trends, problems & metal finishing outlook
DESCRIPTION
Trends, Problems & Metal Finishing Outlook. TURI Metal Finishing Forum May 20, 2004 Christian Richter The Policy Group. Snapshot: Surface Finishing in 2004. Globalization Pressures & Challenges. U.S. Pressures on Processes. Asia Pressures on Prices. Europe Pressures on Products. - PowerPoint PPT PresentationTRANSCRIPT
Trends, Problems& Metal Finishing Outlook
TURI Metal Finishing ForumTURI Metal Finishing Forum
May 20, 2004May 20, 2004
Christian RichterChristian Richter
The Policy GroupThe Policy Group
Snapshot: Surface Finishing in 2004
Globalization Pressures & ChallengesGlobalization Pressures & Challenges
Asia
Pressureson
Prices
U.S.
Pressures on
Processes
Europe
Pressureson
Products
Global Sourcing Coating Options New Market Demands
Snapshot: Manufacturing Job Losses Since 2000
Of the 2.8 million total, over 50 % of job losses in five industries:Of the 2.8 million total, over 50 % of job losses in five industries:
Computer & electronicsComputer & electronics Transportation equipmentTransportation equipment MachineryMachinery Fabricated metalsFabricated metals ApparelApparel
17 of 21 industries constituting U.S. manufacturing sector have sustained 17 of 21 industries constituting U.S. manufacturing sector have sustained losses exceeding 10 percentlosses exceeding 10 percent
Surface Finishing Market Research Board – loss of 40K – 70K jobsSurface Finishing Market Research Board – loss of 40K – 70K jobs
This time really This time really isis different – Cyclical vs. Structural Losses different – Cyclical vs. Structural Losses Over 70 percent structural losses Over 70 percent structural losses
U.S. Import Trends from China and from Other Pacific Rim Countries (% of total U.S. imports)
1990 1995 20002003
China
Asia - Excluding China0
5
10
15
20
25
30
35China
Asia - ExcludingChina
Output & Employment in the Manufacturing Sector: Jobs Down, but Output Constant
0
5
10
15
20
25
30
35
1950 1960 1970 1980 1990 2000 2002
ManufacturingEmployment as Shareof Total Employment
ManufacturingOutput vs. Real GDP
PrimarySuppliers
OEMs& DoD
Finishing
SurfaceCoatingOptions &Solutions
Design of Products, Practices, Protocols
Research, Procurement Policies
GlobalCompetition
US Regulatory andOverhead Demands
* EU Directives & Market Demands
Supply Chain Trends& European Pressure
Agenda for Surface Coatings: Engagement - Procurement / R&D
DriversResponses
Pentagon: Driver or Bellwether on Emerging Technologies & the Environment?
$ 100 million in funding for enviro research & testing programs
Focus on non-electrolytic processes Recent Pentagon meetings on metals & coatings technology
December 2003 – Joint Strike Fighter & nickel March 2004 – corrosion #1 priority / “dry coatings” at depots
Finishing Strategy: Informing Pentagon R&D Priorities, Analysis and Procurement & Maintenance
Key Industry Concerns: Eliminate potential “bias” in emerging decision making Review environmental impacts, functionality / applicability &
cost in programs
Project: Joint DoD-Finishing Industry Symposium / Workshop on Technology
Pentagon – Selected Technology Programs focusing on Reduced Environmental Impacts
Department of Defense Department of Defense Environmental Security Environmental Security Technology Certification Technology Certification ProgramProgram
Department of Defense Joint Department of Defense Joint Group on Pollution PreventionGroup on Pollution Prevention
Department of Defense Department of Defense Propulsion Environmental Propulsion Environmental Working GroupWorking Group
Key Websites: HCAT.ORG / SERDP.ORG
Or go to Or go to
www.hcat.org Click on Click on HCAT HCAT Member Member WorkspaceWorkspace Check that Check that you have the you have the proper browserproper browser Click button Click button to enter siteto enter site
Username:Username: hcatguesthcatguest
Password:Password: hcat hcat
Significant U.S. “Non-Regulatory”Developments for Nickel
RECENT ACTION (U.S. National Toxicology Program)RECENT ACTION (U.S. National Toxicology Program) 1010thth Report on Carcinogens – December 2002 Report on Carcinogens – December 2002 DeterminationDetermination: Nickel compounds upgraded to : Nickel compounds upgraded to
“known” human carcinogen“known” human carcinogen
Significant U.S. “Non-Regulatory”Developments for Nickel
PENDING ACTION (US EPA Risk Assessment)PENDING ACTION (US EPA Risk Assessment)
Major decision on soluble Ni compoundsMajor decision on soluble Ni compounds Industry study (TERA, 1999) and scientific input have Industry study (TERA, 1999) and scientific input have
role in outcomerole in outcome
KEYKEY: EPA currently engaging in additional round of : EPA currently engaging in additional round of internal review in light of NTP nickel listing (& EU internal review in light of NTP nickel listing (& EU developments)developments)
Expected publication – Imminent ?Expected publication – Imminent ?
