BREAKING NEWS

Top 10 Things that Make Distributors and Manufacturers
Special to Each Other

When asked what makes their relationships work, GAWDA Distributors, Manufacturers and Suppliers were not at a loss for words to explain. The full survey will be published in the Winter edition of Welding & Gases Today and available in the online magazine on December 15 at www.gawda.org by clicking NEWS and selecting The Journal from the drop-down menu.

Next Issue! Distributors and Manufacturers/Suppliers will explain their expectations of each other on December 23.

NWSA Journal Gets New Name

Following the recent change in the association's name to Gases and Welding Distributors Association, GAWDA's official magazine, NWSA Journal was renamed to Welding & Gases Today. The next issue, mailed on December 15 and online in its entirety at www.gawda.org, contains an in-depth look at how distributors and manufacturers in our industry are working together. Meet the 2003 Board of Directors, see photos from the Annual Convention, learn about online privacy violations and how to make sure your drivers' hours are in compliance. Bob Thornton, Jr., GAWDA's new First Vice President, talks about his companies, South Jersey Welding Supply and Pennsylvania Welding Supply. If you are not already receiving a complimentary subscription to GAWDA's magazine that has earned rave reviews from its members, you can purchase an annual subscription for $40 ($195 for non-members) by contacting GAWDA Headquarters at (215) 564-3484.

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MAKING THE SALE

General Air Proves Persistence Pays Off

If at first you don't succeed, try, try again. That's the motto Greg Knight, sales representative at General Air Service and Supply Co. (Denver CO), followed over the course of eight months and almost a thousand tries, and succeed he did. In the past, General Air had lost the business of a large automotive company in Denver that manufactures airbag inflators when the company switched to a local machine shop for ground tungsten needs in hope of saving money. Instead, the local shop failed to grind the end-user's tungsten electrodes properly and could not keep up with the constant demand. That's when General Air employees found themselves with an opportunity to win back the business.

According to Knight, the competitor's method of tungsten grinding had been causing a rejection of parts on the lines, which caused welds to wander or change voltage. To further assess the problem, Knight examined some of the rejected tungsten and noticed that some of it was ground in a rotary instead of being longitudinally ground, creating problems with the arc. Knight remembered Diamond Ground Products, Inc. from a trade show he had attended two years prior and called General Manager Deborah Manning to help develop a higher quality pre-ground electrode that could improve the end-user's productivity. After obtaining drawings of the specified requirements from the end-user, Knight sent them off, along with samples, to Manning for analysis. Next, Knight and Manning visited the customer together to discuss and test different types of finishes, grinds and parts for the tungsten.

Diamond Ground Products grinds tungsten to the proper specifications.

Because of the nature of automotive work, one of the issues was the large number of tungsten pieces involved in each order: the end-user was dealing with close to 500 pieces. Phone calls, e-mails and faxes flew back and forth as the team tried and re-tried to find the perfect regrind system, one that would not only accommodate a high volume but also reuse the spent tungsten material while lowering waste and electrode costs for the end-user. After trying approximately 1,000 samples of 10 different types of grinds and tungsten, Knight and Manning finally found the perfect system.

The only challenge now was to convince the end-user that the price, which was higher than what the local machine shop charged, was worth it. “The weld technicians understood why they should switch their business to us, but we had to negotiate with purchasing,” says Knight, adding that General Air and Diamond Ground's system for grinding tungsten electrodes to the required specifications would be worth the added cost because it could lower the end-user's application cost by 60 percent. “Once their contract with their current supplier ran out, we started replacing their tungsten, but it took about eight months of sales calls every week in order to get the blanket purchase order for the tungsten.”

The contract between the end-user and General Air was officially completed in September, and stock was set up in General Air and Diamond Ground facilities to ensure immediate deliveries. Old tungsten is picked up for regrinding on a weekly basis, and General Air receives orders for approximately 900 tungsten electrodes ground to the required specifications each month, with sales averaging between $35,000 to $160,000 a year.

