As the year winds down, the fastener industry is buoyed with optimism, even as it faces growing market pressures and wild uncertainty. Keeping things jolly, Buckeye Fasteners manager, Larry Kelly shares the frostified back story of Old Rusty Bolt beer, the benefits of employee owned companies, and his deep knowledge of working in the sweet spot (1:27:11). Also joining the reindeer games, Würth Industry North America VP, Jeff Schmitt weighs in on the over seas freight situation, and sees growth opportunities ahead despite some obvious headwinds (24:32). On the Fastener News Report, intrepid anchorman Mike McNulty welcomes Doug Ruggles of Martin Fastening Solutions to unpack the resilient FDI numbers (49:51). Carmen Vertullo presents the Fastener Training Minute, this time explaining the principle of perpendicularity (1:18:58). BONUS: Meet Screwdolph! (14:01) Brian and Eric note a perfect storm and an upcoming alignment of the stars. Run time: 02:17:58
Hosts: Eric Dudas
Intro: It's Fully Threaded Radio Episode 159.
M McNulty: I thought it would be a good idea to close the year by emphasizing another good virtue to go along with gratitude. I think that we're going to need some heavier doses of the virtue of fortitude. Also known as courage.
Fortitude is the virtue that enables us to remain resilient and endure difficulties for the sake of what is good. And when practice properly, it can help us moderate emotions of anger and fear, which come into play. When we are faced with complex and difficult situations, including the threat of evils. And I don't just mean the obvious threats of actually contracting the virus, but those that come from people and organizations that seek to take advantage of this crisis to implement nefarious ideologies and programs.
It's time for Fully Threaded Radio.
Eric: It is Fully Threaded Radio, voice of the mighty FCH Sourcing Network. This is the online on demand, predominantly fastener related talk radio podcast, where the thread radi come to hear and be heard, but you don't have to beat fastener royalty to join in. Fortunately for me. And we're so glad you clicked in everyone. Thanks for being here.
Hi, it's Eric Dudas and the co-host of fully threaded is with me as well. He's a man, who'd probably be more comfortable spending Christmas down under with a Speedo in some Vegemite pudding, but he's here with us in the frozen Tundra, behind the mic in our FTR Midwest studio. He's Brian Musker. Hey, Bri, I need to tear the wrapper off of this one.
Brian: Yes, I am. And it would be true to say I would be better off in the Southern Hemisphere at the moment, but whatever I'm here. Okay. So, it's call.
Eric: Yes. Lucky for us. And we're winding up another season. Can you believe it, Bri?
Brian: I know.
Eric: It just crept up on us. Although I can't say that we haven't earned it. It does feel like we've been through a long slog this year.
Brian: Right. And I can't wait to get there and for it to end.
Eric: Well, we're almost there because this is episode 159 of Fully Threaded Radio. This time we're publishing on December 17th, 2020 approaching a fresh new start. And I think the package today is a good way to take it out. Lots going on. As everybody knows, we don't have to elaborate.
Eric: We'll kick the show off today with some startling information about the situation with over seas freight. And we teased this last time and we'll be joined by Würth Western Region VP Jeff Schmitt. He'll add his thoughts to that. Plus give us some additional perspective from his vantage point at the senior level of one of the biggest players in the fastener game.
Matter of fact, when I get done with these intros Bri, we got some late breaking news about another acquisition from Würth . They never stop.
Eric: During the feature segment today, Larry Kelly of Buckeye Fasteners sits down with us for a conversation and you'll hear a major announcement from him that I'm sure will come as a big surprise to many of you. And you'll also come to understand some history of the venerated fastener industry brew Old Rusty Bolt. Plus, you'll hear why Larry's motto in life. Very plainly "Let it be".
Brian: I didn't know he was a Beatles guy.
Eric: Yes. Well maybe he is. Maybe he isn't. Not saying listen in.
Brian: Okay. Right.
Eric: During the Fastener News Report today, industry newsman, Mike McNulty's here and you know, he's grown the report into really an expose segment. And this time it's more deep insights into the actual stories of American business success. As he speaks with Doug Ruggles of Martin Supply, they'll cover the latest Fastener Distributor Index results and more.
Brian: You mean the sort of slightly surprising, Fastener Distributor Index results.
Eric: You'll also find out what happens after the Lunar New Year. According to one of our FDI respondents, that was a little bit of a head-scratcher for me. Bri, we'll take that up at the end of the episode today.
Eric: Also, don't miss the back-page report because there's a lot going on in the world that we will not touch on during the show today everyone. We can all feel it well, McNulty frames it up for us. And we're so thankful that he's focused the way he is. It helps us all a lot. If you've ever laid awake at night, wondering about perpendicularity, have you done that Bri?
Brian: Oh, I can imagine it's quite a frequent actually. Isn't it for everyone? We'll see if you live on the other side of the world and you have to walk around upside down, then you think about things like that.
Eric: See, you never thought of that. So perpendicularity, if that's your thing, or if you've ever wondered about it, today's Fastener Training Minute has something for you, Carmen Vertullo will be here with that puts a nice bow on today's package.
Of course, we haven't finished loading it up because we need you to shout out our fine list of sponsors. And we've been so fortunate to have them throughout this year. We're looking forward to another year, but please Bri do the honors.
Brian: We are very lucky to have and have had for the last year, great set of sponsors. Many of them have been much longer than one year. So, the title sponsors of Fully Threaded Radio, are Stelfast, Brighton Best International and Goebel Fasteners. Stelfast, 'For Service You Deserve and People You Trust'. Brighton Best International 'Tested, Tried and True. Goebel Fasteners, 'Quality the First Time'.
Also sponsoring Fully Threaded Radio are Buckeye Fasteners, BTM Manufacturing, Eurolink Fastener Supply Service, INxSQL Software, ND Industries, Parker Fasteners, Volt Industrial Plastics, Würth Industry North America and Solution Industries, 'Home of Solution Man'. Need to buy something, look to the sponsors first because they help bring this to you. Okay.
Eric: Thank you, sir. And that's true. You know, this is a time of year when people think about giving gifts and our sponsors really give a gift to the fastener industry every episode, because they do in fact make it possible. And we thank all of you for being out there too. You're a big part of it.
Hey, let us know what you think of the podcast that helps us out. The email address is firstname.lastname@example.org. We do appreciate your comments and we value your suggestions and feedback.
Okay. So further to goings on with some of our sponsors Bri, this one wraps up two of them in a nice, neat package.
Brian: Okay. We like packages.
Eric: It's sort of a theme that's developing here inadvertently.
Eric: This one comes to us by way of LinkedIn, Tracey Lumia over there at Distributor Link Magazine posted up Lindstrom announces Direct Connect from INxSQL for instant real time inventory levels and accurate pricing. We got the release here from Lindstrom, with the big and bold INxSQL logo.
This is a great program the Direct Connect System that INxSQL has been running with a bunch of suppliers over the years. As a matter of fact, Bri, you had something to do with that many years ago when it first got started because Porteous was the flagship company, wasn't it?
Brian: Right. We developed that interface that later turned into what we call the DCP scrubber, which works with Stelfast, where it takes the description of your inventory and looks up the matching Stelfast part number. We first developed that for Porteous actually.
Eric: Yes, and so times have changed, but a bunch of great companies are still aligned with that, including for a long time, Stelfast. Now Lindstrom and times have changed so much that they're now known as LindFast Solutions, both supported under the Direct Connect system brought to you by INxSQL.
And as you just alluded, Bri, the FCH scrubber is a valuable piece of middleware that operates in the background of that whole thing for some of the participating companies. So, folks, if you're an INxSQL user or if you're looking for a new ERP partner, there's a hint.
Brian: Yeah. It helps business.
Eric: In the second bit of news. I mentioned when we were kicking things off here comes to us also from LinkedIn post here. This is minutes ago, where CEO, Dan Hill, welcome Action Bolt and Tool to Würth Industry North America. So, we guessed that there was a new acquisition coming Bri, and it sounds like here it is.
Brian: Wow. The onward march. Okay.
Eric: Würth never quits. The post goes on our new business division Würth Construction Services represents an expanded commitment to our construction customers. So, we've got the conversation with Würth VP, Jeff Schmitt coming up in a few minutes, but this was only teased during that. Here it is. We've getting out in front of ourselves. We'll be watching.
Brian: Be careful to get in front of yourself. Okay. That's when you trip up.
Eric: I think listeners know that I'm pretty good at that, Bri. But thanks.
Brian: Okay. Alright.
Eric: One other headline that hits a little close to home, and this will come as a relief to some of you FCH members. And I say that with tongue firmly in cheek, our long-time member happiness coordinator as I called her Sue Rice retired at the end of November.
Now she's been with us for a long time. And her main role has been to ceaselessly remind FCH members to keep their fastener listings up to date on the network. She really helped us out a lot. And some of the local shows too. And she got to know many of you out there over the years.
So, she's still checking her email, feel free to reach out to her if you'd like to. I'm sure she'd be really glad to hear from you. She's in, Scott's down in Florida right now, I believe. You probably like that Bri, but for now you're in the clear from the barrage of regular reminders from Sue Rice. We'll never replace her.
Brian: Right. And just so I should point out, Sue's constant reminding you to update your inventory is based on a really good reason. Okay. Some time ago, a year or two years ago, we, after set of user suggestions, we changed the way all our search results are listed. And they said, well, I don't want to list, go through all this stuff because some of them are like a year old. Why don't you list all the ones that are really relevant and have been updated at the top? And so, we did.
So, when you update your inventory, your inventory comes up the top of the page. And it's a great way because as you know, the hurried person might only look at the first page. Even though they can scroll through a lot of listings. It pays absolutely to renew your inventory. Update us. Okay.
Eric: Fresh listings get top search engine placement folks. And that's just the way it works in the modern world. So of course, we're talking about the FCH Sourcing Network. That's at fastenersclearinghouse.com. It's our main gig. We appreciate your support there over the years, but it's like a free utility for the fastener industry, frankly, everyone.
And I guess you probably mostly know that, but yeah. Keep your inventory fresh. We're working on systems to make that happen in the absence of Sue. But don't think that we're not going to be pestering you still in other ways.
Eric: So, you've been warned.
Brian: Right. Okay.
Eric: Hey everyone, we've got a couple of vital messages for you now, and there may be a little Christmas goody tucked in there for you too. Then we'll be back to tear the wrapping off of this one. It's Fully Threaded.
Brian and Eric your online fastener talk radio brothers in thread, Fully Threaded Radio.
As the year ends with such a wide spread diagnosis. Some call it COVID, some say it's psychosis, but who would it be for the most healthy reindeer of all. Screwdolph the Threadnosed Reindeer doesn't have a job this year. No mass will stay on his nose. Everybody runs in fear. All of the other reindeers, signed up for their UBI. Called him a superspreader. told him he could go and die.
Then one fraudulent election eve, Bill Gates came to say, Screwdolph take this shot today. We'll give you cash on your RNA. Then all of reindeer loved him in the quarantine, they wait. No end to all this bullshit. It's worse than hydrogen embrittlement, It's worse than hydrogen embrittlement.
At Brighton Best. We continue to expand our wide range of products, including stainless steel and metric fasteners. Our family of brands include preferred US Anchor and Ironclad Performance Wear. BBI has been a trusted partner since 1925. With award-winning hand tools, gloves, and drywall screws. BBI is the largest master distributor of fasteners in the USA, Tested, Tried and True'. We are Brighton Best. To learn more about Brighton Best visit Brightonbest.com.
Goebel Fasteners presents the Go-Lock structural interlocking blind rivet. Available in aluminium steel and stainless steel with diameters 3/16th of an inch, 1/4 of an inch and 3/8th of an inch. The Go-Lock is one of the most versatile and common style of structural rivets on the market today. Pad with the AirPower 3 Pneumatic tool.
This combination proves efficiently robust for truck and trailer applications where the need for heavy duty fasteners is required. With its high strength features. It is clear why the Go-Lock has the best performing structural blind rivets in the market today. Goebel Fasteners, 'Quality The First Time' goebelfasteners.com.
