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The Hill and Griffith Company's News Blog

Pushing for Larger-Dimension Diecastings

Posted by Hill and Griffith Company on Wed, Nov 18, 2015 @ 06:12 PM

From Foundry Management and Technology, November 2016

Lightweight vehicle designs need high volumns of complex cast parts, prompting a wave of projects for large pressure diecasting machines.

Walker Die Casting, a Lewisburg, TN, producer of aluminum components for automotive and truck manufacturing, has ordered a 4,500-ton cold-chamber diecasting machine from HPM North America, to be delivered in 2017. According to the contractor it is the largest cold-chamber machine it has produced to-date in North America. But, that distinction may not last long.

There is an outbreak of demand in North America for new discasting capacity on that scale, machines sized to produce a range of highly engineered parts in aluminum alloys. It's demand prompted by motor vehicle manufacturers working on new production programs keyed to lighter vehicles, with lighter component parts for powertrains, drivetrains, and structural systems.

But lighter car and truck designs are not the only factor in the wave of new diecasting capacity: Mercury Casting, a business unit of Mercury Marine, ordered a new large-scale diecasting machine as part of a plan to expand the group's stern-drive engine platform.

The 4,500-ton Series II cold-chamber machine for Walker Die Casting machine will be built by HPM North America, Marion, OH, and its corporate parent, China's Yizumi Group. In operation, it will produce 125- to 135-lb. castings.

Series II machines have a C-frame support for the shot-end; a five-point toggle clamp, with a high-strength, cast-steel linkage, hardened pins and bushings; and a crosshead that is fully supported by Allen Bradley CompactLogix plc and IO production process controls.

The developers claim the Series II provides the diecasting industry's lowest total cost of ownership.

The machine ordered by Walker Die Casting will be engineered to HPM North American specifications by an HPM/Yizumi engineering team led by HPM North American president William Flickinger. He said Walker's procurement decision was based on the reliability of several HPM diecasting machines operating now at the Tennessee plant, and, on the performance of new HPM North American diecasting equipment at other major auto parts producers.

Also influential in the decision was the HPM/Yizumi plan to build the machine with SAE bydraulic fittings, inch fasteners, and inch tubing. North American suppliers will provide the machines' major hydraulic, electrical, and control components, and HPM will complete final assembly and test runs of the 4,500-ton diecasting machine at the Yizumi facility prior to delivery.

llustration of typical diecasting machine from Hill and Griffith. Not part of FM&T's article)

Expanding In-House Capacity

BuhlerPrince Inc., Holland, MI, is building Mercury Casting's new diecasting machine for delivery in June 2016. The model 4575CCA machine will have 75 inches of free space between the tie bars, space that Mercury Castings unit will use to help expand the dimensions of its in-house casting capability. BuhlerPrince described it as "the largest high-pressure diecasting machine bult in North America.

"We are excited to bring this new machine into our porfolio," stated Samir Mesanovic, director of Mercury Castings. "It will be a welcome addition to our production and increase our capabilities to produce the largest and most complex parts for both Mercury Marine and other customers."

Mercury Marine is widely known for manufacturing outboard motors up to 60-hp, but it also builds MerCruiser sterndrive motors (inboard/outboard drive) and inboard motors over 75 hp.

Mercury Castings casts complex aluminum and lost foam castings for Mercury Marine programs, as well as for manufacturers of automotive, agricultural, and industrial systems.

According to BuhlerPrince, the new machine will give Mercury Marine the abiltiy to produce the largest automotive structural parts, and parts for other industries where lighter designs are needed to address fleet vehicle carbon-emission reductions, to achieve better fuel efficiency, or both. It's a wider trend that has seen automotive and other vehicle designers shift specifications from iron and steel structures to aluminum and other ligthweight materials, a shift that favors high-pressure diecasting production.

BuhlerPrince, Holland, MI, is an operating division of the Swiss manufacturer Buhler Die Casting. It produces machines ranging from 200 to 4,500 toms of clamping force, and offers retrofit and/or remanufacturing services, spare parts, and service and support for diecasters in North America.

