MayJune2011

The NTMA Southwest Regional Precision Magazine Featuring Arizona, San Diego and North Texas MAY/JUNE 2011 Issue ON THE LEADING EDGE: 2011 Board of Directors

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Upcoming Events n

National Robotics League is On the Move

KEEPING IT

COOL!

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THE DO’S AND DON’TS OF COOLANT MAINTENANCE

What’s In It for Me? n

Helpful Websites

UNINTENDED CONSEQUENCES OF U.S. ENVIRONMENTAL PROTECTION LAWS RISK MANAGEMENT STRATEGIES: ARE YOU GETTING THE MESSAGE?

FEEL THE HEAT!

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AUTOMATED PROCESSING EXPLAINED

Eight Tax Tips from the IRS

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arizonatooling.org THE RIGHT TOOLS. THE RIGHT TEAM. THE RIGHT TIME.

PLUS: NTMA Update: Save on Services Legislative Update: Manufacturers Head to Washington

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CONTENTS MAY/JUNE 2011

VOLUME 2, ISSUE 2 MAY/JUNE 2011

The NTMA Southwest Regional Precision Magazine

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MAGAZINE

PUBLISHER MiNO Media, LLC EXECUTIVE DIRECTOR & EDITOR Chris Mignella CREATIVE DIRECTOR Neal McDaniel ONLINE SERVICES DIRECTOR Theo Tigno CONTRIBUTING WRITERS Mickey Gartman, Davis Hopkins, Omar Nashashibi, Michele Nash-Hoff, Brett Reynolds, Brent Terhaar

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ADVISORY BOARD Chris Mignella, Lisa Ellard, Glenn VanNoy, Gail Houser EDITORIAL AND ADVERTISING Chris Mignella Phone: 602.242.8826 • Fax: 480.970.8501 Email: ExecutiveDirector@arizonatooling.org PLEASE SEND ADDRESS CHANGES TO Chris Mignella Phone: 602.242.8826 • Fax: 480.970.8501 Email: ExecutiveDirector@arizonatooling.org

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DEPARTMENTS in this issue

FEATURES

03 President’s Letter

10 Job Costing - Gospel or Garage?

Managing Profitability

04 News Roundup 06 Legislative Update 07 Technology Update 08 Safety Corner 20 Arizona Chapter Info 26 San Diego Chapter Info 28 North Texas Chapter Info

12 Unintended Consequences of U.S. Environmental Protection Laws Learn About Some of the More Stringent Environmental Regulations 14 Automated Processing Explained Reduce the Need for Human Involvement, Improve Process Quality and Reduce Costs 16 SPECIAL ADVERTISING FEATURE The Do’s and Don’ts of Coolant Maintenance The Oil Barron Bulletin

Precision Magazine is published six times per year

by MiNO Media, LLC. Opinions expressed are those of the authors or persons quoted and not necessarily those of MiNO Media, LLC. While efforts to ensure accuracy are exercised, the publisher assumes no liability for the information contained in either editorial or advertising content. Publisher assumes no responsibility or liability for unsolicited manuscripts or artwork. Reproduction in whole or part without the expressed written consent from the publisher is prohibited. Precision Magazine is the registered trade name of this publication.

Copyright ©2011 by MiNO Media, LLC. All rights reserved.

ACHIEVE BUSINESS SUCCESS THROUGH ADVOCACY, ADVICE, NETWORKING, INFORMATION, PROGRAMS AND SERVICES. arizonatooling.org

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PRESIDENT’S letter OUR MISSION: “WE JOIN TOGETHER AS MEMBERS OF THE SW REGION PRECISION CUSTOM MANUFACTURING COMMUNITY TO ACHIEVE BUSINESS SUCCESS IN A GLOBAL ECONOMY THROUGH ADVOCACY, ADVICE, NETWORKING, INFORMATION, PROGRAMS AND SERVICES.”

THE BURNING QUESTION:

WHAT’S IN IT FOR ME? April, 2011 at is what everyone wants to know before investing time, energy or money. Membership in the ATMA/NTMA is no different, it has to provide value to the member in order to retain that member. However, unlike many transactions, the value received for membership is not simply exchanged for a check. e only way to get value from the ATMA is to participate. It’s the old adage, you only get out what you put in.

Most of the people I talk to who aren’t getting value aren’t participating.

If you are about to tune out, because you don’t feel like you have the time to participate, wait a minute. We are all busy. I work my butt off every day in my small business, and there are certainly times I would rather go lay on the couch than go to a meeting. But I am always there, and I always get something out of every meeting. So remember, as an old machinist once told me, ‘ere is no whining in Machining’. If you want to be there you can. Just showing up doesn’t guarantee you any pearls of wisdom either, nobody is going to hand you the secret to running a business on a powerpoint slide. You have to listen, look for interesting ideas, think how you can apply them to your business and follow up hard.

In my first President’s letter I wrote about the things I had gained by being a member of the ATMA and NTMA. Let me update the list of benefits I have received in the last year: • Got a call from a large OEM looking for new suppliers for a major program who learned about Excaliber from the NTMA capabilities list.

Have you filled out your capabilities?

• Got a contract for parts being re-shored from China. Have you attended a Purchasing Fair?

• Bought a machine based on head to head performance test that I learned about at an NTMA tech conference. Have you attended a conference or webinar?

• Gained two new energy customers by partnering with other ATMA members to provide broad based solutions. Are you partnering with other members?

• After hearing about a government agency that helps offset business lost to offshoring at an NTMA conference, applied and am expecting a 50-75% matching grant. at is what is in it for you, if you participate. Come to meetings, join the Board, make suggestions, tell us what you want.

MARK WEATHERS PRESIDENT, ARIZONA TOOLING AND MACHINING ASSOCIATION

arizonatooling.org

arizonatooling.org / 3

NEWS roundup

OUR MISSION: “HELP MEMBERS OF THE U.S. PRECISION CUSTOM MANUFACTURING INDUSTRY ACHIEVE BUSINESS SUCCESS IN A GLOBAL ECONOMY THROUGH ADVOCACY, ADVICE, NETWORKING, INFORMATION, PROGRAMS, AND SERVICES. ” OUR VISION: BECOME THE PREMIER CENTER OF KNOWLEDGE TO LEAD THE U.S. PRECISION CUSTOM MANUFACTURING INDUSTRY IN CONTINUING WORLD LEADERSHIP.

NTMA NEWS DID YOU KNOW...

NTMA Members Have Ways to Save Thousands of Dollars on Common Services!

Yellow Freight Shipping: NTMA members can save as much as 70% on the cost of their LTL shipments. NTMA members saved an average of over $5,000/yr in 2009.

“We saved over $20,000 on our shipping costs using the NTMA Yellow discount program.” -New York Member Grainger Industrial Supply: NTMA members receive a minimum 10% discount on all items but can achieve as much as 60%, depending on how much and what kind of product purchased. NTMA members saved an average of $900/yr in 2009. Shipping is Free if members register and order online.

“To achieve a 10% discount with Grainger a company must be purchasing at least $100,000/yr with Grainger unless they’re part of a program like the NTMA has negotiated.” -Grainger Representative “The NTMA discounts save me more than the cost of my dues. The biggest value I get is in the networking we do with members at the local and national level.” -St. Louis Member FedEx Shipping: NTMA members are offered several different discounts on many of FedEx services. NTMA members saved an average of $625 in 2009.

“We saved over $1200 just on FedEx services alone in 2009. This just about paid our dues.” -Illinois Member The above represents just a small portion of the discount programs NTMA members can take advantage of. By being able to take advantage of the group buying power, NTMA members lower their costs on every day goods and services.

Call Today to find out how you can benefit from NTMA Membership: 1-800-248-NTMA (6862) or visit www.ntma.org n

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ONE VOICE

NATIONAL ROBOTICS LEAGUE IS ON THE MOVE NTMA's National Robotics League is on a fast track to be the premier organization to drive students to our industry by creating an interactive, fun, and challenging program that interlaces student education with real manufacturing experience. This program has the flexibility and the support to educate and inspire Parents, Students, and Educators to the opportunity that exists within the world of precision manufacturing.

By aligning manufacturing companies and schools with the program, the NRL plays an instrumental role in changing the negative perceptions that manufacturing has been made to endure for years and provides opportunities for students to advance their skills and talents with an ends to a career in manufacturing.

A demonstration of this program and more information regarding how to become involved will be made available during the NTMA Annual Convention in Chandler Arizona on March 4.

The 2011 National Robotics Competition will be held in Indianapolis, Indiana May 20-22 and will be in cooperation with the Indiana Chapter of the NTMA and IVY Tech Community College. Here we expect over 100 teams to battle it out for their spot as National Champions: what a great opportunity to scout for your next generation of skilled workers.

The National Robotics League is a trademarked program of the National Tooling & Machining Association; a 501(c)6 organization whose goal is to help precision manufacturing companies achieve business success.

For more information on the National Robotics League visit www.GoNRL.org.

