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american

www.amba.org
the

mold builder
Volume 24 No. 4

speak out
a message from our president
Mike Armbrust

We
hope this letter finds you and your businesses doing well and begin-
IN THIS ISSUE: ning to see some signs of a positive return of the economy and your
revenue. This past quarter has brought about some changes to the
AMBA. By now most of you are aware that Melissa Millhuff, the
Executive Director of the AMBA has resigned. Melissa will be relocating to Michigan
after becoming engaged, and her husband-to-be is unable to relocate to Chicago because
of business commitments. Melissa’s last day as Executive Director was Friday, July 9th.
AMBA Scholarship Winners
The Board of Directors would like to personally thank Melissa for all of her dedica-
tion and hard work she put into the Association. Melissa was very proud of what the
Chapter Spotlight - West Michigan AMBA team accomplished during her tenure as executive director and wishes all the
staff, members and partners the best of luck as the organization evolves. I hope you
join us in congratulating Melissa on her upcoming marriage and wishing her the best
for the future.
AMBA News
In early June, the Board of Directors hired Harbour Results, Inc. to come and facili-
tate the Association through the development of our first long term strategic plan. The
board thought it critical to assess the Association and develop a plan to reinvigorate the
What’s Your Business Worth? organization much like we have all had to do with our companies. We have put some
very exciting new plans in place to grow the organization, create new programs, pro-
vide new value to members, get great speakers for our upcoming events and promote
Human Resources the AMBA brand. We continue to remain focused and committed to the vision of the
Association and these new plans will allow us to do much more for the members, cus-
tomers, partners, suppliers, government and educational institutions so we truly make
a difference.
summer 2010

In response to Melissa’s departure we were able to secure the team of Harbour Results,
Inc. to not only assist with strategic planning but also step in as interim Executive Man-
agement of the AMBA. As of July 12th Laurie Harbour and Gary Burns from Harbour
Results have been working with the staff of the AMBA to ensure that our accomplishments continue,
(continued on Pg 8)

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2 AMBA
Speak Out: A Message From Our President
(Continued from front cover)
The official publication of
American Mold Builders Association
new initiatives are implemented and business goes on as usual. You can
meet Laurie and Gary at the AMBA offices and at our Washington Fall Leading the Future of U.S.
Conference event on September 28 – 30th. This new team is excited and Mold Manufacturing
looking forward to serving the AMBA. If you have any questions or con-
cerns, please don’t hesitate to contact the AMBA office or any one of the
board members.

Thank you for your commitment to the AMBA. Don’t forget to sign up
for the Washington Fall Conference. We have critical issues that will be
covered and you won’t want to miss the opportunity to talk with your
3601 Algonquin Rd, Suite 304 • Rolling Meadows, IL 60008
congressional representatives and senators about your business and our phone: 847.222.9402 •fax: 847.222.9437
industry, and impress upon them our needs and desires for the future of email: info@amba.org • website: www.amba.org
U.S. manufacturing. You can read more about the Fall Conference in this
issue. Remember, fair trade starts with you! Officers and Board of Directors

I am proud to be an American Mold Builder! God Bless America! o President


Mike Armbrust, Mako Mold Corporation
Vice-President
Todd Finley, Commercial Tool & Die
In this Issue: Secretary
Summer Business Forecast Survey............................................................................... 4 Shawn McGrew, Prodigy Mold & Tool
Point of View................................................................................................................. 6
Taking the Case for American Manufacturing to Congress........................................ 6 Treasurer
AMT’s Manufacturing Mandate: Revitalizing American Manufacturing.................. 8 Kent Hanson, H.S. Die & Engineering, Inc.
Inconvenient Truths About Currency Manipulation.................................................. 9 Association Legal Councel
“The Design is Mine”: Moldmakers Speak Out on Who Owns the IP......................12 Richard N. Mueller & Associates
AMBA Educational Scholarships for 2010.................................................................13
AMBA News.................................................................................................................17
Welcome New Members.........................................................................................18
Board of Directors
Members and Partners Exhibit at PDx / Amerimold 2010..........................19 Steve Rotman, Ameritech Die & Mold
Member News.............................................................................................................20 Shawn McGrew, Prodigy Mold & Tool
Chapter Spotlight - West Michigan Chapter.............................................................21 Kent Hanson, H.S. Die & Engineering, Inc.
Chapter News..............................................................................................................21 Justin McPhee, Mold Craft
Welcome New Partners...............................................................................................26 Robert Earnhardt, Superior Tooling
Partner News...............................................................................................................26
Todd Finley, Commercial Tool & Die
Gibson Insurance Dan Glass, Strohwig Industries
Small Business Health Care Tax Credit: Questions & Answers (Q&A)...... 26 Roger Klouda. M.S.I. Mold Builders
Human Resources Scott Phipps, United Tool & Mold
What Can an Employee Handbook Do For Your Small or Robert Vaughan, Fairway Injection Molding Systems
Mid-Sized Business? .....................................................................................30
Mike Walter, MET Plastics
Auditing Your HR Function...........................................................................30
Job Descriptions - At the Heart of the Job..................................................30
Andy Baker, Byrne Tool & Die
Michael Bohning, Creative Blow Mold Tooling
Tax & Business
Qualified Transportation Fringe Benefits....................................................31
Deducting Business Bad Debts.....................................................................32 AMBA Staff
Using Employee Stock Ownership Plans (ESOPs).......................................32 Sue Daniels, Member Services Coordinator
Tax Benefits from the HIRE Act....................................................................32 Shannon Merrill, National Chapter Coordinator
States Follow Lead of the Federal Government by Adding
New Hire Incentives......................................................................................34
The American Mold Builder is published four times annually in spring,
Business Success Strategies
summer, fall and winter by the American Mold Builders Association.
How Much Is Your Business Worth?............................................................34
Assistant Editor: Sue Daniels; Contributing Author: Clare Goldsberry;
Transferring the Plastics Business................................................................36 Layout & Design: Controlled Color, Inc. phone 630/295-9210;
Timeless Ways That Will Grow Your Business..............................................37 Publishing: Your Images Group, Inc., phone 847-437-6688; Copy
Why Mold Shops Qualify for the R&D Tax Credit.......................................37 deadline: 25 days preceeding publication date. Contact AMBA at
Social Media Marketing Strategies...............................................................40 847/222-9402 or email info@amba.org for advertising information,
Three Marketing Mistakes Every Business Manager Makes.......................40 article submission ideas, or a subscription.
The Great Leader - Top Tips and Advice for Successful Leadership............43
Grow Your Business Network.......................................................................43 Opinions expressed in this publication may or may not reflect the views
Classified Corner.........................................................................................................44 of the Association, and do not necessarily represent official positions or
Tech Corner.................................................................................................................44 policies of the Association or its members.
Advertiser Index..........................................................................................................46

AMBA 3
AMBA Summer Business Forecast are trending down for 24%, a significant drop from the 31% of the
respondents in the Spring survey.
Confirms Recovery
Employment levels are also confirming that responding companies
The Summer 2010 Business Forecast Survey of the AMBA reveals that are much busier, with employment Up for 26% of the respondents in
the recovery seems to have taken hold as business continues getting the Summer survey, compared to only 14% of the respondents in the
better for a majority of respondents. The quarterly survey revealed that Spring survey. Employment numbers remained the Same for 63% of
current business conditions once again improved over the previous three the respondents, down from 66% in the Spring survey. Employment is
months, with 9% of the respondents saying that business is Excellent– Down for only 11% of the respondents, a significant drop from 20% of
up two percentage points from 7% of respondents in the Spring 2010 the respondents reporting reduced employment in the Spring survey.
survey, better than it has been in more than a year. A total of 40% of the
membership responded to this recent survey. The current average number of shop employees ticked up by one at an
average of 23. The current average number of design and engineering
Current business conditions also improved significantly, moving up employees remained steady at five, after a drop of one in the Spring
9% for those reporting Good conditions (44%) compared to 35% of the survey to five employees. Work-week hours for shop employees also
respondents in the Spring survey. That is up a full 21% as the outlook ticked up by one hour to 46 for the Summer survey. For design and
continues to move in the right direction. Fair business conditions exist engineering employees the hours continue to remain steady at 45, the
for 41% of the respondents compared to 43% of the respondents in the same as the Spring 2010 survey.
Spring survey. Those reporting Poor business conditions continues to
decrease, with only 6% noting poor conditions, down from 14% in the Questions:
Spring 2010 survey. This category continues to show improvement – The questions in the summer survey asked respondents, “What is your
from 27% reporting poor business conditions in the Fall 2009 survey. biggest technological challenge?” and “Do you use quoting software
Certainly this tends to prove out what is being heard in the industry – when quoting jobs?” If “Yes” what type; if “No” why not? And what
that things are turning around for many mold companies. percentage of quotes become actual jobs?

The biggest technological challenge for moldmakers seems to be as


No one in the survey reported Bad conditions for the first time in many
varied as the companies. Cost of purchasing technology was mentioned
quarters. Last summer, during the heart of the recession 12% reported
several times, as was finding and training new people to run the
bad business conditions. What a difference a year makes.
machine tool technology; reducing the programming time; and meeting
shorter and shorter lead times.
Projections for business over the next three months are a also optimistic
with respect to the outlook of future business among respondents. Nine One respondent said, “We do not have a technological problem. Our
percent expect business to Increase Substantially, compared to 4% problem is no work.”
in the Spring survey, as this continues to improve. Those expecting
business to Increase Moderately however, fell from 44% in the Spring Responding to the question regarding the use of quoting software to
survey to 31% in the Summer survey. Respondents expecting business help with the task of mold quoting, 49% of the 99 respondents who
to Remain the Same came in at 47%, up a bit compared to 45% in the chose to answer this question use quoting software; the remaining 51%
Spring survey. Respondents expecting business to Decrease Moderately do not use quoting software. Of that 49% who do use quoting software,
increased by four percentage points to 11% compared to 7% in the 75% use a system they developed themselves; with 26% using software
Spring 2010 survey. Two percent of the respondents expect business to they purchased.
Decrease Substantially, also an uptick from 0% in the Spring survey.
When asked why they don’t use software to quote molds, 44% of the 27
When asked to compare their company’s current level of business respondents who chose to answer the question said they “don’t trust the
with that of three months ago, responses indicate some movement in a data” provided by the software. Another 56% of the respondents said
positive direction: the “software is too expensive.”

Quoting activity is again Down for 32% of the respondents compared Comments from respondents included, “Custom moldmaking proves
to 46% of the respondents in the previous survey; the Same for 44% of to be too diversified and creative . . . especially creative!” Some found
the respondents, up from 35% in the Spring 2010 survey; and Down for the software not flexible enough for their use; some find that it doesn’t
24% of the respondents compared to19% in the Spring survey. provide accurate numbers; or they tend to quote for the same customers.

Shipments are Up for 36% of the respondents, the same as the previous The percentage of quotes that turn into jobs continues to be quite low:
quarter, but stayed the Same for 45% of respondents (up from 42% in 57% reported that only 1-10% of the quotes they submit result in getting
the Spring survey); and Down for 19% of the respondents, fewer than the work. 29% get 11-25% of the jobs they quote; and 14% get 26%+ of
the 22% reporting in the previous quarter. the jobs they quote.

Backlog is Up for 37% of the respondents, up slightly from the 34% Additional Comments:
in the Spring survey, confirming the “excellent” and “good” business Overall, business is looking quite good for the majority of those
projections. Backlog is the Same for 34% (down two percentage points responding to the survey. “The first half of our fiscal year was horrible,”
from the Spring survey); and Down for 29% , down slightly from said one respondent. “The second half is starting off crazy. We can’t
30% in the Spring survey. Work seems to be keeping steady with little keep up. I will actually be hiring another tool maker.”
fluctuation.
“We’ve seen more quotes in the last 90 days than we usually see in
Profits in the Summer survey are Up significantly for 29% of the six months,” said another respondent. “But the time to release orders
respondents, compared to 20% in the Spring survey. This category has promised is now months instead of days.”
also trended up from a low in the Spring of 2009. Profits are the Same
for 47% of the respondents, down two percentage points from the In spite of the optimism, some expressed a degree of reluctance to
Spring survey, and identical with 47% in the Fall 2009 survey. Profits believe that the recession is completely over for this industry. “Presently

4 AMBA
AMBA Summer 2010 Business Forecast Survey Results

The AMBA Business Forecast Survey was developed to provide AMBA members with information
on the current business conditions and a projection of the upcoming months. The Summer 2010
Survey resulted a response rate of 40% from AMBA members. Business remains "Good"
for 44% of the respondents, and for 9% of the respondents it is "Excellent."

AMBA Members Current Business Projection of Business Over the Next 3


Conditions Months
Increase
44%
Excellent 47% Substantially

Good 31% Increase


Moderately
Fair
9% Remain the
Same
Poor 9%
0% 11% Decrease
41% Bad 2% Moderately
6%
Decrease
Substantially

Current Level of Business in Last 3 Months

70% Quoting
60%
Shipments
50%

40% Backlog

30%
Profits
20%

10% Employment

0%
Up Same Down

Current Work-Week Hours Current Number Plant Employees


50
50

40
40
Plant Employees

30
Work Hours

30
46 45
20
20
23 5
10
10
0
0
Average Shop Employees Average Design & Engineering Employees
Average Shop Hours Average Design & Engineering Hours

What percentage of the


Do you use quoting software quotes that you submit result
If you do use quoting
when quoting jobs? in actual jobs?
software, did you:
49%
26%
14%

74%
Yes No 29% 57%
Develop it yourself
51%
Purchase it from a software company 1-10% 11-25% 26% +

AMBA 5
it is looking more positive, but I have the feeling it will probably still (in this case, the lawmaker or his/her assistant). You listen to them
take a considerable amount of time before we all will be satisfied,” said talk about how wonderful they are (it’s part of their job to be self
a respondent. congratulatory), and then you present the issues that you, as a
moldbuilder, are dealing with. If you’re happy with their voting record,
“We are cautiously optimistic about the future,” said another make sure to thank them for their efforts. On the other hand, if you’re
respondent. “The workload is good but we are concerned about unhappy, don’t scold them about it (it may be fun to vent, but it’s about
continued offshore sourcing.” as effective as yelling at a child); just give them your side of the story,
and ask them to reconsider their position. Also, if you happen to take
That comment indicates that China is still a burr under the saddle of sides with the party on the other side of the aisle, by no means should
some, in spite of word from many mold shops that China seems to
you point that out, as there will be no motivation for them to listen to
be less of a problem, and noting that they are quoting against China
you. Just find the common ground, and work from there.
less often. “Offshore tooling is still driving prices down,” said one
respondent. Another noted that “We are seeing more and more Chinese
tooling! Something needs to be done!!” The exciting part about these meetings is that it gives us the chance
to let ourselves be heard, make our issues known, and possibly make
Visit our web site at www.amba.org o a difference. It provides our lawmakers the opportunity to hear from
someone other than the large corporate lobbyists. Granted, a small
industry group like the AMBA may not single-handedly form policy
Point of View in Washington, but if lawmakers hear the same story from a number of
groups, there are bound to be some changes.
By: Mike Walter, Vice President of MET Plastics and AMBA
National Board Member
Now is the time to be heard, and strength in numbers is what we need.
Fall is just around the corner. While this It’s time put into the AMBA what you get out of it. I hope to see you
time of year typically means it’s time to in Washington! o
wrap up the summer activities and start
unpacking the argyle sweaters, flannel
shirts, and long johns from storage, it’s Taking the Case for American
also becoming known as the time of year
that AMBA members put on their activist Manufacturing to Congress
hats and head to Washington to lobby their By: Scott Paul, Executive Director, Alliance for American
elected officials. manufacturing and speaker at the upcoming AMBA Fall
Conference in Washington, D.C.
This year will mark the third year that
AMBA has held its fall conference in Americans believe that our country has
Washington. The first year, we spent lost its leadership position in the world
the conference learning about the political issues at hand and what economy, a position they want to regain.
we should be doing to get our voices heard. Last year, we went back They view a resurgence of, and policies to
to Washington and spent two days lobbying our congressmen and support, manufacturing as critical to regain
senators. As this was our first attempt at lobbying, we learned a few that leadership position. Voters are right:
lessons (for instance, don’t try to lobby on a Monday), but we also made we must not allow the long-term neglect
an impact. A number of members built on those initial meetings and of our manufacturing sector, coupled with
developed relationships with their lawmakers, ensuring their awareness an economic crisis, to diminish America’s
of our industry. Some of us were even able to setup meetings with our leadership position. We can, and must, do
lawmakers at our shops. better.
If you weren’t able to attend the previous two fall conferences, this
To date, our nation’s economic recovery
is the year to get involved. As in past years, we will be meeting with
policies have been focused on the financial sector, attempting to shore
lawmakers in groups. However, this year we will have seasoned
up the shaky foundation and to enhance the regulatory infrastructure.
lobbying veterans in our midst (ok, maybe we’re not experts, but at
Long-term economic recovery will not occur until we also take actions
least we’ll be able to navigate the hallways of the offices and find the
to address the challenges facing the productive sector of our economy.
cafeteria during breaks).