"Buhler is very proud to partner with Mercury for their expanding diecasting equipment requirements, " stated BuhlerPrince president and CEO Mark Los. "Continued investment in equipment and people allows BuhlerPrince, as the only diecasting machine builder in North America, to provide innovative products to our customers, enabling them to be competitive on a global basis."

The Hill and Griffith Company is known for our hands on approach. Let us visit your plant and recommend products that suit your needs. Learn more.

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Light Vehicle Sales Update Means Business for Die Casting Industry

Posted by Hill and Griffith Company on Wed, Feb 04, 2015 @ 09:28 AM

Thanks to the NADCA Feb. 7, 2015 Newsletter



WardsAuto tracks light-vehicle (LV) deliveries throughout sales reporting day. Monthly year-over-year change represents the change in daily sales rate (DSR). January had 26 selling days this year and 25 in 2014, meaning DSR % change will be smaller than year-over-year comparisons of total sales volumes.

Led by strong gains in truck sales, U.S. automakers sold 1.149 million light vehicles in January, a 9.3% increase in daily sales (over 26 days) compared with year-ago (25 days). The resultant seasonally adjusted annual rate - roughly 16.55 million - was the industry's highest January SAAR since 2006. A 14.4% rise in daily sales of light trucks spurred the industry growth, as car sales rose just 3.7%. Light trucks accounted for 55% of LV sales in January, compared with 52.7% in January 2014. General Motors led all automakers, accounting for 17.7% of the month's LV sales, followed by Ford (15.2%) and Toyota (14.8%). Subaru recorded the largest year-over-year growth with a 28.3% increase in daily sales, while Volvo and Volkswagen registered industry-worst 3.8% DSR declines.


The Hill and Griffith Company is known for a hands on approach to applying Diluco® die casting release agents, plunger lubricants, water glycol, hydraulic fluids, start-up lubes and metaworking fluids. Let us visit your plant and recommend products that suit your needs.

Bulletins and Technical Papers for Die Casting Products

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Pace Industries Gives Students Look at Die Casting Industry

Posted by Hill and Griffith Company on Fri, Nov 07, 2014 @ 12:49 PM

Thanks to the NADCA Nov. 6, 2014 Newsletter 

Grant Sloan of Ozarksfirst.com reported that Pace Industries, Harrison, AR, was among the some 1500 companies across the country that hosted high school students earlier this month for National Manufacturing Day. Following the interest of the first Manufacturing Day they opted to host a second one. 

Pace Industries Die Casting Student Tour 1 resized 600

"I've always kind of known what the inside of the factory was like, but this was a much better description," says Yellville Junior, Lexii Knox. 

The technology-based equipment used in Pace’s die casting facility is something sales coordinator Chris Barnard says is a perfect fit for the next generation. 

"To get new fresh workers in here that are technologically savvy is very important," says Barnard. "It's going to be the turn of the industry." 

Pace Industries Die Casting Student Tour 4 resized 600

Roughly 80% of manufacturing companies across the country say they have problems pulling in skilled workers. In Arkansas, manufacturing makes up 90% of the state's exports - which is why Pace is opening its doors to help change some of the misconceptions. While manufacturing pulls in nearly 15 billion dollars a year for the state, Pace Industries is hoping these tours will do more than help grow the industry. 

"It's not what it was 25 years ago," says Chris Barnard. "That when you come to manufacturing it's a career, and it's a place for growth, to help out the community and to keep jobs in small towns." 

Pace Industries Die Casting Student Tour 5 resized 600

To view a video of the event at Pace click here.

The Hill and Griffith Company is known for a hands on approach to applying Diluco® die casting release agents, plunger lubricants, water glycol, hydraulic fluids, start-up lubes and metaworking fluids. Let us visit your plant and recommend products that suit your needs.

Bulletins and Technical Papers for Die Casting Products

Tags: Die Casting, Die Casting Release Agents

Hill and Griffith attended the VI Congreso Die Casting Show in Mexico

Posted by Samantha Farris on Mon, Nov 03, 2014 @ 09:17 AM

imetalmexico resized 600

Ryan Canfield - HG Sales Rep representing our booth at the VI Congreso Die Casting I Medal Show in Mexico

The Instituto del Aluminio, A.C. sponsored the VI Die Casting Congress, which will took place in Aguascalientes, Ags., Mexico from October 16th to 18th, 2014.