Stelfast customers say it all. Tim Minter, Northern State Supply. I've been in this industry for 40 years and I can never remember basically when Stelfast hasn't been a part of it, they've taken care of us over the years helped us grow quality outfit, quality people. This goes back to the days when Sorano and you call up to Toronto.
And we ran out of some 70th jam nuts, and they were basically just opening Cleveland. I believe at the time. And president of the company took care of it. And I got us what we needed in about three or four days and saved us from shutting down a production line and they'll bend over backwards and take care of your needs for you. It's more of a personal relationship with the group. Very good group of people. For service you deserve and people you trust. It's Stelfast.
J Radel: Hi, this is John Radel from Solution Industries and you are listening to Fully Threaded Radio.
Eric: Brian and Eric, back with you feeling I would say adequately jolly all things considered. What you say Bri?
Brian: Adequate. Okay. Great way of saying it.
Eric: Under the circumstances.
Brian: Yeah, just enough.
Eric: Okay. Well, I'll give you an example. A lot of people were looking forward to the NFDA ESPS meetings. Those are always a big hit with NFDA members. And they had originally said that they were going to do them in December, which I think might've been a delay to begin with, but they were going to do it online in Zoom format. And then they just decided to cancel it. So, no ESPS this year.
Brian: It is how sort of method of business that really requires or benefits much more from sitting across the table from someone and around the table with a group for all the Zooms that doesn't suit that properly.
Eric: But I think that's exactly what people eventually saw and thus this decision. So, there is zoom fatigue creeping in across the industry. I hear it.
Brian: Yeah. Right.
Eric: We'll see what happens. Something's got to give. Now let's turn to the issue of over seas freight rates because it doesn't look like anything's giving in that department. And we tease this last episode. In the interim I got with Chris Donnell over at Scanwell Logistics, lots of you know him.
He puts out a very useful newsletter. I glance at it from time to time, but this time around it was definitely worth a study because as many of you know, there is a huge congestion going on right now. And this is being attributed to peak season congestion and a container shortage by some of the people that I spoke to earlier on in this situation when I became aware of it. But as it turns out, it's more like a perfect storm of circumstances case.
And the result is causing all kinds of problems. Mainly rate hikes along with surcharges, as well as delays and all the accompanying cascading issues. Let me take a look at the latest newsletter. I received this from Chris back on December 10th, few days back, starts off saying. "The equipment shortages have gotten far worse than previously reported. In many locations, bookings are being denied and not told when equipment will become available."
Okay. So, skipping down to the money line on this. "This amount varies per carrier, but we've seen anywhere from a 200 to 500 per container charge."
Eric: That's not chump change. Another point and this is some practical advice. Importers should be padding their transit times by at least one to two weeks to ensure that they're working with enough property to with stand the current delays. Analysts are predicting a hard-fought first quarter of 2021 for ocean freight. As they predict the current status of the market will get worse the closer, we get to the Lunar Chinese New Year's. See that pops up again here, Bri.
Brian: I know you had to put that in of course.
Eric: Yeah. We'll hear about that later during the FDI.
Eric: Importers should continue to see rate increases and equipment shortages continue until March at the earliest. So, Chris said, he's been doing this for 20 years. It's unprecedented in his experience, even during the port strikes and tariffs few years back, you probably all remember that. And the upshot is we're facing a hundred percent higher year over year transport costs.
Eric: So, looking at the fallout from this aside from the obvious to add to the problems, a lot of the smaller logistics companies are going away and the larger companies as always are taken full advantage. So, this is going to now cascade to trucking and rail. And it was actually a really surprising factoid in this newsletter. Where is it?
The trucking market has seen roughly 24% of its drivers retire or move to other industries during the past year. This loss in qualified truckers marks only the second time in recorded history. When we saw a year after year decrease is more than 150,000 truckers have left since the start of 2019. Could you imagine?
Brian: I remember about a year of Fully Threaded Radio we did interview someone and they pointed out that one of the biggest problems coming up in the future was going to be simply a lack of truck drivers. So, it's coming to bear fruition, that prediction.
Eric: Yeah. A lot of you are aware of the increasing tide of technocratic development. And I don't know if it's even necessarily development it's being thrust upon us. I don't know. And this is not boding well, and specifically with regard to airfreight, lot of you guys who are relying on exotic imports from Europe are going that route since the $4 a kilo rate that we were seeing a year ago is now about $15 per kilo.
And expects increases to go through Q1 as more of that cargo capacity is taken up with pharmaceutical shipments. So, we all know what that's about.
Eric: That's just adding to this perfect storm.
Brian: Go and talk to Harry Mosher.
Eric: Good point Bri.
Brian: Right. It could also be a giant plan on behalf of our Asian friends to sock it to the American manufacturers’ suppliers.
Eric: Well, when things get dicey, you hear a lot of finger pointing and the blame game is in full swing. I don't know if it's that simple, but, yeah, that's definitely a piece of it. And you know, this is just what's going on out there. We're not discussing this to spread alarm. It's just the fact that we've got to all expect overheads to increase and the current FDI optimism. We'll see if it takes a hit next episode.
Eric: Thanks to Chris Donnell over there at Scanwell Logistics, we're going to get him on the podcast as well, and he'll give us an update next month.
Brian: It'll be even more timely by then I would say.
Eric: And by then, of course, we'll also be dealing with the Lunar New Year, otherwise known as the Chinese New Year. So that's another pressure point on that whole situation. And we'll rehash this a little bit with a perspective from somebody who actually knows what's going on. As we've talked with Jeff Schmitt, let's get to that conversation right now, Bri.
Eric: You can't look at fastener industry media today without seeing a press release or feature story, a tweet or LinkedIn posts from our long-term partner Würth Industry North America, widely known as WINA. They're making things happen. We're fortunate to have on the line with us now, the Vice President of WINA's, Western Region, he's Jeff Schmitt. Welcome to Fully Threaded, Jeff.
Jeff: Thank you, Eric.
Eric: You doing all right?
Jeff: Doing just good. Trying to get back in the swing of things, got a lot of activity to try and close out 2020. Been working extensively on 2021 planning budgets and the adjustments of what we need to do to continue our growth and really support a lot of our operations, given the economic and supply chain situation across the world. So, I'm really excited to be on board with you today.
Eric: Same here. Thanks a lot for doing this. We finally got it scheduled. You run a tight ship over there and your time slots are very carefully planned out in advance. So not quite the way that I operate normally, but somehow, we made it happen.
We were speaking earlier on the podcast about the situation with over seas shipping and impact on the supply chain. I'm sure you have some thoughts on that, but to start off Jeff, I'd like to ask you to introduce yourself. So, listeners can get a feel for the perspective you're bringing to the conversation. Fire away on that, Jeff.
Jeff: Sure. So, I've been the Vice President of West Region here for WINA's. And so, January of this year, I actually came from a sister company, with Würth Revcar that was operated down on the East Coast. And I was out in Virginia for eight years before relocating, myself and my family up to Minneapolis and mid-April, right in the midst of the pandemic.
And it's been an interesting year thus far. Also had my first child this year and then having to adjust to a whole new working and competitive landscape has been quite interesting here in 2020. And then, dealing with situations such as the supply chain that you mentioned, especially with our international and over seas freight, companies. Because what we've seen thus far this year, or, here as of late is that you've seen a significant increase or surplus and exports that are coming out of Asia.
And we've seen a huge drop in container and equipment availability that's coming across now. Fortunately for us, that's really more in the 40-foot containers, that a lot of the retailers, as well as PPE equipment are coming across over seas on. Where fasteners are typically sent over in 20-foot containers because of their weight.
But with that said, a lot of these companies are still looking to now utilize 2-20-foot containers versus 40-foot containers. And it's really creating a strain on equipment availability and being able to actually, fully load up the ships to be able to come across the pond and be able to supply us.
So, we've had to make a number of adjustments on our side in order to be able to account for that with increased lead times adjusted forecast and adjusted demand planning to make sure that none of our customers are impacted. And we've been doing that now for about 90 days and have really made some strides and improvements in that area where our customers really haven't felt any impact.
So, we continue to monitor the situation on a day-to-day basis. We see the PMI is still at an upward trend, as the last six months have unfolded and we continue to see that the trade surplus that's coming into play. So, looking at India, Taiwan and China, which is primarily where most of our product is coming from, we've made all the adjustments necessary to ensure that our customers feel unscathed in this situation.
Eric: Okay. So, you're definitely then seeing something that's more dramatic than the annual what's come to be known as the Walmart effect. Am I understanding that correctly?
Jeff: Yeah, definitely. Typically, nowadays, you have all of the holiday containers that came in and that's typically at the end of Q3 and then early part of Q4, kind of ramping up for the retail side, but with so much online ordering and everything else that's going on, we're seeing some of those strains and, we're having to make adjustments, as I stated in order to account for that.
But this surge, if you just look at China's exports where they were up 20% year over year, and you're continuing to see that trade surplus continue to rise for them. We just have to prepare ourselves for, what's potentially going to be a really tight scheduling and supply chain situation that will come through the Chinese New Year.
And even furthermore with that, we're also going to see with a new president elect coming in, how that's going to impact potential tariffs and other things like that. Where if those are taken out, then we're probably going to see an even tighter squeeze in our supply chain as things unfold and I'm having to monitor that situation daily in order to make sure that we make adjustments as needed.
Eric: Lots of opportunities for planners like yourself to flex your muscle.
Eric: Good thing there are guys like you in the supply chain, that's all I have to say.
Jeff: I appreciate it. The other thing that we've seen here as of late is, material prices are continuing to steadily rise. They have been for about four months now and, you're actually seeing investors starting to invest more into raw materials. And so, we anticipate, even further surge in pricing.
And so, I think that, you're going to see again, the supply chain tightens up even further because I think that more people are going to buy now trying to capitalize on where the pricing is at. And then that's going to put a further strain on this.
So, again, working with our freight forwarders, a number of brokers and our internal logistics team is going to be pivotal for success, moving into 2021 and into that Q2 timeframe where I think we're really going to see, some of these, supply chain constraints, with our international freight and shipping situation.
Eric: Okay. And regarding the commodity prices, are there any particular commodities that are noteworthy that you'd like to mention? I was hearing quite a bit of talk just several weeks ago about nickel and that's a big one. A lot of people pay attention to. Anything you want to mention.
Jeff: What we've seen actually copper is at an eight year high, so that one is actually driving a lot of activity and we're seeing iron ore, which, is a primary component in steel, is continuing to rise. So, China's steel continues to rise at a pretty steady rate. Nickel is, rising, but, not as quickly as copper and iron ore right now.
So again, keeping a close eye on that and how that impacts things. With steel being about 30% of the makeup of a finished good. And then Nickel being about, 60, 65% of our stainless-steel goods. Definitely having to keep a close eye on that and monitor the activity levels there and make sure that, we can continue to make sure the supply chain is intact. Because they even stopped some manufacturing of nickel in Asia earlier this year, because they were trying to adjust the market a little bit.
So, now we're going to see, what happens and what the other environmental regulations that they continue to extend in China will impact on our supply chain. So, these two things collectively, when you talk about the freight constraints and the equipment shortages, and then with the material pricing, we're going to see a lot of activity and again, have to keep a close eye and monitor all things that are happening so we can make sure all of our customers continue to be taken care of.
Eric: Well, everything else in the world is going sideways. So why shouldn't the fastener industry be impacted too. Right?
Eric: Strap yourself in. Well, we've got more on that over seas shipping issue coming up later in the podcast. Mike McNulty's here talking about the FDI, but, thanks for your comments on that one, Jeff. Obviously, we're talking about things that we're reacting to in the market, but as always is pushing ahead with its own initiatives and what are you focused on right now for '21?
Jeff: So right now, it's really about a new competitive landscape and a new way of working and selling. And so that's what we've had to make adjustments to. You mentioned earlier on about limited tight schedules. And that's because I can't tell you how many Zoom and go to meetings and Skype calls get scheduled way out in advance that, it's just the formal way of meeting and getting things done at this point.