This year is a critical year for us. It’s an election year, and a number America’s manufacturing sector has inherent strengths: a qualified,
of districts are up for grabs. Job growth is a hot topic, and many determined workforce; an innovative society; and diverse natural
lawmakers realize that they too will be in the unemployment line if they resources. Revitalizing manufacturing, while requiring a number of
don’t at least create the perception that they’re helping to grow jobs important steps, can capitalize on these strengths, restore its vitality and,
in their districts. Additionally, currency legislation is making its way in turn, help America’s economy recover. But manufacturing cannot
through the House of Representatives, and its gathering steam. This continue to endure the policy vacuum that it has faced for far too long.
is the bill that we asked our lawmakers to support last year. There’s a
good chance it will come up for a vote either shortly before or after the Revitalizing manufacturing will require that these key challenges
conference. If it comes up before the conference, we will need to make be addressed:
it a point to thank those officials who voted for the bill and let them
know that we support them. If the bill hasn’t come up for a vote yet, we • Access to capital: Many of our nation’s manufacturing companies
will need to educate our lawmakers on the importance of the bill and continue to face problems raising capital at competitive rates. The
ask for their support. Federal Reserve, Department of the Treasury and other public
entities must take aggressive steps to open up avenues for funding
The meetings themselves are nothing to get nervous about. They’re at rates that will help increase investments in plant, equipment and
basically “sales” meetings in which you make a pitch to the customer people. In addition, specific support should be given to ensure

6 AMBA
that we are able to address the goal of energy independence by
expanding funding for programs that will accelerate development
of the manufacturing of alternative and renewable energy
production equipment and components. Immediately expanding
funding for Section 48(c), dramatically expanding support for Hot Runner
industrial energy efficiency efforts and other programs and
policies directed at the similar goals are key steps in that effort. In
addition, as our nation seeks to become more energy independent,
Solutions For
it will be important to ensure that the safe and effective
development of domestic sources such as natural gas, wind, solar All Applications
and nuclear energy go hand-in-hand with developing domestic
supply chains for this new energy infrastructure.
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While the stimulus bill focused on “shovel-ready” projects, it I Designed for Engineered Resins
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important to create a National Infrastructure Bank and invest Hot Half Systems
heavily in America’s highways, transit, rail, shipping and other
infrastructure needs, many of which have gone unaddressed
for far too long. Fostering long-term demand in manufacturing Quick-Flo™ Systems
requires more sustained investment and must be coupled with For Hi-Cavitation Molding
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coupled with adherence to Buy America requirements. This can
provide important support to our manufacturing sector while also
complying with our international obligations. Opti-Flo® Manifold Technology
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innovative workers. But the challenges of a global marketplace I Optimized for DF Gold
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conjunction with enhancing access to capital, increasing demand


and taking other steps to revitalize our manufacturing sector,
we must make investments in our people to ensure that they are
equipped to meet the ever increasing demand for talented workers.
Congress should examine ways to increase access to training funds
for people who are out of work as well as those seeking to enhance
their skills.

• Competitiveness: Many of our key competitors have continued


their protectionist and predatory approaches to promote their own
economic interests at the expense of others. Our trade policies
must focus on achieving real results that not only open markets
to our products, but also ensure that unfair trade is not allowed
to continue to decimate our economy. Congress must keep our
trade laws strong — in legislation, in negotiations and in dispute
resolution — and strictly enforced. Congress must also act to
address currency manipulation by China and other countries. Not
only must it do this on a country-to-country basis, but must also
ensure that industries be able to utilize our trade laws to respond
to currency manipulation when our government refuses to act. In
addition, efforts like China’s indigenous innovation effort must be
aggressively confronted. Enforcing our laws more aggressively is
key to not only restoring economic growth and our manufacturing
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The President’s call for doubling our nation’s exports, is a worthy
goal, but it is also a distant one. And, in the meantime, the flood

AMBA 7
of imports continues unabated. The imbalances we saw prior to
Anatomy of a Better the recession are returning, inflating our trade deficit, which means
Hot Sprue Nozzle jobs and wealth are again headed overseas at alarming rates. While
part of the answer, clearly, must be to raise our national savings
rate, that goal cannot be achieved without restoring economic
growth and incomes. Our trade deficit demands equal attention.

These five areas of focus represent only a few of the immediate steps
that must be taken to put our nation, and our manufacturing sector,
back on the path to long-term economic growth. These initial actions
must be coupled with longer-term efforts to ensure that our tax code,
trade policies and other important issues are reformed and modernized
to address today’s competitive realities. Real, concrete steps are
necessary if America is to regain its economic leadership. We cannot
afford to wait. o

ENGINEERED TO FIT
DIRECTLY INTO M-U-D AMT’s Manufacturing Mandate:
UNIT DIE INSERTS Simple and
Effective
Revitalizing American Manufacturing
◆ Even Temperature By: Douglas K. Woods, President of AMT – The Association for
Control Manufacturing Technology and presenter at the upcoming AMBA
◆ Replaceable
Components Fall Conference in Washington, DC
• From 1.875" Total
◆ Field Serviceable
Nozzle Length
LCP, Ultem,
◆ Cost-Effective In the boom of the 1950s, manufacturing
PPS and
• Field Serviceable
other high represented more than a quarter of this
heat-heat
sensitive country’s economy and about a third
resins of employment. Today, manufacturing
accounts for only about 12% of
Call Us Direct the economy and less than 10% of
(800) 499-OSCO employment. Considering that American
CRY-2883 Prelim1-1.fh11 1/15/07 3:33 PM Page 1
★ www.oscosystems.com ★
manufacturers work at a 17% cost
C M Y CM MY CY CMY K
disadvantage versus their foreign
competitors, it is a testament to these
companies’ determination and resilience
that they have been able to survive this
latest recession.

The past two years have been devastating for the U.S. manufacturing
sector, particularly the small and medium-sized companies who for
decades supplied the auto industry, and a solid recovery has yet to take
hold. Uncertainty over the future hampers efforts to retool, diversify
and invest in R&D. When a company does decide to upgrade and
invest in new manufacturing technology, working capital and financing
are unavailable and government grants and incentives are difficult to
obtain. The supply chain has become still another obstacle. Companies
drew down inventories by stopping or slowing production early in the
recession. That has forced some suppliers to narrow their customer base
to only their very best customers because they are unable to supply
all of their customers effectively. Add the fact that U.S. companies
are forced to operate in a business and regulatory environment that
significantly adds to the cost of doing business, and it is no wonder
that the United States currently lags behind our trading partners in new
fields we should be dominating. If we don’t redirect our government
policy and resources to focus on manufacturing innovation and R&D,
there will be more missed opportunities for American technological
leadership, and our citizens will ultimately pay the price.

AMT believes a national manufacturing strategy – a “Manufacturing


Mandate” – is necessary to begin a sustainable recovery and build a
strong foundation for long-term economic growth. It is possible for
the government, industry and our academic communities to work
together, utilizing an infrastructure already in place, to revitalize our
manufacturing sector, encourage innovation and promote real economic
growth.

8 AMBA
Composite
The Administration’s “Framework for Revitalizing American recovery is fueling a continuing uneasiness over the future. A carefully
Manufacturing” is an important first step in strengthening our country’s considered approach to policy aimed at ensuring U.S. manufacturing
beleaguered manufacturers. AMT is encouraged by President Obama’s companies survive and prosper is necessary. In the short term, that
efforts in responding to the struggles of small and medium-sized means taking steps to loosen credit and heat up demand for American-
manufacturers. His administration has set a worthy goal to double U.S. made products. It also means slowing the pace of some necessary
exports over the next decade and launched the National Export Initiative reforms and, in other cases, eliminating unnecessary reforms until our
to achieve that goal. The Administration also demonstrated a strong nation — its businesses and its citizens — has had time to rebuild and
commitment to Science, Technology, Engineering and Math (STEM) strengthen. In the long term, it means generating innovation.
education and R&D in its FY2011 budget. Targeted investment in
export promotion, R&D and STEM education programs is fundamental In a few weeks, the doors will open for an important manufacturing
to America’s competitiveness in the global marketplace, and these event sponsored by AMT — the 28th edition of IMTS (the International
initiatives underscore the importance of education, trade, manufacturing Manufacturing Technology Show) at Chicago’s McCormick Place.
jobs and innovation to our economy. Manufacturing needs more of IMTS is important because it provides the unparalleled opportunity for
this focused attention from our federal government if high-value jobs manufacturers and customers to come together under one roof for the
are to be created, if our trade deficit is to be reduced, and if we hope to largest manufacturing trade show in the Western Hemisphere. IMTS
generate the tax receipts to outweigh our spending. inspires manufacturers to put money to work through wise investment in
technology. Together, IMTS 2010 and AMT’s Manufacturing Mandate
While AMT is pleased that the Administration appears to recognize can be the rallying point for revitalizing American manufacturing. Our
that a strong manufacturing sector is critical to America’s economic economy, our standard of living and our national defense depend on
growth and national security, we are concerned that increased taxes what actions we take now to prepare for our future.
and excessive government regulations, like those contained in the new
health care law, the financial reform bill and energy/climate change To see the Manufacturing Mandate it its entirety, visit www.AMTonline.
proposals, will derail this fragile recovery. It is time to take the next org. To learn more about IMTS, including information about attending
major step. AMT is calling for a federal policy of collaboration between the show, visit www.IMTS.com. o
government, industry and academia that encourages innovation and
R&D in new products and manufacturing technologies; assures the
availability of capital; increases global competitiveness; minimizes
Inconvenient Truths About Currency
structural cost burdens; and builds a better educated and trained Manipulation
“smartforce.”
By: Alan Tonelson, Research Fellow, USBIC (US Business and
Industry Council)
There is little doubt that America’s future rests on our ability to
innovate. Business leaders from a range of manufacturing industries
More than eight years after domestic
share the conviction that innovation is the driver of sustained economic
manufacturers began complaining;
growth, competitiveness and a higher standard of living; and a vital
the United States keeps appeasing and
manufacturing sector is obviously a critical element of the innovation
enabling China’s brazenly predatory
process. American products are still sought after around the world
policy of currency manipulation. One
because of our ability to harness emerging technologies to create
main reason: So many outsourcing
superior products and services.
multinational companies, and their equally
How, then, are our major trading partners winning the innovation multinational Wall Street banks and
race? They have done a better job of incentivizing R&D, inspiring and brokers, see huge profits to be made by
training their youth to enter careers in manufacturing, promoting exports supplying the lucrative U.S. market from
and attracting foreign investment in manufacturing. Consequently, super-low wage, highly subsidized, and
American companies are setting down their manufacturing roots and regulation-free foreign production sites
spending greater portions of resources in countries that provide more like China. They benefit from practices
efficient manufacturing infrastructures and greater financial incentives like currency manipulation, and they have
for innovation. This has had a dramatic impact on innovation as U.S. lobbied hard and lavishly in Washington to keep the gravy
manufacturers’ investment in R&D outside the United States has train running.
outpaced domestic R&D by a three-to-one margin over the last decade.
Not surprisingly, the United States has also run a negative trade balance But there’s more than money and power involved. Most of America’s
for advanced technology products during that time – the first deficit in blue-chip academic economists recoil in horror at the thought of
this area since World War II. playing hardball with China – or any trade competitor. Many are in the
multinationals’ pockets. But securing reciprocity in trade relations also
To achieve long-term superiority in the rapidly evolving technology- isn’t what they – or the professors who taught them – learned in school.
based global economy, we need a national strategy to first help the So they churn out a steady stream of arguments either defending
sector recover from the downturn of the last two years. Then, that Chinese practices or explaining why strong American responses
strategy must focus on the long-term goal of unleashing a dynamic will fail, or both. And thanks to their credentials, many politicians –
innovation economy and generating real economic growth…we believe including those simply looking for cover – take them seriously. And so
the essence of that strategy is outlined in our Manufacturing Mandate. of course do numerous journalists and other commentators.

Yes, the recession has taken a significant toll on our manufacturing Yale University’s Ray C. Fair provided a typical example of this
sector – one from which it will be difficult to recover. Adverse business thinking in the Wall Street Journal in June. His op-ed “The Yin and
conditions have affected long-term planning and diverted important Yang of Yuan Appreciation” ably summarizes many of the main
resources away from R&D and job creation. This has already cost arguments for appeasing the Chinese – and presumably other currency
American industry important inroads into new markets. The slow manipulators. But it also illustrates that the purely economic case

AMBA 9
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against effective U.S. countermeasures – like those gathering some trying to change the behavior of other countries, which to a great extent
steam in Congress – is thoroughly lame. is beyond our control, and certainly beyond our direct control.

Most of Fair’s points boil down to the observation that Yuan Fair also has a point when he warns that a significantly higher Yuan,
appreciation by itself probably wouldn’t boost U.S. production or or tariffs that raise the prices of Chinese goods could – at least at first
employment, and in fact would likely backfire (at least modestly), doing – cause problems for the U.S. economy. In particular, it could slow
the domestic economy more harm than good. This point may have some Chinese growth – which has relied heavily on exporting – and thus
merit as far it goes. But it’s equally clear that it doesn’t go nearly far reduce Chinese demand for products that Americans do export there.
enough. In fact, what Fair’s article shows most vividly is what happens He also rightly points out that, at first, fewer U.S. imports from China
when smart people stop thinking at points they find convenient. could slow American consumers’ spending, and therefore growth in this
country.
For example, it is true in theory, as Fair points out, that producers based
in China could shift production to other countries, and thus evade the But those believing in completely painless ways out of the economic
effects of Chinese revaluation. Real world circumstances, however, in mess created by decades of failed U.S. trade and other economic
practice would often blow this argument out of the water. Specifically, policies are simply deluding themselves. The point of changing trade
in enormous industries like electronics, both foreign and Chinese policy is to help build a reliable foundation for American growth and
producers have such huge sunk costs in the China-based manufacturing prosperity over the long haul. This aim involves shifting our growth
complex, and this complex is so big, and contains such well-developed formula from the current reliance on importing and spending and
and efficient networks of suppliers, that moving much of it would be borrowing, to reliance on saving, investing, and producing. In the
prohibitively expensive and/or difficult. process, U.S.-based producer businesses and their employees will see
more opportunities to finance their living standards through earnings,
And what about industries that can move? The U.S. Business and and less need to do so by borrowing and incurring ever greater debts.
Industry Council – unlike some other manufacturing groups working
against currency manipulation – has insisted from Day One that a new
Using tariffs to negate the effects of China’s predatory trade policies
China trade policy needs to be part of a much broader overhaul of
and reduce (and hopefully eliminate) the bilateral deficit is a big
America’s entire trade policy. So, for example, any U.S. response to
essential step toward that goal. As Fair argues, wages initially may not
Chinese currency manipulation has to be agile and smart enough to be
rise fast enough to offset the initially higher prices for U.S. goods that
able to cope with any production shifts from China to other countries.
China tariffs would encourage. But with effective enough tariffs, these
Another example – we need to stop signing trade agreements whose
wages must eventually rise, all else equal, as economist love to say. If
main purpose is to offshore production and jobs to low-cost countries, the resulting net new demand for U.S.-made goods is great enough, it
and dramatically modify or withdraw from existing agreements that fit is bound to produce some increase in net demand for U.S. labor. And
this description. unless the laws of supply and demand have been repealed, a tighter
labor market will push wages up.
As Fair notes, it’s also true that the effects of Chinese revaluation on
U.S. imports and exports and output and employment would depend Finally, Fair’s overall conclusion that the net impact for America of a
in part on what America’s other competitors do with their exchange much stronger Yuan is modestly negative seems to assume that Sino-
rates and other aspects of their trade policies. Similarly, the effects of a American trade is reasonably balanced and mutually beneficial already.
Chinese revaluation would also depend in part on overall trends in these Were that the case, the multiple changes produced in both countries by
other foreign economies as well – mainly, how quickly or slowly they Yuan revaluation – or even some form of tariff – could indeed just about
were growing. But again, the response is pretty simple – Washington negate each other. But because bilateral trade is so massively lopsided,
can’t forget the nation’s other trade policy challenges while it responds and the U.S. deficits so enormous, any reduction in these deficits as
to Chinese predation. It needs to be able to walk and chew gum at the such inevitably benefits U.S. growth and employment and wages more
same time. on net.

Fair is also correct in pointing out that even a much higher Yuan could Most important, Washington can ensure that most of these gains stay in
well have reverberations all around the world that would reduce the the United States, rather than leak out to other competitors, if our trade
benefits to domestic manufacturers here (although there is no reason policies are smart and agile enough to keep preventing and plugging
to believe that his own research findings are anywhere near accurate new holes.
enough to capture all these effects. No one is remotely that smart.)
Alan Tonelson is a Research Fellow at the U.S. Business and Industry
But in part precisely for this reason, America’s main goal should not Council, whose nearly 2,000 member companies and associations
be a stronger Yuan. It should be imposing tariffs high enough and include the American Mold Builders Association. The author of The
Race to the Bottom (Westview Press, 2000), Tonelson is also a columnist
long-lasting enough to greatly reduce imports from China and greatly
for the Washington Times and Industrytoday.com, and a contributor to
narrow the bilateral trade deficit. These tariffs also need to be high
USBIC’s AmericanEconomicAlert.org website. o
enough to offset the effects of all of China’s other predatory trade
policies, including intellectual property theft, other illegal subsidies, and
dumping.

Incidentally, this focus on U.S. actions rather than reforming the For Breaking News and the Latest AMBA Activities
Chinese economy reflects another distinctive USBIC view: U.S. trade Be sure to read the Weekly Beat email News Bulletin &
policy needs to spend more time focusing tightly on controlling what
Market Report!
America can control – that is, access to its own market – and less time

AMBA 11
“The Design is Mine”: Moldmakers Speak allow one to produce the product without a key code to unlock it. “The
customer would own the design, which would allow them to view
Out on Who Owns the IP assemblies, components, and manufacture spare parts, but would not
By: Clare Goldsberry allow the entire design to be remanufactured, thereby protecting those
tool design concepts developed by inventive American moldmakers,”
When moldmakers come up with a creative, innovative idea that Rice says. “When we contract to do a design, it belongs to our
solves a specific challenge for a customer, who owns that design? The customers, yet we’ve spent thousands perfecting this mold design. They
customer, say most moldmakers. But that creates other problems for the can take the design to China or India and get a tool made for a fraction
mold manufacturer. of the cost.”

