SIC 3324
STEEL INVESTMENT FOUNDRIES



This classification covers establishments primarily engaged in manufacturing steel investment foundries.

NAICS Code(s)

331512 (Steel Investment Foundries)

Industry Snapshot

Shipments from steel investment foundries were valued at $2.79 billion in 2000, compared to $2.34 billion in 1997. The industry is subdivided into four product classes. In the late 1990s, the largest of these sectors—high temperature metal investment castings—accounted for 42 percent of total industry shipments, with over $987 million in shipments. Carbon and alloy steel investment castings were the second-largest category, with shipments valued at over $801 million, or 34 percent of total shipments. Stainless steel investment castings claimed 18 percent of total shipments, garnering $423 million. Nonspecific steel investment foundries represented the remaining 6 percent of total industry shipments.

The materials consumed by this industry were primarily those used to make steel. The delivered cost of pig iron was $1.2 million in the late 1990s, while the delivered cost of iron and purchased steel scrap accounted for a collective delivered cost of $49 million. Other metals included: cobalt-based alloys ($36.8 million); nickel-based alloys ($100.1 million); and all other ferrous shapes and forms ($29.4 million). Sand had a delivered cost of $12.3 million, and clay refractories had delivered costs of $3.2 million. Industrial dies, molds, jigs, and fixtures that were used to produce the wax patterns reported delivered costs of $18 million. Grinding wheels and other abrasives had delivered costs of $19.7 million. Industrial patterns carried a cost of $3.45 million and all other materials, components, parts, containers, and supplies reported delivered costs of $175.2 million.

Organization and Structure

In 1997, 159 establishments were involved in this industry. Of this total, 116 companies, or about 72 percent, were larger companies with more than 20 employees. California, with 19, was home to the greatest number of steel investment foundries, followed by Michigan with 18 and Ohio with 16. California also led the nation in shipments of steel investment castings in 1997, with shipments valued at over $260 million, or about 11.0 percent of the U.S. total. Ohio's shipments accounted for 10.1 percent of the total, while Michigan produced steel investment castings worth over $224 million, which represented 9.6 percent of the nation's total.

Steel investment foundries are not necessarily in a class of their own. Many foundries practice investment casting regardless of the metal type, and many steel foundries may practice several casting processes beside investment. For example, the art industry used investment casting to create bronze sculptures, while the jewelry industry used investment casting to produce intricate designs. Relatively few steel foundries, with respect to the entire steel foundry industry, used the investment casting process exclusively.

The Environmental Protection Agency and the Occupational Safety and Health Administration keep watchful eyes on the industry and continually impose regulations. One particular advantage of the investment casting process is that, compared to other casting processes, it is not harmful to the environment. The sand used can be further recycled; and, since the process involves no chemical binders, there is no danger of producing hazardous fumes. With less waste and fewer pollutants produced, this process was not severely affected by increasing environmental legislation.

Background and Development

According to Paul DeGarmo in Materials and Processes in Manufacturing , "investment casting actually is a very old process. It existed in China for centuries, and Cellini employed a form of it in Italy in the sixteenth century. Dentists have utilized the process since 1897, but it was not until World War II that it attained industrial importance for making jet turbine blades from metals that were not readily machinable. Millions of castings are produced by the process each year, its unique characteristics permitting the designer almost unlimited freedom in the complexity and close tolerances he can utilize."

Investment casting is also known as precision casting or the lost wax process. A pattern of wax or other expendable material is created and is attached, sometimes in clusters, to expendable down sprues. This conglomeration is then invested, or surrounded, by a refractory slurry, which then dries and hardens at room temperature. The mold is then heated to melt or burn out the wax or other expendable material. In the hollow cavity, molten metal is cast. This casting process is particularly adapted to the production of small, intricate parts using metals of higher melting points than are feasible for use in die-casting. Steel is one of the primary metals used in the industry.

Investment casting is a high precision process and is therefore expensive. The process allows highly complex shapes to be produced while maintaining good dimensional accuracy and surface finishes. The ability to produce thin wall sections are another advantage of using the investment casting process. Sections as thin as 0.015 inches, for example, have been cast.

A major technological advancement in the foundry industry was developed in the early 1990s. This advancement was known as both Rapid Prototyping and Functional Prototyping. Rapid prototyping is a computerized system that uses stereolithography and selective laser sintering to create a three-dimensional shape that has been drawn on a computer aided drafting station. A computer takes the three-dimensional model and mathematically slices it into layers of specific thickness. Each layer is transmitted digitally from the design unit to the production unit where the material of choice is used to build the shape layer by layer. Using this new technology, a designer could take a customer's idea, design it, and in several hours or days, depending on the size of the part, have a prototype available for the customer to evaluate. The new technology dramatically reduced both the time and expense of producing intricate designs.

The largest producer of rapid prototyping equipment in 1996 was 3D Systems of Valencia, California. They sell a system that uses ultraviolet light driven by a CAD program to slice through a photopolymer pool. The company is developing a process called QuickCast to improve the accuracy of the stereolithographic models used to produce the patterns for investment casting. The CAD program divides a part to be cast into a core and cavity then generates a negative of the part. Next, the product is molded with QuickCast and built in steel to produce a mold insert. In the December 1996 issue of Modern Casting, Matthew Duke of Precision Technology Inc. remarked that stereolithography allows a great reduction in lead time when used in the right applications, but for many parts the cost is still prohibitive.