It is one of the most important events at Latin America specialized in Die Casting, where the most important suppliers and clients of this sector converge.

Within this forum networking and professional development, discussion and information about the most important issues is exchanged.

The world market for Die Casting has increased in recent years considerably which opens a high competitive market due to the active technological innovation and quality improvements of multinational groups. It is an excellent platform for experts in the field to come together and showcase new trends, announce new processes and products.

The Hill and Griffith Company is known for a hands on approach to applying Diluco® die casting release agents, plunger lubricants, water glycol, hydraulic fluids, start-up lubes and metaworking fluids. Let us visit your plant and recommend products that suit your needs.

Bulletins and Technical Papers for Die Casting Products

Tags: Hill and Griffith, Employee, Die Casting, Die Casting Release Agents, Metal Casting

Causes & Fixes for SCC Bug Holes

Posted by Lauren Campbell on Tue, Jul 08, 2014 @ 03:12 PM

By John Pelicone and taken from Precast Inc. Magazine's May/June 2014 issue. 

For full PreCast Magazine Inc. Issue click here

Like a persistent mosquito, one question has plagued precast concrete producers for years: “How can I eliminate bug holes?” In the past, this question was much harder to answer, because concrete was placed at a stiffer consistency that required excessive vibration. And excessive vibration sometimes caused more bug holes. After the introduction of self-consolidating concrete (SCC), bug holes(ii) became a less common occurrence. Yet, as a recent online industry discussion revealed, this perturbing problem is still with us.
Preventing Bug Holes


Let’s focus on production’s tail end

The first thing we all learn about SCC is that it’s a tricky devil to work with. There is no room for error, consistency and control are king, and problems, like bug holes, can have more than one cause.

Most online commentators agree that there are three main causes of bug holes:

• Improper selection and application of form release agents

• Problems with SCC mix design (cement, water content, viscosity, admixtures)

• How SCC is placed in the form

Rather than trying to cover all possible sources of bug holes, I decided, like the online commenters, to focus on form work, placement and form release agents. Attempting to cover complex SCC mix-design issues would be too unwieldy for one article(iii).

Two types of release agents

Chemically reactive agents: When a chemically reactive form release agent is used, a nonviolent chemical reaction takes place when fatty acids react with free lime on the surface of fresh concrete. This reaction results in the formation of a metallic soap, a slippery material that allows air bubbles to rise along the vertical surface. This “soapy” film also prevents the hardened concrete from adhering to the forms during stripping.

Barrier release agents: Thicker coatings on forms are typical of the older barrier-type materials, like heavyweight used motor oil, vegetable oils, diesel fuel and kerosene. Barrier type release agents are less expensive than chemically reactive agents, but they are not generally recommended for reducing SCC bug holes.

A problem with the heavier, thicker barrier agents is that the flowing SCC may actually push the release agent down the vertical face of the form, thereby enfolding or entrapping air pockets that lead to surface bug holes.

International input on SCC bug holes

The following is advice from industry experts on bug hole causes and remedies.

Juan Manuel Pereira, Concrete Quality Software, Spain (concrete-quality.com)

“Generally, oils will give the worst finish, especially if applied in excess. Use a wax-based mold-release agent in a thin layer (like polishing furniture), which gives excellent results. They are more expensive, but, when you do the math, the cost per square foot is negligible. Maintaining good form condition is also important.”

Jeff Bishop, precast division manager, Nox-Crete, Nebraska (noxcrete.com)

“Too often, the form release application equipment is inferior, the sprayer has a faulty tip, or the equipment fails to maintain the minimum pump pressure to adequately apply a thin coat on the form surface. Not many plant workers will make frequent stops to check or correct the pressure after they have started spraying. We spent three years developing quality pumping and spraying equipment that ensures a consistent, fine spray.

“Sometimes with truck deliveries, the discharge chute gets ahead of the initial hydraulic head formed by flowing SCC; this can cause entrapped air. You have to make sure you are adding concrete to concrete in such a way that the head is maintained. As the SCC flows down the form and up the side of the form, entrapped air is pushed forward, up and out.”

