Beneficial Aspects of Combining Resources Within Our Industry.”

County-of-Origin Marking

It was unanimously agreed that this was the most important problem currently facing fastener distributors on a national basis and where networking by the 10 associations should be given immediate attention.
In the past only importers of fasteners ha to mark the country-of-origin on the fasteners they brought in and sold to others. Now anyone who sells imported fasteners must mark the country-of-origin on the repacked packages no matter how few fasteners these new packages contain.

The new policy is spelled out in Custom Regulations 19 CFR, Part 134 – a recently passed amendment to Section 304, Tariff Act of 1930 as amended (19 U.S.C. 1304). It requires downstream marking of the packages and also mandates that importers must inform subsequent marketers of the fasteners, in writing, of the requirements for marking the country-of-origin.
The new regulation goes into effect October 24, 1983.

This new regulation has caused both consternation and confusion among distributors. The consternation is about what it will cost them to remark the packages and the need to do it by such an early date.
The confusion is about such questions as (1) If the regulation also pertains to fasteners already in inventory whose origin may not be known; (2) How to handle marking of multi-component units where the separate parts may have come from different countries; (3) The penalties for not remarking the packages as required; and (4) What to do about fasteners that are imported in unfinished form and have secondary operations performed.

NFDA president Robert Endries reported his association has sought an extension of the effective date.
NFDA representatives and its legal counsel have been in frequent touch with U.S. Customs and both vocally and in writing have asked for clarification on some points of the regulations.
The NFDA also informed Customs of some fastener facts of life that Customs may not have been aware of in promulgating this amendment.

Endries said that the amended regulations (1) did not single out fasteners but covered all imported items except those specifically exempted; (2) that the advocates of these new regulations consisted of a small number of industry trade groups like those representing domestic manufacturers of hand tools and wire rope; and (3) that Customs seemed to recognize the can of worms that had been opened for fastener distributors and appeared to be open minded about any effort that might be made industry wide to delay the effective date or exempt fasteners from the regulations completely.
Endries also said that with the promulgation of the amended Custom regulations, importers are now requiring their customers to sign an “exemption certificate” which, in effect, exempts the importer from any liability in case the repackage fasteners are not marked. Without this exemption certificate some importer will not sell any fasteners to a distributor.
CBNSA’s Don Lesse is also working through legal channels and the National Association of Wholesale Distributors is now making its own effort to push back the effective date.

Having agreed that this was a matter with possibly dire financial consequences – such as putting some companies out of business – and one that requires concerted and immediate action, the presidents of the 10 distributor organizations unanimously agreed that in its future communications with Customs that the NFDA should add the other associations in recommending a change in the effective date.

While the association presidents were aware that some of their domestic manufacturer members favor the marking requirements, they also recognize their organizations are primarily distributor-oriented and that distributor interests should be their primary concern.
They also noted that many domestic manufacturers import fasteners and being reluctant to admit it, would not be averse to seeing the amended regulations do a fade job altogether.

Those assembled agreed to a plan of action, which includes the NFDA to draft a guideline letter to U.S. Customs for members of the various fastener associations to use in contacting Congress, the White House, Small Business Administration and others.
Al Zoukas of MFDA pointed out that the resulting communications could be impressive because the associations represented at the meeting and their families total the voting power of a city the size of Syracuse, NY.
WAFD’s Larry Stanley – who is a member of the U.S. Senate’s advisory group on small business – advised against a duplicating machine approach to the problem, which would result in congressmen receiving identical letters. After the first few were received subsequent duplicated letters would probably hit the round file. To be effective it is necessary for each person or company to make an individual protest utilizing, if necessary, some of the points made in the guideline letter, Stanley advised.

FIN found little certainty among the members on (1) the need to remark fasteners now in inventory if they were brought in prior to the passage of new regulations; or (2) penalties for non-compliance.
FIN pointed out that there is not a single line in the amended regulations on the subject of existing in-stock imported fasteners and the sanctions have most certainly been given serious, an detailed consideration by Customs and other regulatory and law enforcement agencies.
Penalties for failure to comply are spelled out in paragraph (e) of the new regulations on page 33863 of the Federal Register, July 23, 1983. Both civil and criminal charges can be leveled against any person, importer down through the seller to the ultimate user, who fails to comply with the regulations.

The consensus at the meeting was that anyone not complying and caught would become a test case determining the legality of the new regulation.
A suggestion was made that when such a test case happened it might be in fastener distributors’ interest for that segment of the industry to wholly or partially defray the malefactor’s legal fees. ©1983/2010 Fastener Industry News.

Health Insurance, Credit, Standard Containers and Car Rental/Hotel Discounts

Health Insurance / Major Medical

Al Zoukas said that within MFDA some 61 companies representing 1,200 employees have expressed interest in purchasing health insurance through a single carrier thereby reducing individual company costs.
The question for those at the meeting was, “What are the possibilities of getting this coverage on a networked national level?”
While figures are not yet available, it’s estimate that members of just the MFDA could realize savings of up to 40% for major medical and that similar savings might be attained if other fastener reorganizations were to have their members participate in such a program.

Credit

Zoukas said the MFDA has a pilot credit reporting service in the works and provided some details about how it would work: 90 day and over creditors would be reported by each company to the bureau each month and a code given for the reasons for the late or non-payment of invoices.
Richard Proteau said LAFA has had a credit bureau in operation for about 10 years but he did not believe it had grown much during that time.
If the NFDA pilot program is effective, the goal would be for each of the other organizations to integrate their credit information to a centralized third party bureau to provide this information on a national scale.

Standard Containers

Discussion here was about developing standard shipping containers for 1/4, 1/2 and full keg size and utilizing integrated sources to bring down the cost of containers.
Anthony D’Agostinono said three members of the upstate New York group had merged their buying of 1/4 keg containers and achieved 20% savings.
Besides establishing greater purchasing power, the objective for the combined fastener groups would be to get a standardized package that all could use.
The leaders also discussed union regulations concerning maximum weights of packages and printing costs to individualize the packages.

Paper Supplies

Since so many companies are moving to computers the possibility of combined purchasing of computer paper and related supplies through a national network was explored.

Car Rentals & Hotel Prices

The establishment of a discount program with major auto rental firms based on regional or national networking was discussed and the topic was broadened to include motel and hotel rates.
Larry Basner of New York Fasteners pointed out that most chains had dropped their salesman discounts and raised prices. ©1983/2010 Fastener Industry News