Monday, August 8, 2011

The glass is still half full

As this is being written, turmoil in the global markets caused by a downgrading of the US credit rating by Standard & Poor’s has Wall Street and other financial centers in a panic. Our befuddled leadership in Washington is busy pointing fingers of guilt at each other or chortling as the political fallout may likely fulfill their wish for a one-term presidency. Meanwhile, the elected representatives have taken a five-week hiatus while Rome burns, except for the Republican presidential hopefuls who are being fed so much fodder by a summer-bored media that they are falling all over each other competing for one last vote in Iowa.

Lost in all this is the impetus of the President's bullish stance on revitalizing the health of the manufacturing industry. It was just another mouthful of words that rings hollow as it is now obvious he doesn’t have the political wherewithal to move anything through a divided Congress that senses blood.

This, the 100th in this series of blogs, was originally planned to be a celebration of the good news emanating from the major public corporations that have just reported their latest quarter financials and the powerful news from industry leader TRUMPF whose 2010/11 preliminary figures were nothing short of spectacular: sales up 51% from the second-highest ever sales and bookings for 2010/11 at € 2.22 billion.

However, it is now a blog about the facts. Yes, we have heard the rumblings of concern within the global manufacturing economy, causing us to look more and more like a male version of Little Mary Sunshine; make note of my sensitivity on this subject.

And here are the facts: the manufacturing sectors that use industrial lasers are not those that are directly affected by a rise in the interest rates, such as the housing industry. Those that are driving the good news reported in the guidance issued by the public laser product suppliers are the aerospace industry, which is locked into long term contracts for new aircraft (and engine) deliveries for the next five years; the alternate energy industry where solar -rich countries are finally pushing photovoltaic installations instead of the nuclear options that were already on the drawing boards; the medical devices suppliers that are experiencing a global surge in preventative medical treatment; the microelectronics industry which cannot seem to fully satisfy the volume of laser drilled micro-substrates; the alternate energy vehicle suppliers whose order books are full of battery-operated vehicles even as the President gave the industry a “kiss-of-death” with his proclamation for doubled gas mileage regulations (try selling this one Mr. Obama); and a booming product marking sector that is sold on laser-generated 2D barcodes both for regulatory and inventory purposes

These are real, growing markets that will sustain the laser business for the rest of this year and well into the next. Yes, I hear the groundswell of support for a second recession that could wipe out these markets, and I am enough of a pragmatist to believe that this scenario is stronger today than six months ago when I poo-pooed the idea. But, as far as the industrial laser business goes, I see the glass of water as half full. And if I am wrong, it really won’t matter, as we will all go down in flames this time around because no amount of water will quench the global fire.