Cecil Wilson, plant manager, Metromont Corp., South Carolina (metromont.com)

“There are three reasons for SCC bug holes – it’s 1/3 form release agent, 1/3 the mix and 1/3 how the concrete was placed. All three potential causes need to be checked systematically, one at a time, so you can pinpoint the problem. It is imperative to pour SCC so that entrapped air has the opportunity to escape(iv).”

Bob Waterloo, technical sales manager, Hill & Griffith Co., Indiana (hillandgriffith.com)

“Training. I’m a huge proponent of training workers on proper application. ‘Thinner is better’ is what I advise plant workers during my training sessions.

“Here’s an analogy: Think about waxing your car. You put on a thin coat and then buff it out; it’s the same with release agents. In fact, the coating should be thinner than a wax finish on a car.

“But do workers always take the time to mop or rub down forms after spraying? Labor is a major expense for all precasters, and the person prepping forms may not follow proper application methods if he knows the forms are needed in production ASAP.”

John Stewart, global business development manager, Ecoratio, The Release Agent Co., Great Britain (ecoratio.com)

“The main thing is to use a good release agent. Where possible, revert to a top-class release agent rather than a mold oil. This will help surface air escape quickly rather than being retained by a thick oil.”

Alexis Borderon, Reval Stainless Steel & Concrete, Italy (reval-stainless-steel.com)

“We have tried coconut oil, fat, oil-free release agents – all kinds of miracle products from world-class salesmen. I certainly learned that whatever product you use, it must be applied in a thin layer, concrete must be poured close to the form, and never let fresh SCC be poured from a height! We never vibrate.”

Sam Strong, president, Strong Products LLC, Michigan (strongproductsllc.com)

“Release agents generally average $7 to $10 per gallon, but specialized applications may call for a more expensive product. A precaster’s cost and time concerns can result in a poor choice of release agent. A cheaper price may look good but can lead to more labor cost down the road after you have product staining and bug holes. Truth is, product reps rarely see forms being wiped-down or mopped according to manufacturer’s instructions, especially at the smaller precast operations.”

Concrete Form Release

Brian Robinson, continuous improvement manager, Humes Pipeline, New Zealand (humes.co.nz)

“You should try a few different mold release oils – diesel-based, bio oil-based, etc. Suppliers should bust your door down to provide some free samples; stay away from your current so-called ‘cheap’ option. A good release agent that works will end up a similar price – if applied sparingly (correctly), it will result in better quality products. It’s a process of elimination; using different release agents will help you determine if the mix has any issues.

“You’ve got to place from one point in the mold and let it flow. We noticed the SCC places better in the mold using about a 150 mm-diameter opening – not a wide-mouth opening. Also, if the concrete needs to fall a considerable height, a tremie pipe or sleeve works well. This prevents segregation and removal of release agent by falling concrete (which also affects the finish) and reduces bug holes. We never need to mechanically vibrate (we outlaw this) but large, deep tanks may need a small amount of rodding (12 mm-diameter ) reinforcing bar, rodded up and down a dozen times at the opposite side of the mold (from where the concrete is placed) to prevent a discolored seam.”

Greg Stratis, manager, Shea Concrete Products, Massachusetts (sheaconcrete.com)

“We don’t use external vibration for our SCC products – you can quickly over-vibrate the mix. We use SCC on 95% of our product. A lot of our products are vaults with reinforced 3-in. or 6-in. walls. Our SCC design is 5,000 psi with 26-in. spread.

“We are able to get a smooth finish without vibration. In my opinion, if bug holes are present on our product using this mix, it is usually due to too much form oil or a change in our oil consistency. But generally, I would say that the cleanliness of the form and the quality of the release agent used are critical to preventing finish bug holes in the concrete surface.”

Claudio Subacchi, director of R & D, Hawkeye Pedershaab, Iowa (hawkeyepedershaab.com)

“To make sure it is not your release agent, try to make a pour after waxing the surfaces. Sometimes fatty acids (probably the form release agent) generate some bug holes. For wax, we do not use an oil-based one and avoid ones that have beeswax, because they have sugar residues that can potentially cause other kinds of problems. We use a very thin layer of carnauba oil and let it dry, and then cast. If the bug holes go away, then it is your release agent; if not, ask your admixture supplier for a defoaming agent.

