Manufacturing Rebounds in September

October 16 -- Ariens Co. in Brillion is looking for more workers to help it meet seasonal demands for snow removal equipment.

 

Diane Bluel, human resources manager at Ariens, said Monday the company has between 70 and 80 part- and full-time openings. Available jobs include low-skilled assembly positions to those requiring more skills including machinists, fabricators and welders.

“It’s for our seasonal ramp up,” Bluel said of the company’s job fair. The company, which as about 1,200 workers between its two Brillion plants, also held a job fair in the spring to fill seasonal positions at that time.

What’s happening at Ariens Co. reflects rebounding manufacturing activity nationally. The Institute for Supply Management’s September Index showed U.S. manufacturing grew for the first time in four months, buoyed by a jump in new orders and more jobs.

The increase is a hopeful sign that the economy may be improving after a weak stretch. The institute, a trade group of purchasing managers, said Monday that its index of factory activity rose to 51.5. That’s up from 49.6 in August.

The reading “will boost hopes that some of the recent slowdown in economic growth was just a summer phenomenon,” Paul Dales, an economist at Capital Economics, said in a note to clients.

Not all manufacturing sectors are reporting robust activity.

John Daggett, a spokesman for Oshkosh Corp., a maker of military vehicles and parent company of fire apparatus manufacturer Pierce Manufacturing, said the firm has felt the impact of government spending cuts.

“Municipal spending and tax revenues are still down,” he said. “As we all know, defense business is driven by contracts and future defense budgets are reduced.”

In the manufacturing survey, a measure of new orders jumped to 52.3, the highest reading since May. That suggests production will increase in the coming months.

And a gauge of employment rose, a sign that manufacturers may report a gain in jobs when September’s employment report is released Friday. Manufacturers shed workers in August.

Manufacturers also said they are facing rising costs for corn, fuel and several other commodities.

The improvement at U.S. factories comes even as growth is slowing overseas. Europe’s financial crisis has pushed many countries in the region into recession. Growth in emerging nations such as China and India has slowed.

China’s manufacturing sector shrank in September, according to a survey by a Chinese trade group. But its measure of factory activity rose for the first time in four months, to 49.8, from 49.2.

The U.S. economy grew at an annual rate of just 1.3 percent in the April-June quarter, down from a 2 percent growth rate in the January-March quarter.

 www.postcrescent.com

Decision Nears on Huge Plant, Hundreds of Jobs for Lincoln County, NC

September 13 -- Lincoln County commissioners approved incentives Monday night that they hope will help convince a Chinese-owned company to build a huge manufacturing facility here that would employ hundreds of people and pump millions of dollars into the ailing economy.

Although the company already has selected Lincoln County as its North American headquarters, it is still considering a location in another state for the manufacturing plant that initially would employ 300 and ultimately maybe thousands.

Denver Global Products, owned by RATO North America, would invest a minimum of $20 million within two years and employ 300 people at an average annual wage of $31,000. Both the capital investment and the planned average wage are substantially higher than any other economic development announcements in Lincoln County in many years.

Denver Global was a small, privately owned company on Pilot Knob Road in Denver until it was purchased late last year by the Chinese company, RATO, in a deal valued at $70 million.

While in Denver, the company employed a number of engineers who spent thousands of hours testing and researching small engine equipment such as lawnmowers.

The company ran out of space in Denver a few months ago and was convinced by county economic leaders to move at least temporarily into a vacant building in the Lincoln Industrial Park in Lincolnton.

The Denver Global president, Roger Leon,  told news@norman last year that he would like to build the new manufacturing and distribution center in the Denver area. That decision hinges, however, on a number of things including the availability of infrastructure, and local and state tax incentives.

County officials described the attempt to persuade Denver Global to locate in Lincoln County as “very competitive.”

Georgia is believed to be the other state competing for the company. Leon, like several of Denver Global’s key employees, formerly lived in Augusta, Ga.