For more information on the National Tooling & Machining Association visit www.ntma.org. NTMA n

BENEFITS OF JOINING THE NTMA EDUCATION Our Education Team is devoted to increasing the availability and skill level of human resources for the US precision custom manufacturing industry. With membership you will have access to a number of resources designed to inform and educate.

BUSINESS DEVELOPMENT NTMA offers members a wide variety of tools to help build and effectively manage their businesses.

• • • • •

Legal Advice & Assistance Operational Cost & Executive Compensation Reports Wage and Fringe Reports Networking Events Software Evaluation

DISCOUNT PROGRAMS The NTMA uses group buying power to help save members money in many different areas of their business. The programs offered have proven cost savings benefits for members who have taken advantage of them. See what they can do for your organization.

ONLINE RESOURCES NTMA has developed a wide range of online programs to assist members with various business-related issues.

• • • • • • •

Business Management Advisories Chapter Management HR | Enviro | Safety Resource Centers Job Board Marketplace Publications Software Evaluation Center

NTMA INSURANCE The NTMA has created a comprehensive insurance program for US precision metalworkers that provides protection for their business insurance needs.

MARKET RESEARCH AND REPORTS The NTMA keeps members informed on where different market sectors are heading in order to allow members a chance to go after new business or to help make better informed business decisions.

GOVERNMENT AFFAIRS Stay Informed, Take Action, Make a Difference.

PHOENIX METAL TRADING, INC. Industrial Scrap Specialists OUR MISSION: Our mission at Phoenix Metal Trading is to provide the best service at a fair price and to continually improve our company to be a leader in our industry.

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UPCOMING NTMA EVENTS! National NRL Competition Date: May 20-22, 2011 Location: Indianapolis, IN NTMA/PMA Purchasing Fair Date: September 7, 2011 Intercontinental Venue: Chicago O’Hare Hotel, Chicago, IL

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LEGISLATIVE update

MANUFACTURERS HEAD TO WASHINGTON

by OMAR NASHASHIBI We have a saying in Washington, D.C., “If you don’t have a seat at the table, you’re on the menu!” Today, manufacturers have a stronger influence than at any time in recent memory because they are actively engaging their government officials.

Manufacturers from the National Tooling and Machining Association and Precision Metalforming Association, including Southwest Regional members, went to Washington on April 6 to meet with over 100 members of Congress, their staff, and experts at the Departments of Commerce and Labor.

Company executives from all over the country serving diverse industries explained to their elected officials the opportunities and challenges they see in their industry. They lobbied their members of Congress on issues from workforce recruitment and training to tax code overhaul and regulatory reform.

While the manufacturers visited with their Senators, the U.S. Congress sent a bill to the President repealing the 1099 IRS reporting requirement included in the health care reform law. The new policy would have required businesses of all sizes to file tax forms (beginning in 2012) for every vendor that sells them more than $600 in goods, property or services annually. This was an especially important victory for small businesses, which would have faced a tremendous paperwork burden. Manufacturers in the industry saw first-hand how their efforts can make a difference and change Washington.

As the budget process continues to dominate the headlines in Washington, policymakers are working on important issues behind the scenes. Senators Sherrod Brown (D-OH) and Mark Kirk (R-IL) introduced legislation to require the Department of Commerce to produce a National Manufacturing Strategy, something most other industrialized nations already have.

In addition, several hot button issues continue to see increased action.

Senators in both parties offered amendments to stop or delay the Environmental Protection Agency (EPA) from issuing greenhouse gas emissions regulations. In the House of Representatives, Energy and Commerce Committee Chairman Fred Upton’s (R-MI) bill to block EPA from acting continued to move through the legislative process. This will

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CONTINUING IN OUR EFFORTS to bring you the highest level of current information regarding all things “legislative,” we present to you the remarks of Omar Nashashibi The Franklin Partnership, LLP

remain a controversial issue on Capitol Hill as Senators seek to reach 60 votes to stop or delay EPA action on regulating emissions from stationary sources such as facilities, buildings, etc.

As part of the debate over the budget and spending, lawmakers are beginning to discuss an overhaul of the tax code. House Ways and Means Committee Chairman Dave Camp (R-MI) recently stated his desire to reduce the corporate and individual tax rates to 25%. During their visits with members of Congress in April, the manufacturers educated policymakers about the importance of including in tax overhaul small businesses, 72% of which are pass-through entities such as Subchapter S Corporations or limited partnership (LLC, LLP) and would not directly benefit from only reducing the corporate tax rate. Most in Washington do not believe the Congress can complete a tax overhaul in 2011 but they are laying the groundwork and beginning the conversation about how to improve domestic competitiveness through tax reform.

All these issues have a significant impact on employers and employees and the industry must have a seat at the table in Washington in order to succeed. By participating in the process, manufacturers can make a difference. Whether repealing the 1099 requirement or improving workforce recruitment and training programs, it is critical businesses and their trade associations continue to fight in Washington to strengthen manufacturing in America. n

Omar Nashashibi is a founding partner at The Franklin Partnership, LLP, a bi-partisan government relations firm retained by the National Tooling and Machining Association in Washington, D.C.

TECHNOLOGY update

YOUR WORLD WIDE PRESENCE: GOOD, BAD, UGLY?

by MICKEY GARTMAN "Everyone has one but we never look at our own." Take a look at your site on a regular basis. Is it relevant, up-to-date and working properly? The following are some important points to consider in keeping your site safe, relevant and functional.

Domain Name Registration It is important that you register your own domain name and keep it renewed. If you miss the renewal date the name becomes available for registration to anyone. When you register your domain name with a domain name registrar be sure the contact information you supply is accurate and permanent. This is the information used by the registrar to contact you and if they have the wrong information you won’t receive correspondence from them. There are various tools on the World Wide Web you can use to check domains names such as http://whois.sc/yourdomain.com

• During negotiations with your developer, find out what tool(s) will be used to develop your new site. Some tools are very technical and require a great deal of training and experience to use. Some are designed for a professional developer but with some minor training can be used as an ongoing maintenance tool to maintain the site. ou should decide if you want to self-maintain the site or pay for maintenance.

• If you self-maintain be prepared to pay for assistance and error correction as needed. Even though some of these tools are easy to use by non-professional developers, errors are easy to make

Development If you are in the process of creating a new site or reconstructing an old one it is of vital importance that you work closely with the developer designing your site. Don’t just turn it over to him or her without giving complete details and design information. Your Web presence represents your company. Without your specific branding intentions your site will be created from the mind’s eye of someone who has no knowledge of your business or how you want to portray it. Be detailed and informative; don’t assume. Be involved in all stages of development.

Most developers allow you to view the site as it is developed.

At the very least, get an agreement with your developer on the foundation (overall site navigation, color scheme, sections of the site, etc) before starting any coding or development. Changes can be made but understand that there will be additional cost if you request changes after development starts.

• Browse the internet and find sites and color schemes that

and even harder to find and fix. You will eventually need help.

• Since most developers deal with hosting companies on a regular basis they will be able to recommend one that has the technical requirements needed for your site.

Upgrades & Relevancy There are two important parts of your site to keep current: the actual content that is displayed on your site and the underlying software that runs in the background and displays the content. Software changes every day. Whatever software tool or language your developer uses, it will be dependent on other software to work. And all of these software products change for various reasons. As a result you should be prepared for periodic upgrades to your site software. If you have a two year old site that has not been upgraded you may have a problem.

Delaying these upgrades may make the site non-upgradable. A complete redevelopment may be necessary. Old software is a target of “hackers”, so protect your site by keeping it upgraded regularly.

appeal to you.

• Supply all necessary content and images in digital form.

• Image files should be of the highest quality possible.

You also want to keep content on your site fresh and up-to-date. Don’t leave old photos and dated articles in prominent locations on your site.

Visitors to your site seeing the same old things again and again may lose interest and never return, instead opting to visit a rival site with more relevant information and content. n

• Make sure you understand what the developer does and does not do with your image files and graphics. Simple cropping or resizing of pictures is usually a provided task at no extra charge.

Most everything else will result in additional charges.

Mickey Gartman is owner of Gartman Technical Services (GTS), and Arizona based IT solutions provider.

arizonatooling.org / 7

SAFETY update

Strategies for Safety RISK MANAGEMENT STRATEGIES: ARE YOU GETTING THE MESSAGE? source FEDERATED INSURANCE

Texting + Driving = Danger Americans love the convenience and sense of security cell phones give us. The number of cell phones is growing and they’re being used in more ways than just talking—such as text messaging, picture messaging, and Internet surfing. Has this useful device become a danger in the hands of inconsiderate users and distracted drivers?

BION – Believe it or not Recent studies and news stories seem to confirm that driving and texting is a very dangerous combination. According to a study sponsored by the National Highway Traffic Safety Administration (NHTSA), “…driving while text messaging was associated with a 400 percent increase in the amount of time spent looking away from the road, relative to driving without text messaging.”

AWTTW – A word to the wise The California train accident should not have happened—but it did. It’s an example of when multitasking should not be an option because only one task—safe driving—really matters. Make your employees aware of the dangers of texting while driving, whether they’re on the job or on their personal time. We should all think twice before putting our cellular phones into text mode when we’re behind the wheel.

