November 2023 Volume 5

Official Publication of the Forging Industry Association

FIERF Scholarships Making an Impact on Student Education Page 66 What’s New with the Forging Foundation

November 2023 forging.org

(FIERF) Page 72

FORGING FOUNDATION AND RESEARCH & TECHNOLOGY

FIERF Research Grants & Project Updates Page 77

Empowering Women and Allies: Strategies to Overcome Unconscious Bias Page 38

Colorado School of Mines student demonstrates hand forging during the first-ever Forge the Future Summer Camp Page 74

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PRESIDENT'S NOTE

President's Note

5. First Forging Children’s Book Series: Freddy the Forger made its debut with two books, an audio recording and upcoming language translation. 6. First Education Grant to a Community College: to support development of an automated cell for teaching in a ‘factory-like’ scenario within a community college (Blackhawk Technical College – Janesville, WI). 7. First Forging Competition: multiple universities competed, demonstrating why their tuning fork is best – held at Forge Fair. Next competition April 2024 in Milwaukee. 8. First FIERF Summer Camp: held at Cuyahoga Community College with more than 25 middle-school aged students in attendance. Members were involved in exercises and hosted plant tours. Three planned for 2024 (Cleveland, Chicago, Detroit). 9. First Forging Proclamation Declared: in the city of Trenton, Michigan with the efforts of Trenton Forging and further recognition on the floor of the Michigan House of Representatives on the first official Forging Manufacturing Day. 10. First Forging MFG Day Established: the second Friday of October in conjunction with National MFG Day (Month). Importance of Completing Trade Surveys To represent members on matters of fair trade, FIA members need to cooperate and complete our trade attorney’s survey on the assessment of the impact of imports on forged products and potential trade remedy options. You can find the survey here: https://www. surveymonkey.com/r/7R6HWG5. It is helpful to report any individual incidences of bids lost due to foreign competitors selling forgings at unrealistic prices, i.e., finished landed components sold for our cost of raw material. You can report those incidences either directly to our trade attorneys (Thomas Beline tbeline@cassidylevy.com or Myles S. Getlan - mgetlan@cassidylevy.com) or on FIA’s website at this link: https:// www.forging.org/advocacy. Best regards, James R. Warren President and CEO Forging Industry Association

What A Year We’ve Had We’re nearing the conclusion of quite a successful year for the association and its foundation. It was an interesting start with the recession/no

recession chatter and a strong-enough economy that mostly handled still higher inflation. Not all of our markets are humming but FIA’s Orders & Shipments survey results and visits with forgers/suppliers show us that many forgers have kept busy in 2023. Notwithstanding the automotive strike and difficulty securing titanium, it could have been an even stronger year. The FIA and FIERF had a great year due to successful events (Forge Fair, Automation Conference, Management Development Institute, Marketing Conference, ForjaMex), an increasing membership base, first-time congressional appropriation and other government contracts, and above average donations to the foundation. We’re addressing some dips in attendance at the Annual and Fall Meetings, we’ve tweaked our strategic plan and have the FIA FIERF ship pointing in the right direction. I’m proud of both FIA FIERF boards, our standing committees and our wonderful staff who execute the boards’ vision so well. I appreciate all the members sharing with me how pleased they are with what we do and pass that feedback along to staff often. Thank you for your confidence in us. Ten ‘First Evers’ for FIA-FIERF in 2023 Members, boards, committees, and staff kept busy rolling out ten ‘first evers’ for FIA and FIERF. No one could ever accuse our members and staff of hanging back taking it easy! Here are the ten first-evers: 1. First Female Chairperson: Chelsea Lantto became the first Chairwoman of FIA in our 110-year history. 2. First Significant Congressional Appropriation: recognizing the importance of the forging industry a $5 million appropriation (Senate) is pending FY2024 budget approval (contract with Army Research Lab) to support forging industry R & D and automation implementation. 3. First Lobby Day in Canada: held in May with plans for annual visits to Members of Parliament and government agencies. 4. First State Lobby Day: held in Michigan (June) with additional future states planned in 2024 and beyond.

Editorial Staff

Board of Directors

Robert Brodhead Mark Candy Mark Derry Robert Dimitrieff Jose Lozano

Mike Morgus Matt Natale James Romeo Joe Schwegman

PUBLISHER James R. Warren jwarren@forging.org MANAGING EDITOR Angela Gibian angela@forging.org

ASSOCIATE EDITOR Amanda Dureiko amanda@forging.org DESIGN Lorean Crowder lorean@forging.org