“Typically on large architectural surfaces, you do not want to have the SCC travel more than half a meter on a 40 mm-thick pour. If that happens, you may not have bug holes, but you get a shadow from the release agent. See my video for a demonstration(v).”

Todd Leber, chief inspector, Nebco Inc., Lincoln, Nebraska (nebcoinc.com)

“We have had success using two form release agents casting SCC. The key is to apply it as thin as possible. Contact your local distributor to find the right material for your application.”

So in conclusion, let’s summarize the industry’s consensus from for preventing SCC bug holes in three points:

• Use the thinnest application possible of a quality form-release agent, using superior sprayer equipment (pumpers maintained at proper pressure and sprayer tips/nozzles in good condition);

• Maintain proper SCC placement from one pour location in the form, remembering that a slower placement rate allows entrapped air to escape; and

• Maintain forms in clean condition.

John Pelicone

John Pelicone is a private consultant for Big River Industries Inc. and has worked in concrete materials, testing and sales in the precast and prestressed industry for more than 40 years. Contact him at pelicone@bellsouth.net or (770) 682-9896.


ii According to PCA (Portland Cement Association), “The ever-increasing use of structural concrete as an architectural building material has catapulted quality in surface appearance to a prominent position within the concrete construction industry. One of the primary influences affecting the surface aesthetics of concrete is bug holes. Bug holes are surface voids that result from the migration of entrapped air (and to a lesser extent water) to the fresh concrete-form interface. These surface defects manifest themselves mostly in vertical surfaces.”http://www.cement.org

iii See: SCC Part I (characteristics, aggregates and equipment) and Part II (troubleshooting and test methods) in Precast Inc. magazine, January-February and March-April 2014 for detailed information on mix design and control of free water.

iv Best Practices Guidelines for Self-Consolidating Concrete, prepared by the Ready Mixed Concrete Association of Ontario, January 2009, page 10. RMCAO recommends: “For large vertical elements care should be taken not to fill the formwork too rapidly. The placement rate should be slowed to the point that there is sufficient time for the entrapped air to rise to the concrete surface. Since air movement can only take place when the SCC is itself moving into the formwork, slowing the placement rate may assist in removing unwanted air pockets at the formed face of the concrete.”

v See video at: https://www.youtube.com/watch?v=d8luoYe1Fqg Contact Claudio Subacchi of Hawkeye-Pedershaab at: Claudio Subacchi <csubacchi@hawkeye-pipe.com>

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The Hill and Griffith Company is known for our hands on approach. Let us visit your plant and recommend products that suit your needs.

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Tags: Hill and Griffith, Die Casting Release Agents, Concrete, Concrete Form Release Agents, Casting Solutions

AFS Die Casting News: Foundry-In-A-Box Promotion

Posted by Hill and Griffith Company on Tue, Jun 03, 2014 @ 01:56 PM

Die Casting News

Thanks to the American Foundry Society Newsletter; May 20, 2014

West Milwaukee Intermediate School students are learning metalcasting thanks to the efforts of the Wisconsin Chapter of the American Foundry Society and teachers like Andrew Mente, technology education teacher for the West Allis-West Milwaukee School District in Wisconsin. Mente and the AFS chapter have worked together to demonstrate the process to seventh and eighth graders with the Foundry in a Box. 

Mente shared the value of this partnership and its positive influence on the students in an article he wrote for his fellow teachers, which can be read here.

“Students were very excited when I first told them about the prospective of creating unique objects out of metal,” Mente wrote. “My students have never seen anything like it before.”

Mente shared one example of a student whose first efforts at making a mold failed to produce a good casting. He discussed with the student what could have gone wrong and how to fix it. They ended up widening the gate and venting the distant areas of the mold, which resulted in successful castings.

“Seeing him carefully inspect his castings after breaking loose the sand was a great joy to me,” Mente wrote. “It was hard to diminish his enthusiasm for creating objects every day after that.”

Since its inception, the Foundry in a Box has been utilized at events and schools to interest and educate the next generation of metalcasters. The kit allows students and teachers to create their own castings, from pressing the oil-based sand into a small matchplate mold, melting tin in a microwave oven and safely pouring the molten metal into the mold. For more information on Foundry in a Box, click here.

