Gearing up in the Midwest

23 August 2012

As a recovering Midwest automotive industry sees burgeoning crane demand, Nicole Robinson gauges the opportunities on offer from auto manufacturers and their suppliers.

In Kia's Georgia plant, only one department has overhead cranes and there isn't a dedicated team working full-time on the cranes, says spokesperson Corrine Hodges. There is a pool of people across maintenance and production that use the cranes, but as to what either group uses them for, she is not authorized to say. Looking at the Kia factory, there may not be a strong demand for cranes within the factories of foreign automotive manufacturers, however there is demand from Tier One suppliers and other vendors. Remarking on the strong influx of foreign manufacturing in the southeast, Demag Cranes' eastern region division manager Dennis Clark says that he started to notice a change in demand in the last four or five years. He adds that he can't even recall who was first anymore.

"It not only came from the automobile companies, but also the sub-suppliers to the automobile companies: the stamping plants and the parts suppliers," he says.

The southern United States has become inundated with foreign automotive manufacturers, who attract suppliers and component manufacturers to the region as well. It's not only foreigners looking to the south. General Motors is reported to be reopening its Spring Hill, Tennessee assembly plant, formerly used for the now defunct Saturn brand, with an expansion to accommodate production for the Chevrolet Equinox SUV.

The plant was previously closed in November 2009, just a year after a USD 700M retooling of the former Saturn plant in 2008. Currently, planning activities are underway and the project is slated for completion by the fourth quarter of 2014.

And it's not only the Southeast building cars. The Midwest, traditionally a hub of automotive production, is seeing a slight resurgence of manufacturers and their suppliers following the recession. As the manufacturers' confidence grows so should crane demand.

Where cranes are concerned in the automotive industry, the demand for service and new equipment is interchangeable, though reliable.

And while public transport and other 'green' initiatives are popular, cars are sgoing nowhere anytime soon.

Market malarkey
When it comes down to consumers, the automotive market fluctuates.

Demand has hit peaks during fiscal programs and even thanks to product placement in films.

In his interview for this issue's Midwest report, Bob Trybula, a sales manager for Konecranes, says automotive is one of the driving forces as the region comes out of the recession and into recovery. He specifically cites the Cash for Clunkers program, introduced by Congress in 2009, for moving cars off of lots. The stimulus program allotted USD 3bn to incentivize car owners interested in buying more fuel-efficient vehicles.

When the program ended in August 2009, cars made in America topped the most-purchased list.

The top three new vehicles came from the following manufacturers: Toyota achieved 19.4 per cent, General Motors had 17.6 per cent and Ford took 14.4 per cent. "American consumers and workers were the clear winners thanks to the cash for clunkers program," said U.S. Transportation Secretary Ray LaHood. "Manufacturing plants have added shifts and recalled workers.

"Moribund showrooms were brought back to life and consumers bought fuel efficient cars that will save them money and improve the environment."

At the end of the program, Ford and General Motors announced production increases for both the third and fourth quarters as a result of the demand generated by the program. Honda also announced it would increase production at several of its U.S. plants.

At home and away
When it comes down to the actual cranes, product requirements can vary by type of manufacturing or process.

"In the auto assembly plants, it's more of the monorail, chain hoist, light duty-type equipment.

In some of those supply houses, especially stamping plants, it's the heavier equipment because they have to do a lot of dye changing, and there are larger cranes involved in those," Clark explains. "It depends on which facility you are dealing with and which product is in more demand. In general it [automotive] helps all products across the board, from our point of view."

When cranes are used in an automotive manufacturer's facility, if it's a large overhead crane it's usually moving a piece of equipment.

"It's not actually used in manufacturing. It's unloading a truck or something of that nature," he says. "The light duty chain hoist and monorail systems can get involved in the actual production where they are moving a piece of equipment along an assembly line. It's not actually manufacturing the equipment but moving it so it can be worked on."

With foreign companies opening shop in the southeast and U.S. companies expanding abroad there is an emerging trend for crane companies to tag along for the ride. Foreign manufacturers may rely on crane products established globally so their manufacturing process doesn't vary too widely from what is happening in their home plants. "I don't know that it's 100 per cent, but there is a strong influence from a global supply point-of-view. They want to try to be as uniform as they can be throughout their company," says Clark.

Demag has helped many companies in this very same position. "We have many North American customers that we work with globally and locally.

"These customers rely on us to leverage our knowledge of their business and processes outside of North America to develop a consistent solution for their North American operations."

Demag recently installed six 25t, double-girder cranes at a dye-handling facility that works to support Kia or one of the manufacturers suppliers.

"Actually a lot of same manufacturers supply to all the [car] companies. They are making it the same way," explains Clark. "We would supply the T1 manufacturers for GM, for VW, for KIA, for BMW, for any manufacturer. They would buy equipment for them all."

At home in your auto
Elkhart, Indiana, is home to the home on wheels. Several large manufacturers of RVs base their corporate offices here and have production facilities in locations across the county.

Hoosier Crane Service Company is based in Elkhart and sees plenty of work from the unofficial RV capital of the world. Hoosier's vice president of sales Jon Harkrider says that they mostly supply and service smaller cranes, 3t and under, for tasks such as picking up axles, tires and frames during RV assembly.

"It's not too different from the automotive manufacturing," Harkrider says. "The plants are smaller, instead of an automotive plant that has 3,000 workers they might have 300 workers."

Each plant usually builds only one model of RV. It's a very efficient system, he says. And it also means that one Manufacturer operates 40 plants across Elkhart County alone to produce all of its brands' models.

The difference between car manufacturers and the RV manufacturers is in how the investment is made in equipment. Automotive companies are more long-term, and justify spending money on equipment that will save labor costs over, for instance, a five-year period. "The RV guys want the most cost effective solution they can get because a year from now that plant could be retooled," he says. "The RV guys are constantly retooling because they do new models every year. And they have a pretty big turnover on personnel."

A different manager may be hired and prefer the factory to have a different layout. "They'll actually call us in, we'll drop all the cranes to the floor and we'll reinstall them in a different configuration," Harkrider explains. "It happens a lot.

"We'll do sometimes the same plant two or three times in the same year."

The recession didn't take such a toll on Hoosier compared to other companies in the Midwest. One reason for this is that although RV companies began to mothball facilities on seeing declining demand in 2008, cranes still needed to be moved around among the buildings left open. Hoosier employees stayed busy for two years doing exactly this kind of work for its customers.

Rail company Norfolk Southern has a hub near Elkhart, sending through some 150 to 200 trains a day, many of which bring in raw materials such as plywood for the RV companies. Hoosier has also done work with this company providing cranes to lift train cars to change wheels and bearings. Chances are if you see an RV on the road, Hoosier had a hand in its maintenance, assembly or transportation at some point.

Demag KBK double-girder suspension cranes in an automotive engine production line.
Installation of a 25t bridge crane with trilifter
A 50t overhead crane spanning 110ft installed at a midwestern machine fabricator
A 25t double girder crane designed for operation with low headroom
Two 25t and 50t cranes installed by Hoosier Crane Service Company
A 250t/100t Demag open-winch process crane used to transport and turn compressors in an automotive plant.