MARKET UNCERTAINTY TO REMAIN IN 2009  top

By Jim Mattson, Purchasing Manager

If I was asked for one word to describe the current raw material market, I would choose uncertainty. As 2008 winds down we can look back and all agree we've just been through a very turbulent and rapidly changing period in the raw materials markets.

The cost of steel went to unprecedented levels along with the price of scrap the first half of 2008. In the time frame of about two months scrap pricing pretty much crashed and burned. Raw material pricing has also started a rapid decline. Where will it end?

Forecasts are changing daily, but with the current state of the economy, the auto industry being on life support, and the Purchasing Manager Index continuing to drop, most experts believe 2009 will be a year of lower material pricing. The major steel mills have all announced major reductions in steel production. They are trying to keep the price of steel at what they consider acceptable levels, but they are not having much luck.

Per an American Metal Markets issue dated November 19, US raw steel output is nearing a 7-year low, but steel pricing is still declining. With the removal of so much capacity out of the market, pricing concerns will rapidly give way to availability concerns.

At Iowa Laser we continually work with our suppliers on making sure that we have steel available for our customer's orders. Our sales staff remains in constant contact with the Purchasing Department on material needs, current pricing and availability. Although 2008 was a wild ride, we avoided any market-created material shortages. Let us hope that 2009 is a lot less volatile, but still a highly productive year.

2008 SALES REVIEW    top

By Joe Barber, Sales & Marketing Manager

For our final 2008 newsletter, I was asked to give a year-end review of Iowa Laser from the Sales Manager's perspective. Topics included an overall sales review, our equipment purchases, the completion of our building expansion, and the Trumpf tube laser we'll be adding in early 2009. Just looking over that list and having some quiet reflection, I have to admit that a little pride is the best way to summarize my initial reaction.

While 2008 has been a unique year to say the least, Iowa Laser is fortunate to have been insulated from much of the recent “economic downturn.” Don't get me wrong, my 401K is an ever-constant reminder of the condition of the market, but 2008 has been a very successful time for us here at ILT. We've closed out the year with record sales (spurred on by the still robust agricultural economy), and have worked diligently to expand our capacity for future requirements.

The past year has seen the addition of several new Trumpf sheet lasers and pressbrakes. We have also updated our machining centers and welding capabilities, along with adding a welding engineer to our staff to allow for development of our welding processes. All of these additions are possible because of the expansion of our manufacturing facility. In 2008 we completed an 81,000 square foot expansion, more than doubling the size of our Chancellor Drive facility.

2009 promises to be as exciting as 2008 with our new Trumpf tube cutting laser and the addition of a weekend shift. Both of these moves allow us to expand our capabilities and our capacity to serve our customers.

It truly is a unique time. Economic uncertainty seems to loom around every corner. Everyone seems to want to hunker down and wait out the storm, but its times like these that allow those in the right position to stand firm, develop and improve. This has always been Iowa Laser's way and it will be our future.

Have a Merry Christmas.

TUBE LASER ETA...   top

Iowa Laser's new rocket-fast Trumpf Tube Laser will be delivered mid-February 2009.  Maximum processing characteristics include:

-6" round or square

-3/8" wall thickness

-weight per foot 13.2# (281# total)

Software and hardware with this machine will be increasingly user-friendly, allowing etching capability, along with pierce points and soft pierces.  We anticipate the ability for even greater accuracy, but will delay publishing tolerance capabilities until our own testing is complete (immediately following installation). 

Have you considered using lasers to cut tubing rather than sawing and/or machining?  

If you or your customers needed a tube laser quote, is Iowa Laser on the list?

To discuss further, contact us at info@iowalaser.com .

THE ANALYTICS OF QUALITY     top

Note: ILT's Quality Manager, John Lamos, is busy finishing up his fiscal year-end data collection and preparing for the annual internal audit. Below is a look back at an article printed in the Sept 1997 newsletter.   (Eleven years later and Don is still teaching us.)  Enjoy!

