C-62 Part 4: Case Studiestwenty-two pounds of wire per production shift, buying
a new machine was an economically unfeasible option.
Fisk Alloy solved the equipment problem by acquiring
Strandflex in Oriskany, NY. This was an older steel wire
stranding mill full of tubular stranders in seven-bay,
twelve-bay and eighteen-bay configurations. Brian Fisk
explained the difference:Seven-bay machines actually have six bays that strand
seven wires. Twelve-bay machines strand thirteen wires
and an eighteen-bay machine strands nineteen wires. The
seven and twelve are concentric construction, where first,
the internal seven-wire core is made in one direction and
a twelve-wire closer is made in the opposite direction. This
is done because the twist forces are set in opposition and
result in a straighter wire. It is a more expensive manufac-
turing approach because of its step-by-step process. Unilay
construction, which is done on the eighteen-bay machines,
makes and closes a nineteen-wire construction all at once,
before annealing. (The center of the Fisk Alloy Conductor
logo [below] shows the 19-wire configuration.)
Brian suggested reconditioning and utilizing any
useful machines and selling any they could not use to
steel wire producers in India and China. In doing so, Fisk
Alloy ultimately recouped 40 percent of the Strandflex
purchase price. Brian commented on reconditioning
machines:
Oriskany has proven to be the perfect place to build our
own eighteen-bay machines. Rather than pay $250,000 for
each custom-made new machine, we are literally building
a new eighteen-bay machine every eight to ten weeks from
old equipment by reconfiguring six and one-bay machines
into eighteen-bay machines. We tear them completely
apart, weld the frames, re-machine the barrels, and do
what it takes, but we wind up with a machine that is better
and faster than the original. The original machines ran at
1,600 rpm and the rebuilt machines now run at 2,000 rpm,
a 25 percent increase.In 2008, FAC bought fifty ultrafine tubular strand-
ers, for $800,000 from Medallion Wire and Cable in
Houston, TX, to manufacture ultrafine wire (.002 inch
down to .0008 inch, finer than a human hair). The
acquisition expanded production and product capability.
Brian Fisk noted:When we eventually consolidate all fifty machines in the
Hawthorne plant in 2009, we will have the capacity as
well as the capability for ultrafine stranded conductors.
The ultrafine line will expand our offering for high per-
formance. It will enhance our profile in the conductor
business for both higher volume and specialty products,
such as biomedical applications. However, using Percon
in biomedical applications will require certification, just
like with the military. They see it as a whole new product,
especially if it is for an application where the device will
be implanted.
Eric summarized the vision of the business segments:
Here’s the business model: Oriskany is the volume opera-
tion on the high-performance side (FAC), Hawthorne will
be the specialty high-performance operation. Hawthorne
is a volume operation for the original shaped wire business
(FAW) and we need to develop the specialty shaped wire
operation.Market Opportunities
Although the military and aerospace were exempt from
the RoHS regulation, equipment recapitalization in the
airline industry would eventually increase demand for
Percon-type products because under ROHS and the
related WEEE statutes, commercial airplane manufac-
turers were responsible for the ultimate disposal of any
toxic component. The Boeing Company noted, “Many
manufacturers have a global supply chain, increasing
the possibility that suppliers will be affected by diverse
chemical bans and use restrictions. More productive,
new airplanes will play a greater role, and there will
be relentless pursuit of further environmental progress.”^5
Suppliers to Boeing were already providing Percon for
some applications.
Airbus, the other major airplane manufacturer, had
already been informed by a supplier that it had ‘gone
green’ and would no longer supply a cadmium-containing
product. It recommended Percon 24 as the certified
replacement. Earlier, Airbus had forecasted an average
annual delivery rate of new planes at 1,215 from 2007
through 2026, driven by a 4.5 percent annual increase
in passenger traffic, fuel and eco-efficiency issues and
the replacement of older-generation equipment. (see
Exhibit 4 for Airbus Orders and Deliveries 2000–2007).^6
Based on its commercial airplane forecast 2008–2027,
Boeing forecast sales in both new and replacement air-
craft, with replacement airplanes taking a greater share
of demand. Boeing estimated total fleet size at the end
of the twenty-year period at 35,800 airplanes. Long-
established airlines were expected to order replacements
for the numerous aging airplanes, and leasing companies
would order new airplanes.^7 Commercial size airplanes
required 632,000 feet^8 of copper wire^9 although Brian
Fisk noted that: “We are so far down the component