SUMMER OCMA NEWS

MEMBERSHIP LOSSES HIT OCMA FINANCES HARD:CASH CRUNCH LOOMS

The extended economic slowdown and increased foreign competition, primarily from China, has led to a number of unexpected bankruptcies and closings in the Ohio metal casting industry. In addition to these unfortunate situations, other metal casting companies have dropped their OCMA membership to help them cope with financial pressures. The end result of these unfortunate events is the creation of a serious cash crisis for OCMA. Without additional membership revenues, OCMA’s cash on hand will not get us through to the next spring when membership renewals will replenish available cash. In an e-mail and fax message to OCMA member companies, OCMA Treasurer John Burke stated, “The bottom line is, in order to stay viable, the OCMA needs capital and it needs it NOW!”

The cash crunch comes despite OCMA Board of Trustees best efforts to prepare for an economic slowdown. At the direction of the Board, OCMA achieved a goal of approximately one-half of normal annual expenses or $50,000 in surplus dollars in the late 1990’s that were invested in Treasury securities. The surplus was to be used to tide the organization over during economic slowdowns or for extraordinary expenses that would benefit the OCMA membership. The surplus was used to fund the VOC Project ($15,000) a program that saved those companies using phenolic urethane resin systems tens of thousands of dollars, investigation of an electricity aggregation project ($10,000) and membership in FIRST, Inc., the organization bringing about expanded opportunities for beneficial reuse of spent, non-toxic foundry sand, a priority within our industry. With these expenditures and sizable operating deficits caused by membership revenue losses, ($38,000) the surplus has been wiped out.

To address the looming cash crunch, the OCMA Board of Trustees have asked each OCMA member company to identify and recruit one new member to the Association. The Board of Trustees believe that membership growth is the key to the long-term survival of OCMA. Increased membership effectively reduces the financial burden on everyone and brings a wider pool of talent into the Association. Additionally, the Ohio metal casting industry has much more clout and its ability to protect and enhance the well being of the industry is strengthened if everyone is contributing to its efforts. Unfortunately, many companies in the industry are benefiting from the efforts of OCMA without contributing to these efforts.

The Board of Trustees is confident that if all OCMA members direct their energies to member recruitment, we can increase OCMA membership sufficiently to meet the cash flow crunch. However, it the recruitment efforts fail to adequately fund the Association, the Board is prepared to levy a voluntary assessment to meet the cash flow needs of OCMA. The Board has no intention of allowing OCMA to run out of money. Those OCMA members who have successfully recruited new members will not be asked to make a monetary contribution. The amount of the assessment is dependent upon the success of the recruitment drive, however it is expected that it would range between 25-35% of annual dues.

If you have any questions about this article, or would like to volunteer your efforts, please contact OCMA President Walt Chaput, GMP – Defiance (419) 784-7430, OCMA Vice President Doug Rowe, Ford Motor Company, Cleveland Casting Operation (216) 676-3207, or OCMA Executive Director Russ Murray (614) 876-5100.

OCMA President’s Awards

At the July 17th meeting of the OCMA, OCMA President Lynn Bierly presented the “Company of the Year” award to John Burke, OSCO Industries, Inc. and the “Supplier of the Year” award to co-winners, Jeet Radia, Keramida Environmental, Inc. and Craig Schmeisser, RMT, Inc. The awards, established in 1994, recognize the value to OCMA of contributions made by its member companies and the individuals who give their valuable time to advance not only the OCMA, but also more importantly, the metal casting industry in Ohio.

Lynn Bierly, Mansfield Aluminum Castings presenting "Supplier of the Year" award to John Burke, OSCO Industries, Inc.

It was quite appropriate that OCMA President Lynn Bierly presented the President’s Award to John Burke, who has been a long-time contributor to the OCMA. Presently serving as interim Treasurer, John has also served as President (He was the only OCMA President to serve for more than one year due to the ill-health of his Vice President Dick Wilkinson, Col Pump Company, Inc..), Vice President, and Trustee. He was also Treasurer during the early 1990’s. It was during his presidency that the OCMA Mercury Task Force was formed to answer Ohio EPA questions regarding the potential mercury emissions from Ohio foundries.Also during his presidency, 1) the OCMA HR Day in October was inaugurated; 2) research monies were secured for USDA Agricultural Research Service (ARS) to study the use of spent, non-toxic foundry sand in agricultural and horticultural applications; and 3) OCMA began its close scrutiny of the developing Iron & Steel Foundries MACT Standard.