Leon envisions building a campus-like development for manufacturing, distributing and research and development.

The company likely would build small-engine equipment like its Chinese owner that builds everything from power tools to motorcycles.

The decision by commissioners Monday night would give Denver Global about $80,000 annually over five years in local tax incentives. The state has also approved unspecified incentives and grants in an attempt to convince Denver Global to locate in Lincoln County.

If the company decides on Lincoln County, construction could begin next spring.

 Ken H. Fortenberry       www.denverncnews.com

Advertising Group Recommends Generac Discontinue Certain Ads

September 27 -- The National Advertising Division has recommended that Generac Power Systems Inc. alter or discontinue certain advertising for the company’s standby home generators, including what the NAD called the “broad, unsupported” claims that Generac is the “most environmentally friendly generator on the market.”

NAD is an investigative unit of the advertising industry’s system of self-regulation and is administered by the Council of Better Business Bureaus. Kohler Co., a competing generator manufacturer based in Kohler, brought forth the claims against Generac, with headquarters in Waukesha County.

NAD requested substantiation for claims related to the power, engine life, sound output, environmental benefits and safety performance of Generac generators.

“Generac disagrees with a number of NAD’s conclusions, and believes that we provide more than enough information for the consumer to make an educated decision to purchase a Generac home backup generator,” the company said in a statement to The Business Journal.

Generac noted that the NAD recommendations for discontinuing certain environmental or power quality claims largely involved “outdated or defunct marketing campaigns.”

“We at Generac are disappointed that (NAD) implied deception on the part of Generac, especially since the NAD upheld the two most important claims leveled against us: low sound levels and generator fire ratings,” Generac said in the statement. “Upon review of Generac’s detailed test data, the NAD agreed that Generac provided a reasonable basis for its advertising claims, although they preferred that Generac provide clarification.”

 www.bizjournals.com 

These 3 Small Stocks Could be GE's Next Takeover Target

Okay, I had to stretch my imagination reading this article, but then that’s not always a bad thing to do…  The OPEESA Editor

September 27 -- When he was head of General Electric Jack Welch had one rule for his company: Be the top player in the field, or don't even bother. The numbers backed him up. Business school professors repeatedly teach that an industry leader can have up to twice the net profit margins of the second-leading player (which in turn has twice the profit margins of the third-leading player).

So whenever GE enters into a new niche, it likes to make a rapid push to establish industry leadership.

That's why mining-equipment firms are buzzing right now. GE has stated plans to become a $5 billion player in the industry within a few years. A few acquisitions in the space -- including a May $466 million purchase of Australia's Industrea Ltd. and an August deal for Fairchild International for an undisclosed sum -- have already gotten GE to a $2 billion run rate in the mining-equipment industry.

But there's no way GE can go from $2 billion to $5 billion in just a few years through good old-fashioned organic growth. In fact, the company readily concedes that it will need to make more deals to hit its ambitious target.

This should come as welcome news to investors who are already eyeing the mining sector.

The move comes at a curious time. Leading mining equipment players such as Caterpillar are already warning of a slowdown.  Why would GE want to invest in an industry that might be cooling off?

It's because the company thinks long-term and is well aware of the fact that many large mines around the world have already given up their most accessible bounty, so future mining efforts will have to dig deeper to get at the good stuff. That's why GE wants to become a leading player in the niche of helping miners work more efficiently, in ever-more challenging environments.

So which company is GE targeting in order to become a key player in this space? Well, industry rumors have been focused on Joy Global which may seem like a bargain for GE after its stock has slid from $96 in early 2012 to a recent $54. Indeed, on a fundamental basis, this is likely a solid entry point, as Joy Global's earnings per share power could exceed $10 by mid-decade thanks to a series of recent acquisitions. It's the near-term mining industry pressures that keep investors from taking that long view.