Current Conditions

Steel investment casting survived the recession of the early 1990s, which eroded the industry's key markets: the aerospace, automotive, and energy industries. The middle of the decade, however, brought another set of challenges. Foremost among these was the continuing decline of the aerospace industry. The end of the Cold War resulted in the Department of Defense slashing its arms expenditures, which fell from $81 billion in 1990 to $45 billion by the late 1990s. Although commercial plane building surged again in the late 1990s, investment casters were affected by the rampant consolidation that swept through the industry. As aerospace companies merged, they turned to fewer and fewer suppliers for their precision cast parts. A similar consolidation occurred in steel investment casting.

Steel investment foundries were also been impacted by the increasing use of aluminum cast parts in the automotive industry. According to Ducker Research Company, the average aluminum content per passenger vehicle has risen at annual rate of 4.3 percent since 1977, and overall aluminum content in automobiles doubled during the 1990s. Car manufacturers began turning to aluminum because it is easily recyclable, as well as being lighter than steel. With federal regulations mandating specific levels of fuel efficiency, automotive companies turn to aluminum cast parts rather than steel to reduce the weight of vehicles.

Another issue facing steel investment foundries concerns the quality of the steel required to cast intricate parts. Because extreme precision is needed to produce these castings, any inclusions in the metal will ruin a part. The primary quality issue facing the steel industry in the late 1990s was the cleanliness of steel. Clean steel is essential to the industry because steel that is free of tramp elements, slag, and dross creates better quality parts. According to John Svoboda, "[in] the early 1980s a high-level management task force representing the steel industry identified oxide macroinclusions as the major factor responsible for the lack of acceptance of steel castings by the design engineering community. This study augmented the already well-known requirements for cast steel to be free from tramp elements, gases, and microinclusions. In short, the mandate for 'clean steel' has been issued." By the late 1990s, significant progress had been made in clean steel production. Moreover, future studies were expected to establish a method of quantifying the cleanliness of steel and find the relationship between cleanliness, mechanical properties, and design performance.

Total industry shipments grew from $2.71 billion in 1999 to $2.79 billion in 2000, while the cost of materials increased from $856 million in 1999 to $894 million in 2000. Although employment declined from 22,521 in 1999 to 22,318 in 2000, payroll costs increased from $723 million to $741 million.

Industry Leaders

Pechiney Corp. was the leading steel investment foundry in 1998, reporting sales of $2.78 billion and 28,000 employees. The company was also involved in various forms of aluminum production. Portland, Oregon-based Precision Castparts Corp. was the industry's second-largest company in 1998. Precision produced investment castings that were used in the aerospace industry, as well as other industrial sectors. Although aerospace industry casting accounted for over half of Precision's 1998 sales, the company was striving to limit its dependence on that cyclical sector. Through a series of acquisitions in the late 1990s, Precision had entered into new markets, primarily fluid management technology. Between 1996 and 1999, the company had reduced the portion of its sales linked to aerospace 10 percent. Precision's most notable clients included General Electric, Pratt & Whitney, and Rolls Royce. Its 1999 sales were $1.47 billion, and the company employed 12,355 workers.

Atchison Casting Corporation of Birmingham, Alabama, was another key player in the industry. The company, which produced castings ranging in size from several ounces to over 200 tons, provided castings to the automotive, railroad, military, mining, and utility industries. Its significant customers included Caterpillar, General Electric, Deere & Co., and General Motors. The company's 1999 sales were $475 million. With 4,500 employees, Atchison had been one of the driving forces in the industry's consolidation during the 1990s. Additional industry leaders included the Whitehall Casting Division of the Howmet Corp. of Greenwich, Connecticut (1998 sales of $1.3 billion, 11,500 employees); Portland, Oregon-based PCC Structurals Inc. (1998 sales of $285 million, 2,600 employees); and Citation Corporation of Birmingham, Alabama. Citation, which reported 1998 sales of $724 million, operated 23 facilities in 10 states and employed over 6,330 workers. Citation derived the bulk of its sales from the automotive sector.

Workforce

The iron and steel foundry industry faced substantial employment reductions during the late 1990s. The number of workers employed in steel investment foundries dropped from 27,100 in 1995 to 22,673 in 1997 and to 22,318 in 2000. Roughly eighty percent of steel investment foundry employees were production workers. On average, these 17,746 employees earned $15.05 per hour and worked 38.5 hours each week.

Further Reading

Darnay, Arsen J., ed. Manufacturing USA. 5th ed. Detroit: Gale Research, 1996.

Delch, D. K. "Free Trade: Patient Needs Resuscitation." American Metal Market, 25 November 1996, 14.

Ducker Research Company. "Report on Aluminum Content in 1999: North American Passenger Cars and Light Trucks." Available from http://www.aec.org/ducker_report.htm . 1999.

Horton, Robert. "Risk Demand Fuels Investment Casting Technology Innovations." Modern Casting, December 1996, 45.

Schmitt, B. "Group Seeks Harmony in the Discord of Free Trade." Am. Met. Mark, 18 May 1995, 6A.

"30th Census of World Casting Production - 1995." Modern Casting, December 1996.

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

United States Census Bureau. "Steel Investment Foundries." Available from http://www.census.gov/prod/ec97/97m3314c.pdf . October 1999.



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