NORTH AMERICAN NEWS
by JohnWolz, editor
GlobalFastenerNews.com
“Great Recession” leaves leaner fastener industry
Sales and profit figures from the opening quarter of 2012 indicate fastener companies have not forgotten lessons learned in their struggle to survive the global economic downturn of recent years.
H
iring is on the rise throughout the fastener industry. And sales volumes are up, with much of that growth coming from organic market share gains. Price gains are evident as well.
However, profits remain more robust than sales, suggesting
that while most companies are growing, leaner operating methods necessitated by tough economic times remain in place. Fastenal is a visible example of this kind of operation. Known
for its aggressive new store opening model, the distribution giant has diversified its growth strategy with a new approach: industrial vending machines. And the strategy seems to be paying off. Fastenal marked a milestone in April, reaching 10,000 vending
machines installed at customer locations. The pace of growth has been impressive — from 892 installed machines in March 2010 to 9,798 machines in place at the end of March 2012. “In 2011, we … installed 5,528 [industrial vending] machines, an
increase of 287% over the 2010 number,” Fastenal stated in its 2011 annual report. Installations of FAST Solutions began to rise sharply in mid-
2011 after Fastenal boosted the program. The build-up included 13 regional “build centers,” a 24/7 tech support team, and more than 70 demonstration vehicles, as well as a dedicated vending program workforce of 200. Meanwhile, their new store openings have dwindled from their double-digit pace before the recession to an annualized rate of 5% in 2011. “Expense control has always been a strong focus at Fastenal,”
stated CEO Will Oberton, “and 2011 was no exception.” Overall expense growth last year was 15.3%. Labor and related expenses grew 19.7%. The non-payroll expense category grew at just 6.7%. “Even more impressive to me is that our two-year growth for the non-payroll expense category was only 4.9% compared to 43.3% sales growth over that same period,” Oberton commented.
Queenin: NFDA charting a new course
After more than 40 years, the National Fastener Distributors Association had “reached a fork in the road,” according to incoming president Jay Queenin.
W
hen the balance sheet was tallied from 2011, Queenin and the board realized changes were essential to return the organization to solid footing. Running an association is like running a business, Queenin told
members at the association meeting in Atlanta. The US$50,000 loss the organization took in 2011 prompted stark changes. Queeenin cited “outside” factors including industry
consolidation, leaner companies, competing for scarce resources, information and relationships migrating online, and generational changes as influencing the new direction for the Group. He said the board has labored since January “all working together as a team” in making decisions. “We’re willing to try new things,” he told members gathered in Atlanta. Principal among those changes was to replace management
firm Smith-Bucklin, which had managed the association for six years, with Vickie Lester, an established, high-profile leader in organizational management. “We are charting a new course for the NFDA,” Queenin said. He noted that the NFDA has 89 distributor members and 58
associate members. 90% of the organization’s income is derived from member dues. Queenin acknowledged inclusion of both domestic manufacturers and importers was an issue for the NFDA. “Anti- dumping divides us,” he said, but reiterated that the two factions can work together on such issues as health care unions and taxes. He called on members to be more active in the organization, and pledged to make volunteer work a priority.
The NFDA aims to: 1. Bring industry leaders together. 2. Provide tools and insights to increase professionalism. 3. Work with other associations to strengthen the overall fastener industry — a new strategy for the organization. “Most of you belong to more than one association,” Queenin explained. “We will work together in moving all associations in one direction.”
4. Transform the NFDA into a national voice on policy matters that impact numbers by desseminating information.
For the NFDA the next 60 days will serve as a transition
period. The organization’s next meeting will be held in November 2012 in Scottsdale. Plans are not finalized, but the meeting will be sometime during the Pac-West meeting. In 2013 the NFDA plans a traditional spring meeting that will “possibly co-locate with another association.” Jay Queenin succeeded Matt Ulrich of Assembled Products
Inc. As a student Queenin worked summers at Specialty Bolt & Screw Inc and then went to law school. He became a prosecutor in the Massachusetts Attorney General’s office. He joined the family fastener business six years ago and is now COO. Founded in 1977, Specialty Bolt services large OEMs. Newly elected vice president Kevin Reidl works for Hodell-Natco Industries. The new distributor board members are Jim Lindrup of Fabory USA; Bob Lincum; and Simmi Sakhuja, president of Stelfast Inc.
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Fastener + Fixing Magazine • Issue 75 May 2012
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