SIC 3462
IRON AND STEEL FORGINGS



This industry includes establishments primarily engaged in manufacturing iron and steel forgings, with or without the use of dies. These establishments generally operate on a job or order basis, manufacturing forgings for sale to others or for interplant transfer. Establishments that produce metal forgings for incorporation in end products produced in the same establishment are classified on the basis of the end product. Establishments further processing forgings are classified according to the particular product or process.

NAICS Code(s)

332111 (Iron and Steel Forging)

Industry Snapshot

The forging processes of the iron and steel forging industry—not the industry's end products—characterize the industry. Forging reconfigures a substance by pressing, hammering, or constricting it with a great deal of pressure. Most substances are forged after they have been heated, but not melted. Liquefying metals to make parts is called casting.

There are three main processes for forging metal: closed die or impression die forging, which compresses a metal between two dies that contain an impression of the end product; open die forging, which hammers metal between two flat dies but moves the piece between blows to shape the end product; and seamless rolled ring forging, which punches a hole in the work piece and then rolls and squeezes it into a thin, seamless ring.

All forging processes make very resilient parts known as forgings. Forgings are strong because forging processes create a grain flow in the parts of the finished product that require maximum strength. Forging processes also impart beneficial metallurgical properties, such as ductility, resistance properties, dimensional stability, and absence of porosity. Although companies may forge many types of metal, the most commonly forged metals are carbon steel and alloy steel.

Establishments in the iron and steel forging industry are concentrated in the Midwest and Northeast, with the highest number of establishments in Ohio, Michigan, and Illinois. Texas, California, and Pennsylvania also have a large number of forging establishments.

Industry shipments were valued at $4.9 billion in 2000. The industry's primary consumers tended to be companies engaged in industries that were concentrated in the same general regions as the forging companies themselves, even though forging companies do market their products nationally and internationally. The largest purchasers of forged products are the aerospace, national defense, and automotive industries, as well as agricultural, construction, mining, material handling, and general industrial equipment manufacturers.

Background and Development

Humans first forged metals by hand-hammering them. The steam hammer automated the forging industry in 1843—the steam raised the hammer, but the weight of the hammer was the only pressure used to shape the metal. By 1888, a double-acting hammer used steam to supplement the pressure exerted by the falling hammer. Technology continued to advance the industry.

A census taken by Forging reported that two forging methods dominated the industry in 1992: closed die and open die methods. The closed die method was used by 248 companies, while the open die method was used by 109 companies, a margin of more than two-to-one. The ring rolling method was used as a primary method by 16 plants; 13 plants in the census cited other unnamed primary methods of forging. The Forging census included 32 Canadian companies and companies classified in SIC 3463: Nonferrous Forgings.

Forging developed as more of an art than a science, and even in the 1990s, when most forging was almost completely mechanized, forging processes could not be completely predicted with scientific methods. The unique problems posed by forging are the result of the many factors manufacturers must take into account. The most common factors to consider are the properties of the metal to be transformed, the strain or amount of pressure required to shape the metal, the rate at which the pressure can be applied to the metal for deformation, and the appropriate temperature for the deformation to occur without scaling or breaking the material. All the factors must be balanced to achieve consistently desired results from any of the forging processes.

Even with advances in technology, the complexity of some forging problems have not been solved. Determining the kind of die lubricant to use for forging operations is an example. Before the industrial revolution, animal oils, coal, soapstone, and crude oils were used because the products were "simple" and the processes requiring lubricants were "minimal," according to Forging. The advent of the steam-hammer demanded new lubricants, which were developed by the end of the nineteenth century. The new lubricants were steam-refined mineral oils, sawdust, salt water, fatty soap solutions, and oil and graphite flake combinations.

The oil and graphite mixtures proved to be effective as forging speeds increased with automation, but because those mixtures were explosive, other lubricants needed to be developed. Mixtures of water and graphite replaced the oil-based mixtures by 1970. In response to health related problems caused by graphite lubricants, research on synthetic lubricants began in the 1970s. In 1993, Forging reported that "water-based graphites make up about 60 percent of the forging industry sales, synthetics 15 percent, and oil-based graphites 15 percent."

The success of the forging process relies on the effectiveness of the lubricant, but no simple method for selecting a lubricant exists. Each lubricant has advantages as well as disadvantages. Oil and graphite applies easily and works well at many temperatures, but is explosive and expensive. Water and graphite costs less and helps cool dies, but requires careful application to work; in addition, graphite dust can collect in the work area and cause problems for workers. Synthetic lubricants are cost effective and less hazardous but must be applied through spraying, may impede metal flow, and are ineffective to use for forging complex shapes.