Whether or not they acknowledge it openly, moldmakers are some Rice also notes that architectural designs were not protected until 1990.
of the most innovative, creative people there are when it comes to Today, all their designs are copyrighted. You can purchase the design to
coming up with solutions for molding challenges. It’s been said that build one building or one house. “We let the OEMs do what they want
to be a good moldmaker, one has to be able to think backwards and because we have no control over our industry,” says Rice. “I think we
upside down—not an easy thing to do. But thousands of people in mold do. My thought is we like our customers and want our customers to
manufacturing companies throughout Europe and North America do it make spare parts. But to make an entire assembly—a second tool—we
every day. And thousands of OEMs and molders benefit from this vast want them to come back to us for that. To unlock every detail so that
storehouse of engineering knowledge that has been gained over the past anyone can build the tool using our creativity isn’t fair. We have to
four decades from these workers. challenge the people in our industry to find solutions to this.”
What do you think? Who owns the design? At what point are creative
This knowledgebase didn’t come from a textbook in a college of
elements of a mold property of the moldmaker? Are they ever the
engineering. Many of these people (the older ones, especially) don’t
moldmaker’s property? Do you have a solution? Or is this even a
have a college education, and younger folks find their creativity
problem? Tell us what you think.
blossoming under the mentorship of esperienced moldmakers who can
turn chunks of steel into precision, high-speed “machines” to produce a
Comments from moldmakers
myriad of plastic parts. But when this knowledgebase is used to create
“To us this has been an issue. The way that we have accepted it is that
mold design innovations, who owns them?
the customer is buying the design when they buy the mold. It is not a
“As you are well aware, the greatest investment made by mold sound way, as the engineering is our ‘autograph’ and is what sets us
companies in today’s competitive environment is their [mold] design for apart from our competition. We saw one of our specific product designs
each product,” says Mike Rice, CPIM, Gruber Tool & Die Inc. (West plagiarized by a customer that let [an] offshore [company] have—or
Bend, WI). “Many ingenious ideas are crafted to improve the design at least look at—one of our distinct designs for this particular product,
and reduce the overall cost of the tool. Our customers demand that and then came close to trying to copy it. They didn’t get it all right, but
they own the design when complete, which allows them the ability to it could happen with anything that we do. It would be interesting to see
manufacture replacement components. The issue is that they may then what some of the larger shops may be doing with this type of issue, such
outsource additional molds to cheap overseas manufacturers using that as H.S., Commercial, Proper, MSI, Prestige, Moldcraft. They are all
unique design concept we developed, thereby reducing or eliminating into niches where engineering is their life. The AMBA might be able to
design costs and cutting the U.S. moldmaker out of subsequent be the leader again in dealing with a delicate issue that is rampant and
mold builds.” highly abused.” —Steve Rotman, president, Ameritech Die & Mold Inc.
(Mooresville, NC)
But the customer doesn’t just pay for the molds; it also pays for the
mold design—and, moldmakers say, generally the mold design is part of “In our case, and probably with most automotive mold shops, the
the quoted mold price. There are mold companies that break out the cost design is included in the mold price and provided with the mold in the
of the design separately from the mold build and the mold sampling. format the customer requests. The only regrets I have are when we do
Many, however, show one price inclusive of stated design, build, and a concept before the order is placed and then don’t get the order. This
sample. That could be why many OEMs have lost sight of the time it has only happened a couple of times and really ticks me off, but it is
takes a mold designer to get an optimum design. the measured risk we take during the sales cycle. I have also withheld
mold designs for payment issues, but once payment is received, the mold
Because that time was invested, the customer can use the design designs are released. Unless you are clearly stating in the quote terms, I
provided with the mold to purchase replacement parts, or even to buy think you’ll have a problem, at least in the markets we work in.” —Todd
another mold for the same product from another company, in North Finley, VP, Commercial Tool & Die Inc. (Comstock Park, MI)
America, Europe, or Asia. That cuts the original mold designer/builder
out of the picture. So is this fair? “Unless a customer would have us sign a nondisclosure for a specific
technology or solution, we would consider it fair game for any mold
Probably not, but that’s how it’s done. Todd Finley, VP of Commercial
application. I’m sure we could call it ‘proprietary,’ but it really doesn’t
Tool & Die Inc. in Comstock, MI, says, “In our case, and probably with
mean anything unless you have it patented. Generally what we sell to
most automotive mold shops, the design is included in the mold price
customers is our ability to solve problems through the design process,
and provided with the mold in the format the customer requests. Unless
which generally includes suggested modifications to product design
you are clearly stating in the quote terms that the design is not included
and possibly some unique moldmaking solutions. I’ve been involved in
in the mold price, and the customer agrees to those terms, I think you’ll
building thousands of unique and complex molds, and toured hundreds
have a problem.”
of mold shops worldwide, and I think truly ground-breaking solutions by
Rice asks, “Has anyone in the tooling industry looked at the idea mold shops are pretty rare.” —Anonymous
of locking and unlocking designs similar to what is done when
downloading software?” He points out that generally one can download Published: June 30th, 2010, “Injection Molding Magazine’s e-Shots”. o
software packages for review and testing of the product but it doesn’t

12 AMBA
AMBA Gives $11,000 in Scholarships Northern Ohio Chapter
$1,000 National Scholarship
The national office of the AMBA gave away $11,000 in scholarship Sarah Hendershot, University of Akron, from
funds for 2010. AMBA chapters gave $12,500 in scholarship funds. Colonial Machine.
Each year the AMBA national office awards scholarships from its
Education Fund to the dependants of employees of AMBA
member shops.

The national scholarship winners were:

Non Chapter Pennsylvania Chapter


$1,000 National Scholarship $500 National Scholarship
Hattie Nicole Willard, University of Central Missouri, Zachary William Thomas, Clarion University,
daughter of Gary Steven Willard, engineer at Creative majoring in Math, son of Charles Thomas, engineer,
Blow Mold Tooling. Reddog Industries.

$500 National Scholarship


California Chapter
$1,000 National Scholarship Stephanie Nicole Baer, Allegheny College, majoring
in Biology, daughter of Laurie Baer, office manager at
John Valvaneda, LaSierra University majoring in Suburban Tool & Die.
Biochemistry; son of John Valvaneda, moldmaker at
Harrington Mold – California Chapter

Carolinas Chapter
$1,000 National Scholarship Make this 21st Century
Chason Hancock, North Carolina State Univ.,
majoring in Poultry Science, son of Randy Hancock, Owner’s Manual Your
Accuchrome Tool and Mold.
Mold Data Storage Solution
Cost Effective Mold
Management System
Chicago Chapter
$1,000 National Scholarship • 8 GB memory
Natalie Rocque, Elmhurst College, Pediatric Nursing, • Virtually indestructible case
daughter of Donald Rocque, moldmaker at Creative
Die Mold. • Password protected
• Innovative software
• Backup &
synchronization
services available
• Many more
Minnesota Chapter
features & benefits
$1,000 National Scholarship
Nathan Parks, North Hennepin Community College,
majoring in Mechanical Engineering, son of Wayne
Oldcastle, Ontario Schaumburg, Illinois
Parks, project manager at Mold Tech. Fountain Valley, California Taunton, Massachusetts

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AMBA 13
Chapter Scholarships were as follows:
Southeast Michigan Chapter
$500 National Scholarship California Chapter
Phillip D. Bolton, U of Michigan – Ross School of $500 Chapter Scholarship
Business, son of Joseph Bolton, GM at Convex Mold. Joseph Wierzbowski, Cal Poly Pomona, majoring
in Engineering, son of Ron Wierzbowski, sales for
Fairway Molds.

$500 National Scholarship


Marija Cacovic, Oakland University, daughter of Mark West Michigan Chapter
Cacovic, plant manager, Convex Mold. $1,500 Chapter Scholarship
Brenden Magnan, Commercial Tool & Die

Southwest Michigan Chapter


$500 National Scholarship
Travis Tomaszewski, U of Michigan, majoring in $1,500 Chapter Scholarship
neuroscience/pre-med, son of Ted Tomaszewski, mold Sean Bannen, CS Tool Engineering, Inc.
designer at Hanson Mold.

$500 National Scholarship


Brittany Wesner, Western Michigan U, majoring $1,000 Chapter Scholarship
in Music Education, daughter of Jeff Wesner, CNC Sara Ransom, CS Tool Engineering, Inc.
supervisor at Quality Mold & Engineering.
No
Photo
Available

Western Michigan Chapter


$1,000 Chapter Scholarship
$1,000 National Scholarship
Allison Dyer, Franchino Mold & Eng. Co.
Jamie Wooster, Central Michigan U, majoring in
Family Study/Psychology, daughter of James Wooster
of CS Tool & Engineering.

$1,000 Chapter Scholarship


Wisconsin Chapter
Melissa Thomas, H.S. Die & Engineering, Inc.
$1,000 National Scholarship
Samantha Aycock, U of Wisconsin – Whitewater,
majoring in Art/Education, daughter of Roy Aycock,
moldmaker at Strohwig Industries.

14 AMBA
Minnesota Chapter $1,000 Chapter Scholarship
$1,000 Chapter Scholarship Timothy Williams, Wisconsin Tech, majoring in
Evan Easterela, St. Paul College, majoring in Machine Tooling, Isometric Tool.
No Engineering Technology, son of Eric Easterla,
Photo toolmaker at Isometric Tool.
Available

$1,000 Chapter Scholarship


Jeffrey Rice, Dunwoody College, majoring in Drafting Southwest Michigan Chapter
No and Design. $500 Chapter Scholarship
Photo Erin Reddaway, Western Michigan U, majoring in
Available No Math and Secondary Education, daughter of James
Photo Reddaway, moldmaker at Mach Mold

$1,000 Chapter Scholarship Available


Nick Ask, Wisconsin Tech, majoring in Machine
No Tooling, toolmaker at Mold Craft. $500 Chapter Scholarship
Photo
Sara Schamltz, Lake Michigan College, Business
Available Management, daughter of Mike Schmaltz, moldmaker
at Accu-Die & Mold.

$1,000 Chapter Scholarship


Dale Wilkenson, Dunwoody College, majoring in
No Drafting & Design.
Photo Congratulations to each of these deserving students! We wish them the
Available best in their endeavors. o

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10260 Indiana Court., Rancho Cucamonga, CA 91730 • Tel: 909.941.0600 • 800.432.6653 • Fax: 909.941.0190
Email: albaplas@albaent.com • Website: www.albaent.com

AMBA
alba-ad-oct2008.indd 1 15
10/7/08 9:27:27 AM
2011 AMBA
Annual Convention
March 2-6, 2011
Red Rock Casino * Resort * Spa
Las Vegas, Nevada

Look for more


information in
October, to
reserve your place
at the AMBA
Annual
Convention at Red
Rock Resort in
Las Vegas,
Nevada!

Keynote speaker:
Steve Rose, Practice Lead of Kotler Marketing
Group presents the keys to “Defending Your
Price.” Learn how to compete against low-
cost, overseas suppliers who can’t match your
quality and service but undercut you on price.
Rose will share success stories and best
practices that have allowed high quality
suppliers to defend their price and win more
business.

Also presenting:
Steve Lefever , Chairman, Business Resource
Optional Post-Convention Activity: Services presents “Profit Mastery”. Returning
2011 Las Vegas Shelby for the fourth time as a popular AMBA
American NASCAR Race convention presenter, Steve will present an
March 6, 2011 educational and entertaining a half-day session
Las Vegas Motor Speedway on his “Profit Mastery” program.
16 AMBA
AMBA News
2011 Annual Convention – March 2-6, 2011
– SAVE THE DATES!

AMBA Fall Conference – September 28-30

The AMBA Annual convention will be held from March 2-6, 2010 in
Las Vegas, NV.

Join us as keynote speaker Steve Rose, of Kotler Marketing Group,


presents the “Keys to Defending Price”, particularly in an environment
where AMBA members increasingly must compete against low-cost,
overseas suppliers, who can’t match your quality and services but
undercut you on price. The good news is high quality mold makers
and die casters have a compelling case to make, even with the most
aggressive buyers and Purchasing Departments. Rose will share success
For the third year, the AMBA Fall Conference is being held in our stories and best practices that have allowed high quality suppliers to
nation’s Capitol – Washington, D.C. – where we will once again defend their price and win more business.
schedule meetings with our Senators and Representatives to show
them that we are serious about the issues that impact American Expect a phenomenal lineup of topics and speakers! Set aside these
manufacturing. dates for an event that you won’t want to miss!

The Fall Conference starts on Tuesday, September 28, with a reception. AMBA Exhibited at PDx / Amerimold 2010
On Wednesday, September 29, we will meet in the morning to hear a
AMBA exhibited at the PDx / Amerimold trade show in Cincinnati, OH
welcome address on Taking Action from Mike Armbrust, President of
on May 11-13. The main goals when exhibiting at the trade shows is to
the AMBA and General Manager of Mako Mold.
promote AMBA members and the U.S. mold manufacturing industry.
We also speak with attendees about membership and the AMBA Partner
Doug Wood, President of the (AMT) Association for Manufacturing
program.
Technology will provide us with education on the issues so that
attendees will understand the issues on which the AMBA wants to focus A special THANK YOU is deserved by the members listed below who
with our elected Congress people. This year we will cover new issues volunteered their time to help staff the booth and assist with answering
that have surfaced since last year, so Doug Wood will arm attendees technical questions from show attendees.
with the knowledge that you need to understand what steps need to be
taken and how we can accomplish our goals during our time in D.C. * Todd Finley, Commerical Tool
* David M. Bowers II, JMMS
Next, Scott Paul, Executive Director of the Alliance for American * Dick Laverty, Chicago Mold
Manufacturing, will make a presentation in “Conducting an Effective * Harry Petrinowisch, Oakley Die & Mold
Meeting with a Congressperson.” * Steve Rotman, Ameritech Die & Mold
* Todd Spearitt, QME, Inc.
In the afternoon, attendees will be assigned to groups, and each
group will have pre- scheduled meetings with specific Senators
and Representatives. We will try to schedule meetings with the More Online Seminar Topics from AMBA
Congresspersons from your states where possible. Watch for these webinar topics to be available soon:

On Thursday, September 30, the entire day will be devoted to more pre- • Calculating profit and Loss on Jobs
arranged meetings with Congresspersons. • Workers Comp 101
• Budgeting and Financial Forecasting
• Rapid Prototyping Options
AMBA Fall Conference Testimonial: • Search Engine Optimization for your Website o
The Fall Conference in Washington, D.C. was a great move in
empowering the members that the competitor might not be Do We Have your Current Email Address?
overseas, but in Washington trade policies, and we need a strong
and compelling voice. We need to learn how to play politics. Be sure to notify AMBA of any email changes, so no
Sean Shafer, Makino interruptions occur with important information from the AMBA.

AMBA 17
AMBA New Member Welcome
Dates To Remember The AMBA wants to give a warm welcome to the following companies
that have recently joined the association:
AMBA EVENTS
AMBA Fall Conference Paramount Tool & Die
Kent City, MI
September 28-30, 2010, Washington, D.C.
www.paratool.com
Hyatt Capitol Hill Todd VanLoon, Vice President
AMBA Convention
March 2-6, 2011,Las Vegas, NV Paramount Tool & Die offers mold building and mold repairs for small
Red Rock Resort Spa and Casino and medium-sized plastic injection molds for the automotive and
furniture industries. The company also has the capability to build and
INDUSTRY EVENTS repair zinc and aluminum die cast dies and trim dies. Paramount Tool &
Die was founded in 1997 and currently has eight employees. Paramount
International Machine Tool Show 2010 is part of the West Michigan chapter of the AMBA. “I heard the AMBA
September 13 - 18 - Chicago, IL was a good reputable organization for moldmakers in the U.S. and
wanted to be part of it,” he said when asked why he joined AMBA.
The International Manufacturing Technology Show is
one of the largest industrial trade shows in the world,
Powermark International Inc.
with thousands of exhibitors and over ninety-one Machesney Park, IL
thousand visitors. The event is held every two years in www.powermarkint.com
September at McCormick Place, Chicago. Gregg Powers – President
Dan Hamilton – Vice President
PLASTEC Midwest
September 28-30 - Rosemont, IL Powermark International Inc. was founded in May 2005, and designs
SOURCE the latest technologies and ideas in primary and manufactures plastic injection molds. The company services the
processing machinery, computer-aided design and automotive, consumer, medical, aerospace, electrical, packaging,
manufacturing, production machinery, contract services, industrial, and railroad industries with tooling to run in presses ranging
materials, molds and mold components, automation from 25 to 700 tons. The company employs 18. Gregg said that he
technology, materials handling/logistics, enterprise IT…and joined AMBA because he wants to be more involved in the industry and
participate in the networking.
much more.
K-Show Encompass Tool & Machine Inc.
October 27 - November 3 - Dusseldorf, Germany Ponca City, OK
K is the world’s premier trade fair for plastics and rubber. Its www.encompasstool.com
scope and focal points are all-embracing, covering the full Jerry Hart – Manufacturing Engineer
spectrum of products and innovations from basic standard to
Encompass Tool & Machine Inc. was founded in 2005, and currently
high-tech solutions. occupies 25,000 square feet of manufacturing and office space. With
No other event is as impressive as K with regard to volume its 25 employees, Encompass Tool & Machine provides design,
and quality. This is the showcase for what is important today manufacturing and repair of injection and blow molds for the plastics
and what will shape the markets of tomorrow and beyond. industries. The company serves the aerospace industry with tooling and
fixture fabrication, serving both domestic and international companies.
From global market leader to young spin-off, K attracts
Hart said the reason that Encompass Tool joined AMBA was to gain
everyone who wants to succeed in business now and still be access to government contracting opportunities, and to take advantage
up-to-date down the line. of advertising on the AMBA website. o
Pack Expo International 2010
October 31 - November 3 - Chicago, IL
PACK EXPO International 2010 in Chicago, October AMBA Fall Conference Testimonial:
31–November 3, is the only show you need to attend next Attending the Fall Conference was a good learning experience. I
year! You’ll find everything to improve operations, increase felt more connected to the Congresspersons that personally took
efficiency, reduce recalls, maintain equipment and protect the time to meet with our group from Michigan. Like all AMBA
your brand. A world-class program with new value-added events I have attended, it has proven to be a great way to network
features is already shaping up. with peers. After the fall conference I started doing business
with new customers and vendors from people I met during the
EuroMold Washington event. I attended my first conference in the fall last
December 1 - 4 - Frankfurt, Germany year, and the AMBA staff did a great job setting up meetings with
The 17th EuroMold, the world-wide leading trade fair all representatives from our voting district. The meetings were
for Moldmaking and Tooling, Design and Application back to back, keeping the pace busy and exciting. Everyone on our
Development will take place Dec. 1 - 4, 2010. As the team chipped in during the meetings with Congressman, which
international meeting point of the industrial sector, it helped get every good political issue addressed.
presents products and services, technology and impulses for Dave LaGrow, Maximum Mold, Benton Harbor, MI
tomorrow’s markets.

