Inside Rubber - 2019 Issue 4

S T R AT E G I E S F O R F U T U R E S U C C E S S

2019 Issue 4

DESMA Program Blends Internship and Education  Rubber Processing Forecast  Succession Planning  Supply Agreements

The Official Publication of the Association of Rubber Products Manufacturers

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CONTENTS 2019 ISSUE 4

FEATURES 6

View From 30 Feet

Building a Future that Works: DESMA Molds Homegrown Employees

10

Solutions

12

Legal

16

Perspective

20

Review

22

Markets

26

Succession Planning Keeps Rubber Businesses in the Family

20

Five Steps to Better Supply Agreements The Rubber Industry Looks Ahead to 2020 Recapping the 2019 Benchmarking and Best Practices Conference Silicone Elastomers to Reach Highest Global Consumption Rate in 2019

6

Marketing

How Marketing Impacts Talent Recruitment

30

Benchmarking

32

Management

Compensation Rises While Hiring Falls for Rubber Manufacturers Five Trends in the World of Environmental Health & Safety

32

Departments 4 9 24 28 34 34

From the Managing Director Technical Standards Update Industry Member News Calendar Ad Index

www.InsideRubber.com Cover photo courtesy of DESMA www.arpminc.com 3

FROM THE MANAGING DIRECTOR

N

Dave Jentzsch Blair Rubber

ow that we have started the fourth quarter – and our 2019 Annual Benchmarking and Best Practices Conference is behind us – we will be making plans for 2020. ARPM Executive Director Troy Nix made another spectacular opening presentation at the Benchmarking Conference. His exceptional motivational enthusiasm filled our emotional reservoirs with enough passion to carry us well into the new year. Thank you, Troy.

In our annual meeting, we presented membership awards and selected new members to the board, while extending the terms of others. I would like to recognize the current board and the ARPM staff – Troy Nix, Letha Keslar, Beth Jeffries and others – for their time and energy in making our organization healthy and relevant.

Our association’s networking opportunities bring rubber manufacturing leaders together where we can learn something, feel something and share something. Think back to that most difficult business trial and remember how you overcame it. You know that if you could share it, it would bless the lives of other leaders going through a difficult time. We received that gift when visiting Marel Riley-Ryman’s plant, Southern Michigan Rubber, at the ARPM plant tour at the end of August. Marel and her team shared not only the difficulties and challenges but also the blessings that came out of a tragic fire at her facility. We often overlook the blessings because of the difficulties, but she taught

7321 Shadeland Station Way, Suite 285 Indianapolis, IN 46256

us that there are blessings. We can rise triumphant when people pull together and are willing to help.

If you’re willing to roll up your sleeves and give back to the industry or the association, there are plenty of areas to get involved with ARPM, whether on the standards committees, training committees or the board of directors. These committees represent a great opportunity for young and old professionals to get involved, develop leadership skills, enhance our expertise and continue life-long learning. Sharing our expertise, thoughts and experiences will enhance our love for continued learning and professional growth. Going it alone brings undue stress and ultimately could lead to failure; where sharing brings edification, as well as personal and professional growth.

Training will continue to be a critical focus for ARPM in 2020.

We are pursuing a new direction in developing the rubber manufacturing courses that will provide the training you need to succeed right now. ARPM is focusing on the immediate needs of our industry, and the association’s team – and the board of directors – is always willing to hear your input on how to improve.

Dave Jentzsch Blair Rubber/Hyload

Managing Editor: Dianna Brodine Art Director: Becky Arensdorf Published by:

Phone: 317.863.4072 | Fax: 317.913.2445 info@arpminc.org | www.arpminc.com © Copyright 2019 ARPM Officers and Board of Directors President Dave Jentzsch, Blair Rubber Past President Tim Jarvis, Continental ContiTech Treasurer Marel Riley-Ryman, Southern Michigan Rubber Secretary Joe Keglewitsch, Ice Miller LLP

4 Inside Rubber // 2019 Issue 4

ARPM Board of Directors Kirk Bowman, The Timken Group Charlie Braun, Custom Rubber Corporation Joe Colletti, MarshBellofram Randy Dobbs, Sperry & Rice LLC Lisa Huntsman, Cooper Standard ISG Steve Nieto, Tahoma Rubber and Plastics Tom Pitstick, Gates Corporation Mike Recchio, Zeon Chemicals L.P. Mike Smith, Basic Rubber and Plastics John Stourac, Zochem Joe Walker, Freudenberg-NOK Sealing Technologies

2150 SW Westport Dr., Suite 101 Topeka, KS 66614 Phone: 785.271.5801 ARPM Team Executive Director Troy Nix – tnix@arpminc.org Managing Director Letha Keslar – lkeslar@arpminc.org Project Manager Beth Jeffries – bjeffries@arpminc.org Marketing Director Marcella Kates – mkates@arpminc.org

VIEW FROM 30 FEET

Building a Future that Works: DESMA Molds Homegrown Employees

by Lara Copeland, contributing writer, Inside Rubber

B

etween ever-changing technology and the retirement of a substantial portion of the skilled workforce, the US is experiencing a shortage of qualified workers in manufacturing. To help fill the thousands of manufacturing jobs that remain vacant each year, initiatives are being set in place across the country to close the skills gap.

per week), while a local community college reinforces skills with classroom experience chosen by employers. The participating company commits to providing a competitive manufacturing wage for part-time work while the student is enrolled in the program, and the company pays the student’s tuition at the community college.

The Kentucky Federation for Advanced Manufacturing Education (KY FAME) is one such initiative where students, employers and educators work together for the benefit of all. According to its website, “KY FAME is a partnership of regional manufacturers whose purpose is to implement career pathway, apprenticeshipstyle educational programs that will create a pipeline of highly skilled workers.” One company, DESMA USA, operating out of Boone County, Kentucky, started seeing many of its longtime employees announce their retirement plans and turned to KY FAME for help.

Graduating high school students in Northern Kentucky can apply to the KY FAME program, provided they achieve a certain ACT score and their high school transcripts meet the KY FAME threshold. Additionally, students must submit a 500-word essay explaining why they should be chosen, detailing any experience they’ve had in manufacturing or expressing a mechanical/ electromechanical interest.

“For years, we were fortunate with a stable workforce as tenured technicians, and experienced technologists established our company as a service-oriented organization,” DESMA USA President and CEO Scott Early said. “But now, the average age of a DESMA USA employee is 48 years old.”

Wanting to secure its future, the company decided to act. In 2016, management began discussions about hiring a high school graduate, and Early inquired with the local high school regarding potential graduates with mechanical aptitude and a desire to learn from the ground up with a company like DESMA. But, that approach did not work. “High schools really are not in the placement business of upcoming or past graduates,” he said, “and that is when we found the KY FAME program.”

Partnering with KY FAME DESMA USA joined KY FAME in December 2017 and, in the spring of 2018, a team of managers agreed to sponsor a graduating high school student as a KY FAME apprentice.

Through this partnership, employers have the opportunity to invest in the future of not only their own companies, but also the manufacturing industry as a whole. In sponsoring a high school graduate, a company agrees to provide specific on-the-job, hands-on training within a created part-time position (24 hours 6 Inside Rubber // 2019 Issue 4

Once accepted into KY FAME, students begin working toward their Advanced Manufacturing Technician (AMT) certification.

For five semesters, they attend classes at a local community college two days a week and work three days a week with a local employer. This results in an associate degree in Applied Science in Industrial Maintenance Technology-Advanced Manufacturing Track, 68 to 71 college credit hours and two years of work experience, in addition to the AMT certification. Students leave the program ready to enter the workforce full time.

“

I WAS COMPLETELY NEW TO THIS ENTIRE INDUSTRY WHEN I FIRST APPLIED TO THE KY FAME PROGRAM,” HE SAID. “DESMA HELPED A LOT BY TEACHING ME AND HELPING ME GAIN EXPERIENCE IN THIS FIELD.

”

machine broke,” Early explained. “He then told us how he jumped in and tried to troubleshoot the machine to get it working again.” This anecdote helped seal the deal, and DESMA selected him for its first sponsorship.

Morrison was relieved when he received word that he had been accepted into the program because he didn’t know what his career path would look like otherwise. He began work at DESMA in July 2018, and since then he has worked in several areas of the facility.

“I’ve worked in our rebuild department and our project department, and I’ve been able to work hands-on with coworkers on projects such as mold testing and tearing down machines that are a decade or two old to rebuild them for resale,” he explained. “I also traveled to customer plants as a jr. service technician, representing DESMA and working alongside experienced technicians.”

A year into the program, Morrison has strong interest in both the project and rebuild departments, but he is keeping his options open, saying it’s too soon to say where he will want to be after the completion of the program. “There are a lot of options for me, and I want to take my time figuring out what I want to do here at DESMA,” he said.

The work is rewarding for Morrison, but he said simply getting started may have been the most challenging part. “I was Stephen Morrison apprentices at DESMA while earning an associate degree completely new to this entire industry from a local college. when I first applied to the KY FAME program,” he said. “DESMA helped a lot Student sponsorship by teaching me and helping me gain experience in this field.”