But here's the real reason the rumors of a GE/Joy Global are likely incorrect. Joy Global is simply too big. The company's current market value is $5.8 billion, and GE would likely need to offer $8 billion or more to snap up the company. GE rarely makes a deal of that size, and has instead been hinting at smaller tuck-in deals.

Instead, three other companies do look like a nice fit for GE. And while you shouldn't buy a stock solely based on takeover rumors, any deal that transpires would make an investment in any of these stocks just that much sweeter...

1. Generac Holdings

Mining industry watchers may be overlooking this choice because it's not really a mining play. Instead, Generac has made clear inroads into the consumer and industrial spaces with its wide range of generators and back-up power plants. Yet as GE notes, the next wave of investments for mining firms is for equipment that helps them work more efficiently in remote locations.

Climbing deeper into mines, or venturing farther away from key power grid sources, makes the supply of steady power more challenging. Generac's gear is perfectly suited to this task and nicely complements GE's other offerings in this sphere. GE could likely acquire this company for less than $2.5 billion (implying a solid 50% premium for Generac's shareholders) and add $1 billion in sales to the GE mining division -- before GE uses its sales network to boost Generac's revenue streams even higher.

2. Actuant

This is another company that isn't involved in mining per se, but is perfectly suited for the industry. Actuant makes a wide range of products used in complex construction environments, such as hydraulic lifts, machining equipment, electrical products and power transmission. GE continues to stress a goal of helping miners work in more complex environments, and Actuant has 100 years of experience in helping customers do just that.

The current $2.15 billion market value implies GE could have this business for less than $3 billion and layer in Actuant's current $1.6 billion run rate into its own mining division.

3. Columbus McKinnon

This company's product line consists of hoists, jibs, cranes, shackles, winches and many more goods that are used to establish platforms in unstable environments.  Although ship building, logging and transportation have been its core markets, it's starting to build a presence in mining as well. The current $300 million current market value would make this an especially digestible acquisition for GE.

Risks to Consider:  Stocks should never be bought solely on the basis of a possible buyout, and should pass muster from a research perspective, so use these ideas as a starting point for further analysis.

  David Sterman     www.streetauthority.com  

OPEESA Member Engine Warehouse Acquires Majority Share of Ybravo.com

HOUSTON – September 24 -- Ybravo.com recently sold a controlling interest in their company to Ybravo Texas, LLC a corporation controlled by Engine Warehouse Inc. (EWI) located in Houston, Texas.  Ybravo.com believes the additional synergies of this new ownership strategy will directly lead to wider market access for their products and improved logistical support.

Ybravo will continue to be a brand fully focused on commercial landscapers that maintain small properties and the distributors/dealers that serve them. Their 21” and 25” walk-behind mowers offer an outstanding alternative to existing mowers available to commercial dealers and their commercial customers.

Jeffrey Beltramo, President of Ybravo.com states, “We have been seeking an equity partner that would help propel the Ybravo brand forward both domestically and internationally. We believe with the strong EWI distribution model many cost efficiencies can be achieved both immediately and in the long term.”

Robert Graham, President of Ybravo Texas, LLC comments, “The acquisition of Ybravo.com positions EWI well to meet the needs of our dealer network, while providing a means to significantly extend our reach. We continuously pursue quality products and brands which enhance and compliment our existing products.

Graham continues, “We respect the accomplishments of the Ybravo.com management team and look forward to supporting them with additional resources. The existing Ybravo.com management team, Jeffrey Beltramo, President, Leif Persson, Product Manager, and Ron Brunone, Sales Manager will continue to play major roles in the new organization.”

The “new” Ybravo will develop a distribution strategy that will provide easier and more localized availability of their product across all markets.

Ybravo.com dealers are always encouraged to contact our management team directly about any issues they face both now and in the future.

Ybravo.com launched their initial product, the Bravo 21 commercial mower, in the California market in the middle of 2009.

For additional Information, please call 1.888.Ybravo.1 or email to sales@ybravo.com