18 AMBA
AMBA Members and Partners Exhibit at
PDx / Amerimold 2010

AMBA 19
Member News According to Fischer, “Our focus has always been to grow the business, to
build a lasting company that not only can customers count on to be there
Dynamic Tool & Design (Menomonee Falls, WI) for them in the future, but the managers and employees who have worked
Dynamic Tool announces big changes to secure its future. Dynamic Tool hard to see Dynamic succeed. This transition to an ESOP will ensure that
& Design announces a transition to an employee owned company. As of Dynamic will be there for its customers for many years to come.” Todd
April 1, 2010, Dynamic has become an ESOP (employee stock ownership Thull, design engineer, is excited for the transition. “It’s great to be part of
plan) company. When Dynamic Tool & Design was founded in 1976 by an employee owned company. You want to go above and beyond to secure
John Lau and Irv Fischer the goal was to not only build an innovative a bright future for something you are part owner in. It encourages you
company, but to build a strong company that would precede them into the to work hard towards your goals for both your customers and yourself.”
future. As the company grew, there was a need to put a plan in place that Dynamic has always been a leading force in the world of injection mold
would ensure this vision. building and prides its self on evolving to meet the ever changing needs of
the market place. Shifting into an Employee Owned Company will allow
Recently, Dynamic Tool & Design made the transition to an employee them to maintain their position as a recognized leader in the marketplace. o
owned company. This move to an ESOP (employee stock ownership
plan) will ensure that Dynamic Tool & Design will continue to be able
to provide the same quality product, consistent customer service and AMBA Member Benefits:
innovative solutions it has always provided its customers well into the
FREE Qualified Sales Leads – from AMBA trade show
future. As many of our loyal customers know, Dynamic has a very strong
participation. We do the legwork for you! Hundreds of OEM
management team in place. This strong team has allowed this to be
mold purchasers and engineers stop by the AMBA booth at
possible.
industry trade shows (like NPE, PLASTEC, and PDx/Amerimold,
While both John Lau and Irv Fischer will be staying on, going forward our MoldMaking Expo) to get information about moldmaking
management team will be the driving force propelling Dynamic into the companies. We qualify them, scan their information and you
future. While many injection mold builders have had to lay off employees receive a list of hundreds of mold purchasers! It’s that simple!
or even close during hard economic times, Dynamic Tool and Design Join AMBA and have access to Qualified Lead Lists today!
has continued to see substantial growth. We attribute this growth to our
customer base. Affordable advertising opportunities – in our monthly OEM
E-Newsletter called U.S. Tooling & Technology News.  A monthly
Over the years the emphasis has been on building a strong customer base E-Newsletter sent to OEMs, Mold Buyers, Molders, and Tooling
and becoming not just a supplier, but a partner in their manufacturing. Engineers allowing you to advertise directly to your potential
Becoming an employee owned company will make certain that these same customers.  This targeted e-newsletter is delivered to the desk of
customers can count on Dynamic to always be there to partner with them. every mold buyer in our extensive database.

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20 AMBA
Chapter Spotlight - Chapter News
West Michigan Chapter Carolinas
The West Michigan chapter has received
a lot of press in recent months, with
receiving the Chapter of the Year Award
at the Annual Convention in Orlando;
and two of its member companies
receiving Leadtime Leader Awards from
Moldmaking Technology magazine: HS
Die won Honorable Mention in the Large
Shop category and CS Tool won the Small
Shop category’s Honorable Mention. It’s
a chapter that has been successful in many
ways, but primarily due to the hard work
of the chapter’s officers and its member Kent Hanson of H.S. (Left to right) Steve Rotman of Ameritech Die & Mold, former
participation. Die, West Michigan Speaker of the U.S. House of Representatives Newt Gingrich, and
Chapter President Scott Phipps of United Tool & Mold in South Carolina at Gingrich’s
In May 2010, for example, in attendance Real Jobs Summit.
at the chapter meeting, were members, their families, and suppliers/
vendors. Suppliers/vendors are also excited about the opportunities An AMBA Carolinas chapter group attended the Real Jobs Summit with
that participating in chapter meetings offers. At the May meeting, one Newt Gingrich on May 5, which had keeping manufacturing in the U.S.
vendor sponsored a cocktail hour, which was a huge success, and they as its top priority.
now have a waiting list of vendors wanting to sponsor chapter meeting
events. Newt Gingrich, former speaker of the House of Representatives,
brought his Real Jobs Summit to Greenville, SC on May 5. A group
In May, the West Michigan chapter awarded the Kent County Technical from the American Mold Builders Assn. attended to participate in
Center a $10,000 scholarship for its Precision Machining Program. this summit, which drew about 500 attendees interested in promoting
“Getting kids interested at the high school level is crucial to a successful manufacturing in the USA, saving existing jobs, and creating new jobs
future,” said Andy Baker, vice president of the chapter. The scholarship in manufacturing.
was made possible from the awards our chapter won, and also due
to the generosity of Progressive Components, which sponsors these Steve Rotman, president of Ameritech Die & Mold (Mooresville,
awards. “We invited Progressive Components to be a part of the award NC) and Ameritech Die & Mold South (Ormond Beach, FL), was in
presentation because without their support, this scholarship would not attendance along with Scott Phipps of United Tool & Mold in Easley,
have been possible,” said Baker. SC. “This is a really strong movement led by Speaker Newt Gingrich,”
commented Rotman. “I was able to attend the event in Greenville, and
Another thing that has been successful is that they changed one of Scott Phipps and I participated in a Small Business Roundtable where
the evening meetings to a breakfast meeting, and this was very well owners of businesses met with Speaker Gingrich. I have been able to
received. Several members attended the breakfast meeting that are not meet quite a few politicians while visiting DC in the last couple of
able to attend evening meetings. years, but I have never seen the ability to answer so many questions
from different fields, and not feel like I was being patronized.
Since the chapter’s first golf outing in 2008, the goal of the chapter has
been to promote the event as a FUN business event with a little healthy “Gingrich spoke from the heart with conviction, and it was very
competition. In addition, from the success of the chapter’s golf outing, refreshing, to say the least. He stated that he wasn’t there to represent
they were also able to give an additional $7,000 in scholarships to five Republican or Democrat, just the American Constitution.”
individuals to help them further their education.
South Carolina has the nation’s highest unemployment at 12.2% and
The golf outing event has grown and this year’s is shaping up to be the has lost 15,000 jobs in the past year. The Real Jobs tour has stopped in
best yet. Chapter coordinator Jill Finley has been “fielding calls since five cities promoting job creation solutions that lawmakers can use right
the snow melted” from people checking to make sure they were on her now to help put people back to work.
email list so they wouldn’t miss the outing that will be held at Quail
Ridge Golf Club. “Not only did I get several holes sold ahead of time, After the Summit, the Carolinas Chapter of the AMBA held a meeting
the word got out and I had phone calls and emails from people that have with Robbie Earnhardt of Superior Tooling (Wake Forest, NC), David
not participated in the past,” said Jill. “I have some great ideas for this Meyers of Carson Tool & Mold (Kennesaw, GA), David Bowers III of
year’s outing, not to mention a couple of surprises I hope to pull off! JMMS Inc. (Easley, SC), Keith Fox and Dave Harper from Ameritech,
I’m hoping this year’s outing will be talked about long after the last putt and Mark Krajniak of Alliance Carolina Tool & Mold Corp. (Arden,
is made.” o NC).

Among the issues discussed at the Roundtable, Rotman noted that


AMBA Member Benefits: Gingrich is against a VAT (value-added tax), because “it will only feed
Quarterly Business Forecast Survey – Provides a snapshot of the government.” The tax money lost as companies take manufacturing
current and anticipated business conditions so you can see how offshore and produce goods there to export here was also discussed.
your business stacks up against your peers and the industry to
help in your marketing and sales planning. “Gingrich was asked some really difficult questions, but had answers
and solutions that were well thought-out,” said Rotman. “I was
AMBA 21
impressed. His motto—2+2=4—is for: honesty; cutting taxes for
businesses, which leads to job growth; more American energy, which
leads to lower prices; and more competition between schools, which
leads to better education. We’re not looking at the root of the problems.
We’ve got to get back to being problem solvers, but first understanding
what caused the problem in the first place. It was very refreshing to hear
him.” Published May 19, 2010, Plasticstoday.com e-Newsletter.

Chicago
The Chicago chapter of the AMBA is proud to announce its new officers
for 2010-12 term:
Chicago chapter scholarship recipient Natalie Rocque and her
President:        Wayne Sikorcin (Craftsman Tool & Mold Co.) mother Karen.
Vice President:  Francine Petrucci (B A Die Mold, Inc.)
a $1000 check. Natalie Rocque is the daughter of Dan Rocque who is
Secretary:        Matthew Thurow (Alpha Star Tool & Mold Inc.)
a moldbuilder at Creative Die Mold. Natalie is planning on attending
Treasurer:       Mike Walter (MET Plastics, Inc.)
Elmhurst College, In Elmhurst, IL and majoring in Pediatric Nursing.
Directors:         Mike Armbrust (Mako Mold Corporation)
                        Alan Petrucci (B A Die Mold, Inc.)
The chapter will host a general membership meeting on August 17,
                         David Plocinski (Tri-Par Die and Mold Corp.)
with local Congressman Don Manzullo as the speaker for the meeting.
                        Alan Szymanski (Do-Rite Die & Engineering)
Rep. Manzullo earned the reputation as Congress’ champion of
manufacturing and a fierce advocate for job creation.
The Board respectfully accepted the resignation of Tom Borse (Angle
Pattern and Mold Corporation) as Treasurer and Director, and thank him
Minnesota
for his many years of dedicated service to the Chicago Chapter. The
chapter members thank Mike Armbrust for over five years of service as
the chapter president, and are glad to have him continue to serve on the
chapter board. The Board will be seeking nominees for another director
for the chapter.

Chapter members Wayne Sikorcin, Alan Szymanski, Matt Thurow, Tim


Peterson and Karen Norville attended the May 5th Legislative Day in
Springfield, IL with Governor Pat Quinn and Senator Tim Brady as
keynote speakers. Tim and Alan were able
to meet with their reps and senator and felt
it was a very beneficial meeting. Many
other chapter members plan to meet with
their reps at the home offices and/or invite
Pictured from left to right: Timothy Williams, Nick Ask, Nathan Parks,
them to their companies
Evan Easterla, Tim Bartz, Jeff Rice and Dale Wilkinson.

The chapter also held a meeting on June


The chapter held their National & Technical Scholarship Awards dinner
10, with speaker Ryan Pohl, president and
on June 17th. Scholarship awards and $1,000 checks were presented
co-founder of Expert Technical Training
to the two national scholarship recipients: Nathan Parks, son of Wayne
LLC. He spoke on training for growth
Parks, Project Manager at Mold Tech; and Evan Easterla, son of Eric
and profitability. A cocktail hour was
Easterla, toolmaker at Isometric Tool.
sponsored by Progressive Components.
Ryan Pohl, of Expert
Technical Training Four students received $1,000 checks for the Minnesota Chapter
The chapter presented the student they
Technical Scholarship Award: Jeffrey Rice of Dunwoody College, Nick
selected as their scholarship recipient with
Ask of Wisconsin Tech, Timothy Williams of Wisconsin Tech, and Dale
Wilkenson of Dunwoody College.
AMBA Fall Conference Testimonial:
The 2009 Fall Conference was my second trip to DC with The chapter hosted their annual golf outing on July 22nd at Oak Glen
the AMBA, and I was much more comfortable the second Golf Course. See the Fall 2010 issue of this publication for a full wrap-
time around. My first visit was a real eye opener; I had never up of the event.
realized that it was that “easy” to make an appointment with
our Congresspersons. After seeing how the process works Southwest Michigan
during the AMBA Fall Conference, I have become much more The Southwestern Michigan chapter celebrated their annual Graduation
active in voicing my opinion to my State representative and have and Scholarship Recognition Night at Papa Vino’s on May 13.
actually met with him and his staff on several occasions. My
representative actually recognizes me when he sees me, AND his The graduates were recognized with an AMBA Certificate of
staff periodically contacts me for my opinion on issues. Completion in the different specialties of Journeyman Moldmaking
Pat Dolan, GH Tool & Mold Incorporated, Washington, MO requirements. It requires a minimum of 8,000 hours on the job training
in addition to 576 hours of related college classes at Lake Michigan
College to graduate.
22 AMBA
The graduates are as follows: Brandon Glupker (Standard Tool & Die
in Stevensville); Corey Stevens (Accu-Die & Mold in Stevensville);
Brandon Stroud (Hanson Mold in St. Joseph); not pictured Paul Zelmer
(Hanson Mold in St. Joseph). Also pictured at left: Bill Mach, President
of the Southwestern Michigan chapter.

JEM
ENTERPRISE, Inc.
A Cut Above the Rest

Also honored were the winners of the annual $500 AMBA Scholarships.
The winners this year were (left to right):
OVER

75S
Travis Tomaszewski, whose father, Ted Tomaszewski, works at Hanson ma
A de
Mold in St. Joseph. Travis is a senior at Lakeshore High School and US
YE
AR
will be attending the University of Michigan in the fall. His major will
be Neuroscience/Pre-Medicine.
Micro Welder
Erin Reddaway, whose father, James Reddaway, works at Mach Mold
Do you have an easy-to-use
in Benton Harbor. Erin is a senior at St. Joseph High School and will be portable solution for your
attending Western Michigan University in the fall. Her majors will be
Mathematics and Secondary Education. MOLD & DIE REPAIR?
Parting Lines
Sara Schmaltz, whose father, Mike Schmaltz, works at Accu Die & Corners / Edges
Mold in Stevensville. Sara is a senior at Bridgman High School and Scratches / Dents
will be attending Lake Michigan College in the fall. Her major will be
Business Management. “Effective in repairing
areas where tig welding
would have destroyed
Not pictured: Brittany Wesner, whose father, Jeff Wesner, works edges and surfaces”
at Quality Mold & Engineering in Baroda. Brittany is a senior at
Lakeshore High School and will be attending Western Michigan “One of the best investments
University in the fall. Her major will be Music Education. we have ever made”

OEMs & Mold Purchasers Connect with Mold Shops! “Saved us thousands in
labor and materials”
OEMs and mold purchasers can access AMBA’s member
companies through AMBA’s Find a Moldmaker feature at www.
amba.org. U.S. mold shops can be searched by geographic
area, market penetration, quality processes, CAD/CAM systems, Contact Us to learn how to permanently repair ferrous
mold type, etc. Handy web links get you connected to potential metals with metallic ribbon, wire, paste or powder.
customers! Find a Moldmaker is a useful resource to get 800-255-6046
information on mold shops fast and easy. Visit www.amba.org 712-255-6046
and click on “Find a Moldmaker!” rocklinmanufacturingco.com

AMBA 23
24 AMBA
West Michigan Wisconsin

West Michigan chapter scholarship recipients, from left to right: Meeting presenter, Ryan Pohl, president and co-founder of Expert
Sara Ransom, Sean Bannen, Allison Dyer, Brenden Magnan, Jamie Technical Training LLC.
Wooster, and Melissa Thomas. Far right West Michigan chapter
president, Kent Hanson of H.S. Die. The chapter held a general membership meeting on May 18th with
speaker Ryan Pohl, president and co-founder of Expert Technical
The chapter held its annual Special Awards Presentation dinner on Training LLC. He presented about how to develop an internal training
May 18th. There was 100% attendance based on the RSVP’s. Students process, with a specific emphasis on renewing apprenticeship training,
receiving scholarships were Brenden Magnan - Commercial Tool & so shop owners and managers can be sure they have the talented
Die $1,500; Sean Bannen – CS Tool Engineering, Inc. $1,500; Sara workforce they need to thrive in the future.
Ransom – CS Tool Engineering, Inc. $1,000; Jamie Wooster – CS
Tool Engineering, Inc. $1.000 (National award); Allison Dyer – The chapter will be hosting a joint baseball outing on August 24th with
Franchino Mold & Eng. Co. $1,000; and Melissa Thomas - H.S. Die the TDMAW, and the NTMA. o
& Engineering, Inc. $1,000. The student scholarship winners were
presented with their certificates and scholarship checks, and Darlene
Regula, Managing Director and Instructor for Dale Carnegie Training AMBA Member Benefit:
was on had to address the winners as they pursue their futures. Annual Membership Directory – Listing of AMBA members
and their specialties/markets, with circulation to OEMs through
direct mail and AMBA participation in trade shows.

