To celebrate Plastics News' 20th anniversary in March, we continue with our weekly countdown of the Top 20 issues of lasting impact, as reported in our pages.
The series will end with the No. 1 issue in our 20th Anniversary special edition March 16.
No. 6: Machinery
The collapse of the financial industry and a fast-sinking overall economy has been big news for the past six months or so. But what if your industry was entering its ninth straight year of a slump? Now you're talking about the U.S. market for injection molding machines.
According to industry experts, the machinery crash started abruptly soon after what was a record-setting NPE 2000. By the end of the following year, press sales had plunged by 40 percent.
Mid-2000 seemed to mark a turning point, when the U.S. plastics industry switched gears from full speed ahead to slowdown. Many sectors of the plastics industry turned into a tailspin after Sept. 11, 2001, as business moved to China, India and other low-wage countries.
Injection molding was the hardest hit, a fact reflected in a dramatic falloff of U.S. shipments of injection presses. It's hard to believe these days, but in the mid-to-late 1990s, machinery makers reported shortages of motors and other key parts. Lead times got stretched out. U.S. shipments approached a record 7,000 presses.
In the words of an old song, ``Those were the days, my friend. We thought they'd never end.'' Buoyed by a strong first half in 2000, shipments ended at 6,420 the last hurrah. Final statistics are not available yet, but in 2008, shipments sank to the range of 2,300-2,500.
Press shipments could get even worse this year; as we know all too well, the same holds true for the global economy.
As Plastics News' machinery-beat reporter, I feel like I've written the same story over and over and over. Auctions. Molder bankruptcies. Machines dumped onto an already slumping industry. Veterans are saying this is the deepest downturn for plastics machinery ever.
This year, I expect to see some injection press players leave the U.S. market. ``Harsh reality'' that's the catch phrase for 2009.
The U.S. plastics molding industry continues to have too much capacity. Jeff Mengel of Plante & Moran PLLC pegged the rate of capacity utilization at 40 percent, based on 24/7 production and that was in 2005! What do you think it is today?
It all retards sales of new machinery. There's a reason you don't see many young reps selling plastics machinery these days. They have to see a future there.
This long-term weak equipment market poses a danger to the entire plastics industry. Machinery makers develop the new technology that pushes the industry forward, toward ever-greater levels of efficiency. If they're losing money, how does that happen?
Here's the really sobering thing: For machinery especially injection molding by now, this is old news.