In 2018, DESMA sent representatives to the community college Having graduated high school not even two months before to interview all candidates over the course of several days prior beginning work at DESMA, Morrison said he was surprised by to the official draft day. Early said there were approximately 30 the amount of responsibility that DESMA gave him. “For me, candidates available for company sponsorship after the initial the shift from being a kid to a working citizen was the biggest screening. When draft day arrived, each company had several challenge.” candidates identified based on the interview, fit with the company culture and internal discussion.

To make sure Morrison has adequate tasks at DESMA, the company’s management team stays engaged with him. Early said One student, Stephen Morrison, told a story during the interview that “this is sometimes a challenge due to the time commitments process that made him stand out from the crowd. “He said he was required,” but in the long run he believes the company is working part time at a fast food restaurant when the ice cream building a win-win for Morrison, DESMA and future KY FAME page 8 

www.arpminc.com 7

VIEW FROM 30 FEET  page 7

apprentices. With each semester, the company receives a report card and a review on Morrison from his school. Together, management and Morrison discuss the semester and classes he took. Furthermore, he also reports to the DESMA customer care coordinator and the DESMA service coordinator daily. “And, if I need any further help, Scott is always available,” Morrison added.

Early said the company has learned a lot in its first year of sponsoring a student. “There is a sizable time commitment as a sponsor of a KY FAME student, and we must blend this with our daily work,” he stated. “We trust that we are building a relationship with Stephen so that he can one day be a productive member of our company in a career that is beneficial to both of us.”

Looking ahead

In 2020, DESMA plans to enter the draft for another KY FAME graduate in an effort to bring on additional young people and expose them to the industry of rubber injection molding. Early said he also has his sights set on local four-year universities to sponsor an engineering student.

Just over a year into the program, Morrison has completed about half of the work for the KY FAME program. Once it is finished, he will have some options concerning his immediate future. The 68 to 71 college credit hours may or may not transfer to a fouryear university – Morrison said it depends on the classes and the schools. “Some universities won’t recognize certain classes, but some will, and they can be rolled over if that’s the case.”

In the Boone County area, the University of Cincinnati and the University of Kentucky both accept some of the classes Morrison is taking as credit toward a four-year degree. Additionally, as stated in his contract with DESMA, Morrison will work for the company for a set number of years after he completes the program. Once the time period is up, he can explore other options or choose to remain at DESMA.

Considering the number of benefits for not only the company and the industry but also for students, Morrison said he would recommend this program to his peers. “With the free education and the work experience, it is a good set-up that can lead to a path of success,” he said. More importantly, he is happy to have been given this opportunity. “I didn’t want a desk job because that would be boring; I wanted a job that would give me opportunities to advance and learn.” 

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TECHNICAL STANDARDS UPDATE

Committee collaborates to set standards

A Greg Vassmer ARPM Technical Coordinator

ny product category with wide usage and more than one manufacturer is likely to have an industry association interested in the promotion, technology and advancement of the product. If you consider the product on an international basis, then it’s also likely there are international standards creating organizations to cover the same topic.

The hose guidelines managed by the Hose Committee in ARPM are a good example.

Within the US, the ASTM, SAE, ARPM and ISO organizations all have worked with hose standards, test methods and specifications over the years – but, not consistently.

Think of it as a cycle. First, the market demands a new rubber material for a particular kind of hose. Competition causes several other companies to develop something similar and make claims that their performance is better vs. the others. An attentive industry association or standards group develops a standard test so the market can compare the products in a controlled way.

After a flurry of effort in the beginning, activity on the standard decreases to a five-year review cycle – the least thrilling part of the process. Industry consolidation and the move to an offshore supply base also complicate these things. Participation in standards creation and management ebbs and flows.

So, the good news: ARPM and ANSI (the US coordinator of ISO activity) have recognized the vitality of the ARPM Hose Committee and appointed the group as chair for the US Technical Action Group (TAG) for ISO (T)echnical (C)ommittee 45, (S) ub(C)ommittee 1 – shortened to “TC45 SC1.” This committee is responsible for standardization of rubber hose assemblies associated with industrial and chemical applications (Working Group 01), automotive applications (WG02), hydraulic applications (WG03) and hose testing methods (WG04). A total of 28 countries participate as voting members for TC45 SC1.

The ISO standards nicely complement the ARPM standards.

ARPM has focused on maintenance, usage and inspection of hoses, while ISO focused on design guidelines and specifications.

Better yet, the US organizations participating in the ISO standard activities are the same as those participating in the ARPM effort – so much so that the group holds joint meetings to accomplish both ISO and ARPM reviews and discussion.

Dick Batzer and Brett Stone drive the hose activities forward for ARPM and the US ISO TAG organizations. On the ARPM side, they manage 10 guidelines/standards focused on six important hose usages. On the ISO side, beginning in January 2020, ARPM will act to coordinate the US activities for all 81 ISO hose standards.

On the ARPM docket are guidelines intended to aid in the management of the lifecycle of hoses used in difficult environments. Covered are hoses handling steam, ammonia, oil, welding gases, acidic/basic chemicals and gasoline.

These applications are aggressive enough that relatively few manufacturers have the technical knowledge needed, and ARPM standards are in regular use to control maintenance and testing.

The ISO standards, using the ARPM (formerly RMA) standards as a starting point, now cover a much larger range of applications and sub-applications. For example, in addition to gasoline hose standards for the corner gas station, there are standards for diesel fuel hose, automotive fuel system hose and LP gas hose. ISO has developed specification standards covering at least 23 different applications.

ISO also creates a type of guideline known as a “method” standard. That is, specific standard techniques for measuring the properties and performance behavior for hose beyond simple application testing. For example, the measuring technique to establish the diameter of a flexible rubber hose is not obvious because typical techniques change the size of the hose (bend it) while the measurement is underway. The dimension measurement guidelines can help. Rubber hose expands under pressure – but is a hose expanding too much? Use the ISO hose expansion method.

Will it burst? Use the ISO pressure test method. The hose is used outside? The environmental resistance method can help … and so on.

Like the other product areas where ARPM is active, hose applications cross nearly every mechanical industry. But, only a couple are as active within the US and the international stage.

There certainly is a need – materials technology is changing rapidly – but we must engage organizations and companies worldwide and step onto a bigger stage, just as the Hose Committee has done. 

www.arpminc.com 9

SOLUTIONS

Succession Planning Keeps Rubber Businesses in the Family

by Liz Stevens, contributing writer, Inside Rubber

P

lanning for ownership succession is a task that is of vital importance to family-owned businesses, but many owners have not yet tackled it. Unlike management succession – in which companies plan for changes and promotions in the managerial hierarchy – ownership succession planning involves the handoff of the business from one generation of owners to their children, as was the case for Ohio-based rubber manufacturer Newman Gasket.

40% lacking generational transition plans Forbes.com reported that, in a 2016 Family Business Survey by the National Bureau of Economic Research Family Business Alliance, 40% of family-owned businesses stated that they don’t have a succession plan, even while most of them do intend to pass company ownership to the next generation.

The Great Cities Institute at the University of Illinois at Chicago recently surveyed local family-owned manufacturing companies about their plans for the future. Three-quarters of them had owners over the age of 55. Only half of these baby boomers had a succession plan, and just a third of them had designated a specific successor.

“Many succession plans are not carefully planned out or are devised as a result of a health event. A good succession plan is made when the owner can think rationally,” suggests a BusinessWest.com write-up, but Newport Beach, Californiabased attorney Jillyn Hess-Verdon laid out the reality in an Insurance Journal article. “They don’t want to think about it,” said Hess-Verdon, “Most of my clients spend more time planning a two-week vacation than they do on the succession of

“

MOST OF MY CLIENTS SPEND MORE TIME PLANNING A TWO-WEEK VACATION THAN THEY DO ON THE SUCCESSION OF A BUSINESS.

”

10 Inside Rubber // 2019 Issue 4

The Newman Family: Betsy, Dave and David. Photo credit: Andrea Chapelo of Chapelo Photography

a business.” As a result of this avoidance, businesses often are caught flat-footed, especially when surprises pop up or tragedies occur.

The prospect of tackling succession planning can seem overwhelming. It takes time and energy, after all, to meet with company partners, family members and advisers. As a starter step, business owners can write down their ideas on succession and share them with a spouse or a business partner. In case the unexpected occurs, having something documented – even just jotted down – can help.

Ideally, owners discuss their transition wishes with the next generation in the family business, gather the resources needed for succession and put together a thorough plan. And, as the family behind Newman Gasket learned, there are professional resources that business owners can tap into for help with the succession planning process.

Preparation key for smooth business transition at Newman Gasket Betsy Newman, now vice president of Newman Sanitary Gasket Company in Lebanon, Ohio, already was involved in succession planning in 2012 when the company’s founder, her father, David “Dave” Newman, was diagnosed with a terminal illness.