The American Foundry Society is a not-for-profit organization formed in 1896. With its headquarters in Schaumburg, Ill., AFS provides members and consumers with information and services to promote and strengthen the metalcasting industry.

The Hill and Griffith Company is proud to have contributed to the AFS Foundry-In-A-Box educational project. We're known for our hands on approach with foundry and die casting release agents and supplies. Let us visit your plant and recommend products that suit your needs.

Bulletins and Technical Papers for Metal Casting Products

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GM Bedford Die Casting Facility to get an additional $22.6 million

Posted by Samantha Farris on Mon, Dec 23, 2013 @ 09:48 AM

Five plants in Indiana, Michigan, Ohio to share capital improvements for engine, transmission production.

By Robert Brooks 12/16/13


A General Motors worker operating a high-pressure aluminum diecasting machine producing transmission parts at Bedford, IN. GM photo/AJ Mast

General Motors outlined plans to invest almost $1.3 billion more at five GM Powertrain plants in Michigan, Ohio and Indiana, part of a continuing capital program supporting new engines and transmissions. GM noted the announcement brings this year’s investments in its domestic operations to $2.8 billion.

GM also said the new capital program would support its vehicle quality improvement programs and streamline logistics. Specific investment plans were not announced.

Many of the investments are directed at GM’s new 10-speed automatic transmission and new V6 engine. The automaker said these new products would be detailed at a later date.

Among the plants targeted for the new is the aluminum melting, diecasting, and permanent mold foundry at Bedford, IN, where GM casts small engine blocks, transmission casings, and converter housings. Earlier this year, Bedford was identified as the site of a $29.4 million investment program to install capacity for GM’s new small gas engine, and new 8-speed and existing 6-speed transmissions.

Now, Bedford Castings is due for $22.6 million more, to add capacity to produce GM’s 10-speed transmission, and $6.6 million for producing components for the 6-speed transmission.

Bedford now has 486 hourly and 116 salaried employees, and GM estimated 40 new or retained jobs would result from the investments. Plant manager Eric Gonzalez said the program “signifies a commitment to the men and women of Bedford Powertrain and their dedication to build the best Engine and Transmissions in the world.” 

The other four plants in line for new investment are the Flint (MI) Assembly plant, where $600 million will support general site updates, and addition of a new paint shop; the Romulus (MI) Powertrain plant, where $493.4 million are in line to prepare for producing the new 10-speed automatic transmission, and to increase capacity for a new V6 engine; the Detroit-Hamtramck Assembly plant in Michigan, $121 million will develop a new logistics optimization center; and t

In total, GM predicted the new investments would “create or retain” about 1,000 jobs across the five sites.

“GM is committed to a strong American manufacturing base and creating jobs in dozens of communities throughout the country. Today’s announced plant upgrades continue the momentum of a resurgent auto industry,” stated GM executive vice president and North America president Mark Reuss. “More importantly, these investments add up to higher quality and more fuel-efficient vehicles for our customers.”

Thanks to Foundry Management Technology Magazine  

If you like this article, learn more about Hill and Griffith's attendance at the Die Casting Congress Trade Show.


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Tags: Die Casting, Die Casting Release Agents, Permanent Mold Release Agents, Permanent Mold

Help Available to Growing Automotive Aluminum Die Casting Companies

Posted by Samantha Farris on Tue, Sep 03, 2013 @ 09:52 AM

Examples of automotive and aerospace suppliers who are using state-level grant, loan, and reimbursement programs successfully to overcome financial gaps and other obstacles to investing in new equipment, adding space or new facilities, and creating jobs.

Both the automotive and aerospace manufacturing industries have high-tech and capital-intensive operations, requiring highly skilled and specialized labor. Indeed, many of the required inputs, materials, and production processes are common among OEMs and suppliers across both industries. For example, Ford and Boeing have a longstanding collaborative relationship, sharing research and knowledge in the development of new production processes. The Ford Freeform Fabrication Technology initiative, a new method of constructing low-volume and prototype parts, is a recent example. The automotive and aerospace industries also share many government-mandated and consumer-driven challenges that are heavily impacting OEMs and their largest suppliers and, consequently, being forced down through supply chains (see Chart 1).