So, with a lot of the trends that are changing in that context where you can't go visit your customers on site, you can't have suppliers come and visit you. We've really been trying to adapt to a new way to be able to provide insights and innovations, to our customer base and let them know, what we've really been working on.
And so, as an example, we had a very successful Virtual Supplier Day earlier this year, where we had a large number of suppliers and customers attend and we were able to go through a virtual supplier show and even, with the IFE and their recent, virtual conference that they had, we participated and had some great meetings with suppliers then as well.
And it's just now about, how do we continue to evolve and adapt to the landscape that, one, first and foremost keeps, our staff and our partners safe, but more importantly is how we can effectively communicate and still drive innovation and growth into the industry.
Eric: Yeah, I actually was wondering if you were going to mention that virtual event that Würth held earlier in the year, because that was an advance of IFE, and I know you learned a lot of things, and then WINA did participate in IFE and normally in Vegas, we never saw a booth from Würth.
So, as I mentioned during the intro to this conversation, Jeff, WINA's really seems like done a lot to maintain a higher profile than in years past. So, I guess this all ties together and staying in front of the customer, that's part of your strategy, isn't it?
Jeff: It is. And one of the things that I would say, in the last, 18 months or so, Würth, WINA specifically has made some significant investments, and investing in co-ops with our supplier base in order to have better marketing and brand awareness.
And with, Becky, McMorrow, our Vice President of marketing and business transformation. She's done a fantastic job of identifying new ways and opportunities that allow us to really get our name out there where we haven't done so traditionally.
So, you'll see Würth participating in a significant number of events, as the year unfolds in 2021. And we'll be seeing the Würth name out there more, because again, we recognize how our competition was doing a better job at that than we were. And we know that we need to make an investment in this area so that people understand who Würth is where they come from.
As a company that started back in the mid-1940 has been around for 75 years at this point, not a lot of people know who Würth is in the United States, but it's a strong brand in Europe, and we want to continue to motto that here in the United States. And so again, you'll see us, more and more as, as time unfolds.
Eric: I can't say that's a bad thing. It's true, not enough people in the US do know, because when you consider that by some measures Würth is actually the largest privately owned fastener company on the planet. It makes a lot of sense.
And at the rate that acquisitions are happening, I would be shocked if we didn't hear news of another one, at least in the next couple of months. And, these things are just adding to what WINA is involved in. I want to turn back to something you just mentioned, Jeff, about the new way of selling.
And everybody's aware of the fact that one of those new ways involves what's being known as Marketplaces. So, these online, I guess you'd call it a collaborative way of selling. And that's not just B2C, but there's a lot of B2B Marketplace examples out there emerging. Do you have a feel on that? Do you have a comment on that? How's that making you feel right now?
Jeff: In today's landscape is you're seeing everything. And as I mentioned earlier, you're seeing a lot more being driven through e-commerce platforms. And so, we're working actively on a, a couple of different areas in e-commerce platforms and what we need to do.
We obviously already have a couple out there and what we're trying to do is, synergize our activity and be able to create a better value proposition for our customer base. Potentially more along the lines of a catalog type of activity that we're going to be able to demonstrate and be able to compete a little bit better.
Again, historically that's not been our niche. Our niche has been on, the large OEMs and face-to-face relations on this front. And it will continue to still be our core competency. But, as the industry evolves, as everything evolves, we need to continue to evolve along with it. And if anything, be the market leader with some of this evolution.
And, to go back and hit, what you also mentioned on, in regards to acquisitions. I mean, you know, we're seeing a lot of consolidation of fastener companies at this point. Probably faster here in the last five, 10 years, and we've historically seen it. And so that's where, these synergies are going to really come into play amongst what we do and how we become successful.
And, our competition, continues to look at what areas that this needs to really come into strong suit with. And so, you see a number of PEF's that are coming into play that are looking at fastener acquisitions as well. And we need to be out ahead of the curve. And make sure that we can do what's necessary to ensure again, with marketing brand awareness and e-commerce platforms. As well as other types of services and innovations, and make sure that everyone knows what we're doing and what we're going to be able to provide to them.
Eric: And we're talking with Jeff Schmitt, he's Western region, Vice President of Würth Industry North America. Yeah. It's huge. This move to marketplaces. And as you said, lots of companies have relied historically on relationship-based selling. And although I think that's going to continue, you're right. It doesn't make a lot of sense not to have a foot into that new world as well. And it sounds like that's exactly what you are doing.
So, before we wind it up here, just like to give you the opportunity to maybe take a look at one of your business units and make a comment on something that you think might be primed and ready to capture a little bit more attention as we roll into a new year. Is there anything on the horizon you're kind of especially excited about?
Jeff: I'm really excited about, what our sales team has been working on and collaborating on in conjunction again with our marketing team, this year has been really tough, for us because, the COVID situation has prevented us from being able to get onsite. Whether it be with our existing customer base or with prospects.
And so, we've really done a really good job at adapting to the current situation where we've introduced a new selling tactics. And we have a lot of opportunities for growth as we continue to move forward. We've secured a significant amount of business over the last 12 months, that we will be implementing and we're continuing to push in that direction.
So, I'm really excited about the growth opportunities and what we're doing to bring WINA's, together and to be the forefront and the market leader within the North American Hemisphere. Excuse me, the Western Hemisphere to drive, the worst brand in its presence and continue to grow.
Eric: That's beautiful. I have to tell you; I don't know what it is about you guys over there at Würth but you have these wonderful radio voices. We were talking a couple of episodes back with Neil Sexton over there from Northern Safety, of course he's a, semi-pro in retirement and here you come along, maybe we should set you two up as a duo and do a few segments next year. What do you think, Jeff?
Jeff: That sounds great. Neil has a little bit of a leg up because he's been on the radio before, so I'd say this is a first for me. I have been told from time to time that I have a radio voice. So, I'd love to partner up with Neil and get back with you, Eric.
Eric: Yeah, I think we're onto something. Okay. Well, Jeff Schmitt, it's a pleasure to speak to you and, good luck for the year upcoming. Fully Threaded Radio, I guess now you could say you've been on Fastener Talk Radio and you cut your teeth. Let's take it from there. What do you think?
Jeff: That sounds great. Thank you so much for having me, Eric, it's been a pleasure, really excited about, what WINN is going to be able to do moving into 2021 and beyond, and really appreciate your support.
Eric: It's our pleasure, Jeff. You're listening to Fully Threaded, we'll be back right after this.
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Rosa: This is Rosa, the preferred riveter at Brighton Best International, you're listening to Fully Threaded Radio with Eric and Brian.
Eric: Brian and Eric, back with you with more fastener merriment.
Brian: Very Merry.
Eric: Actually, a couple of these news items worth mentioning here before we hear from Mike McNulty are kind of merry. One isn't. I'll start with one that is.
Eric: Welcome back folks. It is the News segment of the podcast sponsored by Volt Industrial Plastics as always. And the title sponsors of Fully Threaded Radio are Stelfast, Brighton Best International and Goebel Fasteners. So, the Pacific West Fastener Association announced it has awarded Semmi Sakhuja honorary lifetime membership to the association because of her extraordinary personal contribution to the association and to the industry.
Brian: Oh, cool.
Eric: Yes, the honor is well-deserved. Congratulations, Semmi. Of course, many of you know, one of the driving forces behind Stelfast. Also wanted to mention another one of our friends was featured on traveling salesman's blog.
This is actually going back a little way, but I've got Fastener Technology International Magazine here I was flipping through and I was reminded that Traveling Salesman also does a version of his blog that comes out in the magazine. This one features Marc strandquist, and it's a very nice interview conversation.
He touches on a few issues that we didn't do when I interviewed him recently on a special report, of Fully Threaded. Mark's getting lots of coverage over there is the newly announced CEO of Optimas Solutions and traveling salesmen keeps pushing it out there. So good job everybody. Okay. Now here's a couple of bummers and then we'll get over the mic.
Brian: Okay. Yeah. Well, right.
Eric: First one is not that bad. It's that the fastener training week that we'd mentioned it was coming up. It was going to be here in Cleveland and by now a lot of people know, but it was postponed until February, so it was supposed to happen mid-month. And now it's all the way until 2021 that's happening in February.
I guess everything's kind of on the bubble right now. So, pay attention to the fastener training Institute website, if you're attending that, or if you're interested in it. It's a great program. Get your certified fastener specialist accreditation through this thing. But right now, February Cleveland is your next best shot.
Brian: Okay, good.
Eric: And then piling on some of the misery that we were expounding upon.
Brian: Thank you
Eric: With the over seas rates and everything got some intel here from our friend, Charlie Kerr, over at Kerr Lakeside. And I'm looking at a couple of letters here from some of the steel suppliers that he deals with. Actually, he's big with Charter, but he's got these letters from all over the place and I've got them here.
And, what we're looking at is some pretty serious material price increases coming in January, and this is going to hit home soon. So, Charlie of course watches these things like a Hawk. And just to give you a flavor of this, looking at a letter here from Charter dated December 10th, the money line in this thing says products in both coil and cut lengths are going to go up by 25 bucks per ton, starting January 1st.
So, this has a lot of manufacturers. And then by extension distributors, scratching their heads and wondering how they're going to absorb these increases, but surcharges are flying around and you got to be aware of this.
I'm looking at a spreadsheet here, the 24 month combined surcharges for alloy and scrap coming off a high back in December of 2018. That was about $15.05. The surcharges really took a nose dive then in July of '19. Well, they've stayed pretty manageable all the way up until what's predicted for January when they shoot back up to $12.39.
So that's just an indicator that there are some market distortions in the supply chain right now. You've got to be ready for it and McNulty mentions it. But I don't think we had a lot of this data at the time we compiled his report. So, this'll be another thing that we'll be watching and we'll have more for you next time. But the bottom line, we should all be expecting some price increases in the near future. Happy New Year.
Brian: Thank you. Yeah. Right. You had to put that there didn't you?
Eric: Well, we try and spread it out throughout the show. We don't want to give everyone a huge dose of this all at once, because who knows, you might get some kind of an apoplectic reaction. God knows, there's a lot of those out there in the world right now, enough to go around without us chiming in.
Brian: Could have said happy Chinese New Year, but they settle before that, isn't it?
Jeff: Yeah. That's not until February this year, Bri. Let's sit on that one when we wrap it up today.
Jeff: But as long as you're in a chatty mood, do the honors.
Brian: Oh, and now for news about screws that you can use, here's Mike McNulty.
M McNulty: Thanks, Eric and Brian, this is Mike McNulty from Fastener Technology International Magazine, bringing you the Fastener News Report, which is sponsored by Volt Industrial Plastics, makers of the world's finest plastic fasteners.
Instead of ending 2020 with a whimper, the US stock market indexes are on a rampage. Steel wire rod and shipping costs are exploding. Government leaders are throwing more money on the fire. Investors are making Airbnb $100 billion richer. And the Cleveland Browns are giving their fans their first winning season in 13 years. But I am still focused on fasteners and ready to deliver today's fastener news report.
In this episode, Doug Ruggles, president of Martin Fastening Solutions and the immediate past president of the NFDA joins us to reveal the latest results of the Fastener Distributor Index. Also known as the FDI. Also, in today's broadcast. We have our top story on the aerospace fastener market, as well as newsmaker headlines from Dyson, Goebel Fasteners, Grainger, Beacon Fasteners, G.L. Huyett, Avantus Aerospace and California Screw Products.
On the back-page report. We're going to talk about pandemic virtues. We'll get to all of that and the latest FDI results right after this.
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M McNulty: The seasonally adjusted fastener distributor index for November was 54.5 moderating slightly from last month, 56.5, but remaining firmly in the growth range. Fastener distributor index data is collected and analyzed by the FCH Sourcing Network and Baird.
The FDI seeks to identify demand pricing and outlook trends within the American fastener distribution industry. To get some insights on these results, we talked to Doug Ruggles, president of Martin Fastening Solutions and the immediate past president of the NFDA.
Hi Doug. Thanks for joining us on the Fastener News Report.
Doug: Thank you, Mike. Good to be with you today.
