CAMM and Automate Canada have surveyed manufacturers throughout the COVID-19 lockdown. Click image to enlargeManufacturing is feeling the financial pain of the COVID-19 lockdown, with cash flow among the leading concerns, according to the latest survey by the Canadian Association of MoldMakers and Automate Canada.

 

The two industry organizations have been surveying their memberships—made up largely of companies with less than 50 employees—weekly, establishing some trends in how companies have managed the first few weeks of economic lockdown, and how they think the recovery will shape up.

The largest impacts on businesses have shifted from the first weeks, with cash flow concerns at the top of the list. Employee anxiety is still a top concern, but it has been trending down as sales disruption and project cancellations have risen.

In Week five, project cancellations dominated the list with continued delays and few new programs compared to prior weeks.

The number of employees out of the workplace due to isolation or quarantine dropped to 58 in total, from 97 last week. About 65 per cent of respondents reported having no employees on quarantine, down from 51 the week prior. For the first time since the survey began in March, none of the larger employers reported having 20 or more employees off on quarantine.

Layoffs have also slowed, with 65 per cent of respondents laying off no workers this week. In another positive trend, compared to 46 per cent last week. The number of employees laid off also decreased this week, with 143 employees laid off temporarily, compared to 197 in week 4. Even with fewer participants in this week’s survey, this still shows a sharp decline in temporary layoffs and demonstrates that employee counts have stabilized.

Indeed, the survey indicates most workplaces are not letting employees go permanently. Some 29 employees were reported as permanently laid off in week 5, down from 32 the week before. Almost 90 per cent of respondents reported not letting anyone go permanently, however, there were no new hires reported. Manufacturers have begun to recall employees, with 32 per cent of respondents calling at least one employee back.

Government Programs

Manufacturers are definitely taking advantage of the Canada Emergency Wage Subsidy program, deferring remittance of taxes and duties and making use of products from EDC & BDC. The most commonly mentioned programs across each week, however, were still EI & SR&ED.

Since week four of the survey, 75 per cent of respondents indicated they were willing and able to supply products or services for medical equipment or devices. For each of the previous survey weeks, about one third of respondents have been able to answer the call for their services or products, mostly in the production of tooling for medical equipment manufacturing.

The increases in workplace shutdowns have slowed in week five, with 37 per cent of respondents at 90 per cent of full operations, compared to 30 per cent last week. The number of workplaces that are completely (or almost completely) shut down remained fairly consistent at 15 per cent.

Most of these shutdowns were due to employee absences and loss of work. Health and safety concerns didn’t factor as heavily this week as in prior weeks, suggesting that workplaces have adopted effective health and safety practices. However, most respondents were not hopeful for a swift return to normal. Most respondents either wouldn’t commit to a date or indicated they think it will take at least four more weeks before they return to full operations.

It’s not all doom and gloom, though, with a number of manufacturers reporting improved collaboration within their company, diversification of their markets, improved connection to government services, and adoption of new technologies and better workplace health and safety practices as upsides to the current situation.

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Most recently, DMG MORI opened its manufacturing facility in Davis, CA. And Haas, which has always manufactured its machines in California at a 1 million sq ft facility, recently announced its intention to expand its facility to accommodate growing machine tool demand. Mazak Corp., which has been manufacturing in North America for 40 years, has expanded its manufacturing operations 15 times, most recently in 2012 with a 200,000 sq ft addition, increasing its total floor space to 800,000 sq ft.

SMTCL's COO Jerry McCarty says SMTCL, considered among the world's largest machine tool builders, will be manufacturing in the US by the end of 2015.

A manufacturing factory in North America will complement SMTCL's current manufacturing facilities in Europe (Germany) and Asia (China). "The United States was chosen because that is where our customers are and we know that we can find workers and vendors that have the dedication to quality that we need", McCarty stated in a press conference at IMTS earlier this week. "We will employ Americans and this facility will be managed by Americans. I can also tell you that although we will continue to use the world's best components in our machines, we will also use a number of local US vendors to provide contract machining, fabricating, and electronics."

The site of the new manufacturing facility has not been determined, but McCarty says SMTCL-Americas will begin manufacturing VMCs and expand with other products as the market dictates. 

SMTCL plans on purchasing or building a 100,000 square foot facility and employing between 100 to 120 employees. "We will need manufacturing engineers, machine assembly technicians, and service technicians, as well as purchasing, accounting, and general management professionals," said McCarty.

McCarty added that he hopes to be manufacturing in the US by the end of 2015. "These machines will be shipped to our customers in the United States, Canada, and Mexico and we look forward to helping our customers compete in the world economy."

SMTCL produces 80,000 machine tools each year and has revenues of $2.9 billion. The company has more than 300 products in its machine tool line-up.

SMTCL-Americas

 

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