Most states have business assistance programs to help companies overcome financial gaps and other obstacles to investing in new equipment, adding space or new facilities, and creating jobs. This article discusses some common problems faced by small and mid-size manufacturing companies, describes select programs that may be used to resolve these issues, and provides illustrative examples of automotive and aerospace suppliers that used these programs to improve and expand their businesses. Of course, these challenges do not solely exist within the automotive and aerospace supplier industries, and this article will be of interest to any company developing strategies to overcome these and similar obstacles.

Finally, since both industries require frequent capital investments, this article focuses on grant, financing, and reimbursement programs that provide up-front or early-stage assistance; thus, tax credits, tax abatements, tax-free bond programs, and tax increment financing arrangements are omitted. While such programs are helpful, their benefits accrue slowly, over a number of years. Also, they are already among the best-known and most-used programs.

Chart1 resized 600

Up-Front Assistance vs. Reimbursements
Broadly speaking, business assistance programs may be divided between those that provide cash or loans and others that provide reimbursement for qualified incurred costs. The first group includes grants and deal-closing funds (often structured as performance-based, forgivable loans), collateral support and loan participation programs, direct loans, subsidized loans, and loan guarantees.

Typical reimbursement programs include training grants and energy-efficiency rebates. Training grants are readily available and reimbursements can be received a few weeks after pre-approved training expenses are incurred. Energy-efficiency rebates have been somewhat underutilized. They will remain available for at least the next two years under a federally mandated program that may vary from one state or utility to another. Lighting and electrical retrofits (or in the case of new construction, upgrades beyond current building code requirements) have a quick payback period when rebates are factored in. Less common, more complex energy-saving measures (production process improvements, for example) can be included under customized incentives.

Business Development and Closing Fund Grants

Many states have business development programs that provide grants, loans, and other economic assistance to help companies close financial gaps and move forward with investment and job creation plans. Sometimes called “deal-closing funds,” they can also be used to help win competitive projects.

A Michigan company that designs and manufactures parts and tooling for the aerospace and automotive industries was “on the ropes” in 2009. The company recently won substantial new work. Retaining its original building, the company leased two nearby buildings and spent almost $3 million in repairs and upfitting. It will invest more than $6.5 million for machinery and equipment for the new buildings. The tipping point in making the project feasible was an $800,000 performance-based grant from the Michigan Business Development Program. The result was a commitment of almost $10 million in private investment and 188 new jobs (tripling the current work force).

In 2012, South Carolina awarded $6.2 million from the Governor’s Closing Fund to 18 projects throughout the state. One of the deals was an $825,000 grant for building upfit, site preparation, and infrastructure for a plastic automotive components maker, which then committed to establish its new facility in South Carolina with an investment of $12 million and 119 new jobs. In June 2013, the fund awarded $300,000 for building upfit to entice a maker of tubing for aircraft fueling systems to relocate its operations to the state. Private investment is projected to be $5.5 million, with 100 new jobs.

The Use of Collateral Support Programs
To facilitate growth, a 250-employee aluminum die casting company serving the automotive and heavy truck industries needed to refinance existing debt and increase its working capital line of credit. A new lender committed to the refinancing, subject to collateral support for the increased working capital line through a state-administered, federally funded program known as the State Small Business Credit Initiative (SSBCI). The state pledged $2.4 million for collateral support, enabling the new lender to refinance $8.5 million of existing debt. This resulted in a project with total private investment of nearly $13 million and the creation of 88 jobs.

An automotive stamping supplier, producing medium-sized components, as well as a larger, more complex Class “A” stampings and assemblies operation, needed new equipment to increase capacity and improve efficiency. The total cost was $7.5 million. The total financing package was made possible by $3.7 million in SSBCI-funded collateral support. The new equipment will enable the company to add 45 new jobs.Both examples above are from Michigan, which created new state programs for collateral support and loan participation in 2009 and then persuaded the federal government to establish a nationwide program built on the Michigan model. The Small Business Jobs Act of 2010 created the State Small Business Credit Initiative (SSBCI), with $1.5 billion in direct funding to states for programs that expand access to credit for small business (fewer than 500 employees for Capital Access Program loans, and fewer than 750 for all other programs). States leverage private lending with federal funds to help finance small businesses and manufacturers that are creditworthy, but unable to get the loans they need to expand and create jobs.