Nickel Developments: Pressure on Processes & Products
New US HHS Cancer Classification and US EPA Risk AssessmentNew US HHS Cancer Classification and US EPA Risk Assessment
RegulatoryRegulatory: Triggers or accelerates new regulation: Triggers or accelerates new regulation OSHA hazard communicationOSHA hazard communication Review of OSHA permissible exposure limitsReview of OSHA permissible exposure limits Review of EPA requirements – esp. air, waterReview of EPA requirements – esp. air, water
MarketMarket: Material end uses / “de-selection” in supply chain: Material end uses / “de-selection” in supply chain AutomotiveAutomotive Aerospace / defenseAerospace / defense
Industry ActionIndustry Action: Engagement with Decision makers: Engagement with Decision makers The Regulatory “Domino Effect”The Regulatory “Domino Effect” Changing “Vicious Circle” to “Virtuous Circle” in the federal regulatory / Changing “Vicious Circle” to “Virtuous Circle” in the federal regulatory /
research agendaresearch agenda
Nickel & Automotive Trends
Europe: Nickel is NOT currently included in ELV Europe: Nickel is NOT currently included in ELV DirectiveDirective
BUT, potential negative decisions re EU nickel riskBUT, potential negative decisions re EU nickel risk assessment could “override” even favorable US decisions onassessment could “override” even favorable US decisions on H&E riskH&E risk
Future Scenarios for AutomotiveFuture Scenarios for Automotive
Regulatory: End-of-Life Vehicles (ELV) DirectiveRegulatory: End-of-Life Vehicles (ELV) Directive Market: Restricted Materials Management PoliciesMarket: Restricted Materials Management Policies
RMMS currently in place address mainlyRMMS currently in place address mainly reporting for substances of concernreporting for substances of concern
Industry / GR Engagement with OEMS, Tier 1/Tier 2 Industry / GR Engagement with OEMS, Tier 1/Tier 2
California Nickel Developments:Drinking Water
Office of Environmental Health Hazard AssessmentOffice of Environmental Health Hazard Assessment(OEHHA) Public Health Goal (PHG) for(OEHHA) Public Health Goal (PHG) forNickel CompoundsNickel Compounds
PHG for nickel compounds lowered to 12 ppb fromPHG for nickel compounds lowered to 12 ppb from
50 ppb (2001) – initial proposal was 1 ppb50 ppb (2001) – initial proposal was 1 ppb U.S. EPA drinking water standard ~ 100 ppb U.S. EPA drinking water standard ~ 100 ppb Background sources – OEHHA reported avg. 15Background sources – OEHHA reported avg. 15
PHG is NOT a regulatory standard!PHG is NOT a regulatory standard!