Newman Gasket – which employs 50 to 60 in its operation making gaskets, “O”-rings and other elastomer molded parts for pharmaceutical, dairy, food and beverage industries – was founded in 1973. Dave Newman always had planned for his children to take over his business. He and his wife, Bonnie, had started preparing for an eventual company transition when their kids were very young by doing estate planning, making life insurance purchases, drawing up wills and using other legal tools.

The children – Betsy and her brother, David – knew from the start that they were slated for company ownership. Each began working at the company as a teenager in Newman Gasket’s inspection and cleaning area. As high schoolers and college students, Betsy worked in the business office while her brother worked in the manufacturing facility. Betsy soon became a customer service representative and learned about outside sales, taking a full-time position at the company in 2006. Her brother, David, also trained as an outside sales representative.

As part of the family’s long-standing plan to pass the company to the next generation, and at the advice of their attorneys, Dave and his children had signed up for a 2011-2012 program of succession planning training at the Next Generation Institute® at the University of Cincinnati. The Goering Center in the Carl H. Lindner College of Business at the university offers an eightmonth-long program for education and support on the ownership succession journey. Betsy explained that, when the family learned of Dave’s dire health situation, it became “go time” for succession planning.

Utilizing outside resources for succession planning The Next Generation Institute® program includes sessions that explore personalities and communication, target dates, training needed for the next generation, assembling advisers for the company, contingency plans, the value of legal documentation, remaining competitive during a company transition, business valuation, legal and tax topics, and creating and sharing the succession plan.

According to the website for the Next Generation Institute® at the University of Cincinnati, “To implement a successful ownership and leadership succession, businesses must address four key factors: 1.

2.

3.

4.

Know their strengths, weaknesses, personal characteristics and development needs.

Recognize the issues and problems that affect the successful ownership transition.

Understand proven time-tested processes to deal with these issues and problems.

Have knowledgeable, expert peers, mentors or advisers that understand the specific situation so that they may provide grounding advice and support throughout the process.”

For Betsy, participating in this program was beneficial, “so everybody was on the same page, and any issues that might need to be dealt with could surface.” The program also offered a chance for the younger generation to meet other family business owners in the area. “It was nice to work with other people who were in a similar situation and get to know other locals,” said Betsy.

The Newman family gained from their participation. “Next Generation Institute® created a framework and support to have important conversations about transitioning the business,” Betsy said. “It also set out a clear path to follow.”

As a result of the senior Newmans’ careful planning and the family’s participation in the Next Generation Institute® program, the younger Newmans were prepared when Dave passed away in 2013. Bonnie Newman became CEO, and the family hired a former vice president of sales to help run the business for a few years, but David and Betsy then took over the day-to-day responsibilities. When Bonnie died in 2018, the siblings assumed full control and responsibility for the business, with David as president and Betsy in the vice president’s chair.

Betsy noted that shouldering responsibility for a large staff of employees was initially stressful, but the transition has been a solid success. “We were ultimately well prepared to make sound decisions for the business. Things are going very well; we are hitting and exceeding sales projections,” said Betsy, adding, “We also are fortunate to have some great long-standing employees who help to make sure we stay on the right path.”

For owners of family businesses, it’s never too early to start planning for the company’s succession to the next generation.

Conversely, it’s never too late to get help in making a successful transition. 

For more information on Next Generation Institute®, visit https:// business.uc.edu/faculty-andresearch/research-centers/goering/ institutes/ngi.html. A list of statespecific succession planning resources also is available on the Next Generation Institute® website, listing centers across the US that offer local education and advice. www.arpminc.com 11

LEGAL

Five Steps to Better Supply Agreements

by H. Alan Rothenbuecher, partner, Benesch, Friedlander, Coplan & Aronoff LLP

S

upply agreements serve as the lifeblood of many manufacturing companies. These agreements outline the terms and conditions controlling the supply of goods and services between various parties. Without this framework, many businesses could not meet the pressing demands of the modernday marketplace.

With so much riding on these agreements, savvy business professionals must pay particular attention to agreement terms.

Failure to critically think through options and deal terms often leads to lost profits and liability concerns over the life of a supply agreement.

for the sale of goods, it is essential that the parties negotiate and document the quantity of goods to be purchased.

A written quantity term is the only term that must appear in a contract for the sale of goods. A written quantity term need not be expressly set forth as a number. It is sufficient that there is a writing, signed by the parties, from which a quantity can be determined, even if doing so requires reference to evidence outside of the document. For example, a quantity term may be expressed as the requirements of the buyer or the output of the seller.

3.

Duration and early termination

Parties to a supply chain contract can mitigate their risk by following certain best practices. While no provision in a contract should be overlooked, the five areas discussed in this article are the most important for risk management strategies.

1.

Critical commercial terms

The first step in drafting any supply chain contract is to ensure that the written document captures all critical commercial terms of the parties’ agreement. Failure to clearly and concisely document the commercial terms of an agreement is an invitation for future misunderstandings and disputes. Failure to agree on a particular term (with the exception of quantity) is not automatically fatal to a contract.

In the absence of an express agreement between the parties on a particular term in cases involving the sale of goods, the Uniform Commercial Code (UCC) permits courts to “fill in the gaps” by reference to default rules and sources such as the prior course of dealing between the parties and usage in the trade. However, if the lack of agreement between the parties on commercial terms is sufficiently pronounced, a court may find that there never was a meeting of the minds between the parties to form any contract at all.

2.

Quantity

The most critical term in any contract for the sale of goods is the quantity term. It defines both the volume that the buyer is committing to purchase and the volume that the seller is committing to supply. To achieve a binding contract 12 Inside Rubber // 2019 Issue 4

When parties are negotiating a supply chain agreement that they intend to apply on an ongoing basis, the parties must agree on the duration. Absent an agreed duration, a contract may be terminated by either party upon reasonable notice. A seller who may be making a significant investment of capital and resources to supply a product will want to make every effort to lock in a long-term commitment from the buyer.

Related to the issue of duration, parties must consider the impact of provisions that provide a right of early termination. An early termination provision can have significant financial consequences for both the buyer and seller. A party that thinks it is locking its customer or supplier into a long-term agreement will risk losing the benefits of that agreement if it does not pay close attention to early termination provisions. If the contract includes early termination provisions, the parties should consider addressing in the contract the financial consequences of an early termination.

For example, sellers should negotiate for the right to recover unamortized capital expenditures incurred in connection with the agreement.

4.

Warranties and disclaimers

Warranties are the promises a seller makes regarding goods or services being provided to the buyer. Supply chain contracts typically include express warranties. In addition to these express warranties, the UCC may supply a number of implied warranties that will be considered part of the contract unless they are disclaimed. The most well-known examples of implied warranties are the implied warranty of fitness for a page 14 

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particular purpose and the implied warranty of merchantability under the UCC. When negotiating a supply chain contract, buyers should seek to obtain the broadest warranties possible. On the other hand, sellers should strive to limit the warranties they give. When possible, sellers also should seek to disclaim any implied warranties under the UCC. Any such disclaimer must be conspicuous. A disclaimer buried in the proverbial fine print runs the risk of being held unenforceable.

5.

Limitation of remedies and damages

Both buyers and sellers should pay close attention to any limitation on remedies or damages contained within the agreement. Although limitations of damages and limitations of remedies share a common goal – shifting of risk – they are different concepts. A limitation of remedy is a tool, most often used by sellers, to reduce the remedies that a buyer may be entitled to in the event of a breach. The most common example is a provision limiting the buyer’s rights to “repair or replacement” of any defective goods. A seller that wants to include such a provision in its contracts should take steps to ensure that it is, in fact, willing and able to stand by its offered remedy. If the remedy is found to have “failed of its essential purpose,” it will be deemed unenforceable.

In contrast, a limitation of damages seeks to mitigate risk either by capping the damages that may be awarded for a breach or by eliminating certain categories of damages altogether. Buyers and sellers must carefully consider the risk-shifting implications of limitations of remedies and damages.

Conclusion The supply chain in the manufacturing industry is fraught with risk. Manufacturers can mitigate risk by following best practices when drafting their supply chain contracts. The areas discussed here are critical for risk management. These areas should be the focus of any company seeking to manage risks.  Building assets and business, and then protecting them from capture by others, is Alan Rothenbuecher’s forte. He has developed a particular experience in the plastics industry (in general) and additive manufacturing (in particular), enabling him to assess business trends and needs, and provide services via alternative fee arrangements. His industry experience has led to Rothenbuecher being selected to act as general counsel for and serve on the board of industry trade associations, such as the Manufacturers Association of Plastic Processors and the American Mold Builders Association. For more information, visit www.beneschlaw.com.