Some large corporations have established bans on use of cell phones while driving on company business—both as a safety precaution for their employees and to avoid possible liability. We urge you to consider this or other safety measures to encourage sensible use of cell phones in vehicles.

Safety tips for cell phone use in vehicles:

A new study conducted in Great Britain goes even farther. It shows that sending messages from cell phones while driving is more dangerous than climbing behind the wheel at the legal alcohol limit (.08% blood alcohol content). According to the report, texting drivers are distracted in three ways:

• Don’t hunt for a ringing phone that’s out of reach.

• Pull over and stop to carry on a conversation.

• If you must talk, keep it short.

• Mental workload - Composing text takes the mind off the road • Have a passenger take the call and relay the high points.

• Control: Using the phone’s keypad leaves one hand on the wheel • Don’t address emotional or distressing issues while driving.

• Visual attention: Eyes are on the phone not on the road ahead • Let calls go to voice mail instead of answering.

When we add a human element to the statistics, the evidence can be sobering. The number of fatal auto accidents stemming from texting while driving is on the rise, especially among young drivers. In California, 25 people lost their lives and 135 were injured in a September 12, 2008, commuter train accident. Records show the driver of the train, which skipped a red light and hit a freight train head-on, received two text messages seconds before the terrible accident according to federal investigators.

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• Don’t text and drive.

EOM – End of Message Wireless technology can be great. Benefits include calling for help in an accident, scheduling appointments, and getting directions. But with all the distractions facing drivers – both inside and outside the vehicle – don’t add to the situation by trying to send a text message while driving. n

Industries Served: • Automotive • Aerospace • Medical • Firearms • Dept of Defense • Electronics 2440 Cades Way, Vista, California 92081 phone: 760.727.5228 fax: 760.727.0799

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FEATURE story

Job Costing– Gospel or Garbage?

by DAVID HOPKINS and BRENT TERHAAR

Ask a job shop owner how they know if they’re pricing jobs at the appropriate level, and the typical answer is, “if my job by job margins are high, and I’m winning work, then I must be pricing right.”

e confidence these owners have in their answer concerns me the most. e margin reports used by job shops are treated as gospel, when in reality they’re almost always wrong! Managing profitability using job by job margin information will ultimately lead companies down the path to lost profitability.

How can I be so definitive in this answer? Job by job profit margins are developed using standard labor and overhead rates. ese rates are developed assuming 1) shop floor activity is consistent from month to month, and 2) labor and overhead costs actually vary with each change in activity. Neither of these assumptions is true in most job shops.

Job rates are based entirely on estimates using underlying assumptions created from past results and predictions for the future. Typically, these rates are based on prior year machine or labor hours allocated over a pool of budgeted overhead costs. Management then spends time allocating these figures to specific machining centers or cells until they get so specific that it feels like the information has to be right. Well, they’re not. With the amount of variables happening in a business, these estimates can never be truly accurate. ink of your last busy month and your last slow month. How much did your rent vary? How many production supervisors or CNC programmers did you let go for the month until activity returned to normal? How much did your property insurance or benefit costs 10 /

change? Did you take the month off paying the leases on your equipment? e reality is the cost structure in a typical job shop doesn’t change much from month to month.

If the cost structure barely changes from month to month, then incremental changes in activity end up having a huge impact on profitability (both positive and negative). If you are already past your break-even point and take on incremental work, the profitability of that additional work will be significantly higher than what your job costing system tells you. Conversely, if you are below your break-even point and are producing jobs with off the charts margins, you will still lose money for the month. Your job costing system is not designed to tell you this. It comes down to common sense and simple math.

What are the risks when relying on these job costing systems? e first is the potential for poor decision making. Relying on data that is likely unreliable is dangerous. Second, many companies use job costing to determine price. A typical estimating process consists of building up the cost of a job using job rates and targeting a specific profit margin. e flaw in this method is that the market sets the price, not your cost structure. Just because your cost structure is different than your competitor’s, doesn’t mean it should drive your pricing. Finally, companies spend significant amounts of time adjusting and trying to refine their job costs. ese calculations get complicated and become useless in managing and evaluating a business.

Think of your last busy month and your last slow month.

How much did they vary?

You’ve already invested significant time and money to develop your costing system – the last thing you want to do is abandon it. Don’t do that! ere is critical information you can gather from your current system. e key is figuring out how to use this information.

Progressive manufacturing companies are simplifying their systems and eliminating the intricacies and uncertainties of job costing. It is important to understand that this elimination of detail doesn’t translate to a reduced focus on cost. Just the opposite – these companies put a high degree of focus on understanding their cost structure. e difference is that the focus is on a macro (i.e., entity wide) basis versus a micro (i.e., job by job) basis.

A typical misconception many businesses have is how they view what their competitors are doing. Don’t assume that the low price your competitors are charging results in lost profits. Companies that manage their profitability in different ways can be extremely profitable by capturing sales at levels others view as non-profitable.

Focus on understanding what drives profitability in your shop.

Although you’re delivering a finished machined product, what you’re really selling, and what your customers are buying, is your expertise and production capabilities. Companies that truly understand and manage their machining capabilities and capacity have a competitive advantage in the marketplace. eir focus is on managing, executing, and pricing based on throughput, not job by job cost. ey still evaluate job performance, but it isn’t on a cost basis, it is on a production basis. e results of changing this focus can be significant. Typically, companies that change the way they evaluate their business bring simplicity and clarity to their operations. Functional teams (production, sales, finance, etc.) understand the information better and work together to drive toward the same goals. ere becomes a shift in people’s focus. Instead of spending time refining their job cost system, management spends time figuring out how to operate more efficiently to drive sales and production through the plant. Most importantly, it leads to increased profitability and organizational direction that ultimately result in increased enterprise value.

Changing the way an organization operates and manages information is no easy endeavor Past practices, especially those that have been consistently followed in successful companies, make it challenging to move away from. Not every organization has the ability to make this shift in philosophy. However, those that do will have a competitive advantage in the marketplace. n

GREA AT INNOV INN ATIONS BEGIN WITH SIMPLE IDEAS. We help our manufacturing man clients innovate, change, and grow.

Contact David H Hopkins opk at 800-525-2826 opkins or dhopkins@larsonallen.com.

Improving profitability | Accelerating growth Reducing risk | Planning for succession

Dave Hopkins and Brent Terhaar are Principals in the Manufacturing and Distribution group of LarsonAllen. They can be reached at 800.525.2826 or dhopkins@larsonallen.com; bterhaar@larsonallen.com. To learn more about

Noticeably ly Dif Different. fffe erent.

LarsonAllen, visit our website at www.larsonallen.com. arizonatooling.org / 11

FEATURE story

Unintended Consequences of U.S. Environmental Protection Laws

by MICHELE NASH-HOFF

One of the most difficult problems in bringing back manufacturing from offshore to "Reshoring" in the United States is the increasingly stringent environmental regulations being imposed at Federal and State level that adversely affect various sectors of the manufacturing industry. The following describes some of the more stringent environmental regulations.

Clean Water: As authorized by the Clean Water Act in 1972, the federal Environmental Protection Agency (EPA) oversees the National Pollutant Discharge Elimination System (NPDES) Regulations for Storm Water Discharges. In most cases, the NPDES program is administered by authorized states. Many states, such as California, have set up multiple water quality control regional boards that develop and administer specific regulations for their region. e San Diego regional board issued 62 pages of new regulations in August 2002, for which compliance has been very onerous and expensive for manufacturers.

For example, rain water falling on a manufacturer’s parking lot must be monitored so that toxic pollutants, oil grease, waxes, chemicals, and visible floating materials are prevented from entering the storm drains on the property connecting to the municipal sewer system.

Hazardous Air Pollutants: In 2005, the Federal Occupational Safety and Health Administration (OSHA) proposed standards to go in effect January 1st 2006, but Congress didn’t approve the new standards as stringently written. e proposed standards would have reduced the allowed emissions for hexavalent chromium (a chemical compound used in the chrome plating process) to less than 1/50th of the allowable level (52 mg. of chromium per meter of air down to 1mg.) e emission standard of 52 mg. that went into effect in 1998 was already a 97 percent reduction in hexavalent chromium emissions. In May 2006, Congress finally approved slightly less stringent regulation of 5 mg. per cubic meter of air, which went in effect January 2007.

Metal plating, including chrome plating, is important to the electronics, machine equipment, defense, and automotive after-market sectors of manufacturing because every metal part that could corrode is nickel or chrome plated to keep it from corroding. ese new standards required existing

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chrome plating facilities to purchase new environmental control equipment in order to maintain compliance status. Many large plating facilities converted to the more expensive, but less toxic trivalent chromium, which is suitable for some applications and certain thicknesses of plating. e trivalent chromium process requires more careful control than the hexavalent chromium process and is more difficult to do in some applications such as barrel plating.

On June 12, 2008, the EPA issued final national air toxics standard for smalleremitting sources in the plating and polishing industry applicable to cadmium, nickel, lead, manganese, and chromium. e final rule affected an estimated 2,900 existing planting and polishing facilities. ese standards seriously affected the chrome plating industry nationwide and have accelerated the offshore outsourcing of products requiring chrome plating.