M McNulty: It's good to hear you on the radio again. So, what do you think about the latest FDI results?
Doug: It is in line with what we're experiencing and in our Fastener OEM side of our business, we've seen a tremendous growth in the last few months. Manufacturing continued to invest and grow in fact, analyzing our November numbers it looks like, especially in our fastener business, the best November we've had in, probably seven or eight years. So, we're excited about that. A lot of depends on your customer mix, but for us it was solid.
M McNulty: Well yeah, that's good to hear. And I think, you know, November traditionally is a slower month seasonally, I guess. But maybe people are playing catch up because of the earlier problems that we all know about, hopefully in the rear-view mirror.
Because this month the sales number actually increased to 66.9 versus 65 of the previous months where the both of those are great numbers and that kind of matches what you guys saw. And then the forward looking indicator dip slightly to still a robust 63.2 after recording a 33-month high last October so looking forward, it's still pretty solid.
Doug: Yes, I would agree with that. We're expecting a very strong December. We have customers who traditionally will close for eight to 10 days over the holidays, that are only closing three to four. So, I think a lot of it, which you mentioned earlier, they're trying to catch up because they could not get components and now, they're finally getting them and they see the growth that's happening in the demand across the US and right now we're forecasting a very strong Q1 throughout, 2021.
M McNulty: Yeah, well, that's good. That's good to hear. And that matches, last episode we had the economic report from ITR and they were talking about a strong 2021 as well. And then I was in on a webinar from an economist too talking about next year and again, same thing. And they're like, don't worry about the noise that's going on in the background. It's going to be a good year. So that's good to hear about, your customers staying open a little bit longer over December. That's good for people to be working.
Doug: I agree.
M McNulty: Now I'm going back to the FDI numbers. We saw employment and customer inventory numbers, both dipped and pricing went up in November. And then I guess, with inventory going down, they're going to have to replenish that. So that would tie into what you're expecting for December as well.
Doug: Yeah. I think there have been some supply disruptions that, if you're importing. A lot of congestion in the ports is what we're hearing. And bank container issues, coming from Asia. So, a lot of constraints you couple that with increase sales and distributor inventory is going to be lower.
And, we're probably like a lot of distributors out there. We're flying parts in for customers that need it, that did not anticipate the rebound. But if you listen to the ITR, reports that the NFDA help promote, and I think we have one the 1st of May, and then again, the end of June, they all forecasted this. So, if you follow that and stay tuned and stay close with the NFDA and all the educational sessions that they have, then you were prepared for this.
M McNulty: Yeah. That's a nice benefit of being in the NFTA for sure. And those guys, they base their forecast on raw data, hard data and facts. So, I've always enjoyed listening to their analysis and forecasts. Now you mentioned shipping, so that ties in there was a special supplementary question on the FDI survey this month.
And, in response to this special question about over seas shipping, 69% of respondents indicated that they're seeing price increases on shipping. And then additionally, another 67% of respondents indicated that they're seeing increased lead times, as well as, as a result of the shipping disruption. So that kind of ties into what you said.
Doug: I agree with all of those numbers and those sentiments. We're seeing a lot of that, and it's always a wrestling match of who pays, what. If you do have to absorb it, can you pass that on to your customers, build it into your price, or do you put special one-time fees? Because we do anticipate that starting the end after Q1, as things start to catch back up, but it is a short-term problem.
M McNulty: One of the respondents his commentary was quote, "Inbound from Asia is ridiculous. Ocean carriers are taking an advantage of us. Hopefully things get better after the Lunar New Year." Which is in February. I had to look it up. But after Q1 is over, things will probably smooth out, another respondent center was the Walmart effect and things will get back to normal after the holidays.
Doug: Could be.
M McNulty: So, filling their shelves for Christmas. Let's see what else? Oh, and the So, six-month outlook was pretty bullish. We had 78% of respondents expecting conditions better, six months from now, which is June of 2021, 14%, the same and only 8% are expecting it worst. So, middle of next year is looking pretty in the eyes of most fastener distributors.
Doug: I think Mike, what we've talked about is if you step back from what we've gone through as an industry, as a country, and globally with the pandemic with the most contentious presidential election in our history. And just general relations, race relations and all that have gone on, it's remarkable that we are where we are.
And if those things smooth out, and get better in any shape form or fashion, the pin-up demand is, I heard somebody say earlier this morning, I was listening to something. They said, it's a tightly cold spring, the economy that is just ready to spring forward and let go.
M McNulty: Yeah, well, that's a good way to describe it. I would agree with that. And hopefully we get past all these things and we get to unbind the spring, I guess. And there are a lot of people that they're ready, people are tired of everything.
Doug: The, the analogy, Mike and I'll just share this one with you. There's a peer group that I'm part of that's in the fastener industry. And we've been talking every couple of weeks. And the analogy that I shared with them is where we are as far as the pandemic and that resonated with everybody.
So, I've been trying to use it more, but you can see the light at the end of the tunnel, and we're all excited about that. And we're all racing toward it. What we did not expect is that the end of this race is almost straight up hill and we really don't want to run that hard. But we have to, if you'll keep that in mind, that this is not the time for us to relax, it's the time that we actually have to dig deeper and to really push, to get up this hill and to the finish line.
And, hopefully, that'll be in Q1. And we start to reap the benefits of that in Q2 and Q3, which is when most people that I've talked to think that life will get back to some form of normal, as far as business travel, being allowed to be in with our customers.
M McNulty: Visit customers, go to trade events.
Doug: Right. All of those things. And so, if you just keep that in mind, last part of this race that we've been running since March is straight up hill.
M McNulty: So, do you have a cross-country background in your normal life?
Doug: No, no. I hate running.
M McNulty: My daughter was a cross country runner. So, I'm thinking of course, is that finish with the hill. Nobody liked that, but there was some of them that finished that way. That's a good analogy. I'm going to remember that one and share it with others as well.
Doug: You're welcome to use it.
M McNulty: Alright. So, finishing up with the report, we had general commentary, outside of the special question and shipping was mostly positive this month. And I've got one comment to share and this one was a respondent who summarize what the current environment is. And that was quote, "Business is picking up." End quote short, but sweet. And it seems to be on target for what everybody is experiencing. Good. Anything else to add on the, on the FDI report?
Doug: No, I think you hit it spot on, we're bullish about where are, where we're going and what the opportunities are for the next several years.
M McNulty: Good. Now in closing, I want to know, how's everything going at Martin Fastening Solutions, which is part of the bigger group Martin supply?
Doug: Our team there has done a phenomenal job, as I'm sure most distributors have and manufacturers from the yo-yo effect of working from home, coming back into the office, which, which we have done exceptionally well. Our HR team to our frontline managers and warehouse workers, keeping our customers moving and supplying them has been a yeoman's effort across the board in all of our lines of business.
And, we've had a very profitable year. We've been able to drive margins up. We've been able to drive sales up, we've been able to acquire new business. And I think customers are resonating with our value proposition.
M McNulty: It's good to hear.
Doug: Yeah, we're excited about that line of business, and coupling it with our general industrial and safety PPE side, along with our integrated services, that really when you bundle those together, they offer to the marketplace, an unbeatable combination that very few in our industry and in the industrial distribution world have to offer.
M McNulty: Well, that's a good story to hear. And I know a few weeks ago, you made it onto the Big 50 distributor list and you came in actually at number 50. So, congratulations on that. I think it's the second year in a row that you've been on the list.
Doug: That's correct. It's really a validation of the work that, my brothers and I have put together and this is a family business. In 2020 we celebrate, well actually at the end of 2019, and we celebrated in 2020. We didn't know what the year was going to be. It was our 85th year of being in business.
M McNulty: Wow.
Doug: We had some big celebration plans. A lot of those like with everything else were put on the shelf.
M McNulty: Probably we were waiting for good weather and didn't know there'd be a pandemic.
Doug: That's right. We weren't counting on that. That wasn't in our plan. But we were really excited to be recognized from that. And that's really just a pat on the back for our team members. It's not anything that we do from our side.
Our job is to point the direction and hold everybody accountable for sticking with their goals. But, it's all about culture for us, getting that professional team together, but still having a family atmosphere that people want to work for and customers like to buy from, that's really our secret sauce.
M McNulty: Yeah. It sounds like you're doing that, right. And, that brings me into my closing question. I was looking on your website and I wanted to know if there's any inside stories you can share with us on the three Ruggles on the Martin leadership team.
Doug: Well, there's a couple of things there, and I'll share with you. While we're third generation owners in the business. My grandfather, Louis Martin started the business in 1934, out of the corner of his dad's business, which was a Foundry. They made the old potbelly stoves, old cast iron pot belly stove. Then he and his dad started the supply business on the side in '34.
So, when you look at it, we're either third or fourth generation, depending on how you count, whether it's grandfather, who was president and 50% owner or his dad. But for us, we constantly think of ourselves as first generation. And if you're a first-generation owner, you're more entrepreneurial, you're more driving and not worrying about maintaining the status quo.
So that's really been a lot of our mindset is where you've grown the company. And the challenge is how do you maintain that and have that same culture within your business? That, and secondarily, the three of us get along exceptionally well. We all are equal as owners and leadership of the business. All have different parts of the business, but we never wanted to work elbow to elbow.
We had to grow the business. So, we each had our own part of the business that we're in. And that was good for all of us. And, I applaud our parents, my dad who was president CEO of the business when we all gravitated back to him. Not by plan or design, but what we did and the way he was able to guide us through the early years as we were growing the business from very, very small to being in one of the top 50.
M McNulty: Right. Well, that's a good story and great American story, entrepreneurial and business story. I like to hear those. And it sounds like you're on the right track and keep up the good work.
Doug: Thank you. Mike. I do want to address a couple of things from the NFDA side.
M McNulty: Okay. Sure. Go ahead.
Doug: Oh, thank you. I appreciate you giving me a little bit of a platform and just want everybody to know there's a lot going on as the NFDA has continued to try and work and add value to our members. One of the things that we are instituting is a monthly webinar round table educational offering, that we're going to try and do in '21. We don't know whether or not our ESPS executive sales planning session that is set in June we'll be able to be in person or not. We're hopeful that it will be. That we'll be in a place.
So, we've decided to add these monthly webinars, focusing on HR, on operations, on sales and marketing and leadership. And our first one is January 14th. So, I just want everybody to be aware that that is coming and going to be a really nice addition for all of our members, as we're continuing to try and figure out how we can help our members grow and thrive, which is their purpose statement.
M McNulty: Can people get information on that on the NFDA website I imagine?
Doug: That's right. Wwwnfda-fasteners.org is the website and all of that, will be there. So, Vickie and Amy and the team have done a phenomenal job working from home and trying to figure out what's coming next as everyone has throughout this.
M McNulty: Right. Well, good. A lot of good resources there. So, I encourage listeners to check it out. If you're a member and if you're not a member, check out how to become one and NFDA does a lot of good work.
Doug: You will not be disappointed. Yeah. Sorry. I stepped on you there, Mike, but you won't be disappointed. And that's what being part of that a national organization. What you did is that influence from other business people that are trying to do the same thing you're trying to do. And, like I said, we talked about the ITR reports earlier.
That information was critical as we were planning, not just, the next year, but back in April or May and June, that we were really trying to plan the next week and the next month. So, having that influence of people to reach out to and network with, really when you go back to our business, that's how we grew our business. When we got involved in national organizations, it is the catalyst that grew us from a very small regional player to one of the premier national distributors out there.
M McNulty: And you had mentioned earlier having, talking with people in peer groups. So, it's good to talk to others who you find out they're experiencing the same thing you are, and then you can bounce around ideas together and help each other weather the storms and enjoy the good times.
Doug: I figured out a long time ago, Mike, that I'm not the smartest guy in the room. So, I want to learn from others that are.
M McNulty: Well, again, thanks for joining us. And, I wish you all the best for the end of 2020 and a good 2021. Thank you,
Doug: Thank you Sir. Good to talk to you and Merry Christmas,
M McNulty: Same to you. Merry Christmas.
That was Doug Ruggles. He's the president of Martin Fastening Solutions and the immediate past president of the NFDA.