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www.arpminc.com 15

PERSPECTIVE

The Rubber Industry Looks Ahead to 2020

By Dianna Brodine, managing editor, Inside Rubber

I

f you’re trying to get a handle on the US economic outlook for 2020, a quick look at these news headlines from the last two weeks paints a confusing picture:

CNBC:

Economists lower outlook, see rising risk of recession Bloomberg: Are We Heading for Recession? These Surging Stocks Point to No Fortune: Management Insiders Forecast a 2020 Recession Financial Times: Policymakers’ Fears of a Global Recession Grow Business Insider: The market’s favorite recession indicator has stopped flashing red Despite the mixed opinions on the country’s economic future as touted by the headlines, the national unemployment rate sits at its lowest rate in 50 years (3.5%)1 and US employment is expected to grow by 8.4 million jobs over the 10-year period from 2018 to 2028, an annual growth rate of 0.5%2. The S&P 500 is flirting with record highs3, driven in part by the fact that the US and China are (finally) close to a trade deal.4 Not all of the news is encouraging, however. That employment growth rate I mentioned is actually slower than that of the previous 10-year period, and the same report says manufacturing employment will decline rather than increase – and, in fact, manufacturing employment numbers were down in September.5 September’s report from the Institute of Supply Management showed decreases in the Production Index, Employment Index and Supplier Deliveries Index. Plastics & Rubber Products is one of 15 segments (of 18 manufacturing categories) in the Production Index that reported a contraction.6

It’s enough to make your head spin, so – instead of relying on the experts in Washington DC or those watching the markets in New York City – Inside Rubber turned to the experts within the rubber industry… the suppliers who provide goods and services to processors across the US and globally. What are they seeing and hearing when their companies talk with customers? And, where are the opportunities for US rubber processors in 2020?

The contributors Stan Sadon is the operations manager at Akron Rubber Development Laboratory, Inc. (ARDL). ARDL employs 100 technical experts and technical support staff, serving all aspects of the rubber and plastics industries, including automotive, aerospace, medical, precision-molded goods and oil field/energy, among others. ARDL is helping processors understand the highly technical applications of rubber and plastics in industry, as well as complex failure analysis and problem solving.

Russ Burgert is the service manager for Maplan Rubber Machinery USA. Maplan began doing business in 1970 and currently employs about 250 people worldwide. The company remains family owned, and its employees build and deliver nearly 300 machines a year to customers in the automotive, o-ring and sealing technology, oil and gas, and medical markets. While 49% of Maplan’s business mix is in automotive technology, energy

And, of course, 2020 is a 15 of the 18 subcategories in the ISM Purchasing Managers Index showed a decline in presidential election year in the US, which always brings its own September 2019, including Plastics & Rubber Products. brand of uncertainty.

16 Inside Rubber // 2019 Issue 4

production and distribution has been a rising market, primarily due to recent natural disasters that have destroyed infrastructure in the southern US. Joe Keglewitsch is a partner with Ice Miller LLP, a full-service law firm with more than 340 legal professionals in eight offices.

Keglewitsch has extensive experience in manufacturing, particularly in the areas of rubber and plastics. Ice Miller has observed increases in transactional practices, meaning real estate, corporate and business law, and mergers and acquisitions. “If we’re the canary in the coal mine,” he said, “this activity has been an indicator that the economy is going well.”

Keeping up with technology advances No matter the industry, developments in equipment technology and materials are accelerating rapidly. Machine producers must move quickly to upgrade existing equipment and develop new technology that can keep up with increased production demands, while also meeting the needs for energy efficiency, reduction of downtime and reduced scrap levels. Materials development is moving just as quickly to create bio-compatible, environmentally friendly compounds while also dealing with a reduction in the availability of industry standards such as carbon black. Keeping up with these changes can be challenging – and costly.

“Right now, we have a big technology swing in the industry as it relates to machine controls,” said Burgert. “As the technology keeps moving forward, we have a huge number of customers who are wondering what to do with their older machines. Maplan has started offering rebuild and control packages to help ease that strain for customers who would prefer to upgrade, but we’re also bringing out new machines for those who have an interest in upgrading technology.”

to replace some of the traditional knowledge that leaves a plant when a key employee retires and to assist with training.

“Obviously, the loss of technical people is an industry-wide problem,” said Burgert. “There’s nobody out there to replace them, so Maplan has taken a bigger role in helping our customers.

First, we’ve gotten more active in selling training packages so our customers have someone to step in and teach those newer employees. And, we developed a diagnostic system called Map. remote where I can dial into a machine and see what the problems might be in the part or processing area. We are using technology to revamp how we reach out and talk to our customers, because we’re taking on more of our customers’ engineering tasks.”

Sadon agreed that the gap in technical knowledge and hands-on expertise is affecting the rubber industry as senior level technical workers retire – and his own company isn’t immune to the challenges associated with bringing in new employees. “ARDL has hired some brilliant young minds, and they are being mentored by our most senior experts,” he said.

“Additionally, ARDL continues to expand its technical training programs, workshops and educational outreach initiatives to help customers and the industry build a solid foundation for tomorrow’s rubber industry professionals. With that goal in mind, ARDL has included a 100-person training center in the design for our recently-opened 136,000 square foot laboratory.”

Current coursework available includes Adhesion; Basic Rubber Compounding; Compound Design, Problem Solving and Failure Analysis in the Rubber Industry; and Rubber Compound Design, Testing and Warehouse Storage.

Solving sustainability issues

Addressing the skills gap

The plastics industry is taking a public relations hit these days, but it hasn’t been so long ago that the tire industry was in the spotlight for its recycling initiatives – or lack thereof. Where some in the industry see roadblocks, Sadon sees progress.

“Innovation is a huge opportunity in the rubber and plastic industries right now,” he said. “ARDL is seeing customers pushing the limits of recycling and developing environmentally sustainable raw materials, manufactured goods and production processes. Not a day goes by without another article being published discussing rubber and plastics goods breaking down and entering our waterways and food chains. It is exciting that so many people are thinking long term and trying to solve these problems, and we’re proud to be assisting their efforts.”

It’s no secret that the biggest challenge facing manufacturing is the recruitment, retention and training of skilled operators.

It’s a story this magazine (and every other publication) has covered extensively: long-term employees with technical skills are approaching retirement age in droves and there are too few young people with a desire to make their careers in the trades.

Retention of current employees and an intensive training program for new employees have become the focus in operations across the country. Industry suppliers also have been stepping in, both

Maplan also is making award-winning strides in the sustainability arena. “We opened a new factory in Austria,” said Burgert. “It’s unique in that we won Austria’s Green Factory 2018 award – meaning Maplan’s new headquarters was named the number one green plant in all of Austria.” The award is part of an annual competition organized by the Fraunhofer Austria Research group.

The group cited Maplan’s commitment to saving energy as a key factor in receiving the honor.

Assessing the ways that developments in resins and additives can change the qualities of the final product is crucial, too, which means rubber processors must dive deep to understand the properties of new materials. “The breadth and depth of knowledge and experience within ARDL’s technical team allows us to quickly jump into any scenario,” said Sadon. “We can confidentially and professionally test and solve problems from our laboratories in northeast Ohio, which includes the ability to reverse-engineer rubber compounds and develop new ones.”

page 18 

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PERSPECTIVE  page 17

Finding reshoring opportunities The cover of the Reshoring Initiative’s 2018 Data Report proclaimed, “A Record 1,389 Companies Announce the Return of 145,000 Jobs.” The report went on to say, “About 60% of companies decided to offshore based on comparing wage rates, ex-works prices or landed costs. Much of the strength of the reshoring trend has been due to companies becoming familiar with a broad range of factors (costs and risks) they had previously ignored.”

Burgert cited those risk factors when he said Maplan has seen an increase in reshoring within the rubber processing industry. “There’s a great success story about a guy making dog toys in China,” he said. “The man had never made a rubber S&P 500 stock market index since 1980, courtesy of Macrotrends part in his life because his production Burgert pointed out another political twist that is sure to influence was all outsourced, but he started to get nervous about what 2020: the presidential election. “It feels as if it’s way too compounds and fillers the dogs might be ingesting when they early, but the election already is starting to weigh into decision chewed on the product he was importing. Ultimately, he bought making,” he said. two pieces of equipment from us and now is producing the dog toys in North America.”

Increasing potential for acquisition growth

Burgert continued, “Reshoring is a definite industry trend, and it’s because companies want to control their production factors in-house versus sending it overseas.”

Wading through political and economic uncertainty Whether or not a recession looms is dependent upon which economic factors are being assessed – and possibly which day it is – but the feeling that a recession is imminent is definitely weighing on the rubber industry.

“The thing that is true for us and for our clients is that there seems to be a general uncertainty,” said Keglewitsch. “There seems to be an expectation that the economy is going into a lull, if not a recession – which is interesting because when I attend industry events, everyone says things are going well … and then follows that statement with the word ‘but.’ Despite the objective indicators, there’s an expectation a cyclical downturn is inevitable.”

“I think the trade dispute and tariff issues have made people nervous,” he continued. “We have helped manufacturers with the issues in navigating the tariffs in China. That consists of updating people as the situation changes, because it’s been very fluid and it’s hard to keep track of the political winds. No one seems to know what’s going on. There also are some exemption processes to apply for, and we help clients navigate those. The rules quickly change, so our job is to help clients interpret the current landscape.”