In San Diego County, six metal processors went out of business between 2007 and 2008, and one company closed down its chrome plating line prior to the stricter regulations going into effect. Two companies moved their chrome plating across the border to Tijuana, Mexico so that there are now only two metal processors that do chrome plating, which has stretched lead times for locally fabricated metal parts that require chrome plating Of course, there is no border control for the flow of air so emissions in Tijuana affect the air quality in San Diego County.

Clean Air: In September 2006, the federal EPA approved new national air quality standards that reduced the previous daily particulate matter standard by nearly 50 percent. Particulate matter is fine particles such as soot, dust, and liquid droplets that are too small to see. A new Maximum Achievable Control Technology (MACT) for hazardous waste combustors (boilers and incinerators) followed in 2008. EPA will soon announce new draft rules aimed at slashing toxic air pollution emitted by power plants.

Electric utilities and manufacturers have objected to these new air quality regulations, saying that the new rules cost billions of dollars to implement. William O’Keefe, CEO, George Marshall Institute, wrote “...the utility

MACT will impose costs on utilities that far exceed air quality benefits...Forcing the utility industry to install the most expensive emissions reduction technologies will simply drive up the cost of electric power when it can least be afforded...at is not what we need as our economy struggles to recover from the worst recession in decades.”

A report released in 2007 by the National Association of Manufacturers (NAM) stated “the domestic environment for manufacturers is dominated by concerns about rising external costs that make manufacturing from a U. S. base difficult. ese costs for corporate taxes, health care and pensions, regulation, natural gas, and tort litigation add more than 30 percent to manufacturers’ costs.”

In addition, the NAM report stated that the annual cost of complying with federal regulations is more than $10,000 per employee for manufacturers, while the cost is half that for non-manufacturers. When companies are spending more money on regulatory compliance, materials, fuel and energy, they have less money for R & D, new product development, and purchase of capital equipment and systems. is puts U. S. manufacturers at a substantial disadvantage compared to manufacturers in countries that aren’t subject to this degree of regulation.

On October 14, 2010, Joe Barton, Ranking Member of the Committee on Energy and Commerce and Michael Burgess, Ranking Member of the Subcommittee on Oversight and Investigations, wrote a letter to Lisa Jackson, Administrator of the U. S. Environment Protection Agency, expressing their concern over the cumulative impacts of new regulations being proposed by the EPA under the Clean Air Act (CAA). e letter included a chart (51 pages), which identified approximately 40 proposed or final CAA regulations, including greenhouse gas regulations, revised air quality standards, and other regulator proposals under the CAA, as well as many regulations in the pre-proposal stages. e letter stated, “At least eight of the proposed or final rules included have compliance costs estimated by EPA to exceed $1 billion each. It appears that collectively the Administration’s new or proposed CAA regulations could impose billions of dollars of

additional new costs annually on U. S. business as the new rules are implemented by your agency.” A response was requested with regard to the accuracy of the compliance costs estimated included in the chart and if there were any other pending or proposed CAA regulations not included in the chart.

One of the unintended consequences of strict environmental protection laws and regulations in the United States that drives manufacturing offshore is the increased environmental pollution in other countries, such as China and India. India and China have been getting more polluted in the last 30 years, as more and more U.S. manufacturing companies have outsourced to these countries. Four cities in India and six cities in China are listed in the “Dirty 30” list of the worst polluted sites in the world, according to a 2007 report by the New York-based Blacksmith Institute. e Institute’s “Top 10” list now includes four cities in China and two in India. e Institute’s list is based on scoring criteria devised by an international panel that includes researchers from Johns Hopkins University, Harvard University, and Mt. Sinai Hospital in assessments of more than 400 polluted sites.

“Children are sick and dying in these polluted places, and it’s not rocket science to fix them,” said Richard Fuller, Blacksmith Institute’s founder and director. e Institute highlights the health threats to children from industrial pollution. Some 12 million people are affected in the top ten sites, according to the report.

One of the worst examples is Wanshan, China, termed the “Mercury Capital” of China, because more than the 60 percent of the country’s mercury deposits were discovered there. Mercury contamination extends through the city’s air, surface water systems, and soils. Concentrations in the soil range from 16 to 232 times the maximum national standard for mercury contamination. To put this into perspective, the mercury from one fluorescent bulb can pollute 6,000 gallons of water beyond safe levels for drinking, and it only takes one teaspoon of mercury to contaminate a 20-acre lake - forever. e health hazards of mercury exposure include kidney and gastrointestinal damage, neurological damage, and birth defects.

Chronic exposure is fatal. continued on page 24 arizonatooling.org / 13

FEATURE story

Automated Processing Explained

by PHOENIX HEAT TREATING INC.

Process control, or “Intelligent Heat Treating”, as we call it, deals with algorithms for controlling a defined process. In heat treating, process control is when the mechanical, electrical, atmosphere, temperature set points and timed process sequences are all handled by control-sensor technology automation. This eliminates the need of human involvement, dramatically improves process quality and reduces costs.

Complex functions that are commonly found in sophisticated tooling and machining equipment are now running equipment in modern metal processing companies. is includes automated PID tuning, cascade control, guaranteed soak times based on multiple parameters, multi-variable deviation alarms and redundant sensors. ese functions are now being utilized by leading heat treating companies to automate a process that would require an operator to enter data and make judgment decisions. With plant-wide data acquisition systems running in tandem with equipment automation, a heat treating company has a quick and easy way for management and quality assurance to review daily reports, track individual jobs, and ensure compliance.

One of the simplest explanations common in heat treating is the endothermic generator that creates an atmosphere to provide a positive pressure in a furnace and a platform on which a carburizing or de-carburizing environment can be created, by adding enriching gas or dilution air. Most often, the source of endothermic gas is the result of air and natural gas mixed in ratios of 2.5/1 to 5.5/1. is combined gas is passed over a nickel-coated-ceramic catalyst at elevated temperatures. Since the reaction is not spontaneous below ratios of 6/1, it is necessary to supply heat to the generator.

While manual mixing of the gas is still found in many heat treating plants, it is quickly becoming archaic because it opens the door for manual errors.

With automated processing, there is no worker involvement and no manual mixing. Instead, mixing ratios of endothermic gas are managed

14 /

In the next few years, manufacturing quality will hinge on automated processing.

by microprocessor controls and sensors that calculate and display dew point, control output for maintaining the dew point set point and control generator temperature. With these inputs, the controller regulates the fuel injection system and automatically adds enriching gas or dilution air as needed. Sensorcontrols even measure the composition of the natural gas that enters a heat treating plant through infrared analyzers that calculate the carbon potential from the temperature, CO, CO-2 and CH-4 in the furnace. is results in controlled quality, no waste of endothermic gas and less cost to the customer.

As automated processing significantly improves quality, more industries are specifying that generators be monitored and automatically controlled for processing certification. e automotive industry, for example, specifies process automation to meet CQI-9 certification. In the heat treatment industry, quality standards including ISO, Nadcap, AMS, among others, can be effectively controlled and documented with real-time data through process automation. Automated processing proves that the metal processing was performed to exacting specifications called for by customer and industry certifications.

When a heat treating process is controlled by automation, the entire sequence of events in the recipe is automatically managed to achieve the desired metallurgical results. With carburizing, there is a heat-up stage, carbonboost phase, carbon diffuse phase, cooldown and quench. Controlling the variables such as time, temperature and atmosphere can produce infinitely higher quality work and allows for guarantees that the exact carbon

set-point was applied to the workpieces, and that the diffusion meets the required case depth to achieve the specified metallurgical results.

In vacuum processing, precision is mandatory.

Once the heating circuit is enabled, algorithms are used to guarantee that temperatures are ramped appropriately to ensure that the rate of heating doesn’t produce a significant amount of stress on the load. e process controllers are also used to verify the temperature of the workpieces during the heating and cooling cycles. As the ramping and cooling temperatures are precisely controlled, stress and distortion on the parts are significantly reduced. As well, with the sensors and verifications built into the automated process, proper vacuum levels are maintained and the quality of the nitrogen or argon gas quench media can be assured.

As industry quality standards and customer quality requirements increase, the requirement of traceability and proof of processing is becoming more common. Many heat treating companies that are using automated processing are also operating plant-wide Supervisory Control and Data Acquisition systems (SCADA) for quick access to information and as the platform of plant automation. SCADA systems can be used to initiate programs running on each piece of equipment and consistently monitor the equipment for an end-of-cycle notification. Meeting industry standards with automated controls and data acquisition becomes easier. Process-control technology, with built-in alarms for deviation around set-points enables compliance for continuously monitoring temperature/ atmosphere required by many certifications.

As with all the other areas of heat treating, control-sensor technology and sophistication are providing the ability to control a process with more precision, resulting in high-quality services and products. e purpose of these systems is to provide a user-friendly environment that will eliminate worker involvement and make the process of entering and gathering information quick and easy.