While SSBCI is a one-time federal grant to the states, each state’s loan repayments will remain the property of that state in perpetuity. “Recaptured” monies can be used as revolving funds for state-operated business credit programs over the long-term. Automotive and aerospace suppliers with fewer than 750 employees under the same ownership should take a look at SSBCI if they have any issues with access to credit. Under SSBCI, states can undertake all or part of the permitted activities. They can also tailor and name their funds. (Tennessee calls theirs “INCITE Fund.”) The basic funding types are described in Chart 2.

Chart 2 resized 600

Training Grants
Training grants provide financial support to businesses that are creating jobs and need to recruit and train new employees or increase skills in their existing work force. There are multiple sources for grant-funded training. Find contacts for federally funded programs in each state at American Job Centers. Institutions of higher education, especially community colleges, frequently have direct sources of funding for training they provide.

Called “Alabama’s Number One Incentive,” AIDT is a notable example of a comprehensive state initiative to recruit, screen, and train workers for expanding businesses, usually at no cost to the business. AIDT is affiliated with several training centers, including one focused on robotics. Most states have one or more training centers that are focused on targeted industries like automotive and aeronautics, or a broader priority like robotics, and provide hands-on training, classroom training, and other business services.

Energy-Efficiency Rebates

Many companies have not yet taken advantage of energy-efficiency rebates, which will be available through 2015, or perhaps longer. “Green” projects can improve competitiveness and business sustainability by reducing ongoing costs. The immense savings (at current energy costs) can be sufficient to offset the entire project cost within a few years’ time, even absent rebates or business assistance programs. While lighting is relatively inexpensive and has a quick payback, building envelope, HVAC, and process improvements often have large up-front costs, and without the ability to fund these, the benefits cannot be realized. To address this problem, several programs exist to enable businesses to carry out energy-efficiency projects. A Kentucky facility had a free lighting audit, arranged by its electric provider. To upgrade 660 fixtures was $167,000 and would result in an annual savings of $50,000. There would also be a reduction of maintenance costs and tax deductions. With a $30,000 rebate, the payback period was reduced to about 2.75 years. A heavy manufacturing facility in another state would benefit greatly from infrastructure improvements, but the cost was several hundred thousand dollars. Payback through energy savings was about five years. Rebates cut payback to less than four years. If needed (and if the company qualified), project financing was available to purchase and install upgrades with no out-of-pocket costs; the contractor/lender would be repaid by splitting the energy savings for six to seven years.

In Sum

While a number of business assistance programs are available in most areas, many companies fail to utilize them, often because they are simply unaware of them. Also, many companies are hard-pressed to find the time to track down which assistance programs they qualify for, and navigating the bureaucratic processes and requirements of each program can seem daunting. When a company is challenged by financial, technological, work force, equipment, or facility needs (among others), help should be sought from:

    • Local and state economic developers;
    • Small Business Development Centers/Small Business Technology & Development Centers;
    • Local agencies delivering work force development and training services under the auspices of the Workforce Investment Act; and Business development and site selection/incentives procurement consultants.

Business assistance programs exist beyond the well-known tax abatements and tax credits. While the examples in this article focused on automotive and aerospace companies, these and similar programs are available to most businesses. These lesser-known and often underutilized resources may provide essential aid to businesses looking to expand their operations, upgrade their production processes and technologies, or improve efficiency and sustainability.

Authors: David B. Munson, Program Development Associate, Center for Automotive Research and Michael Schultz, Industry Analyst, Center for Automotive Research (2013 Auto/Aero Site Guide). From Area Development Site and Facility Planning.

We're looking forward to seeing you at the Die Casting Congress next month. Come by Hill and Griffith's Booth 315 to learn the latest technology, ongoing research and die casting, squeeze casting and permanent mold release techniques that will enhance your competitiveness. The Hill and Griffith Company is known for our hands on approach. Let us visit your plant and recommend products that suit your needs.

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