Immagini della pagina
PDF
ePub

employment includes significant numbers of scientists and engineers. The higher pay required to retain such personnel accounts, in part, for the rise in labor costs at a time of declining employment in the industry. These characteristics are broadly representative of both U.S. and foreign plants and, in part, account for the industry remaining almost exclusively in developed countries.

Since the 1930s, organized labor has represented workers in this industry. Representation is divided between local and national union affiliates. The International Association of Machinists AFL-CIO represents employees at several industry plants. Labor forces are also unionized in Canadian plants and at some foreign facilities, especially in the United Kingdom, Sweden, Finland, and West Germany.

Though specific data are not available on paper machinery labor costs in foreign countries, general relative labor cost data indicate disparities between U.S. and foreign labor rates. Hourly labor costs in Finland, the United Kingdom, France, Italy, and Japan have been consistently less than in the United States while those in West Germany and Sweden have at times exceeded U.S. levels. The boosts in wage rates in Japan and West European nations, measured in U.S. dollars, stem largely from the substantial decline in the value of the dollar in recent years.

Energy Costs

The periods of energy short supply following 1973 brought a renewed interest in energy conservation to the paper machinery industry. Efforts of the Federal Government, in particular the Department of Energy, to reduce the energy intensive character of certain papermaking processes and to make paper machinery more energy efficient are detailed in the research and development section of this chapter.

The cost of purchased fuels and electric energy to the paper machinery industry was $19.5 million in 1986, or 2.8 percent of value added by manufacture and 1.1 percent of industry shipments. Since 1983, energy costs have risen by 13 percent from $17.2 billion. Comparable figures for earlier years were not available.

Costs of Capital

Interest rates affect financing of capital expenditures for the paper machinery industry's new plant and equipment and also sales to potential customers. Given the long-term nature of large machinery financing, a comparison of International long-term government bond yields provides a basis for showing the U.S. position among nations which are major producers of paper machinery (Table 15). This approach has a drawback in that data are not available for Finland. Thus, a second table shows central bank discount rates, including the

TABLE 1.4

HOURLY COMPENSATION COSTS
FOR PRODUCTION WORKERS IN MANUFACTURING,
SELECTED COUNTRIES, 1980, 1985, 1987

United West United Year States Germany Finland Kingdom 1980 9.84 12. 33 8. 21 7. 28 1985 12.96 9 - 56 8 . O7 6. 19 1986 13. 21 13. 35 10. 49 7. 50 1987 k 13. 46 16.83 13. 03 9. O'7 Year France Italy Sweden Japan 1980 9. 13 8. 14 12.51 5. 61 1985 7. 52 7. 40 9 - 66 6. 47 1986 10. 27 10. O1 12. 4 3 9 - 47 1987 k 12. 36 12. 33 15. 14 11. 34

* Preliminary

Source: International Comparisons of Hourly Compensation
Costs for Production Workers in Manufacturing,
1975-1987, Report 750, February 1988 U. S. Department of
Labor, Bureau of Labor Statistics.

Bank of Finland (Table 16). Though the central bank rates are generally lower, both tables show about the same rankings and patterns.

Among nations producing paper machinery, only West Germany and Japan had generally lower rates than those of the United States. In recent years, the downward trend in interest rates partly reflects expectation of reduced inflation.

Price Trends

From 1982 to 1986, prices of all types of paper machinery rose 13 percent or an annual average over the 4-year period of 3.15 percent. A closer look at price increases for specific types of product, as shown in Table 15, reveals nearly stable prices for pulp mill machines (5.8 percent), papermaking machinery -- headbox to reel (6.1 percent), and wood preparation equipment (6.3 percent); moderately rising prices for papermill machinery (10 percent), and strongly rising prices for paper-paperboard converting equipment (20.1 percent).

TABLE 15

LONG-TERM GOVERNMENT BOND YIELDS FOR SELECTED
PAPER MACHINERY PRODUCING NATIONS:

1980-86
(Percent)
United West

Year States Japan Germany France

1980 11. 46 9. 22 8 . 5 13. O3 1981 13. 91 8 . 66 10.4 15. 79 1982 13 - 00 8 . 06 9. O 15. 69 1983 ll. ll 7. 42 7. 9 13. 63 1984 12. 52 6. 81 7.8 12.54 1985 10. 62 6. 34 6.9 10.94 1986 7. 68 4.94 5. 9 8. 44

United

Year Kingdom Sweden Italy Canada 1980 13. 79 11. 74 16. 11 12.48 1981 14. 74 13. 49 2O. 58 15. 22 1982 12. 88 13. O4 20. 90 14. 26 1983 10. 81 12. 30 18. O2 11. 79 1984 10. 69 12. 28 14.95 12. 75 1985 10. 62 13. O9 13. OO 11. 04 1986 9. 87 10. 26 10. 52 9. 52

Source: International Financial Statistics, International Monetary Fund, Washington, DC, February, 1988.