Laser Welding 101 - Every Game Has Its Rules

By Don Kobriger, Senior Engineer 

Have you ever tried to play a game without knowing all of the rules? Frustrating, isn't it? I'm afraid we are guilty of asking you to play some “games” involving laser technology without providing you with all the rules. Oh, I know that you expect us to be the experts, but it still is unfair to keep the general guidelines a secret and expect you to have a warm feeling about how you're doing.

With that in mind, I'd like to give you some general guidelines about laser welding.  

1. When the Carbon Equivalent (C.E.) exceeds 0.30 percent, martensitic transformation provides high weld hardness, which may be prone to brittle failure under fatigue and cryogenic conditions. A weld joint designed to allow for weld shrinkage (and thereby minimize stresses in the weld and heat affected zones) can minimize cracking when welding materials with C.E. greater than 0.30. Also, weld biasing, when welding a material of C.E. greater than 0.30 to a material of C.E. much less than 0.30, can minimize cracking.

C.E. = %C + %Mn/6 + %Ni/20 + %Cr/10 + %Cu/40 - %Mo/50 - %V/10  

1. Medium carbon steels may be successfully welded to relatively low carbon steels by biasing the weld into the low carbon material. This ensures sufficient dilution at the weld interface which limits martensitic transformation.
2. Fully killed or semi-killed steels are preferable. If steels are not killed, back over them with the fork lift (just wanted to see if you're still with me).
3. Steels with high sulfur (>0.05%), phosphorus (>0.04%) or manganese (>0.1) are subject to hot cracking.
4. Pulsing of the laser output can be used to minimize heat input and may be used to overcome cracking or part distortion.
5. Carburized and nitrided steels generally cannot be laser welded.
6. Zinc coated (galvanized) steels are generally difficult to weld in an overlap configuration.
7. Stainless steels are generally laser weldable. However, free machining stainless steels exhibit solidification cracking and are not acceptable.

Laser welding is a process that has established itself as a successful manufacturing method when applied appropriately. These guidelines should help you determine which candidate should be studied further. Please let us know if you would like our insight.

PRESIDENT'S STATE OF LASER   top

By Sean Abbas, President

Where have values gone in America ?

As Dr. Seuss might say:

I do not see them here or there,

I do not see them anywhere.

They are not in elections,

they are not in recessions.

They are not in a housing crisis,

they are not in the bailout-isis.

(I know, I know, bailout-isis is not a word, but I have a point to make and I did not stay at a Holiday Inn Express last night).

As the President of the oldest privately-held laser house in the United States, it is my job to make sustainable decisions that allow for the success of this company and her people, now and for the future.  We believe our success is based in core values that sustain quality and performance.

But as we look around us, at all the events going on in the world, the glaring omission is values.  We've seen a lack of values, the failure to live up to values, and changing values as “opportunities” arise.  More importantly, we've seen the consequences of these failures. The current economic situations scream lack of values, do they not?

Consider the falling of Bear Stearns, one of the oldest and largest financial institutions in the country.  How did it sustain for over one hundred years and then fail?  Why did they invest where they did?  What was the risk vs. reward?  How did the decision-makers of this long-standing company not see the possibility of these investment decisions bankrupting their company?

Were shareholders expecting unreasonable returns?  Yes.

Were managers doing whatever it took to deliver those returns?   Yes.

Were core values compromised?  Yes.

Why were no decisions made to avoid such a catastrophic event?  Because core values were not connected to productivity.  Producing results became more important than producing value- based results.

And it's not just Bear Stearns.  This topic reaches to every corner of the economy, from Asia to America, the public and private sectors.  Values rooted in taking advantage of a situation, person, or business are not sustainable for long periods of time without repercussions.  Short term success, at any and all cost, has stood as a ‘core' value for the last 10 years.  We're now seeing the economy's opinion on this.

We are living in, and with, the consequences of an absence of values.

Let's dig deeper.

At Iowa Laser, we have a set of stated values.  Our individual performance is rated by not only what we produce, but equally, how we live these values at work.  If you punch the clock, do some work, and fail to live these values, you will not work at Iowa Laser…period.  We require adherence to our values because we know they make us better.  They are the rules of engagement - the “how” our company operates – the long standing truths of how we will conduct ourselves, and our business. They don't change with the economic conditions or with the administration in Washington.  We admit that living a common value structure is good for all of us.