The FDI number for November was 54.5 versus 56.5 the previous month. Visit fdisurvey.com to participate in the process and get a detailed PDF copy of Baird's monthly analysis.
Now for today's top story. Technavio reports that after experiencing negative growth in the short term, the aerospace fasteners market will grow by $2.5 billion through the year 2024 at an annual growth rate of nearly 6%. One of the primary growth drivers for this market is the increasing preference for lightweight materials. And since titanium is lightweight, it is increasingly being used for making aerospace grade fasteners that are used in commercial and military aircraft, as well as in missiles and satellites.
Since titanium fasteners are more expensive than other materials, including aluminum and steel alloy fasteners they're increasing use will boost the overall value of the aerospace fastener market. More than one third of the overall growth will originate from the North American region, but the aluminum aerospace fastener segment will grow slower than the titanium segment.
The aerospace fasteners market is segmented by application materials used and geography. Companies covered in Technavio's report include Arconic, B&B Specialist, Boeing, Click Bond, LISI, National Aerospace Fasteners, Stanley, Black & Decker and TriMas.
Next up today's fastener newsmaker headlines in acquisition and expansion news. Dyson is opening a manufacturing facility in Houston, Texas next month to support the growing wind energy market in the Southwest USA. Platinum Equity has signed an agreement to sell price PriSo Holding Corporation, also known as Prime Source to Clearlake Capital Group.
Colony Hardware Inc has acquired Care Supply Company. SouthernCarlson has acquired Manor Hardware. The Bossard Group has taken a 40% stake in the start-up company Multi-material Welding AG. And Goebel Fasteners has announced industry Meritech as an official master distributor for Eastern Canada.
In personnel news, Beacon Fasteners and Components has added Tom Buddenbohn of Budd Sales as a manufacturer's representative for the USA States of Arkansas, Oklahoma, and Texas. G.L. Huyett has added Bob MacPherson as regional sales manager in the greater Chicago region covering the States of Wisconsin, Illinois, and Indiana.
Avantus Aerospace has appointed Bruce Maynard to the role of vice president business development and marketing and Eric Stoltz to the position of general manager at California Screw Products. And Grainger has hired Anaf Durrani to lead product engineering. And it has announced that Robert O'Keeffe vice president and treasurer has been appointed interim CFO effective January 1st, 2021.
You can get details on all of these stories and more in Fastener Technology International Magazine and the Fastener News Report, monthly newsletter, both available online and print and PDF editions and flipbook editions @fastenertech.com.
Now let's turn to the back page to talk about pandemic virtues. Back in March, when people were talking about 15 days to slow the spread, I use the back-page report to discuss the importance of practicing the virtue of gratitude, as well as recognizing the heroic response of many people, companies and industries, including several examples right here in the fastener industry.
So now that we are approaching 300 days of enduring this pandemic, I thought it would be a good idea to close the year by emphasizing another good virtue to go along with gratitude. Piggybacking on Doug Ruggles metaphor in the FDI segment of this episode, when he talked about strongly finishing the race to the end of the pandemic on an uphill slope with the finish line, clearly insight.
I think that we're going to need some heavier doses of the virtue of fortitude. Also known as courage. We need fortitude to run the last stage of this race properly and to enjoy the fruits of defeating the virus. Fortitude is the virtue that enables us to remain resilient and endure difficulties for the sake of what is good. And when practice properly, it can help us moderate emotions of anger and fear, which come into play when we are faced with complex and difficult situations, including the threat of evils.
And I don't just mean the obvious threats of actually contracting the virus, but those that come from people and organizations that seek to take advantage of this crisis to implement nefarious ideologies and programs. No doubt that we have all leaned on fortitude many times over the last nine months, but I think we will need to double down on our efforts while remaining grateful for all the gifts and challenges that come our way.
As Alex Chausovsky of ITR said last month, during the FDI report, the USA is still the best-looking dog in the pound and a safe Haven for investment. I would like to add that it is a safe Haven for many other good things, including being the best place on earth to finally beat back the stupid virus that infects the body as well as to beat down stupid ideas that infect the mind, including socialism, wokeism and leftism.
And finally, did you know that it has been just over 10 years since I've recorded my first episode of the Fastener News Report on the Fully Threaded Radio Podcast. I am certainly grateful for this last decade of being able to share my ongoing focus on the fastener industry with listeners of Fully Threaded Radio, as well as for the courage shown by Eric and Brian to keep inviting me back for more reports.
This has been Mike McNulty of Fastener Technology International bringing you the Fastener News Report. Please send your news pictures, comments, corrections, or complaints to me at email@example.com
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Carmen: Well, hi everyone. This is Carmen Vertullo with the Fastener Training Minute coming to you from the Fastener Training Institute and AIM Testing Laboratory in beautiful El Cajon, California. I've had an issue come up about three times this past year with some clients. And this last time it made me think, perhaps it's something worth talking about on the Faster Training Minute.
The issue has to do with dimensional inspection of a nuts, hex nuts in particular and hex flange nuts in more particular. Now we know that there are relatively common things we have to do to inspect the nut we have across the flats, across the corners, height.
We have the threads, of course, that we measure with a gauge, a threaded gauge for the threads go/no-go. And then we have the plain pin gauge that we do to inspect the minor diameter. But one criteria in particular, which is a little bit more difficult to inspect.
Lots of, even manufacturers don't have the right capacity to do that. And that's inspecting the bearing surface of the nut for its perpendicularity to the threads, which is sometimes classified as run-out. And so, we had some issues with that on a particular flange lock nut. And when we come back, I'll tell you what those issues were and how you can possibly avoid them.
Knowledge is the key to success in the fastener industry and the Fastener Training Institute have the tools you need to succeed from advanced to beginner's training courses. The Fastener Training Institute provides a wide variety of resources to boost your team's ability to operate at an elite level.
Go to fastenertraining.org, to see the schedule online and in person classes coming up and reach out with any questions or requests for custom course materials, the fastener training Institute, fastenertraining.org.
Carmen: Welcome back to the Fastener Training Minute. This is Carmen Vertullo and today we're talking about measuring the perpendicularity of the bearing surface of a flange nut to the threads in particular to the thread pitch diameter, which is the common call-out in most standards, inch and metric. We want to know how perpendicular that surface is the bearing surface to the threads.
And that's important because imagine if the hole in the nut was tap not straight crooked, let's say, and you begin to spin that nut down. And instead of that bearing surface, hitting flat, one side of the nut hits first, that would not work. You would have all kinds of torque tension issues. You might stutter the nut that the nut is going on, it would damage the surface that you are tightening against and so on. So, we want that surface to land all at the same time.
And so, to do that, we control the perpendicularity of that surface to the pitch diameter. And the way that we measured that sometimes is with an inspection called run-out, where we install the nut onto some kind of a thing that can grab it on the pitch diameter. That's normally going to be a thread gauge, but it could be just a threaded stud or something that we can tighten it against.
We put that in a fixture where we can rotate it. We put a gauge up against the bearing surface, it's called a run-out gauge actually. And we rotate that assembly and we see how much change there is in the position of that gauge from zero both directions plus, and minus. We call that the total indicator reading or total run-out and the tolerances on that are not particularly tight. They're relatively manageable. And also, the upside is it's relatively easy to make a nut perfect.
When nuts are made, they are tabbed in a fixture that holds them very tightly. The tab goes in straight. The bearing surface of the nut is located against the surface. And it's pretty hard to mess that up. So, most nuts that I've inspected are pretty much perfect with very little if any detectable run-out, but every now and then we have an issue.
And in this particular case that I've seen three times, the issue had to do with lock nuts. In particular, the type of lock nut was a lock nut, that was all metal where the nut was pinched or crimped. And in the process of crimping, that nut, that bearing surface got deformed ever so slightly. In the case of one nut, which was a relatively large, not a large metric nut M22, the crimp was significant and the bearing surface cupped.
And we could tell it cupped because when we would put it on a piece of sandpaper and sand that bearing surface down ever so slightly, we could see the high points and they were exactly opposite of where the crimp was. So that told us that that is what occurred there.
Now the fact of the matter is chances are in the application. When we tighten this nut down, those two high spots are going to hit first and as we develop tension or stress on the nut, it's probably going to flatten out and work perfectly fine.
However, it doesn't inspect perfectly fine. Matter of fact, it has significant amount of run-out. And the typical amount for a nut might be a few thousands to 8,000 or so in the inch world and that translates into about a 10th of a millimeter, maybe in the metric world. And, we have way more than that.
And we had a print that we had to follow and there was just no way around it. And it was very difficult to convince the end user that this nut probably was usable. And we just needed to maybe change the criteria a little bit, or do some testing to prove that this particular dimensional non-conformance did not affect the function of the part.
So just keep in mind that nut was probably absolutely stunningly perfect up until the point where they crimped it to put the locking feature in. And so, we have to be aware when we are buying and manufacturing, nuts that have bearing surface perpendicularity or run-out requirements. When we crimp that nut, you might lose that feature, dimensional integrity.
Well, now, you know something about nut bearing surface, run-out. Not all standards have requirements for bearing surface run-out. Not all nut standards do by the way. Most of them do, but not all of them do. So, there may be a get out of jail free card for you, depending on what standard you use. Well, thanks for listening to the Fastener Training Minute. This is Carmen Vertullo coming to you from AIM Testing Laboratory.
Male 1: Hello.
Male 2: Hello.
Male 1: You've been walking the fastener show for a while.
Male 2: Yes. I love very comfortable shoes.
Male 1: How would you like some Old Rusty Bolt Beer?
Male 2: I bought a small can, my mama warn me about those things.
Male 1: Well, that's probably because mama never tried Old Rusty Bolt, only the finest beverage in the fastener business.
Male 2: Alright, I'll give it a try. This is pretty good. I'm starting to feel funny. Jenae something's happening. Whoa, I feel, I feel.
Male 1: Old Rusty Bolt making the fastener world feels smarter. One beer at a time. So how do you feel?
Male 2: I got to pee.
Male 1: I believe he said he had to pee. The preceding message was brought to you by Buckeye Fasteners and Ohio Nut and Bolt Company. Proud fastener show sponsor, Old Rusty Bolt Beer, official beer of the traveling salesman.
Jake: Coming to you live from a much larger desk drawer. This is Jake Davis with BTM manufacturing. And you are listening to my friends, Brian and Eric on Fully Threaded Radio.
Eric: If you've been listening to Fully Threaded Radio for any amount of time. You know, that some of the most entertaining commercials that we have on the podcast are from Buckeye Fasteners.
Long-time sponsors, good friends, and those are brought to us in large part courtesy of Larry Kelly past president of the North Coast Fastener Association. And I'm also the main guy responsible for bringing Old Rusty Bolt to the floor of the Vegas show and others he's here with us now. Hey, Larry, glad we could finally get you on.
Larry: I'm so glad to be here.
Brian: Really? That was you all along. I've never guessed that voice.
Larry: Well, all those commercials, there were two of us in a studio and we did all those voices and the magic actually happens when the guy does all the recording, but that was really beer back of those Khabar sodas.
Eric: That was a great one.
Brian: Oh, that's cool.
Eric: The first one, it was brilliant. For a while we had that whole slew of them you sent me, and this is going back a few years, Larry, but there was like, I don't know, half a dozen of them on a variety of themes. And then you called me one day and you said, we have to pull back on these. We have to just go with the old straight one that we had for a while. What happened with that?
Larry: Just a little, it's really hard to say. The fastener community has a different, sometimes different sense of humor than the business community. So, as we thought, and as you thought those commercials were pretty good. Other individuals within the organization.
Eric: They were not amused.
Larry: They were not amused. Correct.
Eric: So, what happened though, that we got to go back to the funny ones then?
Larry: I guess, a different---.
Eric: Different politics?
Larry: I guess you could say that, you know, mostly you asking if we could run them again. And, I was able to convince, individuals that, people really liked those commercials. They were a lot of fun. They kind of represent, the fastener industry itself. Because we don't always take ourselves too seriously. We do when we have to, but for the most part, it's a great industry to be in. We have fun. I don't think there's any other industry I would ever want to be in again.