18 Inside Rubber // 2019 Issue 4

If a recession is on the horizon, it may be hard to find a bright side, but Keglewitsch pointed out an opportunity for manufacturers that are looking to grow. “The mergers and acquisition climate has been very seller friendly over the last few years – maybe even problematically so,” he said. “If there’s a turn in the economy, it will become a more buyer-friendly environment. Then we’ll have an opportunity for companies to grow, acquiring product lines and production capacity at a lower cost and with less competition than currently exists.”

When looking a couple of months into the future, it’s clear that 2020 will see the continuation of old challenges (training and employment issues) and new ones may be developing (economic uncertainty), but opportunities remain for the rubber industry.

And, there are suppliers standing by to help their customers weather the storm and take advantage of the potentials for growth.  References 1. https://www.cnbc.com/2019/10/04/jobs-report---september-2019. html 2. https://www.bls.gov/news.release/ecopro.nr0.htm 3. https://www.bloomberg.com/news/articles/2019-10-24/asia-stockfutures-mixed-amazon-weighs-on-tech-markets-wrap 4. https://www.cnbc.com/2019/10/25/us-trade-representative-says-usand-china-are-close-to-finalizing-some-sections-of-trade-deal.html 5. https://www.bls.gov/web/empsit/ceshighlights.pdf 6. https://www.instituteforsupplymanagement.org/ISMReport/ MfgROB.cfm?SSO=1

SAVE THE DATE Two great events presented by Rubber Division, ACS! April 28 - 30, 2020

197th Technical Meeting

Embassy Suites by Hilton, Cleveland Rockside; Independence, OH Featured topics:

• 3D Printing with Elastomers • New Reinforcing Materials for Rubber • Fracture Mechanics of Elastomers, Networks and Gels

• Sustainability Developments in the Tire Industry • Advances in Polymer Blends • Computational Chemistry

Visit rubber.org for details about this meeting.

October 20 - 22, 2020

International

Elastomer Conference featuring the Expo, 198th Technical Meeting & Educational Symposium

Knoxville Convention Center • Knoxville, nox TTN Interested in exhibiting? Visit rubberiec.org today!

REVIEW

Annual Benchmarking Conference Brings the Industry to Indianapolis

T

he rubber and plastics industries converged in Indianapolis in October for the Benchmarking & Best Practices Conference. More than 600 attendees gathered for an intense two days of education, inspiration and sharing with their peers and suppliers to the industry.

Speakers in the main ballroom broadcasted their impactful, businesschanging messages to a full house.

ARPM Executive Director Troy Nix was first on the stage, sharing a personal message about how beliefs influence behavior. Focusing on the principles of 4DX and framing the work ahead as a battle to be won, Franklin Covey’s Chris McChesney spoke about the execution challenges faced by senior leaders and told attendees that getting out of the day-to-day 20 Inside Rubber // 2019 Issue 4

whirlwind would allow them to achieve more. Tim Reisterer provided strategies for winning and keeping customers, and Kirk Weisler reminded attendees that creating relationships is an essential part of culture creation – and recognizing the skill and dedication of the employee base is step one.

Kina Hart offered an emotional reminder of the importance of safety in manufacturing facilities, silencing the room with her story of the tragic errors and critical omissions that led to the loss of her arm on the first day of a summer job. Sports author Ross Bernstein was the final speaker on the main stage, closing the event by relating stories from the athletic world to situations within the business world to provide an understanding of how

accountability and integrity influence success.

But, as always, much of the value of the event was found in the breakout sessions. Industry peers shared their own experiences with recruitment and retention strategies, managing underperforming customers, improving the request for quote (RFQ) process, implementing cobot automation, launching new programs and surviving an OSHA inspection. In fact, more than 50 members of the industry spoke to their peers in operations, human resources, sales and marketing and leadership positions.

The Benchmarking and Best Conferences event will return to Indianapolis, October 20-22, 2020. ď ľ

“

WE’RE WILLING TO TAKE RISKS TO AVOID LOSS, BUT WE AREN’T WILLING TO TAKE RISKS TO MAKE POSSIBLE GAINS. – Tim Reisterer

”

Opposite page: ARPM Executive Director Troy Nix kicked off the event by reminding attendees that what they focus on dictates how they perform.

From the top left, clockwise: Chris McChesney discussed organizational change through the 4DX process.

Tim Reisterer said the key to winning new customers lies in getting them to understand what they lose by staying with their current provider. Kina Hart silenced the room with a plea to emphasize workplace safety processes.

Interactions with fellow attendees and suppliers added value. Breakout sessions gave industry peers the chance to share organizational success stories that can impact others.

Photos courtesy of Cliff Ritchey Photography

www.arpminc.com 21

MARKETS

Silicone Elastomers to Reach Highest Global Consumption Rate in 2019 Provided by Smithers

S

ilicone elastomers will reach a 2019 global consumption of nearly 500,000 metric tons; it’s a first for the industry, according to data from Smithers’ report, The Future of Silicone Elastomers to 2024.

The market for silicone elastomers is expected to grow at a rate of 6.2% year-on-year during the next five years, reaching a global total of 670,000 metric tons in 2024.

Growth factors High-temperature vulcanization systems (HTV) still are the most important silicone processing method, taking up more than 50% of the market share from 2019 to 2024. However, this processing method will experience sluggish growth across the next five years. In contrast, liquid injection molding (LIM) is growing at a faster rate due to the ease of processing this method offers.

Vinylmethyl silicone (VMQ) continues to be the leading polysiloxane used in the production of silicone elastomers, as can be seen from the following figure. This is due to its broad property range and its favorable price.

Through 2024, demand for siloxane-based elastomers is expected to rise. Their strong heat and chemical resistance will drive use

“

DEMAND FOR SILICONE ELASTOMERS WILL CONTINUE STRONG GROWTH, PARTICULARLY FOR THE AUTOMOTIVE AND MEDICAL SECTORS.

”

22 Inside Rubber // 2019 Issue 4

of poly-trifluoro-vinylmethyl siloxane (FVMQ) formulations.

Simultaneously, the continued transition to LED lighting systems will heighten demand for poly-phenyl-vinylmethyl siloxanes (PVMQ) because of their combination of high refractive index and high temperature resistance.

Industry demands Demand for silicone elastomers will continue strong growth, particularly for the automotive and medical sectors. The fully electric vehicle’s arrival largely will impact future automotive demands, making this the third fastest growing end-use segment between 2019 and 2024. Batteries need encapsulation, and silicone elastomers offer the best solution. Electrical and electronic applications also will impact demand.

The current demand in the automotive industry is for a combination of high-heat and chemical resistance, especially for under-the-hood hoses, particularly for diesel-powered engines.

Silicone elastomers have a relatively large share of this hose market, which is attractive to suppliers of acrylate elastomers, among others.

Demand in the medical sector will be less dramatic, but still relatively strong, particularly for applications such as catheters.

Applications for high-performance elastomers in the sector are otherwise diverse. They include anesthetic tubing, body contact electrodes, prosthetic or surgical implants, and even pressuresensitive adhesives for transdermal drug delivery. Medical devices and components are required to be produced under the ISO 13845 standard.

expectations based on 2017 production rate, the US achieved an increase in automotive production in 2018 of 1.1%. Mexico also increased its production over the same period, but only by 0.1%. However, Canada did less well, compared to 2017, with a significant reduction of 7.9% for 2018. ď ľ For more information on this Smithers market report, download the brochure at https://www.smithers.com/services/marketreports/materials/the-future-of-silicone-elastomers-to-2024.

Many healthcare applications require a high level of transparency, meaning there is a large demand for silicone elastomers. Other key properties of silicone grades – high purity, heat and gamma radiation resistance, and being patient-friendly – make these the most widely used elastomers in this category.

Packaging is another area of growth, especially for head-stand closure valves where silicone elastomers offer a serious long-term solution.

Regional trends Asia is the fastest-growing regional market, expanding at a rate of 7.3%. China, specifically, will have a market increase of 9.5%, making it the key national boom market through 2024.

All of the remaining regions will see a reduced market share, despite an overall growth in their silicone elastomers market.

A contribution to this trend likely is to be difficulties in acquiring sufficient quantities of silicone elastomer basic raw materials.

The United States dominates use of silicone elastomers in North America. US consumption is governed as much by its automotive market as its medical, food and hygiene markets. It has the advantage of two major silicone elastomer producers (Dow and Momentive), as well as several minor producers. In addition, Shin-Etsu, a Japanese company, produces silicone elastomers in the US. The presence of Silicon Valley ensures that the electric and electronic market sectors also are well served. The US also enjoys very strong construction, building and civil engineering markets.