Mold Platen Insulation Materials


Custom Fabricated Components

Energy Cost Savings


From left to right: Ron Moag, Principal of the Kent County ISD
(Intermediate School District); Pete Betzinger, Kent County ISD
Instructor, Precision Machining Technology; Glenn Marx, Progressive
Components representative and West Michigan chapter president, Kent
Hanson of H.S. Die. H320 & H330
The chapter also presented a $10,000 check to the Kent Career
Technical center which offers a Precision Machining Technology
program that focuses on the fundamentals of the machine tool field.
Gund MPI Glastherm HT
Earlier this year, Andy Baker of Byrne Tool & Die was named the
AMBA’s Mold Builder of the Year while the Western Michigan Chapter
was named AMBA Chapter of the Year. Each received a $5,000
scholarship check from Progressive Components and was asked to
choose a trade related school that the scholarships would benefit in their
names. Both chose the Kent Career Technical Center. Consistent Mold Temperature

Show Your Patriotism and Support U.S. Manufacturing. www.thegundcompany.com


Buy “Made in U.S.A.” Gold Plates for your Molds – Display 2121 Walton Road, St. Louis, MO 63114
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for $1 each and 3” x 4” size for $2 each plus s/h. mkleine@thegundcompany.com

AMBA 25
AMBA Partner Spotlight –
Welcome New Partners
The AMBA Partner Program continues to roll along. This quarter we
have another new Partner to introduce to you, and we encourage you to
get to know them:

Roehr Tool Corporation Small Business Health Care Tax Credit:


Hudson, MA
www.roehrtool.com
Questions & Answers (Q&A)
Jim Cullison
The Patient Protection and Affordable Care Act was signed into law

by President Obama on March 23, 2010. This bill and the Health Care
Roehr Tool Corporation was founded in 1968 and is a  leading
and Education Reconciliation Act of 2010, which was signed into law
manufacturer of expandable cavities, collapsible cores, minicores and
dovetail cores.  Roehr Tool’s products are recognized throughout the on March 30, 2010, form the new Health Care Reform Law.
world as remarkable, intricate mechanical tools manufactured with
very high tolerances, even before the advent of wire EDM.  In addition, The Health Care Reform Law gives a tax credit to certain small
Roehr’s  products were instrumental in the early development of employers that provide health care coverage to their employees,
tamper-proof closures and child-safe caps.  effective with tax years beginning in 2010. The following questions
and answers provide information on the credit as it applies for
Roehr continues to provide alternative tooling options for a wide 2010-2013, including information on transition relief for 2010. An
spectrum of industries such as automotive, plumbing, cosmetics, enhanced version of the credit will be effective beginning in 2014.
electrical, medical and more. o
Employers eligible for the credit
1. Which employers are eligible for the small employer health care
Partner News tax credit?
Small employers that provide health care coverage to their employees
DME (Madison Heights, MI) and that meet certain requirements (“qualified employers”) generally
DME, this month is celebrating the 10th anniversary of its Hot Runner are eligible for a Federal income tax credit for health insurance
Service Center, a key component of the company’s commitment to premiums they pay for certain employees.
providing customers with everything they need to succeed with a hot
runner system. In order to be a qualified employer:
• the employer must have fewer than 25 full-time equivalent
The center, which was initiated in 2000 to give processors the support employees (“FTEs”) for the tax year;
and services necessary to run systems at maximum efficiency, continues • the average annual wages of its employees for the year must be less
to enhance its offers to encompass the latest advances in hot runner than $50,000 per FTE; and
systems, including electric valve gate technology. • the employer must pay the premiums under a “qualifying
arrangement” described in Q&A 3.
Key services include:
• Repairs See Q&A 9-15 for further information on calculating FTEs and
• System cleaning average annual wages and see Q&A 22 for information on anticipated
• Total system rebuild transition relief for tax years beginning in 2010 with respect to the
• Re-configurations requirements for a qualifying arrangement.
• Operator training
• Mold tryouts 2. Can a tax-exempt organization be a qualified employer?
Yes. The same definition of qualified employer applies to an
Over the past 10 years, the service center has prided itself on quick organization described in Code section 501(c) that is exempt from
turnarounds. Its technicians recognize that an out-of-commission tool tax under Code section 501(a). However, special rules apply in
can kill productivity and threaten production schedules. As a result, calculating the credit for a tax exempt qualified employer. See Q&A 6.
they make every effort to get machines back in service as quickly as
possible. Standard turnaround time for repairs on systems from 1-12 Calculation of the credit
drops is five working days or less, depending on part availability for 3. What expenses are counted in calculating the credit?
non-DME systems. Emergency 24-hour turnaround service is also Only premiums paid by the employer under an arrangement meeting
available. certain requirements (a “qualifying arrangement”) are counted in
calculating the credit. Under a qualifying arrangement, the employer
In addition to repairs, the DME Service Center also conducts complete pays premiums for each employee enrolled in health care coverage
system rebuilds, with cost savings of at least 40% compared to a new
offered by the employer in an amount equal to a uniform percentage
system. The service center also re-configures systems for process
(not less than 50%) of the premium cost of the coverage. See Q&A
changes such as a material switch or a part design change.
22 for information on transition relief for tax years beginning in 2010
with respect to the requirements for a qualifying arrangement.
To celebrate the 10-year anniversary of the Service Center, DME is
offering all customers a 10% discount on their next service with the
If an employer pays only a portion of the premiums for the coverage
center. o
provided to employees under the arrangement (with employees
26 AMBA
paying the rest), the amount of premiums counted in calculating the
credit is only the portion paid by the employer.

Example: If an employer pays 80% of the premiums for employees’


coverage (with employees paying the other 20%), the 80% premium
amount paid by the employer counts in calculating the credit.

For purposes of the credit (including the 50% requirement), any


premium paid pursuant to a salary reduction arrangement under a
section 125 cafeteria plan is not treated as paid by the employer. In
addition, the amount of an employer’s premium payments that counts
for purposes of the credit is capped by the premium payments the
employer would have made under the same arrangement if the average
premium for the small group market in the State (or an area within the
State) in which the employer offers coverage were substituted for the
actual premium. If the employer pays only a portion of the premium
for the coverage provided to employees (for example, under the terms
of the plan the employer pays 80% of the premiums and the employees
pay the other 20%), the premium amount that counts for purposes of the
credit is the same portion (80% in the example) of the premiums that
would have been paid for the coverage if the average premium for the
small group market in the State were substituted for the actual premium.

4. What is the average premium for the small group market in a State
(or an area within the State)?
The average premium for the small group market in a state (or an area
within the state) will be determined by the Department of Health and
Human Services (HHS) and published by the IRS. Publication of the
average premium for the small group market on a state-by-state basis is
expected to be posted on the IRS website by the end of April 2010.

5. What is the maximum credit for a qualified employer (other than a


tax-exempt employer)?
For tax years beginning in 2010 through 2013, the maximum credit is
35% of the employer’s premium expenses that count towards the credit,
as described in Q&A 3.

Example. For the 2010 tax year, a qualified employer has nine FTEs
with average annual wages of $23,000 per FTE. The employer pays
$72,000 in health care premiums for those employees (which does
not exceed the average premium for the small group market in the
employer’s State) and otherwise meets the requirements for the credit.
The credit for 2010 equals $25,200 (35% x $72,000).

6. What is the maximum credit for a tax-exempt qualified employer?


For tax years beginning in 2010 through 2013, the maximum credit for
From start to finish, Hitachi Tool has the right cutting tools
a tax-exempt qualified employer is 25% of the employer’s premium
expenses that count towards the credit, as described in Q&A 3.
for moldmakers. Designed for roughing in mold steels up
However, the amount of the credit cannot exceed the total amount to 50HRC, our IASF/ASF Face Mills offer:
of income and Medicare (i.e., Hospital Insurance) tax the employer
is required to withhold from employees’ wages for the year and the › 2-5 times better roughing efficiency than conventional
employer share of Medicare tax on employees’ wages. face mills
› Very stable performance in interrupted cutting
Example. For the 2010 tax year, a qualified tax-exempt employer has › Extraordinary metal removal and feed rates
10 FTEs with average annual wages of $21,000 per FTE. The employer › Economical four edged inserts
pays $80,000 in health care premiums for those employees (which
does not exceed the average premium for the small group market in Need more convincing? Contact us for a test!!
the employer’s State) and otherwise meets the requirements for the
credit. The total amount of the employer’s income tax and Medicare
tax withholding plus the employer’s share of the Medicare tax equals
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$30,000 in 2010.
www.vega-tool.com

AMBA 27
The credit is calculated as follows: The credit is calculated as follows:
(1) Initial amount of credit determined before any reduction: (25% x (1) Initial amount of credit determined before any reduction: (35% x
$80,000) = $20,000 $96,000) = $33,600
(2) Employer’s withholding and Medicare taxes: $30,000 (2) Credit reduction for FTEs in excess of 10: ($33,600 x 2/15) = $4,480
(3) Total 2010 tax credit is $20,000 (the lesser of $20,000 and $30,000). (3) Credit reduction for average annual wages in excess of $25,000:
($33,600 x $5,000/$25,000) = $6,720
7. How is the credit reduced if the number of FTEs exceeds 10 or (4) Total credit reduction: ($4,480 + $6,720) = $11,200
average annual wages exceed $25,000? (5) Total 2010 tax credit: ($33,600 – $11,200) = $22,400.
If the number of FTEs exceeds 10 or if average annual wages exceed
$25,000, the amount of the credit is reduced as follows (but not below zero): 8. Can premiums paid by the employer in 2010, but before the new
• If the number of FTEs exceeds 10, the reduction is determined by health reform legislation was enacted, be counted in calculating
multiplying the otherwise applicable credit amount by a fraction, the the credit?
numerator of which is the number of FTEs in excess of 10 and the Yes. In computing the credit for a tax year beginning in 2010,
denominator of which is 15. employers may count all premiums described in Q&A 3 for that
• If average annual wages exceed $25,000, the reduction is determined tax year.
by multiplying the otherwise applicable credit amount by a fraction,
the numerator of which is the amount by which average annual wages Determining FTEs and average annual wages
exceed $25,000 and the denominator of which is $25,000. 9. How is the number of FTEs determined for purposes of the credit?
• In both cases, the result of the calculation is subtracted from the The number of an employer’s FTEs is determined by dividing (1) the
otherwise applicable credit to determine the credit to which the total hours for which the employer pays wages to employees during the
employer is entitled. year (but not more than 2,080 hours for any employee) by (2) 2,080.
• For an employer with both more than 10 FTEs and average annual The result, if not a whole number, is then rounded to the next lowest
wages exceeding $25,000, the reduction is the sum of the amount of whole number. See Q&A 12-14 for information on which employees are
the two reductions. This sum may reduce the credit to zero for some not counted for purposes of determining FTEs.
employers with fewer than 25 FTEs and average annual wages of less
than $50,000. Example. For the 2010 tax year, an employer pays five employees
wages for 2,080 hours each, three employees wages for 1,040 hours
Example. For the 2010 tax year, a qualified employer has 12 FTEs and each, and one employee wages for 2,300 hours.
average annual wages of $30,000. The employer pays $96,000 in health The employer’s FTEs would be calculated as follows:
care premiums for those employees (which does not exceed the average (1) Total hours not exceeding 2,080 per employee is the sum of:
premium for theGBsmall
Global_adv group market in the 1employer’s
3_75x4_875:Layout State) and
15.01.2010 13:53 Uhr a. 10,400 hours for the five employees paid for 2,080 hours each
Seite
otherwise meets the requirements for the credit. (5 x 2,080)
b. 3,120 hours for the three employees paid for 1,040 hours each (3 x 1,040)
c. 2,080 hours for the one employee paid for 2,300 hours (lesser of
2,300 and 2,080)
These add up to 15,600 hours
Your Global Advantage !

(2) FTEs: Seven (15,600 divided by 2,080 = 7.5, rounded to the next
lowest whole number)

10. How is the amount of average annual wages determined?


The amount of average annual wages is determined by first dividing
(1) the total wages paid by the employer to employees during the
 exclusive employer’s tax year by (2) the number of the employer’s FTEs for
 reliable the year. The result is then rounded down to the nearest $1,000 (if
not otherwise a multiple of $1,000). For this purpose, wages means
Your partner for wages as defined for FICA purposes (without regard to the wage base
exceptional standard limitation). See Q&A 12-14 for information on which employees are
components and not counted as employees for purposes of determining the amount of
hot runner solutions average annual wages.

 acknowledged Example. For the 2010 tax year, an employer pays $224,000 in wages
 available and has 10 FTEs.
The employer’s average annual wages would be: $22,000 ($224,000
divided by 10 = $22,400, rounded down to the nearest $1,000)

11. Can an employer with 25 or more employees qualify for the credit if
some of its employees are part-time?
Yes. Because the limitation on the number of employees is based
on FTEs, an employer with 25 or more employees could qualify for
the credit if some of its employees work part-time. For example, an
employer with 46 half-time employees (meaning they are paid wages
for 1,040 hours) has 23 FTEs and therefore may qualify for the credit.
www.hasco.com
12. Are seasonal workers counted in determining the number of FTEs
quotes.america@hasco.com
and the amount of averageannual wages?

28 AMBA
Generally, no. Seasonal workers are disregarded in determining FTEs 19. Can the credit be reflected in determining estimated tax payments
and average annual wages unless the seasonal worker works for the for a year?
employer on more than 120 days during the tax year. Yes. The credit can be reflected in determining estimated tax payments
for the year to which the credit applies in accordance with regular
13. If an owner of a business also provides services to it, does the owner estimated tax rules.
count as an employee?
Generally, no. A sole proprietor, a partner in a partnership, a shareholder 20. Does taking the credit affect an employer’s deduction for health
owning more than two% of an S corporation, and any owner of more insurance premiums?
than five% of other businesses are not considered employees for Yes. In determining the employer’s deduction for health insurance
purposes of the credit. Thus, the wages or hours of these business premiums, the amount of premiums that can be deducted is reduced by
owners and partners are not counted in determining either the number the amount of the credit.
of FTEs or the amount of average annual wages, and premiums paid on
their behalf are not counted in determining the amount of the credit. 21. May an employer reduce employment tax payments (i.e., withheld
income tax, social security tax, and Medicare tax) during the year in
14. Do family members of a business owner who work for the business anticipation of the credit?
count as employees? No. The credit applies against income tax, not employment taxes.
Generally, no. A family member of any of the business owners or
partners listed in Q&A 13, or a member of such a business owner’s Anticipated transition relief for tax years beginning in 2010
or partner’s household, is not considered an employee for purposes 22. Is it expected that any transition relief will be provided for tax
of the credit. Thus, neither their wages nor their hours are counted years beginning in 2010 to make it easier for taxpayers to meet the
in determining the number of FTEs or the amount of average requirements for a qualifying arrangement?
annual wages, and premiums paid on their behalf are not counted in Yes.The IRS and Treasury intend to issue guidance that will provide
determining the amount of the credit. For this purpose, a family member that, for tax years beginning in 2010, the following transition relief
applies with respect to the requirements for a qualifying arrangement
is defined as a child (or descendant of a child); a sibling or stepsibling;
described in Q&A 3:
a parent (or ancestor of a parent); a step-parent; a niece or nephew; an
(a) An employer that pays at least 50% of the premium for each
aunt or uncle; or a son-in-law, daughter- in-law, father-in-law, mother-
employee enrolled in coverage offered to employees by the employer
in-law, brother-in-law or sister-in-law.
will not fail to maintain a qualifying arrangement merely because
the employer does not pay a uniform%age of the premium for each
15. How is eligibility for the credit determined if the employer is a
such employee. Accordingly, if the employer otherwise satisfies the
member of a controlled group or an affiliated service group?
requirements for the credit described above, it will qualify for the credit
Members of a controlled group (e.g., businesses with the same owners)
even though the percentage of the premium it pays is not uniform for all
or an affiliated service group (e.g., related businesses of which one
such employees.
performs services for the other) are treated as a single employer (b) The requirement that the employer pay at least 50% of the premium
for purposes of the credit. Thus, for example, all employees of the for an employee applies to the premium for single (employee-only)
controlled group or affiliated service group, and all wages paid to coverage for the employee. Therefore, if the employee is receiving
employees by the controlled group or affiliated service group, are single coverage, the employer satisfies the 50% requirement with
counted in determining whether any member of the controlled group or respect to the employee if it pays at least 50% of the premium for that
affiliated service group is a qualified employer. Rules for determining coverage. If the employee is receiving coverage that is more expensive
whether an employer is a member of a controlled group or an affiliated than single coverage (such as family or self-plus-one coverage), the
service group are provided under Code section 414(b), (c), (m), and (o). employer satisfies the 50% requirement with respect to the employee
if the employer pays an amount of the premium for such coverage
How to claim the credit that is no less than 50% of the premium for single coverage for that
16. How does an employer claim the credit? employee (even if it is less than 50% of the premium for the coverage
The credit is claimed on the employer’s annual income tax return. For a the employee is actually receiving).
tax-exempt employer, the IRS will provide further information on how
to claim the credit. Source: Internal Revenue Service
This Gibson Insurance Group Legislative Brief is not intended to be
17. Can an employer (other than a tax-exempt employer) claim the exhaustive nor should any discussion or opinions be construed as legal
credit if it has no taxable income for the year? advice. Readers should contact legal counsel for legal advice. o
Generally, no. Except in the case of a tax-exempt employer, the credit
for a year offsets only an employer’s actual income tax liability (or
alternative minimum tax liability) for the year. However, as a general
business credit, an unused credit amount can generally be carried
back one year and carried forward 20 years. Because an unused credit
Do you Want Company Exposure in Industry Magazines?
amount cannot be carried back to a year before the effective date of Contact AMBA’s Marketing Consultant, Clare Goldsberry, and she
the credit, though, an unused credit amount for 2010 can only be will write a FREE press release to help promote your company’s
carried forward. services, products, equipment & special milestones to industry
magazines and local newspapers. Clare has a BA Degree in
18. Can a tax-exempt employer claim the credit if it has no taxable Journalism, and is the senior editor of Modern Plastics magazine.
income for the year?
She also offers marketing assistance in developing company
Yes. For a tax-exempt employer, the credit is a refundable credit, so that
even if the employer has no taxable income, the employer may receive
marketing plans, brochures & customer lists. Contact her at (602)
a refund (so long as it does not exceed the income tax withholding and 996-6499 or email clarewrite@aol.com.
Medicare tax liability, as discussed in Q&A 6).

