Kickstart: Interest rates, machinery sales and plastics

When the U.S. Federal Reserve meets today, the general expectation is that there will be another slight increase in interest rates.

Expect that to mean slowing sales for plastics machinery and other big-ticket items, Bill Wood, Plastics News' economics editor, noted during the July 25 Numbers That Matter Live webinar. As a result, he doesn't expect to see big growth for equipment makers for three or four quarters, with the potential for a boost out of NPE2024 when buyers "have a chance to kick the tires" on new machinery.

"With rising interest rates and declining utilization rates, we've got a few quarters of tough sledding for machinery manufacturers," he said.

In this month's Number That Matter column, Wood noted that production numbers have stalled for plastics overall, and the industry as a whole has not kept up with the rate of inflation. Those numbers vary, of course, depending on the end market. And the economy is generally "holding up better than people anticipated." But there are still big issues to watch when tracking expectations.

"Right now, the plastics industry is only producing about the same amount of product as it did six years ago," he said.

You can read this month's column here and PN subscribers can watch the webinar here.

The Green Bay Packers are the only NFL team owned by the fans. Now the team has purchased Foamation Inc., the company that created the Cheesehead hat. That means, in a sense, that Cheeseheads now own the Cheeseheads.

PN's Jim Johnson has the story on the sale of the Milwaukee-based maker of polyurethane foam products to the Packers. Ralph Bruno created the first Cheesehead hat from leftover upholstery foam and wore it to a Milwaukee Brewers baseball game in 1987. It became more known, though, as a symbol of the Packers.

In 2016, Bruno told PN that about 80 percent of Fomation's sales were Cheesehead related.

At a press event, a Packers spokeswoman said the team is looking forward to creating even more Cheesehead products.

This means, of course, that the Packers likely are the first NFL team to own a plastics company. Although the owner of a plastics company, Shahid Khan, does own both a plastics company — auto supplier Flex-N-Gate — and an NFL team, the Jacksonville Jaguars.

Carbon-fiber composite supplier Plasan North America Inc. has just scored a big win as it transitions into defense work.

The Walker, Mich.-based company said earlier this year that it is transitioning out of the auto supply industry to focus on the defense industry. It has now won a five-year, $300 million subcontract to make subcomponents for the Joint Light Tactical Vehicle A2's armored cab, made by AM General LLC.

AM General won a contract in February to make an estimated 20,000 JLTVs for the U.S. military, our sister paper Crain's Grand Rapids Business writes.

Plasan expects to hire 170 people to make the parts.

"This is a milestone for us and the kind of contract we've been looking for the last couple of years," President John Cavedo Jr. told Crain's Grand Rapids.