In addition, OSCO, Inc. has contributed several outstanding recruits for OCMA committees. John, Ryan Burke, and Bill Kilgore have been loyal members of the Environmental Affairs Committee. John is a charter member of the HR Committee and has assisted in planning several seminars and the first OCMA HR Day. Finally, John’s wife, Sue and his daughter Megan have assumed the duties of “Greeter & Registerer” at the OCMA general meetings to keep costs down.

Jeet Radia, Keramida Environmental, Inc. and Craig Schmeisser, RMT, Inc. were recognized for their tremendous contributions to OCMA’s efforts to mitigate the impact of the proposed Iron & Steel Foundries MACT on Ohio foundries. Both Craig and Jeet have provided valuable technical expertise during the battles with USEPA. Additionally, they were both presenters at the OCMA MACT Standard Workshop held in March 2002, a great success. Both Craig & Jeet wrote major portions of the nearly fifty (50) pages of OCMA comments provided to the USEPA in February 2003 on the proposed Iron & Steel Foundries MACT standard. OCMA members are indebted to both Craig and Jeet and their respective companies, RMT, Inc. and Keramida Environmental, Inc. for allowing them to commit the inordinate amount of time needed to provide these invaluable services to the Ohio metal casting industry.

1. The budget difficulties confronted by the Ohio House and Senate Budget Committees were created by the divergence in the growth of revenues and expenditures. During the past two years Ohio’s revenues have grown at a rate of 1-2% while expenditures have grown at a rate of nearly 8-10%. For example, state expenditures for Medicaid, the program that provides health care for the indigent, represents one-third of the budget and grew from $5 billion to $8 billion in the past five years. Seventy per cent (70%) of all new expenditures have gone for Medicaid.

2. Education, grades K-12, also makes up one-third of the state budget. Under the Ohio Supreme Court decision, the Ohio General Assembly increased, by significant amounts, funding for K-12. However, the new budget provides basically inflation based increases of 2-2/12 per cent. In the final hour, the Budget Conference Committee faced a decision to either cut education spending or temporarily raise the sales tax by one per cent from 5% to 6%. That decision was fairly easy for most of the members.

3. The remaining one-third of the State Budget pays for all the other state services including State Highway Patrol, prisons, mental health and mental retardation facilities and services, parks and environmental regulation, and higher education. These categories have not increased for over three (3) years so they have been affected somewhat by inflation. The public employee contract froze both general across the board increases as well as the step increases provided under civil service.

4. The Senator related how the importing of manufactured goods from China was affecting businesses in his district. He queried the audience to determine whether they remembered a former chain saw/lawn mower company- McCullough. He indicated that MTD has given McCullough, purchased by the Chinese, exclusive distribution rights in the U. S. and we would be seeing McCullough chainsaws made in China back in the stores. He mentioned that stump-cutting businesses in his district were purchasing their equipment in China to avoid product liability issues. Finally, he spoke of a small tool & die shop that closed earlier this year after failing to compete with the Chinese. He mentioned that another more modern tool & die shop was suffering from its competition with the Chinese as well.

5. To improve the competitiveness of Ohio manufacturers, he supports tort reform. He related that he has been voting for tort reform bills since 1981, but the Supreme Court continues to reverse the will of the Ohio General Assembly. He pointed to Senate passage of S.B. 80, a tort reform bill that will limit non-economic damages such as pain and suffering without limiting payment for actual damages including health care and wage losses. He encouraged OCMA members to support passage of this bill.

6. He indicated that the Supreme Court elections would be of utmost importance next year with four (4) seats up for election. Presently, judges in favor of judicial restraint have only a one-vote margin. He urged OCMA members to pay particular attention to the judicial candidates races and to support the candidates who have established a record of conservative judicial decisions.

7. As Chairman of the Ways & Means and Economic Development Committee, he asked a number of tax experts to testify about how Ohio could improve its present tax structure. The consensus among the experts was that Ohio has a tax system that is still based upon a 1930’s industrial economy although the Ohio economy can be best described as a combination of service and industry. For manufacturing specifically, the State needs to go beyond taking action to retard continued job losses. Instead the State needs to reduce the tax burden on manufacturing and move to a more dynamic tax system that covers the service sector as well and will be more responsive to economic growth.

8. He encouraged OCMA to support the Governor’s Third Frontier initiative. Monies from the bond issue will allow government to assist the private sector in its efforts to innovate. New research and development discoveries can be applied to traditional industrial companies to make them more competitive. Tax incentives and small business grants should be provided to encourage investment and R & D. We must maintain our manufacturing base in Ohio.