In the past the vigorous price competition of foreign paper machinery producers reflected several price-related factors: production cost efficiency, higher value of the U.S. dollar and special Government-supported export financing mechanisms. More recently the lower value of the dollar vis-a-vis European and Japanese currencies has shifted in favor of U.S. exporters and helped to narrow differences in costs of materials and labor.

A profile of foreign price competitiveness May also be viewed in terms of type of paper machine. For paper machinery, the Finnish and West German sellers have been very strong competitors. For pulp refiners, Swedish competition was especially effective alongside West German and Canadian penetration. For supercalenders, a Finnish firm and its U.S. subsidiary has been a leading competitor pressed by West German and Swiss-West German firms. For winders, the Finns were particularly aggressive.

TABLE 16

CENTRAL BANK DISCOUNT RATES : 1982-87

(Percent)

United West Year States Japan Germany Finland France 1982 8. 50 5. 50 5. OO 8. 50 9 - 50 1983 8. 50 5. OO 4. 00 9. 50 9 - 50 1984 8. 00 5. 00 4 - 50 15. O7 9 - 50 1985 7. 50 5. OO 4. 00 9. 00 9 - 50 1986 5. 50 3. 00 3. 50 7. OO 9.50 1987 6. OO N/A 2 - 5 O N/A 9.50

United Year Kingdom Sweden Italy Canada 1982 11. 4.7 k 10. 00 18. 00 10. 26 1983 9. 59 k 8. 50 17. OO 10. O4 1984 9 - 3 O k 9 - 50 16.50 10. 16 1985 11. 56 k 10 - 50 15. 00 9. 49 1986 1.O. 37 k 7. 50 12. 00 8 . 49 1987 N/A N/A N/A N/A

* Treasury Bill rates (U.K.) in the absence of discount rates

Source: International Financial Statistics, International Monetary Fund, Washington, DC, February, 1988.

Operating Capacity

The production capacity of the paper machinery industry has expanded little in recent years as manufacturers have concentrated on improving research and development facilities and on upgrading production machinery such as machine tools and material handling equipment. Domestic manufacturing operations have largely remained at existing sites, and new factory expansion has been concentrated at foreign locations.

According to the latest available fighores, capacity utilization rates had not recovered to pre-recessionary levels by the end of 1986. The practical rate, at which a manufacturer can most effectively operate using a normal labor force, stood at 56 percent for the fourth quarter of 1986. This rate was essentially unchanged since 1984, after a recession inspired the fall from 66 percent in 1982 to 41 percent the following year. Preferred rates of operation are normally higher than practical rates. Preferred rates reflect the maximum rate at which facilities May be operated without incurring excessive costs. As with the practical rate, preferred

TABLE 1.7

PAPER MACHINERY PRICE INDEXES :

1984-87 Paper Wood Papermaking Paper-board Industries Preparation Pulpmill Papermill Machinery- Converting Machinery Machinery Machinery Machinery Headbox to Equipment Reel (1982 = 100)

1984 106. 3 1O3 - 7 N. A. 1O7.5 104.3 108 . 6 1985 109. 7 105. 6 104. 7 108 - 8 1O6. O 114.3 1986 ll2. 6 106. 3 105. 8 11O. 0 106.1 120 - 1 June ll2.4 1O6.8 104.8 109.3 106. 0 12O. 1 1987 ll 6. l N. A. 107. 3 113 - 9 106. 4 123.4

June

Source: U.S. Department of Labor, Bureau of Labor Statistics.

rates Fell during the 1982-83 recession, dropping from 79 to 54 percent between the fourth quarters of 1982 and 1983. The preferred operating rate for this industry rebounded quickly to 71 percent the following year and slipped to 65 percent in the last quarter of 1986 (Table 18).

Research and Development

Research and development (R&D) has long been of central concern to producers of pulp and paper machinery as a mainstay to long-run competitiveness. Continued research and development is a given without which firms would quickly fall by the wayside in a rapidly changing technological field. During the 1950s, a then major supplier largely suspended its R&D efforts; within 2 years the firm was bankrupt and sold to other suppliers.

Leading U.S. competitors such as Beloit, Black Clawson, Johnson, and Sandy Hill all maintain special R&D divisions close to their corporate offices or principal manufacturing plants. Both Beloit and Black Clawson also maintain separate R&D facilities at their U.K. subsidiaries. The R&D expenditures by Beloit and, secondarily, Black Clawson, substantially exceed those of other U.S.-based firms. However, many smaller suppliers also conduct extensive R&D activities.

« IndietroContinua »