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INDUSTRY BEAT
(what people are talking about)

Airgas Completes Acquisition of Welding Metals, Inc. (Radnor, PA) • Airgas, Inc. has acquired Welding Metals, Inc., (WMI) a Detroit-based independent distributor of gases and welding supplies with annual sales of about $10 million. The acquisition includes four locations: Madison Heights, doing business as Welding Metals; Roseville, doing business as Parkin Welding; and Rochester Hills and Lapeer, both doing business as Avon Welding. The locations are now part of Airgas Great Lakes, headquartered in Bay City, MI, and one of 12 regional companies within Airgas.

WMI has served Detroit and surrounding markets since 1921 and has been owned and operated by the Houck family since 1951. Tom Houck will join Airgas Great Lakes along with about 35 WMI associates; his brother, Dan Houck, will serve as a consultant to ensure a smooth transition after closing.

Airgas Chairman and CEO Peter McCausland commented: "Our acquisition program remains a key component of our overall growth strategy. The acquisition of Welding Metals demonstrates that we will continue to make targeted acquisitions where we can add locations or density to build upon our national footprint and give us stronger market presence to serve our customers." The acquisition is expected to be accretive in the first year.

Economic Census is Underway (Washington, D.C.) • With the rallying cry, "Counting American Business! Charting America's Progress!" the U.S. Commerce Department's Census Bureau mailed out 1 million classification forms to small businesses on October 31. Beginning tomorrow, December 9 through December 16, four million large and middle-size businesses in more than 1,000 industries will receive the 2002 Economic Census form.

The surveys are expected to provide information on community resources and benefits to help insure that our businesses and industry are represented in today's economic landscape. A new feature of the census collects data on electronic commerce, leased employees, and the supply chain.

For the first time, responses can be filed electronically. For more information about the Economic Census, or to get assistance filling yours out, please visit www.census.gov/econhelp.

New CONCOA Manager (Virginia Beach, VA) • Richard Green was named product manager for CONCOA's laser materials processing and gas blender product lines. He will be responsible for product development, marketing, servicing key accounts, and developing global business.

Tregaskiss Expands Sales Team (Old Castle, ON, Canada) • To better address the varying needs of the marketplace, Tregaskiss created four teams, each focusing on distinct segments of the market: the Business Development Team, headed by Randy Stevens, will focus on the advanced stages of new automotive programs and will work with robotic manufacturers, integrators and OEMs. The Strategic Accounts Team, under Jeff Barron, will work with large accounts and pursue large plant conversions in conjunction with distributor partners. Led by Steve Saumier, the Regional Sales Team will work closely with distribution implementing marketing programs to generate new business and support existing accounts. Cam Heslep will head up New Market Development focusing on growing territories that Tregaskiss currently does not have a strong presence in.

"Gases & Welding" in the News • Along with 20,581 sharp objects such as scissors, ice picks and meat cleavers, over the busy Thanksgiving travel days, airport security screeners confiscated from passengers: 15,982 pocket knives, 1,072 clubs or bats, 98 box cutters, six guns (two at Hartsfield Atlanta and one each at New York's LaGuardia, Cincinnati/Northern Kentucky Airport, Salt Lake City International, and Dulles International), a toy cannon with live ammunition (Chicago O'Hare) and one WELDING GUN (Idaho's Boise Airport)! A spokes-person for the Transportation Security Administration said, "Many holiday travelers are inexperienced fliers and don't realize they can't take knives, scissors, fireworks, ammunitions, or welding guns onto planes." Efforts from GC to reach the welding-gun-toting passenger went unanswered.

Other news: In November's attack against Israeli targets in Mombasa, Kenya, an explosion set off by three suicide bombers at the Paradise Hotel killed sixteen people. Kenyan bomb specialists found parts of two gas welding cylinders fastened to the underside of the vehicle used to carry out the attack. Investigators suspect these were used to create a bigger explosion at the hotel.