Elizabeth Olenbush, Executive Director, Foundry Industry Recycling Starts Today or FIRST, Inc., returned to describe the progress achieved since her last presentation in July 2001. She discussed the development of several new projects with U. S. government agencies that should increase opportunities for the beneficial reuse of spent, non-toxic foundry sand. Highlights of her presentation are presented below:

1. She recounted a meeting with several U. S. government agencies held on April 2, 2003, in conjunction with the AFS Government Affairs Conference where the agencies outlined their efforts to expand the opportunities for beneficial reuse of foundry sand. OCMA President Lynn Bierly, Mansfield Castings, and OCMA Executive Director Russ Murray attended the meeting.

2. At the meeting, the representative of the Federal Highway Administration (FWHA) indicated that they were interested in foundry sand as a recycle material. FWHA is encouraged by the fact that foundry sand comes from the best sources of aggregate and the binder material and gradation of the foundry sand provide the necessary strength and permeability for highway construction.

3. FHWA has committed to publishing and distributing a FIRST-supported publication, “Foundry Sand Facts for Civil Engineers”. They also intend to hold several regional workshops where they plan to distribute the booklet and inform highway engineers about the favorable characteristics of foundry sand for highway construction projects. FHWA is also prepared to produce case studies & fact sheets to promote the use of foundry sand in highway construction projects.

1. Another FIRST project supported by the US Department of Energy and supervised by Penn State University will validate the performance of foundry by-products in Hot Mix Asphalt (HMA) and Controlled Low Strength Material (CLSM), often described as flowable fill.

2. The project has three major tasks: 1) Coordinate development of a National Technical Database Resource; 2) Develop user guidelines for CLSM and HMA mixture designs; and 3) Publish material and performance specifications of CLSM and HMA with foundry sands.

7. Beneficially reusing foundry sand and recycling it rather than land filling it has certainly gained some supporters in the U.S. government. USEPA has announced a new focus on industrial byproducts recycling including foundry sand. There will be a national summit in Atlanta on Nov. 4-5, 2003, to discuss how USEPA can spur more recycling of industrial byproducts.

8. In addition to these on-going major projects, FIRST, Inc. is looking to the future. There will be a need for tech transfer programs once these research studies are completed. Technical specifications will need to be created along with QA/QC standards. And finally, FIRST, Inc. will be pushing to have recycled foundry sand (RFS) recognized as a “product”. She reminded the audience that utilities now receive payment for their fly ash, but it took years to get to that point.

9. Elizabeth asked for support from the Ohio metal casting industry. She acknowledged the financial support that OCMA had given in the past, but realized that with the present financial situation additional financial support to FIRST, Inc. was out of the question. She stated that state associations can no longer carry the financial load and it is time for individual companies to step to the plate and support FIRST, Inc. FIRST, Inc. has secured many major successes for the foundry industry and now FIRST, Inc. needs the support of individual companies. The lack of individual company membership in FIRST, Inc. actually constrains the ability to obtain grants for tech transfer and other important projects. Financial support from individual companies is critical in proving we are serious. The utilities did not achieve their success without the backing of individual companies.

The Power Point presentation from Elizabeth is available by e-mail for the OCMA offices. Please let Russ know if you would like it sent to you.

ENVIRONMENTAL UPDATE

Lynn Bierly, Mansfield Aluminum Castings presenting "Super-Sized" award to Kurt Braun, Ford Motor Company.

OCMA Vice President for Environmental Affairs Kurt Braun, Ford Motor Company, presented the environmental report. Copies of Kurt's outline are available from the OCMA office upon request. A summary table is provided. Key issues are outlined below: Iron and Steel MACT Standards * USEPA is currently reviewing revisions to the proposed rule brought about by general comments and negotiations with the AFS MACT Ad Hoc Committee with their Office of General Counsel. They expect to send the revised rule to the Office of Management & Budget in the next couple of weeks.

§ USEPA target promulgation date: August 30, 2003
§ Promulgation deadline: October 30, 2003
§ MACT Hammer Part II application due date: No later than October 30, 2003 (only applies if USEPA misses their deadline.)
§ Realistic speculation: USEPA will miss August 30, 2003 date, but will have it wrapped up in September.

· Remember: MACT only affects Major Sources defined as more than 10 ton/yr of any one Hazardous Air Pollutant (HAP) or more than 25 tons/yr of any combination of HAPs.

Negotiations Update

Listed below are updates to items that have been resolved or are currently in negotiation with USEPA. The changes outlined result primarily from actions taken by the AFS MACT Ad Hoc Committee. This group is in weekly contact with the USEPA and still anticipates movement between now and the promulgation of the rule.