Eric: You mean for sheer amount of fun that you've had?
Larry: No, just for sheer amount of everything. I mean, the people that you meet over the years, just the education it brings. There isn't a day that doesn't go by that I don't learn something new about fasteners or about applications. Heck I got my certified Fastener Specialist Training Certificate two years ago and I've been in the business for, at that point 35 years.
Larry: And I could not believe how much I learned or let's say how little I really knew when it came to the world of fasteners because our world, we're such a niche product. It's really good to expand your horizon for learning about other fasteners and other materials and applications. I think to date, we have the most certified fastener specialists of any company. I think we're pushing 21 or 22.
Brian: Wow. That's a lot.
Eric: That's all through the Fastener Training Institute. Am I correct?
Larry: Correct. Correct. And we had two more signed up for December, but as you know, it got postpone until, February. And maybe by then, we'll have a few more than just two, but we know the importance of training, especially for our newer employees. Because you can only learn so much on the job. You need to rely on some of the experts that are out there, to help continue that training.
Eric: Alright. For those in the audience who aren't from the Midwest, Buckeye Fasteners and the Ohio Nut and Bolt Company, I'm guessing you're located in Ohio.
Larry: Correct. Headquarters is in Cleveland.
Eric: Okay. And what's the division between those two companies lay it out for us?
Larry: Between Ohio and Buckeye?
Larry: Okay. Well, Ohio is the flagship. They were founded in 1905. And if anyone has ever been privy or, was able to get one of our promotional items, it usually involves some kind of a bike chain because the first product we ever produced was bike chains in 1905.
And then in 1926, we started making weld products. In 1928, Henry Ford used it on the Model A Ford and so on and so forth. Buckeye came along in the seventies, and is the sole distributor for the Ohio Nut and Bolt Company. So, the connection is Ohio makes the parts, Buckeye distributes, markets and sells the products.
Eric: And now I got some promotional items from Buckeye, but I drank them. So, it's an interesting model, but they don't last very long. Anyway. So, thanks for clearing that up. And then there are several other companies under the larger umbrella, right? Like Brainard Rivet.
Larry: Yeah. Brainard Rivet located in Girard, Ohio. They're a cold-headed manufacturer, primarily print specific, mostly, solid rivets, and clevis pins. We have another division in Valley City, which makes pipe thread, rolling dyes and cylindrical dyes and nail dyes. And then finally in Streetsboro, there's a division called Joseph Industries and they primarily deal with the lift truck and AG industries, supplying reman parts and kits, rebuild kits for, those type of products.
Eric: Yeah, that's right down the road here. It must be tucked in that industrial complex area. Good coverage here in the Cleveland area for Ohio Nut and Bolt Company.
Larry: That is correct.
Eric: So, with all of this knowledge, what was the biggest hole that you had when you were doing the training? What were you most surprised that you didn't know after all these years?
Larry: Probably most of it had to do with the metals and the metallurgy and learning the processes that the mills go through to get the material to certain strengths, heat treating. I'm going to say the number one thing that came out of that was the quench and tempering. When you're working with certain products that you have to, get them to a certain temperature and you got to quench them, a certain way to make sure you're treated to the hardness that you're looking for.
Lawrence Krauss did a really good job explaining that in the class. That's one of the takeaways that really stuck with me. Mar acidic, someone help me there. I kind of forget what it is, but it's those kinds of things I found very interesting. It took me back to my days of chemistry one-on-one in college.
Eric: Brian and I are both sitting here looking at each other, like, you're the CFS man.
Brian: Yeah, right.
Eric: Yeah. With the whole hardness conversation though, I thought you were going to segue neatly into hydrogen embrittlement.
Larry: I know that's Carmen's forte. They did touch on that, but Carmen has beat that into your heads over the years that was kind of old news. Some of the other stuff that we've learned in the class was really interesting.
Eric: So, this is another dimension beyond that topic. Okay.
Eric: Got it. Well, as I said, launching off this conversation here, we were trying to get you on the podcast for the longest time. You've always been so reluctant. I think I asked you how many times to be our FDI analyst. You never wanted to do it.
Larry: I'm kind of a shy guy.
Brian: We know that from whenever Lynn used to come anywhere near the booth at the show, Larry Kelly would be gone. Sometimes to bring me a beer, but usually gone.
Larry: No, I would see her coming and I would make sure I was gone. I would tell Clayton like Clayton; this is your turn you take over on this one.
Eric: Yeah. Clayton doesn't seem to have any problems with shyness. That year that you had him all dressed up in the old rusty bolt keg suit. That was absolutely priceless. How did you get him to agree to that?
Larry: I don't know if he agreed to it or if he was more or less mandated that you're going to be wearing this, but he's a good sport. He had no issues with it.
Brian: But he's going to remember it for a long time. Okay. Got this little doll, that's got Larry his name on it and he sticks pins on it. Okay. Still
Larry: I believe so. Actually, he's the one that purchased it. So, I think that's why he had to wear it. But back to your question you've probably asked me, I don't know, more than a dozen times to be on the show and I've always reluctantly said, maybe next time, maybe next time.
Eric: Well, you've always got big news that's about to come and then it falls off and then I forget for a couple months and then we repeat the cycle.
Larry: So yeah, when you asked me the last time I was going to say, maybe next time, but there is no next time.
Eric: Yes. So, this is sort of the big reveal that we teased last episode. So, what's the big news from Larry Kelly, long-time manager at Buckeye Fasteners then?
Larry: Well, after 37 years with the company, an absolutely great company, many of you know that we are an ESOP company. Which means that everyone that works here is an owner or technically called a participant in the company, meaning that you have shares or stake in the company. So, after 37 years of working for an employee on company, I am going to be retiring in approximately 10 days.
Brian: Wow. So, what's going to happen at the next show? Who's going to bring my beer?
Eric: That's right to the point.
Brian: You can't retire just like that. Don't you think you should ask us first?
Larry: The transition processes in place. So, we got everything's covered. Don't worry. You won't go thirsty at the shows. That's for sure.
Brian: Thank You.
Eric: Well, that's a relief. I thought you were going to say Larry, that after all these years, you finally own all the stock and you're going to rename it or something like that, but this is more logical, I guess.
Larry: Not yet. Not even close.
Eric: So that's an ESOP for people who haven't heard of that, or they're not familiar with how it works. It doesn't seem like a very common thing in the fastener industry. I mean, occasionally hear about it, but how does it work at Buckeye? It's a very good thing for the employees. Isn't it?
Larry: ESOP is an Employee Stock Ownership Plan. And so back in 1980, the owners of the company, it was a family-owned business, decided that they want to sell the business. And so, they had a few interested buyers and the treasurer at the time, his name was Richard Biernacki had heard about this thing called an ESOP and did some research on it.
And so, he approached the owners, the family, that the employees would like to purchase the company. So, you know, they worked out a plan where the employees took a chance. They, invested a lot of their pension or their profit sharing that they had when they were a family-owned business and purchased the company. So that was in '80. And then, in '81, '82, there was a recession. And all these people that invest in the company were like, what did we do?
So, it all worked out. I started in '84. So basically, what I tell people is I was handed ownership. I didn't invest any of my own money in this company, but the fact that I accepted a position here after 30 days. I was vested in the company and I started accumulating, shares within the company, based on, my earnings every year.
So, you earn so much money. And then at the end of the year, you get so much of a contribution back in employee stock. And then that keeps building year after year. And as, as you earn additional shares, the company also appreciates in value. So, it's kind of a win-win situation. You're giving shares in the company, goes up, you're giving shares of the company goes up. Now it doesn't go up every year.
We've had some years were the company's gone down. 2008, 2009, we took a very large hit. But we've, come back since then. And right now, we're at the highest value the company has ever been at. And that's after what? 34 years, 30, how many years? Almost going to be 40 years. I think it's 40 years, isn't it? Yeah. We just got our 40-year award.
Brian: Yeah. Pretty good track record. Isn't it?
Larry: There are some other, fastener companies in employee-owned fasteners companies out there, but not very many. It's not real common in the fastener business. The largest employee own company in the world is Davey Tree. We're a hundred percent employee owned.
Some companies are a certain percentage employee owned, like maybe 51% and the other 49% may or may not be retained by the original owner. But back in '80 Richard Biernacki felt the only way to do this and do it right was to make every single person in owning the company 100% from day one.
Eric: You're basically made a man at that point. Right? Did they have a ceremony that went along with that presentation of those initial shares? Was there some sort of a ceremony associated with that?
Larry: No, not really. We have a shareholder meeting every year. We do our handout service awards. We have an individual that's pushing 50 years. No, actually, I think it's over 50 years of service now. So, I remember when I started, I was told that this job is yours. It's yours until you retire, unless you really screw up. And if you do a good job, you're going to walk away with a very nice, retirement account.
Eric: And if not, you would have wound up at the bottom of Lake Erie. Is that what I'm hearing?
Larry: I don't know about that.
Eric: I always wondered what motivated you, Larry. As shy as you are, you've done all these things. You've constantly broken out of your comfort zone. I mean, my hats off to you, man.
Larry: Well, I love what I do. I love my job. I love my company. This company has been very good to me and it's the reason that I can afford to retire at this time. Part of the reason that I'm retiring is as you know, and I mentioned, actually I think I sent you a text, not shortly thereafter. Because you asked, my daughter had a grand baby on Thursday, little McLaren Elizabeth. So, I have a new career that I'm looking forward to, being a Papa. And so, that's kind of motivating me to, look to the next chapter.
Eric: And she is a cutie too.
Larry: Yeah, She's a doll. I got to meet her for the first time on Sunday and she's just a little peanut. The pictures just don't do her justice. She's just, so precious.
Eric: A lot of times for the first couple of days, they look a little bit like an ET, but not in this case what a little sweet heart.
Larry: And she looks a lot like my daughter when she was a newborn and speaking of newborn, she's the second newborn I've ever held in my life. First one being my daughter, of course and now my granddaughter.
Eric: Indemnification purposes, Larry.
Eric: Legal reasons.
Larry: It's my own comfortability. I have a three-to-six-month, threshold of when I hold someone else's child closer to six months usually by then they're almost, crawling away from me.
Eric: Right, right. You don't have to explain that one anymore. I think I thoroughly get that. Well, congratulations again. I guess that's a good reason to saunter off into your, I guess we'll call it an early retirement, but really, you're still going to be connected to Buckeye Fasteners, right? Is that going to be complete or how's the transition actually going to work?
Larry: Well, I currently sit on the board of directors for the corporation. So, I retain my seat. So, I will still be very active with the company, not really the day-to-day operations. I won't be doing what I've been doing, but I'll definitely be involved and it's a two-year position and elections are, in March of 2021. And I will run for re-election for the board and stay involved with the company because it's a great company and I want to see it do well.
And as long as I stay involved with a fastener company, I could still then stay involved with the various fasteners’ associations. I announced to the North Coast Fastener board that I was retiring, but I would like to remain on the board. And, as long as I'm in the fastener business, that is something that I can do. And I would look forward to doing for years to come.
Eric: I think that's permitted by the bylaws.
Larry: It is, as long as they'll let me do that. And they don't kick me off because I'm showing up in Hawaiian shirt and shorts and I'm just so laid back. No, that won't happen.
Brian: Wow. Then they'll take you off to a hospital rather than kick you off the board. Okay.
Brian: So, then that's a pretty long time in a long-established company. So, what's the biggest change, most impactful change that's happened in the time that you've been at the company
Larry: Technology. I remember when I first started in sales, taking phone calls and asking people. Say it's a new customer and you're putting them in the system and asking them the phone number and like, do you have a fax? And at that point it was probably 30% of the people had faxes. And then, as time goes on, thermal paper, plain paper faxes, and now it's not even a field in our ERP system.
I worked in manufacturing and cold-heading, some of the machines that we're running are, they're pretty old, they're from the sixties and seventies and they're still functional, but now we've got robots running lights out manufacturing, and everything's solid state circuitry, touchscreen controls for your machines and your settings and stuff like that. So at least in my opinion, our industry and with our business, technology has really been one of the biggest changes I've seen in 37 years.