With the use of automation technology, computers and recipe programmers, the finished quality of processed metal is light years ahead of where it was just a decade ago.

In short, process automation and systems reporting has revolutionized the heat treating industry. Quality-driven heat treating companies have embraced the technology to delivery higher quality processing services to their customers backed with proof of performance.

One can see where manual heat treating has evolved from, and where automated processing is going. In the next few years, manufacturing quality will hinge on automated processing. e reason is, manufacturers can no longer afford increasing labor costs and risks involved in manual heat treating. A heat treat assurance program that includes a focus on programmed cycles which can produce repeatability and real-time monitoring of the heat treating cycles with metallurgical certification, will be in the future of most manufacturing industries. n

Phoenix Heat Treating, Inc., located in Phoenix, AZ, can be reached at 602-258-7751, or through the website at: www.phoenix-heat-treating.com

arizonatooling.org / 15

TECHNOLOGY update

SPECIAL ADVERTISING FEATURE

VOLUME 2 OF ©

THE OIL BARON BULLETIN

THE DO’S AND DON’TS OF COOLANT MAINTENANCE

by BRETT “THE COOLANT GUY” REYNOLDS, CMFS

Everyone wants to sell you a metalworking fluid, but has anyone ever took the time and told you how to take care of it? Well today is your lucky day, because I’m going to tell you how. Basic coolant maintenance is actually pretty simple; but a few key points need to be followed regularly if you want to get the most out of your fluids. Here is what you want to do.

First: You want to make sure you mix your fluids properly. This is done by adding the coolant concentrate to the water, while stirring vigorously.

Remember, Oil In Last. Also when topping off; don’t just add straight water to the sumps; always add a lean mix of coolant and water. This helps keep the concentration steady, and keeps the additive packages up in the fluid.

Second: Concentration is the key. Make sure you keep the concentration at the proper level for the material you’ll be machining, and never let the concentration fall below the manufactures recommended minimum for any given length of time.

Third: Skim off tramp oils on a regular basis. I have found that Monday morning is a great time to skim off your sumps, since the fluid has sat over the weekend and has rejected out the free oils. If you don’t have this luxury and you machine around the clock, you may want to invest in disc or belt skimmers and or coolant coalescing equipment. Also you may want to consider looking at going to a sulfur free waylube. Conoco/Phillips the manufacture of the Hydroclear TCS slideway lubricant line makes excellent hydro cracked, sulfur free waylubes. Sulfur free mean less odor (Monday morning stink) problems, and cleaner machines and happier employee’s.

BLASER SWISSLUBE

MILESTONES 1936 Foundation of the Company by Willy Blaser 1974 Peter Blaser expands with the Coolants and configuration of a distribution network in Europe and Overseas 1981 Foundation of Blaser Swisslube Inc. in Goshen, NY, the first subsidiary with own production plant 1993 Foundation of Blaser Swisslube Czech Republic 1995 Foundation of Blaser Swisslube Germany 1996 Foundation of Blaser Swisslube Japan 1999 Foundation of Blaser Swisslube France 2001 Foundation of Blaser Swisslube Brazil, China and India 2002 Foundation of Blaser Swisslube Singapore 2006 Foundation of Blaser Swisslube Turkey and Korea 2010 Foundation of Blaser Swisslube Taiwan.

Today, the Coolants have been produced in Hasle-Rüegsau, in USA, in China and in India

If these three basic rules are followed, you will have great success and longevity with your metalworking fluids, ignore them, and they can cost you dearly. n Stay tuned for more useful coolant tips, from The Coolant Guy! Brett Reynolds, “The Coolant Guy” works for Blaser Swisslube Inc. If you would like more useful information regarding metalworking fluids, or would like to find out more information about Blaser metalworking fluid products, please contact Brett at 801.722.4095 or via E-mail at b.reynolds@blaser.com. The Oil Baron Bulletin is not affiliated with Blaser Swisslube Inc. or its subsidiaries.

16 /

arizonatooling.org / 17

shop TALK

EIGHT TIPS FROM THE IRS TO HELP YOU DETERMINE IF YOUR GIFT IS TAXABLE source IRS.gov

If you give someone money or property during your life, you may be subject to the federal gift tax. Most gifts are not subject to the gift tax, but the IRS has put together the following eight tips to help you determine if your gift is taxable.

1. Most gifts are not subject to the gift tax. For example, there is usually no tax if you make a gift to your spouse or to a charity. If you make a gift to someone else, the gift tax usually does not apply until the value of the gifts you give that person exceeds the annual exclusion for the year. For 2010, the annual exclusion is $13,000.

2. Gift tax returns do not need to be filed unless you give someone, other than your spouse, money or property worth more than the annual exclusion for that year.

3. Generally, the person who receives your gift will not have to pay any federal gift tax because of it. Also, that person will not have to pay income tax on the value of the gift received.

4. Making a gift does not ordinarily affect your federal income tax. You cannot deduct the value of gifts you make (other than gifts that are deductible charitable contributions).

5. e general rule is that any gift is a taxable gift. However, there are exceptions to this rule. e following gifts are not taxable gifts: • Gifts that are not more than the annual exclusion for the calendar year, • Tuition or medical expenses you pay directly to a medical or educational institution for someone, • Gifts to your spouse, • Gifts to a political organization for its use, and • Gifts to charities.

6. Gift Splitting – you and your spouse can make a gift up to $26,000 to a third party without making a taxable gift. e gift can be considered as made one-half by you and one-half by your spouse. If you split a gift you made, you must file a gift tax return to show that you and your spouse agree to use gift splitting. You must file a Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, even if half of the split gift is less than the annual exclusion.

7. Gift Tax Returns – you must file a gift tax return on Form 709, if any of the following apply: • You gave gifts to at least one person (other than your spouse) that are more than the annual exclusion for the year.

• You and your spouse are splitting a gift.

• You gave someone (other than your spouse) a gift of a future interest that he or she cannot actually possess, enjoy, or receive income from until some time in the future.

• You gave your spouse an interest in property that will terminate due to a future event.

8. You do not have to file a return to report gifts to political organizations and gifts made by paying someone’s tuition or medical expenses.

For more information see Publication 950, Introduction to Estate and Gift Taxes. Both Form 709 and Publication 950 can be downloaded on this website or ordered by calling 800-TAX-FORM (800-829-3676).

18 /

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arizonatooling.org / 19

MEETING THE GROWING CHANGES OF INDUSTRY

ATMA PRECISION 2011 ATMA Board of Directors President Mark Weathers Excaliber Precision Machining Vice President Dante Fierros Nichols Precision

Accuwright Industries, Inc. is a full service Metal Spray facility utilizing State of Art Robotics and Controls for precision Flame Spray applications. Featuring Plasma Flame Spray, Twin Wire Arc Spray, Combustion Powder/ Wire Spray, and HVOF (High Velocity Oxygen Fuel) Spray.

With Quality programs and certifications such as ISO 9001-2008 and FAA Repair Certificates we can meet the growing changes of your industry. Recently combined with our Metallizing capabilities, we now have the Cold Gas-Dynamic Spray (Low Pressure Cold Spray) available for specialized services.

Refurbish worn or damaged shafts/spindles?

• Don’t throw away those worn shafts/spindles • Think green and repair • Surface restoration for worn or damaged shafts/spindles • Similar and Hard surfacing repair for longer life Over/under sized machined parts?

• Don’t weld • Don’t throw away • Let us rebuild material on incorrectly machined parts • Coatings to match part material • Coatings to provide harder materials • Increase longevity Can’t quote that new job? Never heard of Flame spray?

• It is called Metallizing, Thermal Spray, Plasma Spray, HVOF Spray, Arc Spray, Combustion Spray, Cold Spray • We can do it • Material engineering • Quick turn around times Benefits?

• Fast turn time • Engineering services • Friendly Service • Knowledgeable Staff • Pick-up/Delivery Valley wide • Consulting/Specification selection • In-house testing procedures

Executive Director Chris Mignella Treasurer Maxine Jones PPG Secretary David Lair Dynamic Machine & Fabricating Trustee John Lewis Lewis Aerospace Board Members Bob Marusiak Micro-Tronics, Inc. John Raycraft Arizona Precision Industrial Greg Chambers PPG-Jet Division Jeremy Lutringer Unique Machine & Tool Gary Watkins MarZee Associate Member Liaison Mickey Gartman Gartman Technical Services Arizona Tooling & Machining Association A Chapter of the National Tooling & Machining Association P.O. Box 3518 Scottsdale, AZ 85271 Office: 602.242.8826 Fax: 480.970.8501 arizonatooling@cox.net

TM

MAGAZINE

Accurate Thermal Spray Technologies Accuwright Industries, Inc. Contact: David Wright 480.892.9595 (toll free 877.247.9108) www.accuwright.com 20 /