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GAWDA NEWS

Attention Key Contacts! Have You Checked Your Company's Listing in the Online Directory Recently? • Key Contacts are responsible for updating the listing of their company and its employees in the GAWDA Online Directory and Membership Database. With new edit features, www.gawda.org offers an easy way of making sure your membership listing is current and accurate from your desktop. Follow these steps: From the top of the home page of the website under "Directory," click on "Directory-My Profile." Key Contacts will be routed to a screen that reveals and permits edits to the database information about their company, its headquarters and branch locations, and the names and contact information of all employees listed in the database, with flags by those who appear in the online and printed directory. Those who are not Key Contacts will be able to review and edit their personal listing.

So, Key Contacts, if you haven't checked to see that your company and its key people are being accurately listed in the online directory, which members can download and print at no cost directly from the home page, then take a few moments now to log on to www.gawda.org. Remember, you should assure that all employees who attend GAWDA functions, or would like to receive electronic association mailings including GAWDA's semi-monthly electronic newsletter, or who should be listed in the directory are included in the database listing. It is likely you will only want to flag for listing in the directory those key employees who do business with other GAWDA members.

If you need assistance or do not know your individual User Name and Password, please call Dan Cleary at Headquarters at 215-564-3484.

GAWDA Teams with FDA to Prevent Medical Gas Mix-Ups • GAWDA is working with the U.S. Food and Drug Administration to help communicate the importance of training and following safe practices with regard to medical gases. From the Medical Gases page on the GAWDA web site, you may download images to create posters and stickers to remind people working with medical gases of the importance of following established safe practices.

SOP Manual for Oxygen USP To Be Available on December 18. Additional Modules Nearing Completion. • GAWDA's SOP Manual for Oxygen USP is now in the hands of a group of GAWDA members for final review and comment. The Manual will be delivered to headquarters by December 18 and will be ready to ship soon thereafter to those members who have executed the GAWDA Quality Assurance Program and Services Agreement and paid the Annual Program Fee. For additional information and to request an agreement, please contact Bob Yeoman, GAWDA's Medical Gases Consultant, at 610-837-6782, or at bob.yeoman@brcompliance.com. The special introductory price for the SOP Manual to GAWDA members is $2,995, plus $200 for each additional manual.

Additional optional modules for Air USP by Reconstitution, Nitrogen NF, Nitrous Oxide USP, and Carbon Dioxide USP will be available the first week of January, followed two weeks later by other modules such as Medical and Device Mixtures and Air USP by Compression. B&R Compliance Associates will be offering its Total Solution program commencing January 1, 2003, and is scheduling audits and training visits now.

GAWDA Group Life Insurance Plan Increases Spouse Life Limit to $10,000 at No
Additional Cost • At a September meeting of the Trustees of the Group Life Insurance Trust, the Trustees voted to increase the spouse life limit offered by the GAWDA Group Life Insurance Plan from $5,000 to $10,000 effective on January 1, 2003 at the beginning of the new plan year. The GAWDA Group Life Insurance Plan is underwritten by MetLife, and currently insures more than 9,600 employees and their dependents from 135 member companies. For additional information about this program that has paid a dividend to its plan participants in all but one of its 43 years of existence, please contact Dave Irving, GAWDA's Group Life Insurance Consultant, at 610-566-4851.

Improve Profitability • For years, the GAWDA profitability survey has encouraged firms to think in terms of return on assets (ROA), the best way to measure whether a company is doing an adequate job of producing profits. ROA, however, doesn't translate directly into dollars of profits. The chart below looks at a typical and a high-profit GAWDA member with the same level of sales volume.

The typical firm has an ROA of 7.8% and the high profit firm has an ROA of 19.6%. Such ROA guidelines are useful in thinking about the reward the firm produces in relationship to the risk being taken. However, most operating managers need to have ROA translated into a dollar goal.

The typical firm has a profit of $331,500, while the high-profit firm of the exact same size has a profit of $756,500. In short, the typical firm is leaving $425,000 on the table. In thinking about making changes, GAWDA members need to plan on adding that $425,000 to the bottom line.

There are lots of actions that GAWDA members could take to improve results. Which ones produce the largest profit for a given amount of effort? Al Bates offers four potential changes that could be made with reasonable effort. Read them, along with his full Profit Improvement Report on the "Statistics" page under "Resources" at www.gawda.org, or click here (member login required): http://www.gawda.org/secure/statistics.cfm.

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