AMBA 29
Human Resources
to a well written handbook that addresses common, specific issues, and
as we all know, time is money.

So, what does an employee handbook do for your company?

What Can an Employee Handbook Do For • Provides written documentation of the rules and regulations
Your Small or Mid-Sized Business? • Saves time, resources, and money
By: Michelle L Devon, Accentuate Services • Provide communication between management and staff
• Potentially provides legal protection
It is likely that your company already has many rules and regulations • Spells out privileges and responsibilities for staff and company
that are in effect for its employees. Whether or not it’s acceptable to
smoke in the building, where and when employees are allowed to eat As you can see, there are many benefits for having an effective
lunch, and even as simple as what time the employee should report to employee handbook, but the bottom line is that an employee handbook
work each day, there are many rules that most of the employees saves time and money, and in business, your ultimate goal is to be as
already know. effective and profitable as possible.
There may also be many other rules and regulations your company has Michelle L Devon, Accentuate Services. Visit the website at
that perhaps the employees are not as familiar with, and this means that http://www.accentuateservices.com o
each time an issue arises, the owner, the human resources director, or a
manager has to figure out what these rules are as you go along.
By: Karla Dobbeck, PHR, Human
On top of all the above, there may be laws at the federal, state, and local Resource Techniques, Inc.
level with which your company is required to be in compliance, and
perhaps you or your employees aren’t even aware of them. An employee
handbook that is researched and properly formatted and written will
Auditing Your HR
help prevent future legal problems from arising, because someone in Function
the company simply wasn’t aware of a regulation that had never been
communicated to them. With an employee handbook available, you Consider performing an audit of your
now have an effective means of providing that communication, and current labor law practices. Check with
protecting yourself, your company, and your employees from future various state and local regulations and then
problems. compare the requirements against what is
currently done at your company. Please
Owners, managers, department heads, and human resources staff spend don’t assume that because ‘we have always
a large percentage of their time dealing with employee relations and done it this way’, that your practices
relaying applicable rules and regulations to the staff. An employee are correct. Ten common non-compliance issues found at companies
handbook can keep you from having to ‘reinvent the wheel’ every time include the following:
an issue, question, or dispute arises. While it may take a little bit of time
to properly develop and implement an employee handbook, once the
1. Federal or state posters are missing.
solid foundation is created, the handbook provides a means of reference
2. Application forms do not include proper disclosures or language.
for both the employer and the employee to consult when these issues
3. I-9s are improperly completed or missing.
do occur.
4. Employee files contain protected information.
When employees have documentation to which they can refer 5. Unsolicited applications are mis-handled.
that answers most of their basic questions pertaining to their work 6. Improper payroll deductions.
environment, they do not have to turn to other staff or management to 7. Mandated training is incomplete.
answer these questions for them. The answers are already spelled out in 8. EEO-1 reports are not completed.
the employee handbook in a clear and concise manner. If an employee’s 9. OSHA logs are not completed/posted.
child becomes ill, he or she may want to know what family medical 10. Employees are improperly classified as exempt when they should
leave is available to them. Smaller issues like what time the work day be non-exempt.
starts, where the break rooms are located, and what the company policy 11. Job descriptions are missing or don’t include enough information.
is on personal telephone calls during work hours can be addressed 12. Time keeping procedures are not in compliance.
almost completely through an employee handbook. 13. Vacation records are not kept.
14. Deductions at termination are mishandled.
Other issues, such as discrimination and legality cannot be fully 15. Vacation pay is not calculated correctly at termination.
addressed in an employee handbook. For those larger issues, though, 16. Records are not stored or destroyed appropriately.
an employee handbook can communicate the company policy on those
issues and provide information on where employees should turn should This is just a snapshot to help you see why an audit might be a good
they require additional action on an issue. thing for you to do. There are books and products to help you through
the process.
When a company’s employees have a well written, properly formatted,
and thoroughly developed employee handbook, that handbook provides
them with a first point of contact for answering their questions, and then Job Descriptions - At the HEART the Job
gives them the necessary steps to take should the handbook not address If you do not currently have job descriptions for your employees,
those issues in depth. Because of this, managers, owners, human consider developing them. Because they define the qualifications,
resources staff, and department heads will save much time in referring tasks, education level required and physical requirements of the job,

30 AMBA
Tax & Business
they become the most versatile tool an employer can use during the
hiring process, during the employment relationship and to prepare for a
rightful termination.

1. Hiring - Ad writing, interview questions and the interview itself


is much easier if you have a clear picture of what is required and Qualified Transportation Fringe Benefits
what tasks will be performed.
Employers can help employees get to and from work in a tax-favored
2. Performance discussions - When the supervisor and employee manner. Within certain monthly dollar limits, employer-provided
have the same understanding of the job, the discussion becomes qualified transportation fringe benefits are exempt from tax. The
much clearer and easier since both parties are working from following fringe benefits are currently available.
the same premise. Your discussion can become more job
specific and avoid ambiguous terms such as ‘job knowledge’ or Commuter transportation. Transportation provided by or for an
‘initiative’. employer in a commuter highway vehicle (e.g., vanpool vehicle)
qualifies as an excludable transportation fringe benefit. A commuter
3. Discipline - When supervisors can point to specific performance highway vehicle is one in which (a) there is seating capacity for at least
issues and work habits, the employee is more likely to better six adults (other than the driver) and (b) at least 80% of the mileage
understand what is needed and how to change. is reasonably expected to be for transporting employees between their
residences and their place of work and for trips where at least half the
4. Termination - The employee will be much more likely to adult seating capacity is occupied by employees.
understand the reason for termination if he/she is not meeting
expectations. Job descriptions and employee handbooks are the Transit passes. These include passes, tokens, vouchers, or similar
best tools to prevent charges of discrimination later. items that entitle the employee to transportation. They must be for
transportation (1) on mass transit facilities (whether or not publicly
5. Fitness for duty - Doctors will make better decisions regarding owned) or (2) provided by a person in the business of transporting
return to work if they understand the physical requirements of people in a vehicle seating at least six adults other than the driver. There
the job. are no substantiation requirements for transit passes provided directly
by the employer. Also, transit pass reimbursements qualify if a voucher
6. Americans with Disabilities Act – Employers who have job or similar item exchangeable for a transit pass is not readily available.
descriptions that clearly define minimum physical requirements
for the position are able to use those job descriptions when Qualified parking. This is parking provided on or near the employer’s
making a determination about a reasonable accommodation business premises, or on or near a location from which the employee
or termination. o commutes to work by mass transit or hired commuter highway vehicle.

AMBA 31
Bicycle commuting reimbursement. This includes any employer Using Employee Stock Ownership
reimbursement of reasonable expenses incurred by the employee for
the purchase, improvement, repair, and storage of a bicycle regularly Plans (ESOPs)
used for commuting from the employee’s residence to the place of
employment. The owner of a closely held corporation, including an S corporation,
who wants to sell an interest in the business but does not have a
Employers can use compensation reduction arrangements for qualified buyer, can often use an Employee Stock Ownership Plan (ESOP) to
transportation benefits. Under this arrangement, employees will create a market for the company’s stock. An ESOP is a special type of
not be taxed solely because they can choose between any qualified qualified retirement plan established for the benefit of the corporation’s
transportation fringe benefit and cash compensation. Only employees employees. Unlike the typical qualified plan, an ESOP invests primarily
who choose cash instead of the benefit are taxed. in the employer’s stock. An ESOP may be a stock bonus plan or
a combination of a stock bonus plan and a money purchase plan,
Please contact your tax professional to determine which of these which has been designed to include the various tax and regulatory
provisions would benefit your business. requirements of an ESOP.

Taken from the March 2010 issue of the Tax & Business Alert. o To create a market for the business, the owner arranges to sell his or her
shares in the corporation to the ESOP. The corporation establishes the
ESOP for the benefit of its employees and funds it with tax-deductible
Deducting Business Bad Debts cash contributions. The ESOP uses the contributed cash to purchase
qualifying employer securities from shareholders, who may either
If debt collection is a problem for your business, deducting uncollectible remain with the company or retire. ESOPs may also borrow money
(bad) debts from your tax bill may somewhat lessen the sting of simply from the employer, its shareholders, or third parties to purchase stock,
writing them off. Here is some basic information on deducting business and these loans are exempt from the prohibited transaction rules. An
bad debts. ESOP holding S corporation stock is counted as a single shareholder
for the 100-shareholder limit, regardless of the number of ESOP
First, the debt must be legitimate. A bona fide debt arises from a debtor- participants.
creditor relationship and is based on a valid and enforceable obligation
to pay a fixed or determinable amount of money. For debt creation, The stock acquired by the ESOP is allocated to employees’ accounts,
the business must be able to show that it was the intent of the parties typically on the basis of compensation. As a qualified plan, amounts
at the time of the transfer to create a debtor-creditor relationship. In allocated to employees’ accounts are not taxable to the employees when
other words, the business must be able to show that at the time of the contributed. Instead, they accumulate on a tax-deferred basis until
transaction, there was a real expectation of repayment, and there was the employee retires, becomes disabled, dies, or otherwise terminates
intent to enforce the indebtedness. employment. The employee or beneficiary recognizes income when
the stock is distributed or when the stock is sold and the proceeds are
For most businesses, it is common to incur uncollectible or worthless
distributed to the employee.
debts. Two types of bad debt deductions are allowed by the IRS:
business bad debts and nonbusiness bad debts. Business bad debts
Taken from the May 2010 issue of the Tax & Business Alert. o
give rise to ordinary losses that can generally offset taxable income
on a dollar-for-dollar basis. Nonbusiness (personal) bad debts are
considered to be short-term capital losses. Because there is a limitation
on deducting capital losses, distinguishing business and nonbusiness bad Tax Benefits from the HIRE Act
debts is critical. In March, President Obama signed into law the Hiring Incentives to
Restore Employment (HIRE) Act, which provides a number of tax
Business bad debts generally originate as credit sales to customers
benefits. The benefits include a payroll tax holiday for hiring new
for goods delivered or services provided. If a business sells goods or
workers who were previously out of work, a new general business
services on credit and the account receivable subsequently becomes
credit of up to $1,000 per new employee hired, and an increase in the
worthless, a business bad debt deduction is permitted, but only if the
maximum Section 179 deduction allowed for 2010.
revenue arising from the receivable was previously included in income.

Business bad debts can also take the form of loans to suppliers, clients, Not just any holiday – a payroll tax holiday
employees, and distributors. Additionally, a business bad debt deduction Employers hiring workers who were previously unemployed may
is allowed for any payments made in the capacity as guarantor if qualify for a 6.2% payroll tax incentive in 2010. Under the payroll tax
the reason for guaranteeing the debt was business related. Here, the reimbursement provision of the HIRE Act, qualified employers are
guarantor’s payment results in a loan to the debtor, and the taxpayer is exempt from the employers’ share of Social Security taxes on qualified
generally allowed a bad debt deduction once the loan becomes partially employee’s wages paid beginning on March 19, 2010 and ending on
or totally worthless. December 31, 2010.

Worthlessness can be established when the business sues the debtor, Who is a qualified employer?
and then shows the judgment is uncollectible. However, when A qualified employer is any employer other than the United States or
the surrounding circumstances indicate a debt is worthless and any state or local government – i.e., private and not-for-profit businesses
uncollectible, and that legal action to collect the debt would in all including higher-education public institutions.
probability not result in collection, proof of these facts is generally
sufficient to justify the deduction. Who is a qualified employee?
A qualified employee is an individual who meets the following criteria:
Please contact your tax professional to discuss this tax-saving
opportunity in more detail. • Begins working for a qualified employer after February 3, 2010
and before January 1, 2011
Taken from the July 2010 issue of the Tax & Business Alert. o
32 AMBA
• Certifies by signed affidavit (Form W-11) that he or she • Meets the definition of a qualified employee as described above for
was employed for a total of 40 hours or less during the 60- the payroll tax holiday
day period ending on the date such employment begins
• Continues to be employed by the taxpayer for a period not less
• Isn’t employed to replace another employee unless the than 52 consecutive weeks
employee being replaced left voluntarily or for cause
• Is not a related party to the qualified employer • Receives wages during the last 26 weeks of the period equal to at
least 80% of the wages for the first 26 weeks of the period
Where is the payroll tax holiday computed?
The payroll tax holiday is taken into account on the quarterly payroll tax
How is the credit calculated?
filings by the taxpayer. The payroll tax holiday doesn’t apply to wages
The taxpayer’s general business credit will be increased by the lesser of:
paid in the first calendar quarter of 2010. The amount that would have
qualified for a payroll tax holiday in the first quarter will be taken into • $1,000 per retained worker or
account with the second-quarter payroll tax filing.
• 6.2% of the wages paid by the taxpayer to the retained worker
Can you claim BOTH the payroll tax holiday and work opportunity during the 52-consecutive-week period
credit for the same employee?
A qualified employer cannot take both the payroll tax holiday and work If the total wages paid to the retained worker equal $16,129.03 or more,
opportunity credit on the same qualified employee. The taxpayer will be the allowable credit will be $1,000. This credit will be claimed on the
treated as taking the payroll tax holiday unless the taxpayer elects out of 2011 tax return for calendar year taxpayers.
such treatment.
This general business credit will be used to offset tax for C-corporations
New hire = $1,000 credit and will be passed through to the owners of S-corporations,
The HIRE Act created a new general business credit for hiring and partnerships, and single-member LLCs. Any unused credit can be
retaining qualified unemployed workers for tax years ending after carried back one year but not to a tax year beginning before March 18,
March 18, 2010. This new credit is available to employers for up to 2010, and then will carry forward with other general business credits for
$1,000 for each retained worker. 20 years.
Who is a retained worker? Another year with $250,000 Section 179 expense
A retained worker is an individual who meets the following Under Section 179, taxpayers can elect to expense the cost of qualified
qualifications: fixed assets placed in service during the year. Qualifying fixed assets are
as follows:
• Hired by the taxpayer after February 3, 2010 and before January 1, 2011

AMBA 33
• Depreciable tangible personal property (NEW or USED), including Incentive), WOTC (Federal and State Hiring Tax Incentives), Section
“off-the-shelf” computer software 179 and Cost Segregation. Mark’s email is MLauber@ParadigmLP.com
and his phone number is (281) 558-7100 X-105. Our website is
• Acquired by purchase www.ParadigmLP.com. o

• Used in the active trade or business

The HIRE Act increases the dollar limitation on the Section 179
deduction to $250,000 for property placed in service for the taxable year Business Success Strategies
beginning in 2010. The $250,000 limitation is reduced by the amount
by which the cost of Section 179 property placed in service during the
tax year beginning in 2010 exceeds $800,000. Additionally, there are How Much Is Your Business Worth?
income limitations that could reduce or eliminate these benefits. By: Patrick F. McNally, MBA, CPA, ABV, CFF Partner in Charge
Questions on the Hiring Incentives to Restore Employment Act of 2009? of Corporate Finance Consulting, Blackman Kallick
Contact Cara Hoffman at 312-980-3274, Michael Calahan at 312-
980-2996, Kristen Baehl at 312-980-3238, or your Blackman Kallick You wouldn’t buy a stock if you could not regularly check its value, but
representative. Taken from the June 2010 issue of the Manufacturing do you know the value of your largest investment – your business? You
Edge, from Blackman Kallick. o might think “my friend’s business sold for X times EBITDA (earnings
before interest, taxes, depreciation and amortization), so mine must be
worth a little more than X times EBITDA. But without knowing the
States Follow Lead of the Federal details - how the sale price was paid, expected growth in revenues,
profit margins and how much salary your friend took to name just a few
Government by Adding New Hire - you do not know whether the same multiple can be applied to your
Incentives business. Rules of thumb, such as EBITDA and revenue multiples, can
give inaccurate estimates of the value of your business, which can lead
By: Mark Lauber and Brian Cameron to bad decisions and missed opportunities.
The federal government passed the Hiring Incentives to Restore Other business owners assume their balance sheet shows the value of
Employment (HIRE) Act on March 18, 2010 to incentivize companies their business. However, the value of most businesses is different from
to hire new employees and reduce unemployment. the balance sheet amounts, which are based on historical amounts, not
current values. For example, some of your equipment may be fully
Recently, states have begun to introduce similar legislation to encourage depreciated and show zero value on the balance sheet. Intangible values,
companies to hire and more importantly to hire the unemployed of their such as goodwill and customer relationships, are likely not on your
state. Some of the states that have already passed employment bills balance sheet. If a buyer approached you today, would you sell for the
include Texas, Maryland, Indiana and Florida. amount of equity shown on your balance sheet?
The incentives vary significantly from state to state with respect to: The value of a business is based on the cash flows that business can
• Which type of entity can claim the credit be expected to generate. To understand, and increase value, you must
• Timeframe when the hiring must take place understand what drives cash flow and what makes your business unique.
• Length of employment
• Can the credit be carried forward or carried back Accurately valuing a business involves answering questions about
• Can businesses relocating to the state claim the credit the company and its operations. Here are some examples of areas to
• Some have taxpayer caps and overall incentive caps explore.
• Length the incentive is available
What makes your customers buy?
The credit also differs from state to state. Here’s some examples of Are your customers buying for reasons beyond dollars and cents?
incentives from four different states: Could you command a higher price by repackaging and repositioning
your products with an emphasis on quality or safety, for example? A
Texas - $2,000 per employee company might have a reputation for leading-edge technology, or its
Indiana - 10% of wages paid over 24 months customers might buy because of a products’ reliability or a vendor’s
Florida - $1,000 per employee strong reputation for customer service.
Maryland - Up to $5,000 per employee ($416.67 for each month of
employment during a taxable year) What is the value of the company’s intellectual property?
Assets, such as software development costs, patents and trademarks,
Try to take advantage of these great tax incentives while they last or if may appear on the balance sheet at a cost that does not reflect true
you’re a CPA, let your clients know if they plan on hiring, the sooner value. Other assets, such as customer lists, supply agreements, a highly
the better. trained workforce or a reputation for quality and service, probably do
not appear on the balance sheet.
Contact your CPA or tax consulting firm to determine if there are hiring
incentives in your particular state and if so, with implementation. What is the true cash flow?
Is your nonworking spouse, who doesn’t know what your company
The authors are Brian Cameron, SVP of Business Development, and manufacturers, driving a $100,000 Mercedes paid for by the company?
Mark Lauber, VP of Marketing, both of Paradigm Partners. Paradigm Are family members on the payroll being paid market rate salaries, or
Partners is a national tax consulting firm specializing in niche tax is the owner receiving $1 million a year to run a company doing $20
services such as the R&D Tax Credit, the IC-DISC (U.S. Exporters’ Tax million in sales and breaking even? Are there excessive perks? Asking

34 AMBA
these questions can reveal a more accurate picture of the company’s One company had developed over 15 years an extensive database of
cash flow and, therefore, its value. market intelligence on the buying habits of Fortune 1000 companies
for office products. A large, publicly traded company was willing to
Is a solid management team in place? purchase this company to get the database, since the larger company
Having a solid non-ownership management team in place can be a huge knew it could spend millions of dollars and take many years to gather
boost to value. A buyer is concerned with his ability to generate cash the same information—and might not succeed.
flow after he has purchased your business. If the business is too heavily
dependent on you, the business will have less value to a buyer. Who might be interested in buying?
There are more potential buyers than might be first apparent. Each
How well is the company managed? buyer has different needs, goals, and perceptions of value. For example,
Is the company utilizing its assets to its greatest advantage? Compare a buyers for an auto parts manufacturer might include:
variety of factors to other companies in the same industry, such as sales
per dollar of fixed assets or employee, gross margin and working capital • Competitors looking to expand product lines
turnover. If the business has a unique product or process, is it properly • Suppliers or customers wanting to integrate their supply chain
utilized or could it be more fully exploited? • Private equity firms looking for investments
• A company wanting to gain access to a particular customer
Are there opportunities to improve the top line? • Buyers interested in the firm’s location
Are appropriate resources devoted to sales and marketing, or are the • Companies wanting a recognized name
salespeople simply order takers? Are there opportunities to extend
existing product lines or to tap new markets? Opportunities for sales Understanding who the buyers are and what is important to them is key
growth can have a huge impact on the value of the business. to understanding the value of your business.

