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NFDA Panelists: No Question About Globalization

John Wolz

Editor’s Note: The following are excerpts from a panel discussion at the autumn NFDA meeting. A full report will be in the next regular issue of FIN.

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 manufactures or partnering with distributors offshore, Roseman of Arnold Industries Inc. noted.

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.

John Grabner, president of Cleveland-based Cardinal Fastener & Specialty Co. suggested U.S. fastener manufactures “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.

“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.”

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 finds.

Back home, Cohn warned that the “U.S. is not educating its students to compete in the world economy.” Cohn did question 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.”

Jay Hebert of Porteous Fastener Co. pointed out the history of fastener production moving west from Port Chester, NY, 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.”
�2006 FastenerNews.com