•  Integrity -The foundation of everything we do

•  Teamwork -None of us is greater than all of us

•  Longevity -Our actions and ideas must stand the test of time

•  Learning -The only sustainable competitive advantage

•  People -Our most important resource

Excellence -We must be better every day

Now I know Iowa Laser's values may not be for everyone.   Every organization has to discuss and decide what's best for them… but what if?  What if companies were centered on integrity first, profits second?   What would that do for the concept of teamwork?   How many people have lost their occupations because of a company's near-sightedness?  What if the financial institutions made investments that stood the test of time for the people they serve?   What if our actions stopped being guided by greed and compromised values?

What would that portrait look like in the real world?  Is it even attainable?

Imagine real teamwork and caring coupled with integrity.  A company where the statement “Our employees are the most important resource” is fully embraced by management.   A place where the rate at which you learn and your ability to apply that knowledge is recognized as competitive advantage.  A business that makes decisions with tomorrow in mind, recognizing the future is built on the actions of today.

The place that realizes tomorrow is just as important as today is the place that survives.  I get to work in this environment everyday, and I respect and appreciate the opportunity to do so.

What about you?  Would you like the same opportunity?   You can have it, and it's not very complicated.   Step one is determining your values.  From there, you can begin to define how you will accomplish your mission by living those values.  Get the input of others and come to an agreement.  Measure your decisions and then your performance based on adherence to those values.

As you watch the dozens of crisis unfold in the economy over the next year, think about values.  Think about the lack of values and the roll that plays in the different situations.  Then think about what you are doing.  Are your values defined?  Will you live by them?  Will you be a winner among losers?  That's up to you.  

Merry Christmas and kind wishes for 2009.

ON THE ROAD AGAIN   top

By Matt Miller, Outside Sales

An Ear to the Road, All Eyes on the Sky

The drumbeat at Iowa Laser in 2008 has been steady and considerably louder than past years. With an 80,000 sq ft expansion, (8) pcs of new equipment on the floor and a 17% staffing increase, the patter of footsteps chants in unison “Forward March.”

The U.S. economy travels at a different beat, out-of-step with a quivering voice. Major financials and now the Big 3 are catapulting into hopefully-short-term nationalism, the housing market continues to drag its foreclosure feet, and much speculation winds the consumer goods markets into decreased sales. Credit markets have tightened. ‘Steady upward' in materials and fuel prices is now a high-pitched squeal as prices crash to Correction, U.S.

While all this refreshes day-after-day, nearly every customer I speak with is braced for a downturn in manufacturing, but few have seen it materialize. It is often said Iowa lags behind the market trends of the U.S. by several years (which our children aren't so happy about).  During times like these, businesses in Iowa generally appreciate this gift, even if 'years' now equals 'months.'

But increased stability isn't a function of markets alone. Guiding Iowa Laser's Board and Management decisions is a stereotypical, yet seemingly forgotten Midwestern philosophy. Reach back 30 years to 1978 when Iowa Laser opened its doors and you'll find the inspiration:   Save. Save. Save.  Get cash in the bank.   Have a spotless credit rating, if you must have credit.  Diversify the customer base, price competitively, make quality parts, secure the shipments.

In other words, be consistently conservative. (While “Rainy Day” management isn't glamorous, Iowa Laser isn't looking for glam. We're looking to win.)

Supported by over 450 customers from an eclectic mix of worldwide industry, Iowa Laser's FY2008 sales delivered a record $27,348,000, an 11.5% increase over FY2007 and 50% growth in the last 5 years. In a close race but still holding top customer position by spend is John Deere Worldwide Operations. Does Iowa Laser supply other industries?  Yes.  Non-Ag industries support 34% of sales.

Our marching strides grow silent yet strengthened in 2009. We certainly can't forecast what will come. But moving into our 3rd decade of laser cutting, be certain Iowa Laser has the longevity and positioning to weather a market-correcting snowstorm should one hit home, no matter its depth or duration.

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