Should metalworking companies brace for a slowdown in 2023? Are interest rates having an impact on equipment purchases? Is the move to robotics a significant trend? Chris Hergott, president of CTMA, and vice president, operations at XL Tool, answers these critical questions and more in an exclusive interview.
SHOP: What are CTMA members expecting in terms of business conditions for 2023?
HERGOTT: We just had a board meeting recently and we went over the business conditions. There seems to be a little bit of a slowdown, but no one is really overreacting to it. One thing that scares me is that soon as the media starts talking about recession, you can end up creating a recession because we talk about it so much. We are not seeing that level of decline in manufacturing. Half our members are still very busy. The machining side of things has been busy. We are still short goods, we are still short people, I am not too worried about (a slowdown) from XL Tools’ perspective and neither are a lot of CTMA members. Our forecast
SHOP: What are your thoughts on the pace of equipment purchasing for next year? What’s your own experience as an executive with XL Tool?
HERGOTT: At XL Tool, we just spent over $6 million with an expansion and new equipment so next year we don’t want to spend a lot of money. But had we not had those big capital expenditures we would be investing because you have to stay committed to doing things more efficiently and technology is the best way to do that. I am wondering if part of the reason for the slowdown in equipment purchasing will be based around people concerns. We have huge talent shortages and the kind of talent we require in industry today there isn’t a lot of it out there. Why do you think CTMA spends so much time getting in touch with high schools? This is not the time to back your foot off the gas in manufacturing. I think there are a lot of investment companies that are buying up companies around us and to me that shows they see the value in manufacturing.
SHOP: For those looking to purchase new equipment, our research shows a significant increase in plans to invest in automation and robotics in 2023. Are you seeing that as well and what role can automation play in helping solve the skilled labour shortage?
HERGOTT: The driver is that you don’t have people to run the machines. You have to do more with less. Robotics is going to be huge. But it isn’t easy. It’s complex. The mold industry has always been ahead in terms of automating processes for machining. Can better equipment help us out? One hundred percent it can. And I think that’s where people are starting to reassess how they do things. Look at what automation can provide in the machining portion of the business. I think technology is getting a lot smarter a lot faster than we’ve ever seen before.
SHOP: Despite all the labour shortage issues, only about half the job shops have apprenticeship or job skills development programs or plans in place. What is causing Canadian job shops to drag their feet on this?
HERGOTT: That one still baffles me, honestly. I know shops who have four or five good toolmakers and they don’t have any apprentices. I think some shop owners are stuck where they don’t feel they have the time to train. But they have to. They absolutely have to. You have to train more young people to get into the industry as opposed to carrying on business as usual. We can’t lose sight of that. Don’t take your foot off the gas pedal.
SHOP: What’s your advice to our readers for 2023?
HERGOTTT: Don’t overreact, don’t panic. Continue running your business. Put your foot down and go to work. That’s how I got through the recession of 2008-2009. A good friend of mine a long time ago said recessions aren’t a bad thing. They sort out the weak from the strong and the strong get stronger and the weak just go away. Focus, find out what in your business you should and shouldn’t be doing. Get laser eyes.