The industry has seen many changes in the cost of production. From a low of $1.2 billion in 1983, material costs rose dramatically to just over $2.0 billion in 1989, to $2.5 billion in 1997.

Current Conditions

There are three types of forging orders: custom forgings, which are made at the request of a customer; captive forgings, which are made for the company's own internal use; and catalog forgings, which consist of standardized parts that are resold through various sources. Forged products range from precision aircraft parts to everyday hammer heads and wrenches.

Forgers faced significant competition from other industries in the late 1990s, as end-users looked for lighter, cheaper materials. Powdered metal, cast metal, plastics, and ceramics posed the greatest threat to the iron and steel forge industry. Industry analyst Joshua Billings told Metals Watch that "the competitive pressure from plastics and new metal alloys will force forgers to reduce the weight of their components." Billings added, however, that "[f]orgings may lose some market share for smaller parts to castings and powder metal parts, but will retain their preeminence for very large items or parts that are neither complex nor intricate."

In addition to the challenges presented by rival materials, iron and steel forgers experienced a drop in demand in the late 1990s. Although the U.S. economy boomed for the closing years of the decade, forgers were affected by the collapse of Asian economies. According to the Milwaukee Business Journal , the slowing of the aerospace industry had the greatest potential to harm iron and steel forging business. Since air travel decreased in the wake of the financial crisis, major airlines canceled or delayed orders for new planes. Iron and steel forgers—who produced highly engineered parts for airplane engines—were expected to experience a corollary drop in demand.

Although total industry shipments grew from $4.7 billion in 1999 to $4.9 billion in 2000, they remained lower than their peak in 1998 of $5.3 billion. The cost of materials in 2000 totaled $2.54 billion. The total number of employees in 2000 increased to 26,418 from 25,929 in 1999; however, this figure also remained lower than the 1998 high of 28,404.

Industry Leaders

The majority of the most successful forging companies are privately held. Among the leading establishments in 1997 was Ladish Co., Inc. Based in Cudahy, Wisconsin, Ladish derives 90 percent of its sales from the aerospace industry. The company's 1998 sales increased 8.1 percent from 1997 levels to reach $226.0 million. Ladish employed 1,130 workers. Another key player in the iron and steel forging industry was the publicly-held Defiance, Inc., which manufactured the bulk of its products for the U.S. automotive sector. A subsidiary of Gen Tek, Defiance reported 1998 sales of $89.3 million and employed 691. SIFCO Industries, Inc. enjoyed major commercial airlines as its primary clients. Based in Cleveland, Ohio, SIFCO's 1999 sales were $115.0 million, and employment levels remained stable at 848 workers.

Workforce

Forging requires large amounts of capital investments to maintain the expensive equipment, but the industry sustains companies of a wide variety of sizes. While companies have between 50 and 250 employees, there are thriving businesses with as few as 10 and as many as 1000. In 1997, 47 percent of establishments in the iron and steel forgings sector employed 20 or more. The industry as a whole employed 26,418 workers in 2000, of which 19,560—roughly three-fourths—were directly involved in production. These production employees earned an average wage of $14.57 per hour. The greatest number of iron and steel forging employees resided in Ohio. In addition to these 3,810 workers, 3,381 called Texas home. Pennsylvania contained the third highest number of iron and steel forging employees, with 2,912.

Research and Technology

The industry expects to make significant investments in research and development in the coming decades. $80 billion in federal funding was made available to American manufacturers by a mandate from the Clinton Administration. Roger W. Werne, the associate director for engineering and technology transfer for Lawrence Livermore National Laboratory, noted in Forging that under the Clinton Administration's increased funding for national laboratories, the labs can act as an " 'insurance policy' that can enhance the probability of success of a U.S. company or consortium of companies that decides to push the limit of their technology beyond existing boundaries." About the development of new technologies, the executive editor of Forging , John R. Wright, stated that "America is on the verge of wholesale new areas of technology development. We are close to breakthroughs—a technology blast that will carry this country for the next 30 years."

Further Reading

Stundza, Tom. "Forging News," Metals Watch: The Newsletter. Vol. 2, April/May 1996. Available from http://www.steelforge.com/metals/issues.html .

Stundza, Tom. "Forging News." Metals Watch: The Newsletter. Vol. 2, December 1996. Available from http://www.steelforge.com/metals/issues.html .

United States Census Bureau. "Iron and Steel Forgings," October 1999. Available from http://www.census.gov/prod .

United States Census Bureau. "Statistics for Industries and Industry Groups: 2000." Annual Survey of Manufacturers. February 2002. Available from http://www.census.gov .

Velocci, Anthony. "Aerospace Suppliers Preoccupied with Possible Cyclical Downturn." Aviation Week and Space Technology , 31 May 1999.



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