· Affected source: One category including all operations at the foundry. You will have to add 50% to your facility or build a Greenfield site to trigger new source standards. A new source is defined as exceeding 50% of replacement cost for the affected source. Note: changes made based on requirements of the MACT standard should not be included in this calculation, but be cautious!

· For particulate matter emissions from pouring, the regulation was defined to only address processing of “sand molds” so if you don’t pour into sand molds you don’t have to worry about the particulate emissions limit. This will especially help permanent mold and pipe shops.

· The 200 ppm CO limit for cupolas will be replaced with a 20 ppm organic HAP emission limit, corrected to 10% oxygen. This change was brought about by efforts by the AFS MACT Ad Hoc Committee who submitted very good data to USEPA supporting the change. The 10% oxygen is basically included to address concerns from dilution air.

· For phenolic urethane cold box core-and mold-making operations using TEA as the catalyst, the 1 ppm TEA emission limit can be tested on a fresh charge of acid allowing better performance of the acid scrubber and protecting the TEA recycling program.

· HAP in binders and coatings, naphthalene depleted solvents in binders: a) methanol will no longer be allowed as part of the furan warm box catalyst (only) formulation; b) you will be required to record the annual quantity of HAP materials used in our binders and coatings.

· Foundries are no longer required to attempt to ignite each mold vent if they auto-ignite (auto-ignite is defined as molds where over 75% of the vents ignite and burn for 15 seconds) or are non-ignitable (non-ignitable is defined as mold where less than 25% of the vents ignite and burn.). Basically you need to do what you say you will do in your O&M plan.

· Pouring exhaust combined with other exhaust: You must meet pouring emissions limits with either the combined (commingled) stream or via apportioned flow rate from pouring coupled with the actual collector efficiency. If you can successfully demonstrate compliance of the overall stack emissions or via flow apportionment and collector efficiency, you don’t have to control all commingled exhaust to MACT levels. Simply, the USEPA has provided appropriate flexibility for compliance demonstrations.

· PM limits for melting furnaces: USEPA will revise the 0.001 gr/dscf for new melting furnaces to 0.002 gr/dscf. Existing source particulate matter limits for melting furnaces has been revised from 0.005 to 0.006 gr/dscf.

· Alternative metal HAP emission limit for cupola melting: USEPA will establish an alternative emission limit for metal HAP emissions from cupolas of 0.0005 gr metal HAP/dscf (8%of total PM). This limit helps cupolas melting plate, slitter, etc. (scrap low in metal HAPs) that are near the MACT emission limit of 0.006 gr/ PM/dscf. For purposes of compliance with this limit, metal HAPs will be limited to include only mercury, manganese, chrome, nickel, and lead.

· VOC limits for scrap preheaters: The 20 ppm limit as propane has been revised to 20 ppm VO HAP or 20 ppm VOC as hexane. Additionally, this will only apply to new scrap preheaters. Existing preheaters will be required to have “direct flame contact” or meet a 20 ppm VO HAP emission limit as an alternative. USEPA has indicated that preheaters processing “non-oily, non-painted scrap” will be exempt from these limits and requirements.

· VOC limits for new cooling and shake-out lines: The proposed limit will be revised from 20 ppm VOC as propane to 20 ppm VO HAP or 20 ppm VOC as hexane. USEPA is sticking by this negotiated revision stating that they have data indicating:

· Some facilities can meet this number without additional actions;

· Some facilities with “new pollution prevention” processes can achieve this limit;

· Three facilities either have incinerators or carbon absorption systems that they expect can achieve this limit;

· CERP data has indicated there are a number of products that can assist in achieving this number.

· AFS MACT Ad Hoc Committee responds:

· There is no documented emission testing of incinerator or carbon absorption systems;

· Not all parts and processes that are required to make parts can meet this limit;

· This could force the use of proprietary and single source equipment and/or materials.

· The 200 ft/min exhaust velocity requirement: a) for particulate matter sources, USEPA has proposed using an alternative of 20% building opacity on a six minute average, allowing one six minute average period per hour that does not exceed 27% opacity; b) for VO HAP sources with MACT limits, USEPA has recommended language along the lines of “use of good engineering practices” in lieu of face velocities or specifying compliance with the guidelines of the ACGIH manual.

· Scrap metal inspection program: a) You must have a selection plan and inspection program for at least 10% of incoming scrap including restriction on plastics, organics, liquids, supplier removal of accessible mercury switches and lead containing components; b) if you certify that you do not use “automotive body scrap, engine blocks, oily filters, oily turnings, lead components ….” You will not have to have an inspection program.