“The Right Tools. The Right Team. The Right Time.” arizonatooling.org

ARIZONA TOOLING & MACHINING ASSOCIATION

MEMBER LISTINGS Regular Members Joe Tripi Robert Marusiak Mark Lashinske Phillip LoCascio John Anglin Dante Fierros Tom Osborn Steve Macias Loyal Clausen James Buchanan Maxine Jones Greg Chambers Patrick Stewart, II Ilene Price Tony Costabile Shaun Schilling Michael Dailey Tyler Crouse John Bloom Susan Scarla Paul Shelton Mark Willmering Jeff Gaffney Steven Yeary Mike Gudin Ruben Cadena Dennis Miller Scott Higginbotham Craig Berland Todd Aaronson Jacque Cowin Jeremy Lutringer Bill Ankrom Robert L.Wagner Rick Erickson Bruce Treichler

ATMA

Micropulse West Micro-Tronics, Inc. Modern Industries, Inc. National Aviation Nelson Engineering Nichols Precision Osborn Products, Inc. Pivot Manufacturing Plastic Engineering, Inc. Powill Manufacturing & Eng, Inc. PPG - 'Aimco Facility PPG -'Jet Facility' PPG- Stewart Facility Precise Metal Products Co. Precision Die & Stamping, Inc. Premier Tool Grinding Prescott Aerospace, Inc. Pro Precision R & D Specialty/Manco Rae Tech, Inc. Shelton Industries Sonic Aerospace, Inc. Southwest Swiss Precision Southwest Turbine, Inc. Southwest Water Jet State Industrial Products, Inc. Summit Precision, Inc. Sun Grinding LLC Systems 3, Inc. T.A. Custom Designs, Inc. Tram-Tek, Inc. Unique Machine & Tool Co. Vitron Manufacturing, Inc. Wagner Engineering, Inc. Wire-Tech Zircon Precision Products

Association & Machining the Arizona Tooling RIL 2010 Issue MARCH/AP Publication of The Premier TM

ION PRECIS

602-438-9770 602-437-8995 602-267-7248 480-966-1097 602-273-7114 480-804-0593 623-587-0335 602-306-2923 480-491-8100 623-780-4100 602-254-2187 623-869-6749 623-582-2261 602-272-2625 480-967-2038 602-442-0698 928-772-7605 602-353-0022 602-278-7700 602-272-4223 520-408-8026 480-777-1789 602-438-4670 602-278-7442 480-306-7748 602-275-0990 602-268-3550 602-238-9595 480-894-2581 623-221-4922 602-305-8100 602-470-1911 602-548-9661 480-926-1761 480-966-1591 480-967-8688

GET IT RIGHT. Precision Magazine’s readers

BULLETOOF PR BUSINESS

Cause for Hope

YOUR

to 7 Strategies Help Keep Your nion Company Non-U

Partnerships Building Diverse You Should Know Helpful Websites Making the Cut

480-329-8254 480-892-4595 602-861-1145 602-276-2439 480-785-7474 623-580-0800 602-269-5131 520-397-0436 928-636-2115 602-305-8080 602-248-7880 928-634-7568 480-892-7304 602-353-8088 623-492-9400 480-753-4290 602-437-4005 602-233-1335 480.968.1778 602-278-4725 623-587-9400 602-253-1080 602-275-4406 602-437-0339 480-820-0380 623-581-6200 623-878-6800 480-967-0080 480-967-9339 480-926-8642 602-275-2122 520-889-8325 520-745-8771 602-278-9553 602-870-5600 480-367-9540 480-967-4600 602-437-3085 602-232-5882 480-829-9047 480-348-5942 602-272-2654 623-581-0764 602-265-7575 480-777-8222 602-269-5801 602-484-4520 480-899-0939 480-967-4889

Events Upcoming ATMA

3D Machine & Tools Accuwright Aerostar / Aerospace Mfg. Allied Tool & Die Company, LLC Arizona Precision Industrial, LLC Axian Technology, Inc. AZ Industries for the Blind B&B Tool, Inc Bar S-Machinery, Inc Barnes Aerospace - Apex Mfg. Div. Bartino Tooling & Machine, LLC Bent River Machine, Inc. BID Machine Blue Streak Grinding, Inc. C.G. Tech, Inc. CAD Tools Company, LLC Cassavant Machining Chips, Inc. Cling's Manufacturing Continental Precision, Inc. Creative Precision West Deck Machine & Tool, Inc. D-Velco Mfg. Of Arizona Dynamic Machine & Fabricating Eckert Enterprises, Ltd. Evans Precision Machining, Inc. Excaliber Precision Machining Foresight Technologies Hamilton Industries Hawkeye Precision, Inc. Helm Precision, Ltd. Hi-Tech Machning & Engineering Industrial Tool Die & Engineering Inline, Inc. Joined Alloys JPS Manufacturing JWB Manufacturing Kimberly Gear & Spline, Inc. K-zell Metals, Iinc.

L2 Manufacturing LAI International, Inc Layke, Inc. Lewis Aerospace Lynch Brothers Mfg.Co. Majer Precision MarZee, Inc. Mastercraft Mold, Inc. Metal Spinning Solutions, Inc. Metalcraft

of Directors ATMA Board EDGE: 2010 ON THE LEADING

Hein Tran Dave Wright Brandon McDermott Chuck Eriksen John Raycraft Charles A. Van Horssen John Cain Kevin Burbas Tim Smith Jeff Buntin Tony Miglio Norela Harrington Pat DeLanie Mike Sniegowski Keith Adams Greg Gaudet Joe Cassavant, Jr. Steve Schwartzkopf Kim Rice Ron Gilmore Allen Kiesel Daniel Krings John Maris David Lair Frank Eckert Grant Evans Mark Weathers Jeff Hull Alex Curtis Joe Koenig Tim Malin Jeremy Schaulk Don eriault Sam Ehret Jim Bowen Joseph Sirochman Jeff Barth Jim Carpenter Don Kammerzell Lee & Colleen Adams Matt Kalina Ernest Apodaca John Lewis Wayne Craig Michael C. Majercak, Jr. Edward Wenz Arle Rawlings Paul Clark Jeff Meade

S 7: CHANGING READYWINTODOW INSTALL GEARS REFORMS Will STRATEGIC Manufacturers Make Arizona ?

More Competitive

THE RIGHT TIME. RIGHT TEAM. TOOLS. THE g.org THE RIGHT arizonatoolin

Expect What You Can de from an Upgra

PLUS

• Tax Tips Education Update News and National Latest Local • Tax Reform Red Flags Rule

are key decision makers that you as advertisers and sponsors, want to target. ey want an edge in a constantly evolving industry, and they find it in Precision Magazine. arizonatooling.org

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ARIZONA TOOLING & MACHINING ASSOCIATION

MEMBER LISTINGS Associate Members Linda Daly Richard Short Dave Biggar Greg Whelan John Anderson Isaac Bunney Howie Basuk Stan Watkins Steve Blok Kerry Vance Cindy Stewart Lou Gallo Randy Flores Steve Warner Mickey Gartman Sherry SentGeorge Jackie Bergman David Cohen Tim Kloenne Barry Armstrong Doug Berg Bob Von Fleckinger Jeff Trimble David Gundersen Michael Biesk Ray Limon omas Moore Glen Zachman Pete Hushek Steve Montgomery Arlene Helt Ron Swartzbaugh Jane Rousculp Frank Encinas Russ Kurzawski Lisa Barnes John Drain Greg Burke Joseph Velez Daniel Franks

A 2 Z Metalworker Adams Machinery Arizona Bank & Trust Arizona CNC Equipment ATS Industrial Bank of America Barry Metals Canyon State Oil Co. ChemResearch Co., Inc. Consolidated Resources Creative Promotions D D i - Solidworks D&R Machinery EMJ Metals Gartman Technical Services, Inc. Gold Canyon Bank HUB International Industrial Metal Supply Klontech Industrial Sales L.A. Specialties LarsonAllen, LLP Leavitt Group Magnum Precision Machines Makino, Inc. Marshall Tool & Supply Metco Metal Finishing Moore Tool & Equipment North-South Machinery Phoenix Heat Treating Phoenix Metal Trading Ryerson-Phoenix S&S Machinery Samuel Aerospace Metals Semiray Star Metal Fluids LLC TDS/HDS Marketing Tornquist Machinery Co. TW Metals Law Office of Velez Wells Fargo Bank

602-412-7696 480-968-3711 602-381-2079 480-615-6353 602-276-7707 602-523-2044 602-484-7186 602-271-9888 602-253-4175 623-931-5009 480-839-9511 602-241-0900 480-775-6462 602-272-0461 602-788-8121 623-594-7351 602-749-4190 602-454-1500 480-948-1871 602-269-7612 480-615-2300 602-264-0566 602-431-8300 602-228-0347 602-269-6295 602-276-4120 602-455-8904 602-466-2556 602-258-7751 602-257-4660 602-455-3386 602-714-0116 602-721-0176 602-275-1917 602-256-2092 602-635-6404 602-470-0334 602-864-0014 480-710-5079 602-522-7805

WELCOME NEW REGULAR MEMBER: National Aviation Phillip LoCascio Plocascio@nmc-az.com 2223 S. Wilson St. Tempe, AZ 85282 480-966-1097 www.nationalmachinegroup.com

ANNOUNCING OUR NEWEST PARTNERS: Heritage Bank Gabe Smither gsmither@heritagebankaz.com 422 E. Camelback #J100 Phoenix, AZ 85018 602-852-3483 www.heritagebankaz.com MSC Industrial Supply Co. Steve Piotter, Branch Sales Manager Phoenix, AZ 480-297-6693 piotters@mscdirect.com

MANUFACTURING ESTATES

OUR VISION: ARIZONA’S PREFERRED PROFESSIONAL ASSOCIATION, DEDICATED TO THE GROWTH, HEALTH AND PROSPERITY OF OUR TOOLING & MACHINING MEMBERS.

