WASHINGTON, D.C. - Testifying Tuesday morning before the House Ways and Means Trade Subcommittee, a small manufacturer and National Association of Manufacturers board member advocated successful completion of the ongoing round of World Trade Organization talks and reported that, "In many ways, smaller firms probably need the WTO system even more than large firms."
Dwight F. "Dyke" Messinger, president and CEO of Power Curbers, Inc. of Salisbury, NC, employs more than 100 people in the manufacture of curbing and paving machines.
Emphasizing that his company exports to more than 70 countries and that small and medium-size companies account for roughly 30% of U.S. exports, Messinger also noted that, "Commerce Department data show that one out of every five manufacturing jobs in the U.S. is directly related to exports."
He explained that current trade costs that result from discriminatory foreign standards, counterfeiting and intellectual property theft, customs clearance and other delays disproportionately affect smaller firms who are less able to pay.
Thanks to WTO rules, continued Messinger, "Barriers have been coming down and small firms like mine have benefited. But, we still face tariffs and trade barriers that are much too high. We could sell more to existing customers and we could find new customers if other countries didn't throw up one barrier after another. The Doha Round of WTO negotiations offers the best opportunity to bring such barriers down.
"Trade liberalization over the years has been a boon to our U.S. manufacturing base as more markets are now open to us than ever before," Messinger said. "The more foreign markets open to us, and the fairer trade is, the more we will sell and the more American workers we'll add to our payrolls."
To assure such progress, "The U.S. must continue its determined, aggressive world leadership on behalf of trade expansion and completion of a Doha Round that includes deep cuts in industrial trade barriers," insisted Messinger. "Accordingly, Congress must vote to renew our WTO membership."
He concluded his testimony with strong support for bilateral free trade agreements: "My company had previously faced duties of 6% in Chile and 5% in Australia. As a result of our FTAs with those countries, we can now export to both countries duty free while our competitors are still paying these duties. American manufacturing strongly believes that passage of CAFTA-DR is in the best interest of the United States."
Messinger's full testimony is posted at: http://www.nam.org/s_nam/bin.asp?CID=169&DID=234131&DOC=FILE.PDF.
WASHINGTON -- The National Association of Manufacturers expressed disappointment today with the Treasury Department's failure to cite China for currency manipulation in its semiannual report to Congress, but noted Treasury's statement that time is running out for China to act.
NAM president John Engler released a statement saying, "We have called for Treasury to cite China for currency manipulation in its report, and of course we are disappointed that did not happen."
But Engler pointed to a statement by Snow during a Treasury news conference this afternoon warning China that, "If current trends continue without substantial alteration, China's policies will likely meet the statute's technical requirements for designation" as a currency manipulator.
The total net loss, which includes discontinued operations, was $39.4 million,
down from a loss of $6.6 million in the year-ago quarter.
The sales drop was due to significantly reduced EMS
sales in the U.S., the company said, primarily from customers rescheduling orders to
later in 2005.
Gross margin dollars were $2.6 million less than in the comparable quarter in 2004. Selling, general and administrative expenses rose, due to increased severance, consulting, accounting and legal expenses
During the quarter TFS took a $2.5 million loss on assets relating to ERP implementation,
and $900,000 for costs associated with continuing lease obligations for vacated facilities.
The company also took a $12.9 million charge for the impairment of goodwill for its EMS business
and large panel display business in Marlborough.
Ina statement, the company said that the substantial losses sustained in the past
several years has led to the retention of SG Cowen & Co. review strategic alternatives aimed
at maximizing stockholder value. Based on SG Cowen's advice, the company has exited
the display business and has signed a nonbinding letter of intent to sell its RF operations in Manila,
leaving its EMS operations in Penang, Malaysia, and Redmond, WA. It said it is looking at several merger
or recapitalization options.
"Our alternatives include sale of all or part of our EMS business, merging with another company,
recapitalization and continuation of our business, or seeking joint venture partners.
TFS guided for flat second-quarter revenue from ongoing operations. "For the remainder of 2005, our focus
will be on cost reductions and restructuring our EMS business to achieve cash flow breakeven. We believe that
the combination of our new product introduction and medical and military operations in Redmond with our
high-volume, cost-effective offshore operations in Penang will provide a strong foundation for our EMS business in the future."
At the end of the quarter TFS had cash and restricted cash of $12.4 million vs. $16.2 million
at the end of the fourth quarter 2004.
Year-on-year, days sales outstanding rose to 46 from 38, inventory turns were flat at 5.1 and cash conversion
cycle rose to 62 days from 58.
PALO ALTO, CA --Hewlett-Packard, one of the largest customers of the EMS industry (including companies such as Flextronics, Sanmina-SCI, Jabil, Solectron and Celestica) has faced sluggish demand and an inventory reduction, according to its latest earnings call. The company's total revenue slowed to 7% year on year vs. 10% last quarter.
According to Deutsche Bank analyst Chris Whitmore, strong (10%) sequential growth from HP's business critical servers offset slowing industry standard server revenue and a 6% decline in storage from last year. The division's operating margin improved to 4.4% vs. 1.8% last year.
HP experienced a rebound in printer demand in the April quarter, with sales up 5% year-on-year following aggressive price cuts. Home hardware sales increased 3%, while business printers grew 4% from last quarter (Flextronics has the most exposure to home hardware sales while Jabil has the most exposure to business printers, DB said).
Revenue from PCs grew 6%, decelerating sharply from last quarter's 11% growth -- as desktop growth fell to 1% from 8%. The commercial business increased 3%, with a 10% consumer growth (Sanmina-SCI manufactures commercial desktops for HP).
DB also reported that HP is selling two PC manufacturing plants to Hon Hai in Australia and India.
HP reduced inventory by $656 million and days of inventories to 35 (the lowest level since the second quarter of 2002). Roughly $500 million of the decline was in the printing division.
DB analysts noted that demand remains lackluster and pricing remains aggressive throughout the IT HW industry. In addition, HP's new management team could implement significant changes to its supply chain in an effort to drive lower costs, creating risk to EMS vendors' existing relationships with HP. That said, HP's inventory management meaningfully improved in the quarter.
Minneapolis, MN - The Surface Mount Technology Association (SMTA) is hosting its SMTA/CAVE Harsh Environment Electronics Workshop on June 28-29 in Indianapolis. Jointly organized by the SMTA and Auburn University- Center for Advanced Vehicle Electronics, the workshop addresses the concerns related to harsh environment electronics and the challenges facing the electronics community.
It is intended to bring together the needs from end-users with the capabilities of the research community and industrial supply base. In addition, industrial needs for non-automotive vehicle requirements are addressed.
Harsh Environment Electronics Sessions will include:
Thermal Interface Materials
Component Reliability for Harsh Environments
Module Overmolding for Harsh Environments
Systems Design for Harsh Environments
Lead-Free Soldering and Solder Alternatives
Register by May 27 to receive a 10% discount.
Full workshop details and on-line registration can be found at:
http://www.smta.org/education/symposia/symposia.cfm#harsh.