E-mobility investments also are high in the US, with Ford and General Motors presenting a very broad range of electrically powered vehicles. Contrary to previous www.arpminc.com 23

INDUSTRY Americhem Breaks Ground for Plant Expansion Americhem, Cuyahoga Falls, Ohio, a designer and manufacturer of custom color masterbatch, functional additives, engineered compounds and performance technologies, has announced the groundbreaking for its Morrisville, Pennsylvania, plant expansion. The 60,000 sq. ft. expansion will include an isolated “clean compounding” room with up to six new compounding lines. This clean environment, coupled with Americhem’s ISO 13485 certification, formulation control, change management procedures and regulatory support documentation, gives Americhem unique capabilities to produce compounds that meet the most stringent medical device requirements. For more information, visit www.americhem.com or call 800.228.3476.

ChemSpec Announces Exclusive Agreement for Carbon Black Uniontown, Ohio-based ChemSpec, Ltd., a chemical distribution firm, has announced an exclusive distribution agreement with Himadri Speciality Chemical, Kolkata, India. ChemSpec will distribute Himadria’s ASTM and specialty carbon black products in the US and Canadian tire markets and the US rubber market.

Himadri is the only integrated carbon black producer and offers a portfolio of quality carbon blacks, including Klarex “clean” specialty carbon blacks. For more information, visit www. chemspecltd.com.

ACE Products Introduces DMA Testing Capabilities, Leadership Promotions Rubber and silicone consultant and laboratory ACE Products & Consulting, Ravenna, Ohio, has added Dynamic Mechanical Analysis (DMA) testing to its lab capabilities. DMA measures the mechanical properties of a polymer-based material as it relates to temperature, time, frequency, stress or a combination.

The unit, from Ueshima, represents the latest in innovation for DMA testing through its high efficiencies, ThermoJetter technology and multiple sample autoloader. The tire industry uses DMA to measure rolling resistance, durability and traction.

Business Development Manager Frank Pappas said that while DMA analysis is of particular interest in the tire industry, it is also a prevalent test in elastomer rubber products, and other applications – such as films, adhesives and plastics – can benefit from the data drawn from the test.

at BF Goodrich, and as owner and CEO at Portage Precision Polymers, where he initially met ACE’s Erick Sharp. Frank Pappas joined ACE in February of 2019. In his new role, Pappas will oversee all company sales and customer development. Doug Foster joined ACE during the company’s move to its Ravenna facility. In this new role, he will oversee all daily operations of the laboratory. For more information, visit www.aceprodcon.com.

Smithers Unifies Under One Brand Smithers, Akron, Ohio, a provider of testing, consulting, information and compliance services, announced the launch of a single brand identity, refreshed logo, new tagline and a streamlined web presence. Smithers commemorates nearly 100 years with a new tagline: Innovate with Confidence.

To streamline the client experience and strengthen its global brand presence, Smithers bids farewell to its legacy brands (Smithers Apex, Smithers Avanza, Smithers Pira, Smithers Quality Assessments, Smithers Rapra, and Smithers Viscient).

The shift to a single brand will make it easier for clients in any industry to discover the full breadth of services Smithers offers throughout the entire product development process. Smithers has grown by investing in new technology, and it currently has laboratories and operations in North America, Europe and Asia.

For more information, visit www.smithers.com.

James Heal Extensometer Stretches to Accommodate Testing James Heal, a United Kingdombased manufacturer of textile testing instruments and consumables, has launched the Extensometer and Titan5e instrument. Alongside the existing Titan10, these developments mean James Heal can supply both 5kN and 10kN Universal Testing Machines fitted with a long stroke contact extensometer – ideal for manufacturers in the vulcanized rubber and thermoplastic elastomers markets.

The instruments are versatile enough to test a wide range of materials, from tires, conveyor belts, hoses and bowling balls to shoe soles, medical catheters, roofing materials, sealing rings and vehicle tracks.

The long stroke contact extensometer is ideal for strain measurements of elastomeric materials. The

In addition, the company has announced the retirement of Sales and Marketing Director Doug Hartley and the promotions of Frank Pappas as director of sales and business development and Doug Foster as director of operations.

Hartley served the rubber industry for more than 46 Pappas Foster Hartley years, beginning 24 Inside Rubber // 2019 Issue 4

close up

software is pre-loaded with rubber test standards from ASTM and ISO, as well as a library of other material testing standards. For more information, visit www.james-heal.co.uk.

Grand River Announces Keith Wyatt as Chief Operating Officer Grand River Rubber & Plastics, a lathe-cut gasket and vacuum cleaner flat belt manufacturer in Ashtabula, Ohio, announced the selection of Keith Wyatt as its new chief operating officer.

Wyatt brings extensive knowledge of product development and custom engineering in the industrial rubber products and plastic resins markets. He will be responsible for operations throughout the company’s three product lines. Wyatt has held a variety of senior operations management positions, including vice president of global supply chain and chief operations officer at Enviroplas, Inc., and executive vice president of operations and information technology at Jasper Rubber Products. He holds a bachelor’s degree from the University of Evansville and professional certifications from the University of Chicago Booth School of Business. For more information, visit www.grandriverrubber. com.

Collaboration Brings New Colors to Dow’s 3D-printable LSR A collaboration among Midland, Michigan-based chemical company Dow, Nexus Elastomer Systems and German RepRap enables designers to 3D-print colored parts using Dow’s SILASTIC™ 3D 3335 liquid silicone rubber (LSR) and companion color packs from Mesgo Iride Colors. Dow’s 3D-printable LSR comes in a range of colors thanks to this collaboration, which has linked Nexus’s new color dosing system with German RepRap’s liquid additive manufacturing (LAM) 3D printer.

SILASTIC™ 3D 3335 Liquid Silicone Rubber is very transparent, enabling users to design and produce parts for applications where clarity and transparency are vital attributes.

The final performance is virtually the same, regardless of the color chosen. Potential applications include mobility and lighting, wearable devices, consumer electronics and custom footwear. For more information, visit www.dow.com.

advantage Practical Advice for the Rubber Industry Ice Miller focuses on meeting the needs of our clients quickly, efficiently and cost-effectively. Ice Miller attorneys with rubber industry experience can assist with your greatest legal challenges.

Contact Josef Keglewitsch at 614-462-2279 or josef.keglewitsch@icemiller.com for more information.

100+ lawyers from Ice Miller recognized by Best Lawyers in America®

icemiller.com

300+ lawyers in Columbus and other offices

Ice on Fire

www.arpminc.com 25

MARKETING

How Marketing Impacts Talent Recruitment

by Shelly Otenbaker, president, WayPoint Marketing Communications

P

eople are always on the move, and that’s especially true in their careers. One often-cited study1 from the Bureau of Labor Statistics found that, on average, a person will change jobs 12 times during his or her career. And in 2018, the Bureau of Labor Statistics reported that the median employee tenure2 was 4.3 years for men and four years for women.

The data tell a clear story – at any given point, there’s a substantial population of people looking for their next job opportunity.

Think it’s different in this industry? Think again. Rubber processors frequently indicate that recruiting and retaining talent is a top challenge in their organizations.

So, obviously talent management is a challenge, but what are companies doing in response? Do they have a talent strategy in place? Are they preparing for the future workforce? Are they leveraging marketing for talent attraction?

Marketing is more than business development It is a common myth throughout the industry that marketing is exclusively for business development. In reality, a company’s marketing activities are among the most effective tools in talent acquisition. And, websites often are the front-line marketing presence that is most visible to those seeking to learn more about a potential employer.

During the search process, job seekers will most certainly visit your company’s website to learn about the culture, leadership and major initiatives or projects. Because of this, your website should serve as the foundation of recruiting activities. Why? Because if the job seeker’s experience doesn’t align with your desired brand identity, you’ve potentially lost a qualified candidate – or, worse yet, you’ve contributed to a negative perception of your company that could be shared with others.

What does this mean in terms of employee recruitment? At the most basic level, it means you can’t afford not to have a website or to just “get by” with a generic website that is not built with your target audience in mind. More specifically, it has become imperative for a company website to have a careers section that is easily discoverable, informative and built with the user’s experience in mind.

26 Inside Rubber // 2019 Issue 4

To do this, you need enough information to convey your company’s story (e.g. define your company’s culture, differentiators that set your company apart from competitors, anecdotes from employees). Keep in mind, this will be difficult to do without well-defined key messages about your company, which will help you effectively attract the “right” people for your organization.

Put yourself in the job seeker’s shoes When looking for a job, people typically search for a specific job title, type of company or industry and experience level. Thus, each of your job openings must include this information in the title tags. An example would be: Assembly Operator (Title) – Entry-Level Jobs (Experience Level) | ABC Rubber (Name of Company) – Rubber Industry (Industry Type) Each posting also needs to be organized with a job seeker’s intentions in mind. If you were looking for a job, what would you hope to see in a job description? This commonly includes the purpose of the position, day-to-day and overarching responsibilities, necessary skills and experience, and applicable company information.

But, their attention doesn’t stop at your website. That’s just the beginning. In 2020, 50% of the US workforce will be made up of millennials, and studies indicate that 73% of millennials use social media to find a job. This means your shop should not

just utilize social media but have a social media strategy that leverages the outlets that best match your desired talent pool.

and on-site show activities that will drive potential, qualified candidates to you.