Eric: So, the fastener industry gets a rap for being out-moded in a lot of cases, obviously a lot of new technologies have come in at all levels, but more to the point that I'm making here, what hasn't changed, Larry? What's still the same with the fastener industry all these years later that we rely on for making the fastener industry what it is. What's the biggest thing.
Larry: The process. The actual manufacturing process is the part that really hasn't changed, over the years. Piece of round wire in, hammered around in the dyes and finished part comes out pretty much the same as it's been for years. Probably the part that we made in 1928 for Henry Ford, same technology, same process. Maybe just a little bit faster. On the machines might be a little bit faster, but still the same technique.
Eric: You probably hit it. There's this endearing underlying thing about the fastener industry that I love, and being change resistant as I am. Maybe that's what it is.
Larry: You go into one of these hot forging plants and, they've been doing that that way forever. The CNC shops and the screw machine places, they've probably seen the biggest technological advances because of just the computers and stuff like that, but cold-heading and hot-forging and that various types of manufacturing it's, it's been pretty consistent over the years. The same processes.
Brian: A lot of them are known in practice since the industrial revolution actually. That's where they worked out how to do that properly.
Eric: Well, getting back to the ESOP program, how many people are participants in that in your company?
Larry: Right now, we have about a hundred, active participants, meaning people that are actively working and then we're pushing right around maybe 180 total participants meaning like 80 people that are either beneficiaries or retired employees, or maybe employees that might be out on disability. So, I think it's about 180 total. I should know that number I'm on the board, but it changes constantly. We've had quite a few retirements this year, so it's an ever-changing number, but it's right around that number.
Brian: Huh. It must have taken a bit of a guts really to try and set this thing up back 50 years ago. When the guy thought this plan of maybe I'll go to the owners and see if there's a different way we can do this.
Eric: They made him an offer. He couldn't refuse. Bri. I think it's pretty clear.
Brian: That'd he could.
Larry: Back in the 1980, it was not a very common type of business or practice for the employees to buy a company. ESOP it was relatively new concepts. There was a gentleman by the name, I think Louis Kelso, I don't know if you want to call him the founder of ESOP's, but he was instrumental in the whole ESOP movement.
And, Richard Biernack did meet him and had conversations with him about this. And I think the owner, was convinced that, this was the right thing to do. He's already been investing in employees through profit sharing. He was giving the employees the profit-sharing program. So, he knew that the employees were something that he wanted to invest in and what better way to invest in them and to let them buy the company. I think it was more of a scary, proposition was for the employees buying the company.
Larry: You're putting everything on the line to buy this company, but--.
Eric: Keeps you motivated.
Larry: They also, knew that at that time, it was the right thing to do. They had a lot of faith in their company too, and they controlled their own destiny, if they were to buy the company and a lot of the original investors in the company have done extremely well for themselves, over the years. And many of them are still shareholders in the company after all these years. I think currently we have maybe three original investors still actively working for the company.
Brian: That's pretty amazing.
Eric: You know, Bri you might've forgotten this or maybe you never knew, but the place that you and I first became acquainted, Chicago Bridge and Iron. That was an ESOP company. I actually had some shares in that for many years. You were a consultant. So, I think we just paid you cash, but I had my stock.
Brian: It's changed now. Okay. Another one of the old-time companies.
Eric: So, you're going to stay on the board and you're going to stay on the board of the NCFA. Now, how did you get dragged into the presidency of the NCFA to begin with being as you are? Actually, let me guess, half the time that we went for meetings, Marty Nolan would get up on the podium and pretty much run the show. Were you kind of a puppet president for Marty really controlling, pulling strings behind the scenes? Is that how it worked? I always wondered about that.
Larry: Let's go back to your first question. How did I get dragged into it? Well, Marty Nolan. Marty Nolan's is a sales rep for our company. And, he's the one that more or less introduced me to that. Over the years, our company was not all that active in the fastening industries. Being such a niche company. We didn't particularly see the value in being involved with these associations.
So, spending a lot of time with Marty and he convinced me otherwise. I convinced the sales manager at the time. I think we should maybe join one of these associations. And we started with the North Coast Fastener Association and, we were members for a few years and then we had one sales rep that was a, trustee for, I guess, a year or so.
And then, I realized the importance or I realized, what these associations bring to the fastener community, just the connections and the people you get to meet. So, I got more involved. I think, I did start out as a trustee then vice-president and then president. It was a great experience and still is a great experience. It's just such a good group of people, all the associations have great. I mean the fashion industry is just filled with great people.
Brian: Yeah, that's true. That's what you miss with not having the shows at the moment. There are tons of people you can just go and talk to, it's not necessarily just about fasteners it's about anything.
Larry: That was kind of a motivating factor in my decision to retire. I don't get to do what I'm designed to do, what I'm engineered to do, what I'm built to do. And that is to be out in front of customers and at trade shows and, it's hard zoom meetings and teams it's not the same. Our industry is designed that we need face to face interaction. We got to be slapping hands and drinking Old Rusty Bolt Beer, official beer of the traveling salesman by the way.
Brian: Right. Nearly forgot that didn't you?
Larry: It's been in the back of my mind for a while now and my wife's retiring in March, so we're kind of figuring things out and, just this year, the pandemic and everything it's taken a lot of the wind out of my sail.
Eric: I thought you were going to say, you were designed to just do full-time beekeeping and that was what you were moving on for now.
Larry: I'll definitely have more time to do that. As Eric mentioned, my wife and I are hobbyist beekeepers, and we just buttoned them up for the winter and hopefully they'll get through the winter and come spring. I'll have more time to devote to them.
We're running two hives at home. Maybe I can actually do some splits and get some more hives going. And increase the size of our apiary and which in turn will increase the size of our honey production. It's a very rewarding hobby.
Eric: What's your output annually at this level?
Larry: Running the two hives, one was a newer hive this year. We got about a hundred pounds this year.
Brian: Oh my God. That's a lot. So where are the hives? Do you put them, not in your back yard?
Larry: No, they're in my backyard. Towards the back of the property. My wife had actually had to get a variance from our city to have them because the ordinance says that, bees are a nuisance and we went in front of city council and we convinced them how important the honeybee is to, the ecology of everything. They pollinate 80% of the fruits and vegetables that we eat.
And, so we convinced them to give us the variance and allowing us to have the hive. And so now we're running the two hives. And if I'm going to increase the size of the apiary, I can't put any more in my backyard. There just wouldn't be enough room. I'd have to find another open spot somewhere. But people are always asking for us to put hives in their property. If they got an orchard or something, they'd love for us to put hives there.
Brian: Should ask Jay, I think she'd like you to put a hive somewhere.
Eric: That whole thing was a disaster, Bri. But it wasn't for honey. We got two colonies of bees in the spring, Larry and they were intended to be pollinators for this new greenhouse that we put up. And so, one colony was going to be outdoors and the other one was going to be inside the greenhouse.
And these were a special kind of cutter bee that are apparently very well suited for this type of greenhouse pollination and actually put a raspberry bush in there. The theory being that they love to eat those leaves. So, it'll keep them in there and they'll eat those in preference to any of your produce that you're growing.
So, we did that and I would say within two or three days of the bees emerging from their slumber. When we ordered them, they were all asleep in these little tubes and then they woke up and immediately they just disappeared. They just split the coop, man.
Larry: I guess they didn't like what you had to offer.
Eric: Well, it was actually kind of weird. Because it was like an ongoing litany of disasters. We tried the same thing with ladybugs. I think we put 200 of them inside the greenhouse and within literally a day they were all gone and there was no evidence of them. You would think that if they died, they'd be laying all over the place or nope. They were just gone. And then there's a third similar story involving praying mantis.
Larry: So, when you walk up to a beehive, honeybee hive, and they're all gone they call that absconding, which is not uncommon,
Eric: What causes that? 5G. Right?
Larry: Yeah. No, that was colony collapse disorder. That's what they were blaming it on the cell towers. They were saying that that was a cause for collapse, but they've since proven that wrong, typically when a hive absconds that means there's a pressure in the hive, that's forcing them to leave. And normally it's a virus of some sort, typically the Varroa mite. If they get too many of those, then they'll just abscond and leave the hive because they feel that the hives not safe enough to live in.
Eric: We should have gotten masked cutter bees.
Larry: There you go.
Brian: Right. And lots of disinfectant.
Larry: And again, the problem with beekeeping in this area is 40% of the hives do not survive winter. It's so brutal. Get a warm spell. The bees will break cluster. They'll go out there. They'll do what they have to do. They'll come back. And then it gets so cold so fast. They don't have time to get back in the cluster and you lose, a good portion of those bees they'll freeze.
And if that happens, time and time again, before you know what your cluster so small, they can't keep the hive warm anymore, and then you just lose the whole hive. So, it's frustrating. We've lost hives over the winter. It's just a terrible feeling to go in there and see.
Eric: How long does a hive last? How many years?
Larry: You can run a hive for a long, long time, the problem is the queen only lasts so many years. So, either they replace the queen or you go in there and you intentionally replace the queen.
Eric: Well, how long does the queen live?
Larry: Again? It all depends on her productivity. Typically, two years, is a good run for a queen. Sometimes you've heard queens up to three years, but normally the bees are so intelligent that they know when the queen is failing, they will go ahead and create another queen.
And then that queen will come out and become the new queen and take care of the other queen. They're the only other, organism that can give specific directions, humans and honeybees, the only ones that can give exact directions to where something is and that doozy for them, that's their food source or the foliage they're looking to pollinate. They’re fascinating.
Brian: So, can you heat those things? Could you, like somehow heat it to stop it, getting so cold in the winter?
Larry: Well, if you did that, then they would definitely break cluster. You want them to remain in that cluster as long as they can, because their only job is to keep the queen alive. And as long as they remain in cluster and they keep that constant temperature in the hive, there'll be okay. Sometimes they say the colder, the winter, the better for the bees because they never break cluster
So, it's that constant cold and then warm and cold and warm, which, here in Northeast Ohio, it could be 70 one day and zero the next day. I remember one February it was 77 degrees and the next day it was like 10 degrees. So that's not good for the environment.
Eric: This is like the closest to National Geographic Episode we've ever had on the podcast. I wasn't expecting this, but I'm learning a lot.
Larry: You started it. I'm sorry. I'm very passionate about our bees and our hobby.
Eric: As you should be.
Brian: I'm glad you are.
Eric: I always thought for some reason that these things just went into some kind of a dormancy and then survive the winter. I never realized they had to maintain some sort of a temperature. So, this is fascinating because ours came in tubes and I thought there was like one per tube. I don't know what I'm talking about basically, but I guess if we're going to try it again next spring, I'll have to give you a call or see you at the next NCFA meeting, Larry.
Larry: I don't know much about cutter bees, but I could help you out. If you want to get honey bees, I can certainly help you set up the proper woodware to do that type of thing.
Eric: Would they stay in our greenhouse?
Larry: No. They would not stay in the greenhouse.
Eric: They would abscond?
Larry: Well, no, you'd have to leave the door open. They would probably come and go if they could. But I don't think it would be very successful just keeping them in the greenhouse and not letting them, have more foliage, outside of what's in the greenhouse. So, one last thing, and then, if you want to move on, we can. The interesting fact about the honeybee and the temperature, they maintain a constant temperature year-round. It doesn't matter if it's summer or winter. It's 91, 92 degrees all the time.
In the winter, they cluster, they get in a big ball and they vibrate and shake their wings and they create their own natural heat. And then in the summer what they do is they beard. They come outside the hive. I don't know if you've ever seen a hive that has bees bearding on it. There'll be on the outside of the hive. It looks like a beard and they're actually fanning ventilation back into the hive to cool it down to the temperature it needs to be at. Again, it's fascinating.
Brian: When I was living in New Zealand, my grandfather had bees and I always remember watching them taking these things of honey out and putting them like a big washing machine. And you turn the handle on all the honey sort of spun out of the honeycombs
Larry: And much like the fastener business. That practice is still how you extract honey, you put it in the extractor and either hand-crank it or you got motors and through centrifugal force. It forces the honey out and that's how you get it out of the cells.