Los Angeles Basin Nickel Developments
South Coast Air Quality Management DistrictSouth Coast Air Quality Management DistrictRule 1426 – Adopted May 2003Rule 1426 – Adopted May 2003
Emission controls considered for non-chromium Emission controls considered for non-chromium plating operations, including nickelplating operations, including nickel AQMD used Negotiated Rulemaking process to AQMD used Negotiated Rulemaking process to identify regulatory options and develop rule identify regulatory options and develop rule Rule is essentially a 2-year mandatory data Rule is essentially a 2-year mandatory data collection effort (purchase records, NO source collection effort (purchase records, NO source testing):testing):
Non-chrome electroplating operationsNon-chrome electroplating operations NotNot applicableapplicable to electroless nickel operations to electroless nickel operations
OSHA Chrome Worker Exposure Limit
ImpactsImpacts
Hard & Deco Chrome & AnodizingHard & Deco Chrome & Anodizing
Rulemaking MilestonesRulemaking Milestones
Small Business Impact Review – CompletedSmall Business Impact Review – Completed Notice & Comment – Fall 2004Notice & Comment – Fall 2004 Hearings – Winter 2005Hearings – Winter 2005
Significant IssuesSignificant Issues
Economic Feasibility – Latest OSHA estimate = $5,000Economic Feasibility – Latest OSHA estimate = $5,000 Technical Feasibility – Challenge of reaching low levelsTechnical Feasibility – Challenge of reaching low levels
PELPEL 1010 55 11 0.50.5 0.250.25
Action Action LevelLevel 55 2.52.5 0.50.5 0.250.25
Current PEL: 100 ug/m3 Chromic Acid 52 ug/m3 CrVI (ceiling concentration)
Revised PEL:
Chrome PEL: Components of A Final Rule
•Dramatically Revised PEL
•Action Level
•Exposure Assessment
•Segregated Regulated Areas
•Methods of Compliance
•Respiratory Protection
•Protective Work Clothing
•Hygiene Facilities/Practices
•Housekeeping
•Medical Surveillance
•Hazard Communication
•Recordkeeping
Chrome PEL: Electroplating Industry Impact
1010 55 11 0.50.5 0.250.25
Average Average Compliance Compliance Costs % of Costs % of RevenuesRevenues
0.26%0.26% 0.29%0.29% 0.61%0.61% 0.88%0.88% 1.15%1.15%
Compliance Compliance Costs as % of Costs as % of ProfitProfit
5.34%5.34% 5.82%5.82% 12.46%12.46% 17.96%17.96% 23.46%23.46%
Regulation-Driven Technologies: US OSHA Replacement Options for Cr Electroplating
Substitute MaterialsSubstitute Materials Trivalent ChromiumTrivalent Chromium Nickel-Boron Plating ChemicalsNickel-Boron Plating Chemicals Cobalt-Based Plating ChemicalsCobalt-Based Plating Chemicals
Substitute ProcessesSubstitute Processes Pressure Controlled Atomization Process (Thermal Spray)Pressure Controlled Atomization Process (Thermal Spray) High Velocity Oxygen Fuel ProcessesHigh Velocity Oxygen Fuel Processes Amorphous Nanocrystalline Composite DepositionsAmorphous Nanocrystalline Composite Depositions Flexible Preceramic Coatings DepositionFlexible Preceramic Coatings Deposition Organic Sealants ApplicationOrganic Sealants Application Inductive Coupled Radio Frequency Plasma TorchInductive Coupled Radio Frequency Plasma Torch
Finishing’s $100,000 Regulatory Relief Package: Selected Targets Hazardous WasteHazardous Waste
F006 RuleF006 Rule
Water (Post-MP&M Rule)Water (Post-MP&M Rule) Pretreatment Streamlining RulePretreatment Streamlining Rule
Air Air ExemptionExemption from USEPA federal permitting requirements from USEPA federal permitting requirements Chrome air toxics regulationsChrome air toxics regulations
RiskRisk Revise USEPA criteria for assessing metalsRevise USEPA criteria for assessing metals Inform OEM / Pentagon research effortsInform OEM / Pentagon research efforts Inform US and European risk / regulatory efforts on nickel in productsInform US and European risk / regulatory efforts on nickel in products
OSHAOSHA Chrome worker exposure limitsChrome worker exposure limits
Selected Government Relations Projects / Products & Initiatives
““Future of Finishing” – $75,000Future of Finishing” – $75,000
Surface Finishing Technology Symposium – PentagonSurface Finishing Technology Symposium – Pentagon
Benchmarking Tools for Surface Finishing - $200,000Benchmarking Tools for Surface Finishing - $200,000
EMS / ISO 14000 Training Programs – $200,000EMS / ISO 14000 Training Programs – $200,000
Nickel Finishing Emissions Study – $75,000Nickel Finishing Emissions Study – $75,000
““Nickel Strategy Group” with Nickel InstituteNickel Strategy Group” with Nickel Institute
Nickel Carcinogenicity Study – NiPERA – $1.2 millionNickel Carcinogenicity Study – NiPERA – $1.2 million
The Future of Surface Finishing
Multiplicity of ChallengesMultiplicity of Challenges
EconomicsMarkets
Technology
Sustainability
Regulation
Where the Industry’s Going…
Strategy – The Long Term…Strategy – The Long Term…
Assess trendsAssess trends Anticipate impactsAnticipate impacts Measure opportunitiesMeasure opportunities Offer solutionsOffer solutions Launch the Launch the rightright initiatives initiatives Execute effectivelyExecute effectively
Succeed in the future!Succeed in the future!