Assembly - December 2008 - (Page 36) Capital Spending Assemblers Concerned Over Cost of Materials, Scrap 90 80 70 60 Percent of plants 50 40 30 20 10 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Scrap Materials 2008 2009 29 24 25 21 24 28 26 55 56 56 52 51 51 48 41 22 23 23 46 39 36 27 42 44 30 23 89 86 88 87 88 88 85 86 84 77 82 82 83 Direct labor Assemblers are growing more concerned about the cost of scrap and materials. Some 44 percent of plants will buy equipment to reduce the cost of scrap. That compares with 42 percent in 2008 and 36 percent in 2007. Similarly, 30 percent of assemblers are investing in technology to lower material costs. That’s the highest percentage in the history of our survey. Perhaps this is an indication of the growing value of the components, such as sensors, microcomputers, lead-free materials and fuel cells, that go into even the most mundane products. MS, Puebla, Mexico, and Reynosa, Mexico. The nation’s largest appliance maker is hardly alone. Indeed, slumping home sales and rising material costs have led to a dramatic decline in capital spending among manufacturers of electrical equipment and appliances (NAIC 335). Collectively, assemblers of lamps, refrigerators, mixers, electric motors, batteries and other products will spend $259.4 million on capital equipment in 2009. That’s 24 percent less than the industry spent in 2008, and it’s less than half what the industry spent in 2007. As a group, NAIC 335 will represent just 9 percent of all spending on assembly technology in 2009, down three percentage points from its 2008 share. The median budget in NAIC 335 is $100,000, the same as the past 2 years. However, only 5 percent of all plants with million-dollar capital budgets in 2009 are appliance assemblers. That compares with 9 percent in 2008 and 27 percent in 2007. 36 ASSEMBLY / December 2008 www.assemblymag.com http://www.globalautomation.com http://www.globalautomation.com http://www.assemblymag.com
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