Your social media activity should be utilized to communicate your company culture, key news items related to your business, community initiatives and any other information that would help job seekers determine if they would like to work for your company. Because everyone – including all of your competitors – is looking to hire talent, help your company stand out from the rest by allocating budget to promote job postings on social media.

To manage the changing workforce and to close the talent gap, it is critical for leadership to take action. All too frequently, marketing and communications are pushed aside and not considered an important part of business development and talent acquisition.

Companies that don’t change this mindset are at risk of falling behind. If not already there, invite human resources to the leadership table and ensure a talent acquisition and management strategy that includes marketing be put into place. 

Job boards, such as Indeed and Glassdoor, represent another tool the next-generation workforce uses to identify job opportunities and research the companies posting them. Consider having a presence on these and other job boards: The good news is that a Glassdoor profile is free.

Now, let’s talk about tradeshows. These often are a missed opportunity for recruiting. If your company is participating in an industry event, don’t pass up this prime opportunity to reach potential talent at all levels – from apprentices to experienced professionals. But, as with most things, you can’t just roll in and think the candidates will flock to your exhibit. You need to develop and implement a strategy that focuses on pre-, post-

References 1. US Bureau of Labor Statistics’ National Longitudinal Survey of Youth 1979, https://www.bls.gov/news.release/pdf/nlsoy.pdf 2. US Bureau of Labor Statistics’ Employee Tenure Summary, https://www.bls.gov/news.release/tenure.nr0.htm

Shelly Otenbaker is the president of WayPoint Marketing Communications, a Metro Detroit-based agency that partners with small- to -medium-sized businesses to help them reach their goals through smart, well thought-out marketing strategies. For more information, call 248.506.6696 or www.waypointmc.com.

Reprinted with permission from Plastics Business.

www.arpminc.com 27

MEMBER NEWS

ARPM Honors Member Champions with Educational Outreach Awards The Association for Rubber Products Manufacturers honored three member champions with the ARPM 2019 Educational Outreach Awards. Coinciding with Manufacturing Day, these awards recognize those ARPM member companies that have made a significant impact in the promotion of a career in rubber manufacturing.

Awards this year were distributed to the following three honorees:  1st Place: Blair Rubber Company, Seville, Ohio  2nd Place: Custom Rubber Corp., Cleveland, Ohio  3rd Place: Bruckman Rubber Company, Hastings, Nebraska Through strategic partnerships with schools, programs and/ or students, these awardees all have made significant efforts to increase interest, raise awareness and build skills within the rubber manufacturing industry.

Scholarships will be awarded for first and second place, in the amounts of $750 and $250 respectively, which will go to the recipient’s educational institution or program of choice. ARPM congratulates the 2019 Educational Outreach Award winners and extends a special thanks to all who participated in this year’s award program.

ARPM Welcomes Two New Members The following companies have joined ARPM. The association welcomes these new members.  HiTech Piping Ltd. – Pointe-Claire, Quebec, Canada  Real Seal Company – Escondido, California

ARPM Releases Technical Guidance Document for State of Cure ARPM has released its newly created SP-913 Technical Guidance Document for State of Cure. This publication was

28 Inside Rubber // 2019 Issue 4

drafted and approved by the member representatives of ARPM’s Sealing Technical Committee. The ARPM would like to acknowledge the following member companies for their contributions in the development of this publication: 3M Advanced Materials Division; AGC Chemicals Americas; Amsted Seals and Forming; Akron Rubber Development Labs; Consolidated Metco, Inc.; Fiat Chrysler; Fluid Sealing Science, LLC; Ford Motor Company; Ford Transmission Driveline Eng.; Freudenberg-NOK Sealing Technologies; Grace Technology and Development; SKF Sealing Solutions; The Chemours Company LLC; Trelleborg Sealing Solutions Americas; Zeon Chemicals L.P. and Wacker Chemical.

“This will be the first time that the rubber manufacturing industry has a compendium of vetted and proven methods to address the most important aspect of our manufactured products – their cure state,” said F. Joseph Walker, chair of the ARPM sealing committee, Freudenberg-NOK Sealing Technologies, Global Technology Director, Materials & Laboratory Services. “The direct relationship between rubber’s performance characteristics and the state of cure is of principal importance. Therefore, control of the cure state of manufactured rubber articles provides greater consistency in the performance of the articles during use, thereby improving their quality, and allows for more consistent process control during their manufacture.

“This Technical Guidance Document is an industry first,” Walker continued. “It provides a peer-reviewed series of methods that even the smallest manufacturer can use to measure and control the consistency and quality of their fabricated rubber articles. A document such as this has never before been available and is not available anywhere else. This document should be included in all fabricators’ quality systems, as it conforms to ISO/IEC: 17025 §7.2.1.4 – the only subject-specific document to address cure state methodology. ARPM continues to advance the technical level of our rubber industry through leading publications such as this.”

Keeping with ISO standards, all ARPM technical standards are reviewed every five years to establish if a revision is required to keep it current and relevant for the marketplace. The SP913 Technical Guidance Document for State of Cure and over 100 other technical standards are free for ARPM members or available for purchase on the ARPM website.

Benchmarking Reports Now Available on Vacation Policies, Wage and Salary Vacation Policies Benchmarking Report ARPM collected more than 40 sample vacation policies from manufacturers. This 137-page document includes data regarding policies and procedures from manufacturers, as well as all samples provided by member companies.

Companies looking to update or benchmark their vacation policies are able to review trends and common practices across the industry, as well as review actual policies from other organizations.

Wage and Salary Benchmarking Report This report provides information on more than 60 job titles specific to the rubber industry, as well as additional operational benchmarks. Throughout this report, data are analyzed and broken up in a variety of different ways to allow companies to benchmark their operations against others. To help rubber companies quickly understand particular baseline data points specific to their organization, this report includes a breakdown by annual sales revenue category with data points and analyses located throughout the report.

These ARPM Benchmarking reports are available for purchase on the ARPM website.

ARPM Unveils New Training Module: Job Setup and Production Flow ARPM has added new content to its rubber manufacturing training curriculum. Users now can take a training course related to Job Set-up and Production Flow. The job set-up process involves installing the mold into a press and other tasks to prepare the press for molding a specific part. The job set-up process is closely related to the production process, during which parts are made.

Other topics included in the ARPM training library are Orientation to Rubber Manufacturing, Introduction to Nonmolding Operations, Quality, Pyrometers and more.

content, all in a very engaging format promoting mastery in each skill set.

The new training program is open to all ARPM members at a significant discount. For more information on the program, visit https://arpminc.com/resources/training or email info@arpminc. org.

ARPM Provides Update on its Board of Directors ARPM would like to sincerely thank outgoing board members Tim Jarvis, director of North American Manufacturing, Continental Contitech, and Tom Pitstick, senior vice presidentInnovation, Gates Corporation, for their years of service to the association and the industry. ARPM is grateful to Jarvis and Pitstick for their past guidance and looks forward to the new leadership.

Beginning in 2020, ARPM will welcome seven new board members: • Travis Turek, Bruckman Rubber • Donovan Lonsway, BRP • Doug Gilg, Continental ContiTech • Chris Buhlmann, Gates Corporation • Matt Lockard, HBD Industries • Russ Burgert, MAPLAN • James Wideman, MBL Corporation

ARPM Young Professionals Network Seeks Members ARPM’s Young Professionals (YP) Network is dedicated to bringing together the innovative, creative and dedicated young professionals from across all ARPM member companies. The Young Professionals Network is composed of up-and-coming leaders from all over the country and in all areas of business.

The YP Network hosts events year-round that are exclusively for these young professionals in the rubber industry. Events focus on networking, leadership skills, benchmarking and creating important, lasting connections in the ARPM association.

Interested in signing up or learning more? Email Beth Jeffries at bjeffries@arpminc.org or attend an upcoming event.

Plant Tour Announced for February ARPM has announced a plant tour event on February 20, 2020, at R.E. Darling Co., Inc. in Tucson, Arizona. Watch for more information at www.arpminc.com. 

ARPM Members who sign up for ARPM training through 180 Skills also will gain access to the 180 Skills’ library of more than 700 online, competency-based courses.

This library covers everything from baseline to advanced manufacturing www.arpminc.com 29

BENCHMARKING

Compensation Rises While Hiring Falls for Rubber Manufacturers

By Ashley Turrell, analytics manager, ARPM

W

hen comparing wage data from 2018 to 2019, more than 60% of jobs in the US rubber industry experienced wage increases above the current inflation rate of 1.7%.

Across the board, manufacturing positions averaged an increase in compensation of 3%, according to the most recent Wage and Salary Report published by the Association for Rubber Products Manufacturers (ARPM).

ARPM’s annual Wage and Salary Report analyzed data collected from manufacturing executives and human resources personnel on the reported wages of nearly 60 different job classifications within rubber manufacturing organizations. The 2019 report included data from more than 200 US manufacturing companies across 28 states, representing just shy of 50,000 full-time and part-time employees.

common positions occupied in companies: general manager, engineering manager, human resource manager, information systems manager, maintenance manager, plant manager, purchasing manager, quality manager and sales manager.

