SIC 3321 Gray and Ductile Iron Foundries
SIC 3321
This classification covers establishments primarily engaged in manufacturing gray and ductile iron castings, including cast iron pressure and soil pipes and fittings.
331511
Iron Foundries
According to a late 2004 Foundry Management and Technology magazine survey of more than 150 industry executives, shipments of gray iron castings rose 8.4 percent in 2004, and ductile castings shipments increased by 76.0 percent. In fact, the majority of those queried responded that they experienced positive results and also "reported having a better year in 2004 than expected." However, many of those queried responded that the downturn they experienced in the early 2000s left them cautious upon entering 2005.
Even though production was increasing, top performers felt that it had been the direct result of so many foundries that had closed. One survey respondent noted that their increased production was "because there was so few of us left." Still, other industry players felt the closing of so many foundries could be considered a "natural realignment" within the industry to compete with the global market. While profits were up for the major companies, there was a growing concern in regards to imports that left them feeling somewhat wary.
The survey called for capital expenditure increases of 42 percent for gray iron producers and 53 percent for ductile castings producers. These conservative approaches slowed production, with only 74 percent of gray iron plants and 76 percent of ductile iron foundries working at capacity. Industry executives responded that they worried less about general labor shortages in 2004, though they worried a bit more about medical insurance costs, decreasing orders, and overseas competition. They worried much less about on-time deliveries, but more about the increased cost of raw materials going into 2005.
This industry is heavily engaged in manufacturing pipes and pipe fittings; however, other segments of the industry are growing in response to changing market demands. For example, the automotive industry has switched most engine components to aluminum in response to consumer demands for lighter, more fuel efficient cars. While this move has hurt some gray and ductile iron foundries, it has forced them to find alternative markets. This is readily apparent, since 52.6 percent of product share is claimed by other gray iron castings and 19.9 percent is claimed by other ductile iron castings. Only 3.9 percent of product share is due to cast iron pressure, soil pipe, and fittings, whereas 14.0 percent is attributed to ductile iron pressure pipe and fittings.
Historically, the automotive and aerospace industries were the largest customers for gray and ductile iron foundries. When demand was at its highest, each of the Big Three automakers owned several foundries. In mid-1980s, the poor financial performance of both the domestic automotive and aerospace industries forced closings of many self-contained foundries. Companies in these industries found that outsourcing the casting business was a cheaper alternative than under-utilizing plant and labor capacities.
In the 1980s and 1990s, the corporate average fuel economy (CAFE) standards mandated that automobile manufacturers produce lighter, more fuel efficient cars. As a result, the 650 pounds of iron casting found in a 1981 automobile was reduced to 350 pounds of gray iron per vehicle by 1995 and was expected to fall another 40 percent by 2005. Ductile iron, on the other hand, has experienced some growth in the automotive industry as the mechanical properties of the metal make it an attractive alternative to heavier cast components.
Humans have been casting metals for at least 5,000 years. This is evidenced by the progression of early societies from the Stone Age to the Bronze Age, when people...
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