How can operations be improved? An accurate valuation depends on seeing the full picture
How much can cash flow be improved by streamlining operations and Your business is probably your most valuable asset – and you are
cutting unnecessary costs? Are there nonessential assets that can be probably counting on that value for your retirement. Managing
liquidated? Even a great sales force won’t help if management doesn’t that value begins with understanding the value of your business.
run an efficient operation. However, there is a lot more to valuing a business than the numbers
on the financial statement. To understand the value of a business, ask
What are the company’s hidden assets? questions and dig for answers and consider getting assistance from a
Does your business have information that other companies want, such as professional who specializes in business valuation. The payoff is a solid
market intelligence or customer lists? Does your company have assets that understanding of value – and the information necessary to make the
would be difficult, risky or time-consuming for someone else to duplicate? right decisions for your future.

LaserSales
AMBA 35
Questions about valuing a business? Contact Blackman Kallick’s
Patrick McNally at 312/980-2934, or pmcnally@BlackmanKallick.com.
Patrick McNally is the partner in charge of Corporate Finance
Consulting at Blackman Kallick, Chicago’s ninth largest consulting
and accounting firm. He specializes in buying and selling businesses,
valuations, analysis and planning. o

Transferring the Plastics Business


By: Kevin W. LaMont, of the LaMont Group

Having worked with business owners in the plastics industry for 16


years, I often come across the business owner whose goal is to leave the
family business to the child in the business. My question to the owner is
“how and when?”

If there is no planning and the business owner passes away, the business
will usually go to the surviving spouse. If the business continues to
grow from the time of the first death until the death of the surviving
spouse, the higher business value will only create a higher estate tax. If
the surviving spouse does not work in the business (unless the business
is an “S” Corporation) any income they receive will be perceived as
unreasonable compensation and taxed at both the corporate level and
the individual’s level. Upon the death of the surviving spouse, the
business will transfer to the child but only if there is enough liquid
cash to pay the estate taxes. Even if there is enough liquid cash, are the
remaining assets enough to create fairness amongst the children not in
the business?

info@wi-engraving.com If the business goes to the child upon the death of the business owner,
once again there is estate taxes payable in nine months. We now need
to look to the family to see who is responsible for the taxes. Usually
the surviving spouse won’t want to pay the taxes; after all they didn’t
receive the business. In addition the surviving spouse might need the
cash in order to maintain a standard of living. If the child is responsible
for the taxes, have they saved the necessary amount needed to pay the
Engraving.indd 1 10/23/08 1:33:02
estate PM
taxes? Even if they did, the child can not pay the taxes on behalf
of the deceased business owner.

If the business owner has adequate wealth to maintain their standard


of living they may wish to retire and gift the business to the child.
That will alleviate the estate tax problem but now you have a gift tax
problem and the gift taxes are due and payable by April 15th of the
following year. The business owner could sell the business to the child
but that rarely works. The child must make $1.50; pay 33% in taxes
just to net $1.00. The dollar is paid to the seller who pays income taxes
on the interest portion of the payment and capital gain taxes on the
remaining portion of the payment. All in all, for every dollar the child
makes the seller nets about 35 cents. This is why 70% of all closely
held corporations never make it to generation number II and 90% never
make it to generation III.

Many business owners assume Congress will pass retroactive legislation


to restore the exemption on estate taxes back to $3.5 million per person.
As much as we would all like to see this happen, its just speculation?
For 2010 there are no estate taxes but the way the law was written,
if the President, the House and the Senate do not address this issue,
the exemption will revert back to $1.0 million per person with a top
marginal tax bracket of 50% in 2011.

Even though the Government created these financial hurdles, they have
also given us the tools to accomplish the goal in question. Although not
one tool will work best in every situation, there is one tool which is used
more often then not, this tool is called a Grantor Retained Trust (GRT).
A GRT is a trust created to move wealth to children without gift taxes
www.pcs-company.com | P: 800-521-0546 | www.buyatpcs.com | F: 800-505-3299 | sales@pcs-company.com
or estate taxes, while providing a level of protection against future
36 AMBA
lawsuits, claims and judgments. The grantor (business owner) creates 2. Own a phrase
the GRT trust and transfers the business to the trust. The trust is set up Brand is about owning a word or two in the minds of your market.
for a number of years (typically 5-8 years) which during this time the No confusion about what niche Trench Safety & Supply Inc. owns. J.
grantor retains full control of the business and their income just as they Darius Bikoff, founder of Energy Brands, coined “enhanced waters” as
currently do. Because the trust is structured so that the grantor receives a new multibillion-dollar beverage category. Chris Krause is focused on
back over the GRT term of years, an amount equal to their salary, the “athletic scholarships” for high school athletes.
payments are calibrated to pay back to the grantor the grantor’s initial
contributions. In addition, when you factor in the time value of money And how do you know if you own the phrase? Google it and see if your
from the time the transfer is made to the time the children actually company shows up.
receive the business, a business owner can expect to transfer the family
3. Hyperfocus
business for 20 cents on the dollar. In other words, a $1,000,000
Align the entire company around a single measurable priority each
business can be compressed to $200,000 in the eyes of the I.R.S
quarter. Not 75, not five, but one overarching focus for the next 90 days
that removes a significant bottleneck in the business.
When the GRT term is reached the business passes to the grantor’s
children or to a trust for their benefit of the children. Should the grantor One company needed to hire 16 specialists; another focused on
wish to add the appropriate language to the trust, we find the business doubling inventory turns; a third concentrated on its Google ranking.
will remain in trust not only for the benefit of the children but will pass What about yours?
to the grandchild free of all estate and gift taxes as well.
4. Control your cash
As with all great tax planning tools there is a catch. If the grantor Growth sucks cash, so construct a business model that fuels your
structures the GRT trust for five years, the grantor must live five years growth without the need of outside capital. Gift cards, advanced
and one day; the grantor must outlive the trust period. When creating a payments, tighter billing practices, and shorter sales and delivery cycles
GRT trust you need to structure it so there are enough years to obtain a are a few of many strategies. And to stay focused, look at your cash
good discount on the asset being transferred, yet short enough to obtain position daily. You’ll sleep better knowing the business can fund its
a high probability of outliving the trust. This is where we take a look at own growth.
the client’s health and as well as their family history. Even though the
probability of out living the trust may be high, there is always a chance 5. Write!
the grantor will die prematurely. With this in mind, the grantor will Flood the digital market space with blogs, white papers, YouTube
often obtain an insurance policy on their life, owned by the children. videos, and Twitter messages that align with the phrase you own (check
In the event the grantor dies, the children will receive the death benefit out The Shipping Bloke blog). Then enhance your authority by writing
and use the proceeds to buy the business for the surviving spouse. The a book like Chris Krause’s Athletes Wanted.
surviving spouse will now have adequate cash to maintain their standard
Published content is king in driving education-based marketing
of living and the children will own the business. Should the grantor
programs and in establishing you and your company as the authorities
outlive the trust the grantor has two options, keep the insurance policy
in your industry.
or cancel the policy, but that choice will be made at that time.
6. Pulse faster
Should you have any additional questions pertaining to the above If you want to move faster, pulse faster. The executive teams of the
referenced business secession planning technique please call Kevin W. fastest-moving companies huddle daily, as if in constant crisis mode --
La Mont, ChFC, The La Mont Group, President of Advance Planning driving on priorities, metrics, and data gathered from the market.
and Investments at 949-413-5090. o
Billionaires like T. Boone Pickens formally meet twice a day with their
teams. And successful executive teams gather once a week vs. annually
Timeless Ways That Will Grow to get some talk time around the six strategies I’ve outlined for growing
the business. It’s about having a bias for action.
Your Business
Taken From The Stellar Journal, 4.3. o
By: Verne Harnish

For almost 30 years I’ve been organizing, advising, and just hanging
with leaders of the world’s top growth firms. Dubbed “gazelles,” these
Why Mold Shops Qualify for the
companies continue to hire even as the economy stumbles. R&D Tax Credit
By: Mark Lauber and Zee Makhani
What makes such fast-track businesses tick? How do they prosper in the
hardest of times? Here are six timeless strategies for doing just that -- in Most mold shop owners do not believe they qualify for the R&D
good times and bad. Whether you run a small or mid-size business or (Manufacturers’) Tax Credit. In addition, this notion has been reinforced
manage a department in a larger company, these tips will work for you. by their CPAs.

1. Get an edge The average person would think the same because when one thinks
Find an underlying advantage of 10 to 30 times over the competition to of R&D, one thinks of scientists in lab coats performing experiments
dominate your industry. Barrett Ersek, founder of Philadelphia-based for large Fortune 500 type companies. Certainly that is not the image
Happy Lawn, innovated a way to close sales in minutes instead of conjured up for a mold shop.
weeks using a proprietary mapping and price-quoting process.
So why do they qualify?
How to figure this out? Look at your industry’s biggest cost and time The answer is simple; the IRS definition of what qualifies as R&D.
constraints and challenge the conventional thinking in those areas of The IRS definition is simply “the design or development of a new or
the business. improved product or process.” This can include products that are unique
to the mold shop (or their clients) not necessarily to the entire industry.
AMBA 37
In order to design or develop a new or improved product or process,
some of the following common activities generally take place:
AMBA Fall Conference Testimonial:
The 2009 Fall Conference was great! The speakers were good and • Equipment programming
• Prototyping
visiting with Representatives and Senators was something we
• Testing
should all do if we are going to complain about what goes on in • CMM
Washington. It’s a very complex environment and until you have • CAD design
walked the halls and experienced what goes on in these offices • CAD simulations
you really don’t understand the system. Going to Washington • Tool and mold design
and being able to meet with a few of our elected officials was an • Secondary tooling design and development
eye opening experience, and I am looking forward to the next • Process instruction development
• PPAP development
conference so that I will be able to speak face to face with them
• Integration of new equipment
once again. To be able to visit with them in their environment • Process development
created more of a connection than seeing them on TV or seeing • Lean manufacturing projects
them at some event where you’re just another face in the • Six Sigma projects
crowd. I was nervous at first, but after meeting with a couple of • Design and development of specialty tooling and fixtures
Congresspersons, I realized that they work for us and they are • Evaluation of alternative materials
nothing more than normal people that hold a position. They want • And many more activities.
to hear what we have to say. I can say that several issues that we As a mold shop owner, you recognize that these activities are performed
spoke about in D.C. last fall have become topics in the news. I almost every day by your employees. These are activities that qualify as
realize that this did not happen just because of what we brought R&D according to the IRS definition.
to the meeting, but when we are joined by others with the same
I’m sure you’re asking yourself, “How can I be sure this applies to
topic the numbers get larger and they begin to listen. Just being in my business?”
Washington D.C. was a very positive experience. And just knowing Again, the answer is simple. Contact a firm that specializes in the R&D
that I was there to make a difference made me feel better about Tax Credit (their staff should include engineers that perform the work).
myself and my political views. Most firms offer a free conference call to discuss your company’s
specific activities and tax situation to determine if you qualify and if
Robbie Earnhardt, Superior Tooling, Wake Forest, NC you can take advantage of the credit. They can even provide an estimate
of your credit. Select a firm that is not a CPA, these firms will work in
harmony with your own CPA without any conflict.

Now you’re wondering if it is worth the effort.


Order Gold Plates for all Your Some examples may help. One of the fantastic aspects of the tax credit
is that you can go back three open tax years. So for most shops, the first

U.S. Built Molds! time you take the credit, you can take the credit for the current year and
three previous years. These examples are for mold shops that have taken
the credit for the first time and were able to go back three years.
We now offer two sizes of “Made in USA” Example 1:
plates to put on all your U.S. built molds! Annual Payroll: $2.5 MM
Total Credit: $130,000

Example 2:
Annual Payroll: $4 MM
1-1/2” x 2” 3” X 4” Total Credit: $165,000
size for size for
Example 3:
$1 each $2 each Annual Payroll: $ 10 MM
Total Credit: $700,000
plus s/h plus s/h
As you can see it can be well worth the effort and you can do this for
every year going forward. With credit being so difficult to obtain, this
MADE IN USA
is an opportunity to get a check back from the IRS for taxes you have
“overpaid” and to reduce your current tax year liability. So don’t delay
The new updated AMBA logo and the words and contact a firm today.
“Made in USA” are imprinted on the plates. For more information please contact the authors: Zee Makhani, a
Order your mold plates today, and highlight Senior Engineering Director or Mark Lauber, VP of Marketing, M.S.
Industrial Engineering, both of Paradigm Partners. Paradigm Partners
your “Made in the USA” status! is a national tax consulting firm specializing in niche tax services such
as the R&D Tax Credit, the IC-DISC (U.S. Exporters’ Tax Incentive),
WOTC (Federal and State Hiring Tax Incentives), Section 179 and
Email AMBA at info@amba.org or call the Cost Segregation. Mark’s email is MLauber@ParadigmLP.com and his
AMBA office to order your gold plates today! phone number is (281) 558-7100 X-105.  Our website is
www.ParadigmLP.com. o

38 AMBA
Your Biggest Fan since MoM
While there is no substitute for Mom, nobody looks out for you and your
business quite like the folks at American Mold Builders Association. Just when you
thought the AMBA menu of member benefits couldn’t get any better, they go out and partner with one of the
leaders in the merchant services industry to offer you access to ultra-low rates on your credit card processing.
If your business accepts credit cards as a form of payment, make plans to spring on over to First American
Payment Systems.

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• Check card rates as low as 1.35% • No mark-up on equipment purchase costs
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AMBA 39
Make MoM proud and call First American today!!
Social Media Marketing Strategies For example if you are selling organic produce and you set up a profile
By: Tammy Corbett in a social media network such as Care2.com, an environmental portal,
you are then communicating directly with those individuals who will
There has been a significant increase in the popularity of social media support your product or service because of a shared interest. These
websites over the past few years. With it has come a shift in the way types of social media communities will extend their approval by sharing
that people search for information and how they share and consult in discussions about your products or services with other users and even
opinions on the internet when making purchasing decisions. in some cases “become a fan” of your featured webpage.

Social media sites such as StumbleUpon and Digg, give users a voice Publish articles to popular social media news sites such as Mixx.
on the internet by providing tools to connect, exchange views, share com, Digg.com, and Propeller.com. These sites allow you to post
content, information, and recommend products and services using the articles and vote on news stories.
“thumbs up or down” approach. This has caused a huge shift in the way
people search for information online. More and more, Internet users rely Share videos and images by setting up accounts with Youtube.com
on the opinions of others before they buy into the validity of a product and Flickr.com, leaders in online video and imaging to reach a broad or
or service. “Word of mouth” is no longer only from mouth to ear, but is targeted audience.
more frequently spread on social media sites and it has never been so
powerful. Any product or service deemed worthy are promoted, shared, Blogging enables you to provide information and updates about your
or discouraged against in these online social communities. business to customers.
Social Media Marketing (SMM) targets users by promoting content
through bookmarking, blogging, online video sharing, and social Businesses that incorporate social media marketing into their
networking to potentially expand their audience and drive traffic to their conventional marketing plan have the advantage of reaching audiences
website. Businesses are beginning to understand the power of these using a whole new approach. The benefits of branding and traffic
influences when it comes to establishing a reputation and growing their are just the tip of the iceberg, establishing your business as a leading
online business. Social media marketing strategies such as a business’ authority in your industry promotes good quality links, better search
engagement in various social media websites can help to generate engine placement, which in turn increases sales.
branding and a personal connection with its users.
About the Author: Tammy Corbett is the resident expert for social media
Business profiles marketing at Red Carpet Web Promotion, Inc. o
One of the most important social media marketing methods includes
posting business profiles on social media websites such as Facebook
and LinkedIn. Instead of waiting around for consumers to come to you, Three Marketing Mistakes Every Business
you have to reach out to your target audience. Solidifying your presence Manager Makes
in the social media community creates a direct interaction between
business and consumer that may not dramatically increase conversion By: Terri Langhans
rates but is definitely capable of establishing branding power and Who hasn’t let a typo slip by or misspelled the CEO’s name or printed
credibility. The valuable feedback consumers provide promotes insight the wrong phone number somewhere? Those marketing mistakes don’t
in determining what business strategies are working and what could be warrant an article. In fact, just one word of how-to-fix-it advice is
re-evaluated to make a website more user-friendly. sufficient: proofread!