Compensation for these nine job functions has increased 3% since last year and nearly 38% (or $231,462) since 2009.

However, employers are not only concerned with rising compensation rates. To help recruit and retain employees,

Annual Total Median Staff Level Salary Trend $900,000.00 $850,000.00 $800,000.00 $750,000.00

Of the nearly 60 job titles analyzed in this year’s report, 25% of the positions revealed a greater than 5% growth in compensation. At the time of this article, the current unemployment rate nationally stands at 3.7%, which means that manufacturers are fighting to hire, train, retain and motivate talented employees. As a result, many roles are seeing substantial increases in wages.

$844,729 – that is number that represents total median annual compensation for a combined staff-level team of the nine most 30 Inside Rubber // 2019 Issue 4

$650,000.00 $600,000.00 $550,000.00 $500,000.00 2009

2011

2013

2014

2015

2016

2017

2018

Annual Employee Turnover Rate 25% 20%

Percentage

Of the positions seeing significant gains, roles such as entry-level technical positions, production schedulers, engineering managers and continuous improvement managers are included. This likely is a reflection of the current labor market.

Manufacturing companies are looking to find workers on the floor to keep operations going, as well as talent to help create process and operational improvements to reduce the amount of direct labor involved and increase efficiency.

$700,000.00

15% 10% 5% 0% <1%

1-5%

6-10%

11-15%

16-20%

Turnover Rate

21-25%

26-30%

>30%

2019

companies are offering more benefits than they have historically and, as a result, overall employment costs are increasing.

According to the data, when compared to just five years ago, there has been growth in the percentage of manufacturers offering health insurance (4% increase), vision (22% increase), dental (11% increase) and employee assistance programs (8%), to name a few. Even more, companies are offering additional merit-based annual pay increases to their teams. This means that employers are investing more into salary and benefits packages than they ever had in the past.

Number of New Employees to Hire 35%

32%

31%

30% 25%

18%

17%

20% 15% 10%

3%

5% 0% 1 to 5

As rubber companies across the country head into 2020 and continue the process of evaluating their compensation packages – both salary and benefits – they should be prepared to update their current offerings to match both mandatory changes in compensation and changing expectations from employees.

With more than 86% of companies looking to hire over the next 12 months (more than 4,500 positions need to be filled within responding companies alone), employers must structure their salary and benefits offerings to appeal to talented candidates.

6 to 10

11 to 15

26 to 30

>30

combat the hiring and unemployment dilemma – as the number of positions manufacturers are looking to hire has dropped more than 25% since one year ago. By staying informed about the most current standards and trends, manufacturers are able to plan more strategically for their hiring, compensation and continuous improvement initiatives.  For more information on ARPM’s Wage and Salary Report or to purchase this year’s report, visit www.arpminc.com.

It is not only finding but retaining employees that remains a top concern: Companies are reporting an average annual turnover rate of 27%, up from 21% one year ago. However, companies may begin looking for automation or process improvements to

“

WITH MORE THAN 86% OF COMPANIES LOOKING TO HIRE OVER THE NEXT 12 MONTHS (MORE THAN 4,500 POSITIONS NEED TO BE FILLED WITHIN RESPONDING COMPANIES ALONE), EMPLOYERS MUST STRUCTURE THEIR SALARY AND BENEFITS OFFERINGS TO APPEAL TO TALENTED CANDIDATES.

”

BECOME A MEMBER TODAY!

www.arpminc.com 31

MANAGEMENT

Five Trends in the World of Environmental Health & Safety

E

nvironmental health and safety (EHS) compliance is becoming increasingly challenging. The scope of EHS activity can include environmental concerns, occupational health and safety, community health and safety, and construction and decommissioning. There are regulations to stay on top of and reporting to submit to a host of agencies including OSHA, EPA, NRC and MSHA at the federal level. Additional requirements at the state and local levels further complicate the job.

The Environmental, Health and Safety (EHS) Summit, hosted by The Association for Rubber Products Manufacturers (ARPM), was held on July 17 and 18, 2019, in Columbus, Ohio. Luke Jacobs, CEO of the environmental software company Encamp, presented “EHS Compliance – Getting Everyone on the Same Page: Managing Multiple Sites.” During his talk, Jacobs discussed five trends affecting EHS management and compliance.

32 Inside Rubber // 2019 Issue 4

1.

Data Disclosure and Transparency

One trend is the growing demand for disclosure and transparency of data. Regulatory agencies are asking for more – and more-detailed – information. “If the government is tracking something,” said Jacobs, “they are getting increasingly eager for clean data sets. And, it is important for businesses to have the data available to show if an inspector comes by.”

Business reporting also is affected, as with the need for a company’s annual report to include complete and accurate information. In addition, customers and other stakeholders want transparency. “There are technological-legal-cultural trends that are going on right now,” said Jacobs, “where stakeholders are putting pressure on companies to reveal more about what they’re doing, and also to be better stewards of safety, health and the environment.”

2.

Business Integration

Business integration is another trend impacting EHS. “We’ve heard a lot about justifying health and safety best practices up to management,” said Jacobs. The trend in upper management continues, with board-level executives now treating safety, health and environment as key performance indicators for a business. Jacobs characterizes this as, “getting EHS out of the silo, bringing it into the larger C-suite, and getting everybody on the same page.”

Jacobs views this as a very positive development. “I think this is a great thing for the EHS space because EHS is an important part of how businesses should be making decisions. Safety is the bottom line.” He sees this as a trend that helps companies align their business initiatives with EHS to improve operational excellence and business continuity.

3.

Operational Risk

A third trend, which also is in the area of upper management, is a focus on operational risk strategy.

Per Jacobs, “Executive boards are viewing operational risk as an area where they can really increase a business’s health and predictive power over the future, and treating it more like insurance risk or IT cyber security risk.”

“The goal of this,” said Jacobs, “is to operate with few to no injuries. You don’t want any notices of violation, ideally, and you want to minimize your shutdown time if you have an accident.”

Proactively reducing operational risk is also an opportunity to show industry leadership and to protect a company’s brand reputation.

4.

Evolving Workforce

The fourth trend that Jacobs identified – an evolving workforce – is not so much a trend as it is an unfolding reality. Baby boomers who once made up the core of the workforce are reaching retirement age and creating a challenge for business owners. “As this workforce begins to transition to a younger generation in the next ten years,” said Jacobs, “it is going to take work to figure out how to manage your business continuity. How do you get all that knowledge that has been developed over long careers into your newer hires and into your program once the retirees move on?”

An interesting aspect of transitioning EHS knowledge to a new generation of workers is that it brings both challenges and opportunities. While the task of conveying years’ worth of knowledge and experience is certainly a challenge, the fact that younger workers are more technologically savvy is a boon.

“They might be used to technology from a very young age,” said Jacobs, “and they also communicate differently.” The key is to adjust to new ways of communicating and tap the strengths of a generation of technology power-users.

“

ONE TREND IS THE GROWING DEMAND FOR DISCLOSURE AND TRANSPARENCY OF DATA. REGULATORY AGENCIES ARE ASKING FOR MORE – AND MORE-DETAILED – INFORMATION.

5.

”

Digital Transformation

The final trend that Jacobs highlighted is digital transformation. While many other areas of manufacturing have already embraced technology and computerization, EHS has been slower to jump on the bandwagon.

But, Jacobs sees things changing. “Industrial organizations are accelerating their pace of technological adoption and change,” he said. “It’s pretty clear why you might want to do this. You are going to have more consistent processes. You are going to be able to more easily understand, manage and actually meet your compliance if it’s in a digital system. And you will be able to continually improve across a range of your key performance indicators, which is made a lot easier by having some kind of digital system to help with that analysis.”

The upside of embracing the digital trend is that it can be used to address the other trends mentioned by Jacobs. EHS software systems can handle the task of accumulating, organizing and reporting data, can simplify the job of making data available to upper management for decision-making and for managing operational risk, and can make documenting EHS programs and training new EHS employees easier.  Luke Jacobs is co-founder and CEO of Encamp, a new kind of environmental, health and safety compliance software company.

Along with being a published scientist and international speaker, Jacobs has dedicated over seven years to a variety of environmental research and professional activities. Prior to founding Encamp, he worked as an environmental consultant at GHD managing environmental compliance reporting for Fortune 10 clients. After witnessing a broken system where companies struggle to maintain compliance and achieve internal transparency on EHS requirements, Jacobs has chosen to dedicate his life to making environmental compliance easier and attainable for all. For more information, visit www.encamp.com.

www.arpminc.com 33

AD INDEX

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FEBRUARY 2020 20 R.E. Darling Plant Tour, Tucson, AZ

OCTOBER 2020 20-22 Benchmarking and Best Practices Conference, Indianapolis Downtown Marriott, Indianapolis, IN

For the most up-to-date information and to register for events,visit www.arpminc.com/ events.

34 Inside Rubber // 2019 Issue 4

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