|
CEO Greg Morris says the interest he's seeing in the technology from his customers justifies the purchase of an expensive machine even though the economy is looking a little more uncertain these days.
"I think the handwriting on the wall is that this technology is going to be huge," he says.
Generous tax breaks that small businesses got during the recession were also an incentive for these manufacturers to buy big equipment. Morris said the laws that allowed him to speed up depreciation of new equipment were a factor in his decision to buy. However, those breaks have been scaled back dramatically this year. For example, what was a $500,000 deduction last year is now down to $125,000. It's not certain that Congress will increase them before Dec. 31.
TAKING BUSINESS FROM CHINA
Many of these small manufacturers spend months on design and development to customize parts for their customers. The complexities involved have given U.S. manufacturers an edge. That's helped some small companies in the U.S. take business away from manufacturers in China.
"For specialty manufacturing products, the end users are concluding it's better to have production close by, here in the U.S.," says William Phelan, the president of PayNet. "If there's a problem, they can get the parts shipped overnight, and transportation costs are less."
Wells Fargo also sees the trend in its lending to small manufacturers. "We're seeing this reverse offshoring -- some call it onshoring," Long says.
Some of these companies are getting more business from the government. Peter Boucher, whose company, 3v Precision Machining, makes components for industries including aerospace and medical devices, is also making parts for the new F-35 fighter plane. He began buying machines during the recession and will buy one this year. He has spent $1.6 million on four machines since 2007.
Boucher says his business from aircraft makers has risen sharply because airlines that weren't buying planes during the recession now want to replace them. When Boeing. Co. released its first-quarter earnings in April, it said it had orders for more than 4,000 commercial planes.
"It's a good food chain to be involved in," says Boucher, whose company is located in Tacoma, Wash.
The heavy toll that the recession took on the manufacturing business has also encouraged many companies to buy machinery. Manufacturers that went out of business left behind a glut of machines.
John Maurer has bought four machines in the last year and has been getting bargains -- some cost just 40 percent of the price of a new one and were only a year old. He expects to buy two this year for his family's Springfield, Ohio-based company, Esterline & Sons Manufacturing, whose customers include aerospace and medical device companies and power plants.
"We were able to jump on some good bargains," says Maurer, the company's chief operating officer.
But the deals are disappearing -- which is actually a good sign for the overall economy because it points to the increase in demand. It's become rare to find deals on gently used equipment, says Pastoors of Dynamic Sealing.
"This year, you have to order from the factory," he says.
[Associated
Press;
Copyright 2012 The Associated
Press. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
News | Sports | Business | Rural Review | Teaching & Learning | Home and Family | Tourism | Obituaries
Community |
Perspectives
|
Law & Courts |
Leisure Time
|
Spiritual Life |
Health & Fitness |
Teen Scene
Calendar
|
Letters to the Editor