GET CONNECTED TO THE ATMA! For more information contact: CHRIS MIGNELLA, ExecutiveDirector@arizonatooling.org

22 /

www.BenefitWines.com/atma Benefit wines support the National Robotics League and the Brock Babb Scholarship Fund.

MARK YOUR CALENDAR WITH THESE

UPCOMING ATMA EVENTS! MAY 5/11 Safety Meeting (General Safety Standards) 11:30 at Phoenix Heat Treat, 2450 W. Mohave, Phoenix 5/12 Combined Membership, Marketing & Program Meeting 11:30-1:00 at Foresight Technologies, 1301 W. Geneva, Tempe 5/17 Board of Directors Meeting 11:30-1:00 at Micro-Tronics, 2905 S. Potter, Tempe, 85282 5/25 General Dinner Meeting 5:00-8:00pm at Phoenix Airport Hilton, 2435 S. 47th Street, Phoenix JUNE 6/08 Safety Meeting (General Safety Standards) 11:30 at Leavitt Group, 919 N. 1st St., Phoenix 6/09 Combined Membership, Marketing & Program Meeting 11:30-1:00 at Foresight Technologies, 1301 W. Geneva, Tempe 6/21 Board of Directors Meeting 11:30-1:00 at Micro-Tronics, 2905 S. Potter, Tempe, 85282

Providing precision machining and fabricating of diverse parts and assemblies Serving the Aerospace/Aircraft, Military, Oil Tool and Commercial Industries Our Quality System is AS9100 B Compliant Equipment Capacities range up to HS-4R HAAS 4-Axis Horizontal Milling Center @ 150” x 66” x 48” and Ikegai VTL CNC Lathe @ Ø 55” Diameter Centerless Grinding Capacities ranges from Ø1/8” up to Ø1-1/2” in Lengths up to 14’ long and Ø1-1/2” to Ø 3” RD With Weight Maximum of 50# Dynamic Machine and Fabrication Corp. and Dynamic Centerless Grinding 3845 E. Winslow Ave., Phoenix, AZ 85040

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6/29 General Dinner Meeting 5:00-8:00pm at Phoenix Airport Hilton, 2435 S. 47th Street, Phoenix

MANY THANKS TO OUR 2011 ATMA VALUED SPONSORS!

arizonatooling.org / 23

FEATURE story continued from page 13

On June 19, 2007, the Netherlands Environment Assessment Agency announced that China's carbon dioxide (CO2) emissions were seven percent higher by volume than the United States in 2006. Many experts were skeptical, but on June 13, 2008, the same agency announced that a new study found that China's emissions were 14 percent higher than those of the United States in 2007. "e Chinese increase accounted for two-thirds of the growth in the year's global greenhouse gas emissions, the study found." In addition, China is now the largest source of SO2 emissions in the world (SO2 causes acid rain), and. Japan and South Korea suffer from acid rain produced by China's coal-fired power plants and yellow dust storms that originate in the Gobi desert.

An article titled "Scientists Track Asian Pollution" in the September 4, 2008 issue of e News Tribune of Tacoma, Washington reported that the Journal of Geophysical Research that stated "East Asia pollution aerosols could impose far-reaching environmental impacts at continental, hemispheric and global scales because of long-range transport," and "a warm conveyer belt lifts the pollutants into the upper troposphere over Asia, where winds can wing it to the United States in a week or less."

Dan Jaffe, a professor of environment science at the University of Washington and a member of the National Academies of Science panel studying the issue, said, "is pollution is distributed on average equally from Northern California to British Columbia." He added that "up to 30 percent of the mercury deposited in the United States from airborne sources comes from Asia, with the highest concentrations in Alaska and the Western states."

What good does it do to control the quality of our air and water in the United States so strictly that we drive our manufacturing industry south of the border to Mexico or offshore to Asia where environmental regulations are either lax or nonexistent? If people want strong environmental protection while retaining American jobs, we are going to have to analyze the cost of the environmental impact on American manufacturers and accept a reasonable compromise that doesn't go overboard on environmental regulations that drive more and more manufacturing offshore.

Another option would be to assess an environmental impact fee on products imported based on the level of pollution in the country of origin as compared to that of the U. S. e natural disasters of the past year, such as the Icelandic volcano, and the recent earthquake/tsunami in Japan have shown us that what happens to the environment in one part of the world affects the environment of other parts of the world.

While government takes the time to come to grips with this problem, you can prevent yourself from contributing to the world's pollution by buying products made in America. Remember, every product you buy made in China or India contributes to the world's pollution. n

Learn more at www.savingusmanufacturing.com

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www.UniqueMFG.org • Sales@UniqueMFG.org • (602) 470-1911

WEBSITES YOU SHOULD KNOW

RIGHT. ON TIME.

Arizona Chapter Website www.arizonatooling.org Arizona Department of Commerce – Job Training Grant application www.azcommerce.com/workforce Arizona Department of Education www.azed.gov Arizona Manufacturers Council www.azchamber.com/amc Arizona MEP www.arizonamep.org Arizona State University Mechanical & Manufacturing Engineering Technology www.poly.asu.edu/technology/mmet/ City of Phoenix – Community & Economic Development Program www.phoenix.gov/ECONDEV/index.html EVIT (East Valley Institute of Technology) www.evit.com GateWay Community College www.gatewaycc.edu

Hard Alloy Precision Machining Stainless Steels • Titanium • Maraging • High Temp Milling • Turning • Cylindrical Grinding Serving the Aerospace, Defense, Medical and Alternative Energy Industries Boeing (Silver Supplier) • ATK Sargent • Lockheed Martin

AS9100 Certified by DNV Mark Weathers, Owner 8737 NORTH 77TH DRIVE • PEORIA, ARIZONA 85345 P) 623.878.6800 • F) 623.878.0633 • C) 602.363.7929 mark@excalpm.com • www.excalpm.com

Greater Phoenix Chamber of Commerce www.phoenixchamber.com Human Resources, Safety & Environmental topics of interest (Also see a link on the NTMA website, www.ntma.org) www.blr.com Maricopa Skill Center www.maricopaskillcenter.com Maricopa Community Colleges www.maricopa.edu Maricopa Workforce Connection www.maricopaworkforceconnection.com Mesa Community College www.mc.maricopa.edu Mesa High School www.mpsaz.org National Institute for Metalworking Standards www.nims-skills.org National Tooling & Machining Association www.ntma.org One Voice Advocacy www.metalworkingadvocate.org SCF Arizona www.scfaz.com U.S. Department of Labor www.dol.gov

arizonatooling.org / 25

SAN DI EGO C H A P T E R

NTMA - SAN DIEGO CHAPTER

PRECISION

MEMBER LISTINGS

2011 Board of Directors

Regular Members

NTMA President Melinda Coldwell Cornerstone Machining, Inc.

Todd C. Lawson Dennis Cope Sean Tillett

Academy Machine Products Alphatec Spine Alphatec Spine

760-439-0109 760-494-6774 760-494-6894

Vice President Tony Martindale Martindale Manufacturing

Peter Neville Lyle Anderson Michael J. Brown

800-272-8878 760-746-6459 619-596-9246

Recruitment Director Mike Brown Computer Integrated Machining

Melinda Coldwell Alex Fima

B & H Tool Company Inc. C & H Machine and EDM Services Computer Integrated Machining, Inc. Cornerstone Machining, Inc. Directed MFG / Rapid Manufacturing Diversified Tool & Die Forecast 3D G & S Tool Inc. Henry Machine, Inc. Henry Machine, Inc. I-Source Technical Services, Inc. I-Source Technical Services, Inc. J I Machine Company, Inc. K-Tech Machine, Inc. K-Tech Machine, Inc. Manzke Machine, Inc. MarLee Manufacturing, Inc. Martindale Manufacturing Co. Miller Machine Works, LLC Roettele Industries Waterjet West, Inc.

Member at Large Peter Neville B&H Tool Member at Large Todd Cuffaro Miller Machine Member at Large Heather Russell K-Tech Machine Member at Large John Riego de Dios Construction Tech Academy Associate Member Glenn Van Noy Champion Risk Insurance Associate Member Mark Selway Selway Machine Associate Member Dave Stanton Digital Dimensions

Erich Wilms Donovan Weber Gabor Paulovits Jr. Andrew Allen Nhan Vo Young David Tuza Dora E. Tuza Jim Piel Heather Russell Stuart Russell Cliff Manzke Russell Wells Sr. Tony Martindale Todd Cuffaro Mark Rottele Scott Cormony

760-598-9100 760-929-9380 510-633-9632 760-744-8482 760-744-8482 949-453-1500 949-453-1500 858-695-1787 760-471-9262 760-471-9262 760-504-6875 909-390-3222 760-744-3078 619-501-9866 909-606-8252 760-471-2600

Associate Members Glenn Van Noy Dave Stanton Jeff Schwen Gail Houser Mark Selway

“To form an alliance within the San Diego region of the local machining and tool industry and to foster mutual success through education, technology, opportunity sharing, and act as one voice with the government and the community.”

