Tariffs and the Heat Treat Industry

The hottest topic in the world these days and by extension the hottest topic in the heat treat industry is tariffs. How are they affecting the industry-Mark Hemsath, President, Nitrex / UPC-Marathon / G-M Enterprises offers these thoughts; 
 
“Hi Gord, in answer to your question on how global furnace suppliers are dealing with the chaotic tariff situation, I would offer that it is not easy!  We have had an internal analysis from each division looking into the situation.  As a recap, Nitrex manufactures in Poland, USA and China.  This gives us tremendous flexibility.  However, tariffs being introduced can be very problematic, for instance we have a furnace in ocean shipment and will it see expanded tariffs when it lands in the USA (20% of $1 million is a lot of money!)?  As a global manufacturer we also buy globally and strategically.  We can and we will make adjustments to service our customers in North America, Europe and China and the rest of the world, but boy is it a challenge.  Let’s recap:
 
Tariff Challenges for Global Equipment Suppliers​:
  1. Increased Production Costs:
  2. Supply Chain Disruptions:
  3. Market Access Limitations: Retaliatory tariffs from other countries can restrict access to key markets

Strategic Advantages for us due to Tariffs:

  1. Diversified Manufacturing Footprint: With facilities in Europe, the U.S., and China, we can adjust, but it takes time, money and lots of effort .
  2. Supply Chain Flexibility: We buy from multiple sources in many countries
  3. Proximity to Key Markets: We have always been close to our key markets with a global strategy.​

As the leader at Nitrex/UPC-Marathon, I will be losing more sleep trying to navigate all this and, to be honest, this will certainly hurt many in the short run. Mark Hemsath, President, Nitrex / UPC-Marathon / G-M Enterprises.”

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