- 11 January 2007 -
2007 Forecast: A Mixed Bag for Metal Finishing Industry

Challenges vs. opportunities. That's the general assessment of industry observers who shared their views and perspectives of the new year for Metal Finishing’s 2007 Industry Forecast.See feature story in the January issue.

Looking through the proverbial crystal ball, finishers don't expect many surprises. On the whole, the North American metal finishing community expects to see offshore competition intensify even further, as large finishing contract jobs continue to migrate to Asia. In response, those firms representing the chemical, equipment, and supplies contingent of the industry have already begun to react to these dynamic changes by shoring up manufacturing/distribution operations in China, either through fortifying existing relationships, forming new partnerships, or completing outright acquisitions. As one source told MF, the survival of U.S. finishers in the face of this evolution will boil down to their ability to "adapt, diversify or, in some cases, specialize."

But that isn't the only issue on observers' minds. Finishers are also keeping a close eye on regulatory matters. On the plus side, many are encouraged by recent developments relative to hex-chrome exposure, particularly how The Policy Group—on behalf of finishers—successfully negotiated with OSHA for more lenient restrictions on the PEL issue. More good news came late last fall, when The Policy Group reached a settlement that provided additional relief for metal finishers regarding certain short-term respirator requirements in exchange for accelerating the implementation of engineering controls. Meanwhile, ongoing litigation involving Public Citizen and the Steel Workers Union promises to keep the chrome-PEL issue in the spotlight.

Other environmental initiatives stand to impact the finishing industry. Just last month the California Air Resources Board (ARB) adopted new regulations it claims will reduce cancer risks near chrome plating businesses by up to 85%. How? By requiring that chrome plating or anodizing businesses not be allowed to operate within 1,000 feet of residential or mixed-use areas, and recommending tighter emission controls to diminish contaminated dust. That development was preceded by an EPA amendment regarding industrial process heaters.

Other areas that will require close monitoring in 2007 are several traditional end-use segments that are important to metal finishers—namely the electronics and automotive sectors. Regarding electronics, which is among the most active sectors (consumption-wise), scores of electronic equipment and accessory suppliers have adopted new manufacturing processes to ensure compliance with RoHS regs. This wave has essentially forced subcontractors that supply those firms with services and/or components to comply as well. Regarding the automotive sector, finishers and suppliers alike are hopeful that cost-saving initiatives instituted by several struggling U.S.-based auto manufacturers put those companies back on positive financial footing. After all, the respective fates of these suppliers and finishers are essentially tied, since any potential cutback in auto/parts production and/or preparation would have a direct impact on related finishing contracts.

Whatever 2007 brings, one thing is for sure: Finishers will be poised to adjust accordingly. It's what they do best.

--Reginald Tucker, re.tucker@elsevier.com