Another trend has been the downsizing of many domestic equipment suppliers as a result of the dual forces of increased foreign competition and a contraction of the U.S. metalcasting industry. The research and development budgets of these companies were frequently reduced or eliminated. This leads to a requirement for new skills for operators, maintenance personnel, engineers, and management. In addition, quality systems like ISO 9000 are becoming critical for successful competition in the world-wide market. The industry operates in a very price-competitive environment, largely due to its fragmented nature.
Low profits are a deterrent to recapitalizing the industry.
The rate of change in the industry is likely limited by the ability to invest in getting new technologies into use, not the funding to discover new processes or products. A significant challenge will be to recognize the extent to which improved operating efficiency can be leveraged into lower prices for customers without reducing or eliminating profits. Small foundries seldom have the financial resources or access to credit that is necessary for capital expenditures in extensive modernization or even equipment. These foundries cannot achieve economies of scale in some manufacturing functions such as purchasing and marketing. Many metalcasters, particularly smaller ones, are under-capitalized and do not have sufficient capital for investing in new equipment or exploring new applications of metal castings.