760-727-5228 512-355-1360

Champion Risk and Insurance Services Digital Dimensions, Inc. East County Internet Marketing National Tooling & Machining Assoc.

Selway Machine Tool Company

760-419-1393 858-279-2557 619-315-5604 602-758-6912 888-735-9290

CALENDER OF EVENTS Wednesday April 27, 2011 (5:30pm) - Gregory Koehler – Attorney at Law will give a presentation on best practices for your business at Bruno’s Italian Restaurant in San Marcos.

TM

NTMA - San Diego Chapter phone: 760.419.1393 www.ntmasandiegochapter.org 348 Saratoga Glen Escondido, CA 92025

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Wednesday, March 23, 2011 (2:00pm) - Barbeque at the Ontario Training Center. This is a joint meeting with the Los Angeles Chapter.

July, 2011 - Padres game – details TBD

arizonatooling.org / 27

North Texas Chapter PRESIDENT’S letter

OFF TO A

STRONG START April, 2011 So far 2011 has been a strong start for e North Texas Chapter. We have been recognized as an NTMA Star Chapter, been a part of the launch of this new regional magazine and received an award at the National Convention as the NTMA’s most improved chapter! We look forward to continued growth in the 2nd quarter for e North Texas Chapter and our member companies. In March, I returned from the “Manufacturing for Growth Meeting” held in Chandler AZ. e convention was jointly held with the AMT (Association for Manufacturing Technology), AMTDA (American Machine Tool Distributors’ Association), PMA (Precision Metalforming Association), and the NTMA. e NTMA chairman for 2011, Grady Cope, asked that we as members and leaders “Market Manufacturing to America.” is year there was much optimism as many people were experiencing growth and new opportunities for machining.

In April, a delegation of North Texas Chapter members including myself from Manda Machine Co, Barron Smith, R.W. Smith Co., Wayne Applegate, Applegate EDM, and Frank and Terry Burch, Southern Machine Works attended the Legislative Conference in Washington, D.C. It was jointly held with the PMA and assembled by One Voice, the NTMA’s lobbying group.

We had the opportunity to meet with our elected officials one on one and discuss problems and possible solutions to our manufacturing needs. Both the National Conference and e Legislative Conference offer unparalleled access to people within the industry, networking opportunities and vital information for growth. I strongly urge you to attend one of these conferences in 2012.

Mark your calendars now to attend the Fall Conference at e Broadmoor in Colorado Springs, CO on October 13-16, 2011.

I hope to see you all there.

N O R T H T E X A S C H A P T E R

NTMA PRECISION 2011 Board of Directors President Todd Ellard Manda Machine Company Vice President Jeff Spencer Clay Precision Treasurer Barron Smith R.W. Smith Company Chapter Executive Lisa Ellard Trustee Wayne Applegate Applegate EDM Board Members Mike Berdan BE Technologies Frank Burch Southern Machine Works Stephen Draper Hartwig, Inc. Micah Embrey CNC Precision/Shamrock-Bolt Don Halsey Halsey Manufacturing Ray Jones MWI, Inc. Pat McCurley Midlothian Insurance Karla Chandler Education Liason

“The Power of Connections” NTMA - North Texas Chapter

TODD ELLARD PRESIDENT, NTMA NORTH TEXAS CHAPTER

ntc.ntma@gmail.com phone: 214.536.4970 www.ntmanorthtexas.org P.O. Box 541236 Dallas, TX 75354-1236

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NTMA PRECISION

Proven Experience. Certified Quality.

Dependable Service.

STAR CHAPTER AWARD 2010

Specialty Metals Leadership.

Supply Chain Innovation.

1140 E. Washington St., Suite 205, Phoenix, AZ 85034 602-864-0014 • 800-203-8000 twmetals.com

arizonatooling.org / 29

NTMA - NORTH TEXAS CHAPTER

MEMBER LISTINGS Regular Members Vincente Chan Wade Whistler George Gregory Wayne Applegate Steve Ingersoll Michael Berdan Christi Cameron Jeff R. Spencer Gary Embrey Joseph Lodor Robert McNamara Charles Gilbert David Ellis Rudy D. Kobus Gary Fore Larry Borowski David L. Hodgdon Don Halsey, Jr. Keith Hutchinson Sammy Maddox Todd Ellard Rodie Woodard Woodrow W. ompson Allen Meyer Eddie Steiner, Jr. Morris Padgett Troy Paulus Joe O’Dell Matt Harrell Barron Smith Dion Casto Frank Burch John Anselmi Marshall B. Taylor

Associate Members

Aeroweld Technologies, Inc. A.C.T. Precision Sheet Metal, Inc. ABL Services, Inc. Applegate EDM, Inc. Bailey Tool & Manufacturing BE-Technologies, Ltd. Cameron Machine Shop, Inc. Clay Precision, Ltd. CNC Precision Manufacturing, Inc. Commerce Grinding Company, Inc. Davis Machine & Manufacturing DNS Tool Cutter Grinding, LLC Ellis Tool & Machine, Inc. Expert Tool & Machine, Inc. Fore Machine Company, Inc. Greenslade and Company, Inc. H. H. Mercer, Inc. Halsey Engineering & Mfg., Inc. Lancaster Machine Shop Maddox Metal Works, Inc. Manda Machine Company, Inc. Maximum Industries, Inc. Metal Detail, Inc. Meyer Enterprises O E M Industries, Inc. Padgett Machine Tools, Inc. Paulus Precision Machine, Inc. Plano Machine & Instrument, Inc. Quickturn Technology, Inc. R. W. Smith Company, Inc. Rapid Tooling, Inc. Southern Machine Works Sunbelt Plastics Inc. T & K Machine, Inc.

972-247-1189 214-678-9114 903-509-2256 972-488-8997 972-974-8892 972-242-1853 972-235-8876 903-891-9022 972-241-3931 214-651-1977 817-261-7362 972-241-5271 903-546-6540 972-241-5353 817-834-6251 817-870-8888 972-289-1911 940-566-3306 972-227-2868 214-333-2311 214-352-5946 972-501-9990 214-330-7757 972-353-9791 214-330-7271 254-865-9772 940-566-5600 940-665-2814 469-643-5010 214-748-1699 972-633-8872 580-255-6525 972-335-4100 903-785-5574

UPCOMING MEETINGS & EVENTS Thanks to our January & February 2011 General Meeting hosts: January 2011 – Manda Machine Company ebruary 2011 – Ellison Technologies March 2011 – Larson Allen LLP, Lunch & Learn April 2011 – Midlothian Insurance Agency

Larry Ellison Tommy ompson Lewis Lance Rick Blair Craig van Hamersveld Claudia Pautz Chris Simms Fraser Marshall Frank Vance Norm Williamson Mike Johns Greg Kinney Matt Curtis Rod Zimmerman Randy Joyce Curtis Dahmen Mark S. Holly Leland McDowell Pat McCurley Ray Jones Mike Chadick Reed Hunt Bob Severance Alan VanHoozer Glenn Wise

AJR Metalworks, Inc. Bodic Industries Bodycote Heat Treat Brook Anco Corporation Campat Machine Tool, Inc. Castle Metals Champion Cutting Tool Ellison Technologies Frank J Vance H & O Die Supply, Inc. Haas Factory Outlet Hartwig, Inc. -- Texas Hillary Machinery, Inc. Iscar Metals, Inc. Joyce Engraving Company, Inc. Kaeser Compressors, Inc. Machinists Tools & Supplies McDowell Machinery & Supply Co. Midlothian Insurance Agency MWI Inc. / Southwest Division North Texas Precision Instrument Reed Hunt Services, Inc. Severance Brothers Top Tooling of Dallas, Inc. Wise Machinery, LLC

214-352-3766 972-840-1015 817-265-5878 585-475-9570 972-424-4095 972-339-5000 516-536-8200 972-812-5500 972-255-3925 214-630-6660 972-231-2802 972-790-8200 972-578-1515 817-258-3200 214-638-1262 972-245-9611 214-631-9390 214-353-0410 972-723-5171 972-247-3083 817-589-0011 817-261-4432 972-660-7000 972-278-8300 817-905-9473

THANK YOU TO OUR 2011 SPONSORS!

BILLOR MACHINE TOOL SERVICE Larson Allen LLP CPAs, CONSULTANTS & ADVISORS

TM

UPCOMING EVENTS:

May 19, 2011 – General Meeting, Commerce Grinding, Inc. June 16, 2011 – General Meeting, Rapid Tooling, Inc. July 2011 – Night at The Ballpark Ranger Game

30 /

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