Eric: Good tie back into the fastener industry. Larry, I was searching, you took care of that for me. But that is really cool. We'll have to talk about that offline over a couple of Old Rusty's. And so that leads me to one of my next big head-scratcher moments, which is how you actually picked up on old rusty as the very successful promotional item that you wound up. Really, you carried the old rusty part for the industry for a long time. How did that all happen?
Because as we know, traveling salesman first came out with the old rusty and then we started talking about it on the podcast. And next thing you know, we sort of all together created a hive mind and, and it's the sensation that it is today. How did that happen?
Larry: I can remember this as if it was yesterday, the traveling salesman and I were making a trip to Chicago. It may have been heading for one of the Midwest Fastener events, maybe the Tabletop Show or something, and we're driving down the turnpike and we heard the commercial on Fully Threaded Radio for Old Rusty Bolt.
And, I looked at the traveling salesman. I said, Hey, what do you think if Buckeye Fasteners were to serve Old Rusty Bolt? At that time, I think it was the Vegas show was coming up. At the Vegas show and he looked at me and says, “I don't think that's a great idea. I don't think that's a good idea. I think that's a great idea."
Eric: Okay. Okay.
Larry: So, the rest of the trip, we just started talking about how we could do this, what we would do and, creating an actual tap in. From that car ride--.
Eric: It snowballed.
Larry: Yes. It snowballed.
Eric: Next thing you know, there's Clayton in a keg outfit.
Larry: I think that might've been the pinnacle of the whole thing. I'm not sure. But yeah.
Eric: That was priceless.
Larry: Yeah. It just kind of took on a life of its own over the years. It used to be a promotional item that traveling salesman would give away because he would go in and brew the beer and put it in special labels in the bottles and give it to customers and friends and this and that. He was small-scale, we took it large scale.
Brian: I still have one of my original bottles from traveling salesman actually.
Larry: I was cleaning things up, getting ready to move out. And I found two of them on the shelf. I don't know if there'll be any good anymore, but I might be half tempted to try them.
Brian: I decided not to open mine. I'll just leave them as a bottle beer.
Eric: Well, what a great marketing device. And I'm sure over the years, you've had a lot of comments on it. And of course, the refreshment has been well appreciated over the years as well. So thanks a lot for doing that, Larry. I think the industry owes you a debt of gratitude not on that alone, as well as your many other contributions.
Larry: That's been my pleasure. And it's been Buckeye's pleasure all these years.
Eric: Are we going to be able to expect a couple of new commercials of that? I mean, this really what this whole conversation has been leading up to, it's been a ploy of me to try and get the creative juices flowing for another slew of these things. How long have I been pestering you to come out with another few editions of your wonderful commercials? And I know that a lot of your work goes into those, so I understand entirely, but I do hope eventually we'll get a couple.
Larry: Well, I've been talking with the gentleman that he and I are the ones that come up with the scripts and he’s got some ideas. It's just a matter of finalizing them, getting them down on paper and then heading to the studio, and recording them. So, you've been pestering me for probably two or three years now.
Brian: Probably longer.
Larry: Well maybe. We were on a hiatus for a while.
Brian: You didn't think this was totally going to be free.? Did you?
Brian: You knew that the hard work was going to be put on you at some stage?
Larry: That's okay. Like I said, we have some scripts that we've been working on, some different ideas. A lot of the ideas come through, like just experiences within our company and different things like that. So, hopefully we can do it sooner than later.
Eric: So, we're not going to see at the shows anymore, but we will hear you through some upcoming commercials and who knows, maybe we'll even get you on here eventually. I'm keeping you on the FDI distro list, Larry. So maybe you can be an analyst, a guest analyst. When I'm hard up, I'll call you as a last resort. Would you be up for that?
Larry: Sure. I can fake it 'till I make it through anything.
Eric: I've done a few NFDA meetings, Larry. I already knew that.
Brian: It's been our experience when you're running away from Lynn's microphone, I have to tell you.
Larry: I'd definitely be open to that. Still maintaining a presence in the company. My emails are still going to be coming in. I'll still be answering my emails. After 37 years, the transition process just doesn't happen overnight.
So, there's going to be a lot of emails and a lot of questions of things that come up that I've worked on over the years and, I'm going to help the team transition, as best as possible. And who knows you may very well see me at an upcoming fastener show.
Larry: I still have a seat on the, Fastener Fair Advisory Committee. I'm not sure how that's going to go moving forward, but we'll go from there.
Eric: Well, it'll be interesting to see, but, nevertheless, another feather in your cap. As is this feature segment on Fully Threaded Radio. I always swore that we'd get you on Larry. And I didn't realize it would be really your Swan song, but nevertheless here it is. And I'm so glad that we had this chance.
Larry: Well, it's been my pleasure. I really do appreciate it. And, I love the podcast. First-time caller long-time listener.
Eric: I guess one last time I'll put you on the spot. Was, there any favorite voice that you did for all those commercials that you want to kind of take us out on?
Larry: I'm always parceled my Forrest Gump voice.
Eric: We've been talking with Larry Kelly, Buckeye fasteners in the Ohio Nut and Bolt company, long-time friend, sponsor of the podcast. All around good guy, beekeeper. Don't forget that. And now grandpa. And, it's been a pleasure. Thank you again, Larry. And, why don't you role us out of here.
Larry: Well, on behalf of Fully Threaded Radio at Buckeye Fasteners. I would just like to thank everyone for listening and I wish you a very Merry Christmas and a Happy, Happy New year.
Eric: Great. Back in a second folks.
Since 1905 Buckeye Fasteners and the Ohio Nut and Bolt Company have been supplying the world with high quality fasteners. Our standard product lines include weld fasteners, graded weld screws, leg levelers, self- clinching hardware, clevis pins, rivet nuts and various other fastener lines. Allowing us to support virtually all types of industries, buckeyefasteners.com. Buckeye Fasteners, 'More than just weld'.
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Eric: For service you deserve and people you trust. It's Stelfast.
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Steve: This is Steve Dunham from SASCO Fasteners, the SASCO man in Medford, Oregon. And you're listening to Fully Threaded Radio.
Eric: Oh, you must really like Old Rusty Bolt Beer, Bri. That's all I have to say.
Eric: You know, Larry announces he's retiring. First thing you say is, "Am I still going to get my beer at the shows?"
Brian: Well, some of these things are sort of important, okay.
Eric: No, I hear you. I hear you. Well, he provided a great service to the shows by providing kegs Old Rusty over the years and of course in so many other ways. It was a lot of fun to talk to him. And now you understand my ploy at the beginning of Larry, just wanting to let it be.
Brian: Yeah, yeah.
Eric: It was pretty bad. I admit it.
Brian: It used to happen especially at the Las Vegas shows. Some stage usually when it was sort of a quiet period on one of the afternoons Larry would just come wandering out, he'd bring me a glass of beer, Rusty Bolt. But then if you've been talking for five hours, you're usually parched anyway.
Eric: Yes. You don't have to explain that whole concept to me, Bri. I understand entirely. It sounds like we'll be seeing Larry here and there though going forward. So that's the good news.
Brian: Yes. I hope so.
Eric: And it was very good of him to join us at long last. Hopefully we'll also be hearing some new commercials out of him in the near future because man, have they been entertaining over the years? I've got a whole slew of them here. You know.
Brian: I know they're good.
Eric: Larry Kelly, Buckeye Fasteners and the Ohio Nut and Bolt Company making his way to the exit, but not really.
Eric: Also, thanks to Jeff Schmitt, vice president over there at Würth Industry North America. Thanks for your insights today, Jeff.
And Doug Ruggles past president of the NFDA joined Mike McNulty on the Fastener News Report today. Good insights. Thanks for doing it. And Mike, stay focus brother.
Brian: Right. Very.
Eric: We really appreciate it, Carmen Vertullo as always had the Fastener Training Minute that rounded it all out for us today. And this is rounding out another season of podcast. Well, I can't say excellence, but whatever it is, this is rounding it out.
Although we do have an excellent line-up of sponsors and we're looking forward to next year when looks pretty strong again. So, we have that to be thankful for.
The title sponsors of Fully Threaded Radio are Stelfast,' For service You Deserve and People You Trust'. It's Stelfast. Brighton Best International, 'Tested, Tried, True'. Brighton Best and Goebel Fasteners, 'Quality The First Time', Goebel.
Fully threaded is also sponsored by Buckeye Fasteners, BTM Manufacturing, Eurolink Fastener Supply Service. Fastener Technology international, INxSQL Software, ND industries, Parker Fasteners, Solution Industries. Volt Industrial Plastics and Würth Industry North America.
Let them know you heard them here folks. And thank you so much for listening in. Please let us know what you think of the show. Or if you have suggestions or questions, firstname.lastname@example.org is the place to do it. And who knows one day, maybe we'll have an updated website for the podcast where you can interact with us a little better, but for now that's the way to do it.
And that puts us in a position to wind this one down Bri, you were mentioning to me as I was yammering on about the Lunar New Year. And one of the FDI comments pointed out that possibly conditions are going to change after that whole happens. And then we connected the dots with Chinese New Year.
And of course, it's also called the Winter Festival in some places because that's the more secular way of thinking about it. But whatever you call it all across Asia, it's this week-long festival or series of festivals in actuality, it feels more like it's about a month to people who are outside of Asia because of the disruptions and everything.
Eric: But we know everybody's celebrating and there are many customs and things that go on and it's that time of year coming up. So, we're leaving the Year of the Rat going into the Year of the Ox. I don't know how I feel about that, Bri, but you're telling me that as this all sets in, we've got a very strange celestial alignment happening. And maybe that's what's going on here, Bri, with all of these lining of the stars events.
Brian: Well, anyone who's been through the summer winding your day down by sitting outside on a beautiful summer's evening and having a scotch or something like that, you can't possibly have missed the fact that right above you, you had Mars. You can always tell it because it's slightly orange. And then over on the other side of the sky was always two other planets were Jupiter and Saturn.
Very rarely you see them all together and very rarely you actually see them. So, all summer they've been there, but what's really been happening is that Jupiter and Saturn had been getting closer and closer together.
So, on the 21st of December, the actual same day as winter solstice is going to be called the grand conjunction where they come so close, they look like they're one single thing. And, won't happen again for another 800 years. So, if you can get and have a look, because in our lifetime and no one ever knows, lifetime we'll ever see it again. December 21st, the grand conjunction.
Eric: Now this sounds really big. My guess is the thread ardi are going to be out there having some ceremonies, squirreled away, somewhere secret away, and who knows what'll happen? Hey, maybe we'll have a big development with the election finally, on that day. For people who are paying attention, maybe let us know what's going on, how to interpret all this, but it all seems to be pointing to something doesn't it?
Brian: Yeah. Well of course it could be cloudy, but the truth is you could go out within three or four days, either side of it and you'll see them. If you look over and sort of the South Western horizon a little bit higher than that, sometimes it's up a fair distance. But that part of the sky, you'll see the two things very close together and Jupiter's sort of noticeably brighter. Can't miss it. Okay.
Eric: Well, I'll definitely keep my eyes open for it out there in the Sonoran Desert. But that sounds like you're not going to bite on any of my esoteric significance.
Brian: No. I'm not. Because it was way out of that. Okay.
Eric: Which is probably for the best. It is a predominantly fastener related show. It's getting kind of weird around here. So, we're going to put this one in the Canon. Thank you, all folks. Once again for another great year of fastener, podcasting, people said it couldn't be done. We're doing it. It's because of you. Thank you so much. Hope you'll be with us next year.
Brian: Yep. Live safely. Drive safely. Okay. Come back and join us next year.
Eric: But not too safely. Because it's not American.
Eric: That'll do it.
Eric: For Brian Musker this is Eric Dudas. Get out there, sell some screws.
Brian: And try and have a reasonable Christmas and we'll see you. Okay. In the new year.
Eric: Talk to you next time.
Fully Threaded Radio is a production of Fasteners Clearing House.