· Continuous emission monitoring systems: The only place this will be required is on sources with VO HAP emission limits (e.g. scrap preheaters, existing scrap preheaters without flame contact, and new cooling and shake-out lines). USEPA has stated they will include language making it easier to establish alternative parametric monitoring programs in lieu of continuous monitoring programs.

· Continuous parametric monitoring systems: This one has a lot of precedence behind it and will be tough to negotiate further. Just like many of the Title V and new PTI requirements, we will have to operate control systems like we do during compliance testing. Simply, performance and setpoints during compliance testing will set operating parameters of control equipment.

· Subcategorize cupola melting systems based on the type of scrap used: USEPA feels that they have achieved this through the alternative lead emission limit on cupolas and plan no further action. Negotiations are on-going.

· Alternative total HAP emission reduction standard for cupolas: The MACT Ad Hoc Committee is still working on this one. It would be an alternative emission limit based on overall cupola control efficiency rather than a specific outlet emission number. The differences in control efficiencies between an afterburner combined with a bag house and afterburner combined with a scrubber are very small. The biggest hurdle here is the difficulty in demonstrating compliance (inlet/outlet testing for PM and VOC or respective HAPs versus default values if testing is not feasible).

· Small non-production foundry operations (i.e. prototype areas): There operations have been defined out of the rule via definition of affected source (only includes “products for commercial use”). In addition, R & D or departments producing less than 10 ton/yr non-commercial finished castings are excluded as well.

· Emission bubbling: Not there yet. The MACT Ad Hoc Committee is still working on this one. As an example, it would allow HAP reductions in mold line emissions in lieu of HAP reductions from cupolas.

Join Us This Fall

· The 3rd Annual OCMA HR Day will be held on Tuesday, October 7, 2003, at the Columbus Convention Center. The HR Committee has selected the topic of rising medical & health insurance costs and what, if anything, can be done about it. We will have speakers from McGohan & Brabender and Ohio BWC. We will also have a legislative speaker who will discuss what the Ohio General Assembly is doing to address rising medical care and insurance costs. Contact Russ Murray at 614-876-5100 for more information.

OCMA PAC Golf Outing

· The OCMA Southwestern PAC Golf Outing will be held on Wednesday, September 10, 2003, at the Four Bridges CC in Liberty Township. The OCMA Northeastern PAC Golf Outing will be held on Tuesday, August 16, 2003, at the Silver Lake CC. Please join us for an enjoyable day on the links with your golfing buddies. You will have a good time and support the OCMA PAC at the same time.

EMTEC Report

Nick Cannell, EMTEC, provided the report. Highlights are outlined below:

· Nick reminded the OCMA members of the BWC Safety Grant program that offers $4 for every $1 a company spends for equipment purchased to alleviate ergonomic injuries. The applying company must have a past claim in the area of planned upgrade. The maximum allowable grant is $40,000 and Nick is available to assist any OCMA member interested in applying for a safety grant. More information is available at the following website: http://www.ohiobwc.com/employer/programs/safety/EmpGrants.asp.

· The Clean Air Resource Center is the small business program of the Ohio Air Quality Development Authority. It offers tax abatements and low interest loans for equipment purchased to reduce air contaminants. This would include a bag house, a new cupola, an exhaust system, etc. It is a fairly flexible program and there is no limit on the size of the program. Several OCMA members have benefited from partnerships with the Clean Air Resource Center. You can find the details at: http://www.ohioairquality.org

· EMTEC is involved with four casting related grant proposals:

· Use of fly ash to make cores for sand casting;

· The casting of aluminum knuckles onto extruded fiberglass/plastic rods for suspension components;

· The development of a plastic/aluminum alloy; and

· The development of a high temperature plastic/ceramic mold material for gravity casting.

The Changing of the Guard

New OCMA Board of Trustee Members and Officers

New Officers and Trustees of the OCMA Board elected at the Annual Meeting are as follows:

Officers

* President Walt Chaput, GM-Powertrain - Defiance
* Vice President Doug Rowe, Ford Motor Co. Cleveland Castings
* Secretary John T. Kurtz, Kurtz Bros., Inc.
* Treasurer John Burke, OSCO Industries, Inc.

Board of Trustees - Terms to expire in 2005

* Jeff S. Otterstedt, Clow Water Systems Company
* Craig S. Schmeisser, RMT, Inc.
* Dave Yonto, The Quality Castings Company

Mike Swartzlander, Ashland Casting Solutions, was appointed by the Board of Trustees to fill Doug Rowe’s seat expiring in 2004. Bud Tibbits, Hill & Griffith Company, was appointed to fill Frank Johnson’s seat expiring in 2004.