Search results Here are a few more important marketing mistakes that just about every
The influence of social media sites has changed the way search engines business manager out there makes, along with a recommended fix that
define placement. Images, videos and news content featured on social will help you attract more business and get better results from your
media sites such as Youtube, Digg, and Flickr are equally capable of marketing, regardless of how big or small your marketing budget is.
sitting comfortably at the top of the search results leaving others, who
have not yet jumped on the social media bandwagon, a little confused. Mistake #1: We think that marketing is something we “do.”
“We need to do some marketing.” It’s the first thing you think when
Effective social media marketing strategies you need to boost business. Problem is, when you think of marketing
Take a hint from the popular social media websites by adding some type as something you “do,” you’re usually thinking about publicity, direct
of interactive quality to your website. Engage the viewer and create an mail, flyers, email, ads and promotion. Marketing is much more than
atmosphere of inclusion and direct contact that encourages a user to merely promotion, and it’s rarely a quick fix.
come back and visit again. Forums and social applications can help you
compete for traffic in an evolving market. The real fix is to expand your definition of marketing. Instead of
thinking of it as something you “do,” think of marketing as anything
Become an expert in your niche. Yahoo Answers is a great place to that helps or hinders the sale or use of your product or service. This
start. You can create a business or company profile and begin answering includes: your location, the attitudes of the person who answers the
direct questions and supplying information to those in your target phone, your name, pricing, policies, proposals, personality and more.
audience.
Before you write a promotional word, do a “help or hinder” once-over.
Join social networks. Social networking provides a means to promote Make a list of what’s helping you attract business and what’s getting
association and the exchange of knowledge while also establishing in the way. Figure out what obstacles you can quickly fix or remove?
business contacts and connections. Post your business profile in the What “helps” can you enhance or spotlight? Until the help-or-hinder
popular social and business networks such as Facebook and LinkedIn, homework is done, working on promotion is premature.
but also make sure to concentrate your attention on your niche audience
by joining social media networks that represent and support your Mistake #2: We breathe too much of our own exhaust.
business or company’s ideas. We are such big believers in our businesses that we can’t wait to show it

40 AMBA
off. We admire our attributes and inhale our excellence. Then we exhale
it all into our marketing communications. The problem is, when you do
that, your marketing is all about you. And people don’t care about you.
They care about themselves.

If your marketing is going to get any response at all, the first thing it
must do is connect to something prospects care about. Connect before
you convince. Try this four-step exercise:

1. Describe your products and services. Get the exhaust fumes out.

2. Identify one or two attributes or “attraction factors”

3. What is the benefit, the need or the want, that is satisfied by those
attributes?
Portable Non-Destructive Hardness Testing
4. Why is that benefit important, personally, to the target audience?
Equotip Piccolo 2
For example, Joy dishwashing liquid (descprition) has real lemon For real-time monitoring and user specific conversions.
(attribute) that cuts grease and leaves dishes shinier (benefit). “What a With additional software.
nice reflection on you!” (Connects to what she cares about.) Connect to
what people want. Not to what you do. Greatest Accuracy and best Repetition Rate!

Mistake #3: We all look alike. Contact Proceq to find out how we can solve
A bank is a bank is a bank. Realtors, lawyers and consultants are a your application needs.
dime a dozen. The list goes on. But here’s the good news: the more two
businesses look alike, the more important each difference becomes,
Proceq USA, Inc.
and the more impact even the tiniest difference will have on setting you 117 Corporation Drive
apart. Why? Aliquippa, PA 15001
Tel: +1-724-512-0330
Fax: +1-724-512-0331
info-usa@proceq.com
Consider identical twins. What’s the first thing you do when you meet www.proceq.com
a pair? You try to find a little something to tell them apart. The same 19647_EDRO_AD 7/12/07 3:42 PM Page 1
is true for your business. Your prospects are looking for a point of ... more than 50 years of know-how you can measure!
difference - just about anything - they can use to set you apart from
your competition.

To find your points of difference, start with your points of contact,


or “touch points” in your company. Make a list. Business card, fax
cover sheet, invoice, phone greeting, front door, home page, etc. Then
look at what the competition does and ask yourself how you can do ™
it differently. Just a little bit will make a big difference, because your
prospects are looking for them.
Holder Steel for improved plastics mold tooling
For now, try the “Help or Hinder”, “Connect Before You Convince” and
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meaningful and effective. Be wary, too, of unrealistic expectations, of choice throughout North America. RoyAlloy™ demonstrates
faulty research, deadly bullet points and lack of follow through - four significant improvements, including enhanced machinability,
other common marketing mistakes. improved stability, greater toughness, better weldability, and
more consistent uniformity and hardness when
About the Author:Terri Langhans is the author of the book “The 7 compared with 420F/1.2085.
Marketing Mistakes Every Business Makes (And How To Fix Them)”
and COE (Chief of Everything) at blahblahblah.us, her speaking and
marketing retreat business for companies who want to be anything
but blah. o

Establish Yourself as an Industry Expert


Author an article or submit an idea for an article for The
American Mold Builder publication. Send your article(s) or
idea(s) to Sue Daniels at sdaniels@amba.org. Don’t worry
about grammar and punctuation; the staff at AMBA will Edro Specialty Steels, Inc.
California - Pennsylvania, U.S.A.

help! We will review your submission for consideration in an West: 800.368.3376


East & Midwest: 888.368.3376

upcoming issue. Appenweier, Germany


Tel +49 (0) 7805 91579-0
email: royalloy@edro.com
www.edro.com

AMBA 41
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READY!

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April 12-14, 2011


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Rosemont, IL USA

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42 AMBA
amerimoldexpo.com
The Great Leader - Top Tips and Advice Grow Your Business Network
for Successful Leadership By: Nellie Graham
By: Matthew Hick To be successful in business, one needs to build up a veritable network
of acquaintances. Business networking is something that may help
Whether you’re a manager at work or a leader of some organization,
propel any business venture forward. The more people you know
getting people to do what you want and need, can often seem like a
and can approach in different circumstances, the better you can
daunting task. But it doesn’t have to be. There’s no need to be ultra-
act decisively and effectively resolve a variety of issues. After all,
nice, or mega-mean. The key to good leadership is following these
establishing a business network is all about gathering a group of like-
expert tips:
minded individuals together in the aim of helping each other go towards
achieving goals.
Don’t play the blame game:
Whether a project deadline is missed, or someone forgets to order the
T-Ball trophies, don’t blame others when things go awry. After all, In trying to build up a business network of your own, it is also important
you’re in charge, and that makes you the one responsible for everything to note that it is not only the number of people that you know but also
- even when things go wrong. the quality of people that you know. The size of your network can help a
lot, but so will the type of people you now in your segment of industry.
Be clear about your expectations: You must know how to strike a balance between the quality of people as
It’s hard to follow the game plan if you don’t know what they are. Be well as the quantity that makes up for your business network.
clear and concise when handing out orders. Clearly explain what you
want done and what you expect each person to handle. Then, allow When building a business network, it is also important to gather people
them to go off and handle it in the best way they know how. whom you know you would be able to gather a lot of information and
learn from. A good business network is composed of having people
Accept that everyone’s style is different: who may be able to offer you valuable advice as well as help. It is also
Sure, you may know that folding the company newsletter one way is composed of people that you may be able to easily approach and get in
the best way, but someone else may disagree. Don’t be knit-picky over touch with.
small details and accept the fact that everyone does things differently.
As long as the end results are the dame, does it really matter that Joan In essence, you are doing more than just building a network of business
calls clients at 10 am instead of 3 pm? acquaintances; you are trying to establish a network of relationships.
What one should strive for is trying to really connect and make
Lead by example: friends instead of looking at an established network as a mere need or
Never expect more form your employees or volunteers than you are requirement in order to succeed in business.
willing to do yourself. Show everyone in your office that you’re willing
to kick in and help get things done, no matter what. They’ll be much Building a business network is not really about building contacts from
more eager to stay that extra hour or two to finish up an important whom you can profit or gain something from. If that would be the case,
project if you are to. then the network that would be built would not last long. Many people
make the mistake of always considering what they can gain from a
Learn from your mistakes (and other’s too): certain business contact. The “what is in it for me” attitude towards a
Everyone makes mistakes - so why not learn from them. Whenever you building business network may not succeed for long.
or someone else makes a big boo-boo, be sure to take stock and see how
the situation could have been handled better. Then follow that advice in True, it may provide immediate triumphs here and there, but
the future! building business contacts in such a way would make you look like
a manipulator instead of a collaborator. That would prove to be
Give credit where credit’s due: disadvantageous to any business and in building meaningful business
Never accept all of the accolades for yourself (no matter how great a relationships.
leader you are). Give credit to people who contributed to your success
and make them feel as if you couldn’t have achieved it without them. In building a business network, one should always make an effort to
The odds are good that you couldn’t have, no matter how hard you tried. reach out to contacts and really get to know them in a more personal
manner. In usually business meets, many people make the mistake of
Being a good leader means being able to work well with others, no just handing out business cards to as many people as possible as well as
matter how different your style of doing things, and being able to bring getting business cards from them, all without going through the effort of
out the best in everyone in your group. knowing them. As with establishing any relationship, you need to know
a person first.
Article Source: http://www.leadershiparticles.net o
That is the same way with building your business networks. Take the
effort to know your contacts more than just through the information
Ship with YRC Transportation from their business cards. This way, you would be building a
AMBA and YRC Transportation offer a deep on-bill discount for relationship with your business network and establish it for the long
inbound & outbound LTL freight shipments. Members receive term.
a 70% discount, and also receive 5% off Sealed Divider, 10%
off Time Advantage and 10% off Time Critical shipments! Nellie Graham - EzineArticles.com Expert Author. She served for five
To enroll or learn more, contact your association benefits years as a business curriculum instructor. She holds a B.A degree in
coordinator at: 800.647.3061, or associations@yrcw.com or Business and a MBA in Electronic Business. o
www.enrollhere.net

AMBA 43
Classified Corner
FOR SALE - VM-16 Partner – 1999

TurbulenT Flow plasTic baFFles Description: CAT 40-20 pod tool changer10-7.5 HP,

20% faster cycles


(a little turbulence goes a long way)
spindle-5000 RPM, 4” risercenturion version 6.6240p flash 3.5”
floppy drive, Rigid tapping coolant tray, washdown hose, air
blast table sze:  - 16” x 45”,   X-30”, Y-16”, Z-19.5”220 volt
machine is currently under power.

Contact Info: Jwinter@quality-molds.com,


269-422-2137 - Jon Winter

Price: $11,500.00 o

Tech Corner
Ambient Air Cleaners
Designed for small shops, the
Wynn “M15” Series air cleaners
remove lung damaging airborne
particles at MERV 15 efficiency.
This includes smoke.

These low cost, quiet, energy


efficient units can be suspended
by chain or threaded rod and
are easily cleaned in place with
compressed air. Prices, additional
features and specifications can
be found at: www.wynnenv.com/
You can gain a lot just by going with the flow – DME m15_filters.htm o
Turbulent Flow Plastic Baffles. Compared to traditional
brass baffles, they increase heat transfer and eliminate
yGRENE™ Technologies Inc. launched
blow-by, cooling parts more quickly. The result: 20%
faster cycle times. That’s pretty cool. So give us a call
to Rethink, Rework and Realize
to get yours today – and get unequalled support every manufacturing processes with proven cost
step of the way. savings, reduced environmental impact
An innovative new company, yGRENE™ Technologies, Inc. is being
launched by a group of manufacturing and process experts. Their
mission; to harness best in class, “Eco Friendly” technologies combined
with forward thinking, environmentally driven manufacturing solutions
that ultimately increase the bottom line for customers.

yGRENE™’s philosophy of addressing global environmental


dme.net • 248.398.6000 manufacturing challenges combines energy efficiency, cycle reductions,
increased productivity, and proprietary processes. YGRENE™ has
developed a clean, simple approach to help companies “green” their
watch a plastic vs. brass baffle operations.
comparison at: dme.net/plasticbaffles
yGRENE™’s founder and CEO, Scott Molnar stated, “Everything
we do is 100% Eco friendly and customers who adopt yGRENE™
technologies and practices, realize quickly the impact on bottom
44 AMBA
line profitability. Whether it’s a stand alone technology, a “Turnkey” latest SPG II circuit for improved finishing operations, and our proven
solution, a re-engineered processing facility, or new innovative product high-performance PICO guide system. Together these features create a
launch, YGRENE™’s ability to leverage science, technology and rigid, reliable, high-accuracy machining platform capable of producing
implementation will have quantifiable “Eco” positive results that equate surface finishes to 0.08 μm Rz.”
to dollars saved.”  
Makino’s UPV machines feature a fixed table design in which axis
Contact Information: Scott Molnar, CEO, scott@ygrenetechnologies. movements are controlled by machining heads. Sizes of the UPV-3 and
com, 416.786.2663, www.ygrenetechnologies.com o UPV-5 are 101.57” x 126.97” (2580 x 3225mm) and 113.58” x 131.30”
(2885 x 3335mm) with X, Y, and Z axis travels of 14.57”, 10.63”,
8.66” (370, 270, 220mm) and 21.65”, 14.57”, 8.66” (550, 370, 220mm)
New Makino UPV Series Wire EDMs Built respectively. The UPV-3 will accommodate a maximum workpiece size
of 30.71” x 23.23” x 3.94” (780 x 590 x 100mm) with a payload of
with Oil-Based Dielectric Systems for 771.62 lbs (350kg), while the UPV-5 holds sizes up to 37.80” x 27.17”
Improved Surface Finishes x 3.94” (960 x 690 x 100mm) with a maximum payload of 1,212.54 lbs
(550kg).
Makino announces the release  
of the UPV-3 and UPV-5 Ultra- For more information call 1.800.552.3288, or visit www.makino.com o
high Precision WEDM designed
with an oil-based dielectric
fluid system for high-accuracy AMBA Member Benefits:
machining of hardened materials
and mirror-like surface finishing The American Mold Builder subscription – This 48-page
capabilities. quarterly magazine unique to the AMBA features commentary
and articles covering industry issues, trends, technology,
“The oil-based dielectric fluid member news and AMBA news.
system design of the UPV series
is completely different from our Government Watch and Advocacy Participation – AMBA
other EDM machinery, offering partners with organizations such as the USBIC (United State
multiple unique benefits,” Business and Industry Council) and other manufacturing trade
says Jeff Kiszonas, Makino’s groups to keep AMBA members up-to-date on Congressional
EDM Product Manager. “We’ve integrated a thermal control system activity at the Federal level that impacts manufacturing.
that maintains constant dielectric and casting temperatures, Makino’s

AMBA 45
Advertiser’s Index
Alba Enterprises, Inc ....................................... 15
Alliance Laser Sales.......................................... 35
Alliance Specialties............................................33
Amerimold........................................................ 42
Crystallume Engineered Diamond.................... 8
DME Company................................................. 44
DMS...................................................................13
Duro-Chrome Industries .................................31
Edro Specialty Steels, Inc. ............................... 41
Ellwood Specialty Steel.....................................20
A. Finkl & Sons Co........................................... 45
First American Payment Systems................... 39
Gibson Insurance Group.................................. 48
Graphic Products North America.................... 46
The Gund Company . ........................................25
Haas Automation, Inc...................................... 47
Hasco America.................................................. 28
Incoe Corporation.............................................. 7
JEM Enterprise, Inc. ........................................23
Makino.............................................................. 24
OMNI Mold Systems, LLC............................... 10
Osco ....................................................................8
PCS.....................................................................36
Proceq USA, Inc. . ............................................ 41
Progressive Components................................... 2
Rocklin Manufacturing Co. . ........................... 23
Ultra Polishing.................................................. 46
Vega Tool Corporation..................................... 27
Wisconsin Engraving Co., Inc. / Unitex.......... 36

46 AMBA
THE 2010

VERTICAL MACHINING CENTERS


NEW GENERATION
After more than 20 years of industry firsts, we figured 2010 would be a good year to
“up the ante” again. So we looked at any and every way to make Haas VMCs better,
and then made one last change: We added more value.

IMPROVED: motion control


coolant containment • chip evacuation
CNC interface • ergonomics • serviceability
released for active duty: 01.01.10

Haas Automation, Inc.


800.331.6746 • see them online @ www.HaasCNC.com

47
Specifications subject to change without notice. Not responsible for typographical errors. Machines shown with optional equipment.
AMBA
American Mold Builders Association PRSRT
U.S. Postage
P.O. Box 404
PAID
Medinah, IL 60157-0404 Medinah, IL
(Change Service Requested) Permit No. 20

Insuring the AMBA


Leading Provider
Provider of
of
Insurance
Commercial Insurance
Employee Benefits
Personal Home & Auto

Risk
Management
Claims Consulting
Loss Prevention
OSHA Compliance Consulting
Photo courtesy of PM Mold Company

www.gibsonins.com 800-814-2122
48 AMBA