CHAIRPERSON Chelsea Lantto VICE CHAIRPERSON Jim Kravec

FIA MAGAZINE | NOVEMBER 2023 1

CONTENTS

NOVEMBER 2023 | VOLUME 5

PRESIDENT'S NOTE 1 President's Note WASHINGTON UPDATE 4 FIA Government Affairs Update 6 U.S. Carbon Tariffs ENERGY 8 Insights on Energy and Sustainability in the Forging Industry 10 Forging Case Study: Alcorta and the Power of Competitive Electricity Procurement 12 Tax Opportunities in the Climate Law EQUIPMENT & TECHNOLOGY 14 Hot Isothermal Forging (HIF) MAINTENANCE 16 Navigating Your Way Through AUTOMATION 18 FIA Automation Adoption Initiative: Rapid Training of ‘Robot Heroes’ 19 FIA Member Spotlight: Pickit 3D MATERIALS 22 Lightweight Alloys and Their Place in the Forging Industry 24 Enhancing the Performance and Durability of Forged Steel With Annealing 26 Empowering Industry: Forgers, Component Suppliers and Their SBQ Steel Partners Raise the Bar Together 30 SBQ: ‘A Delicate Balance Between Supply and Demand’ OPERATIONS & MANAGEMENT 34 You’re Not Imagining It, Unions Are More in the News 36 Applying Lean to Sales for Manufacturing 38 Empowering Women and Allies 40 Cybersecurity 101 42 Leadership and Management FAQ 44 Growing Socially Project Timelines for Equipment Repairs and Upgrades in the Steel Forging Industry

INDUSTRY NEWS 48 Reasoning For a Downtrend and Reduced Volatility in Forging Orders 50 FIA Fall Meeting of Members Recap 52 Introducing the FIA Forging Failure Analysis Course 54 Mexico’s FRISA Expanding Reach into the SBQ Market 56 SMS group North America Team Announcement 58 Chiz Bros. Opens Detroit Warehouse 59 Qcells North America and Alton Steel Celebrate Sustainably-Made Steel Partnership 60 Second Annual FIA ForjaMEX Conference a Success in Monterrey 62 Welcome New Members 64 FIA Upcoming Events FOUNDATION NEWS 66 FIERF Scholarships Making an Impact on Student Education 68 Macomb Community College Skilled Trades and Advanced Technology Center Grand Opening 69 Blackhawk Technical College Breaks Ground On I-MEC Center 70 How To Start a Forging Club 72 What’s New With the Forging Foundation 75 Donor Spotlight: Pat Mooney Saws 76 Ted Gutt Fifty-Year Anniversary FORGING RESEARCH 77 FIERF Research Grants & Project Updates 80 Using Bright X-Ray Beams To Look Inside Alloy Processing 82 Robotic DED-GMA Preforms for Forging MEMBERS SPEAK 86 My Forging Industry Internship Experience at Walker Forge AD INDEX 88 November Advertiser Index

p. 72

DEPARTMENTS 1 President's Note 4 Washington Update 8 Energy 14 Equipment & Technology 16 Maintenance 18 Automation 22 Materials 34 Operations & Management 48 Industry News

66 Foundation News 77 Forging Research 86 Members Speak 88 Ad Index

Official Publication of the Forging Industry Association

FIERF Scholarships Making an Impact on Student Education Page 66 What’s New with the Forging Foundation

November 2023 forging.org

(FIERF) Page 72

FORGING FOUNDATION AND RESEARCH & TECHNOLOGY

FIERF Research Grants & Project Updates Page 77

Empowering Women and Allies: Strategies to Overcome Unconscious Bias Page 38

Colorado School of Mines student demonstrates hand forging during the first-ever Forge the Future Summer Camp Page 74

For advertising contact info@forging.org Image courtesy of Adaptec Solutions

FIA Magazine (ISSN 2643-1254 (print) and ISSN 2643-1262 (online)) is published 4 times annually, May, August, November and February by the Forging Industry Association, 6363 Oak Tree Blvd., Independence, Ohio 44131. Telephone: (216) 781-6260. Only (1) copy of the print version distributed at no charge only to members of the Forging Industry Association. Digital version distributed at no charge to qualified individuals. Subscription requests available at www. forging.org. Printed in the U.S.A. Periodicals postage paid in Independence, OH and additional mailing offices. POSTMASTER: Send address changes to Forging Industry Association, 6363 Oak Tree Blvd., Independence, Ohio 44131. Copyright © 2023 by the Forging Industry Association in both printed and electronic formats. All rights reserved. The contents of this publication may not be reproduced in whole or part without the consent of the publisher. The publisher is not responsible for product claims and representations or for any statement made or opinion expressed herein. Data and information presented by the authors of specific articles are for informational purposes only and are not intended for use without independent, substantiating investigation on the part of potential users.

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FIA MAGAZINE | NOVEMBER 2023

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WASHINGTON UPDATE

FIA Government Affairs Update By Megha Patel

What a whirlwind 2023 has been! FIA’s government affairs department has been incredibly active this past year. The organization has held countless, productive meetings with government agencies and stakeholders to spread the forging industry’s message. From launching the first-ever state lobby day, to engaging trade counsel in Canada, the association has been dedicated to expanding advocacy efforts throughout all of North America. This past September, FIA hosted its first-ever state lobby day in Michigan. The organization has primarily focused its efforts on the federal level in the past; however, to reach a larger number of policymakers and make a greater impact, it was time to expand to state legislatures. During our time with Michigan legislators, it became clear that most did not know much about forging and how critical the industry is to a prosperous economy and national security. Aside from the educational aspect, members and FIA staff discussed policy initiatives that are beneficial and harmful to forging producers and suppliers across the state. Currently, the Michigan legislature has proposed an energy package that would pass onerous utility costs onto our members. FIA explained our opposition to this legislation as Michigan already ranks as the 13th highest state in industrial electricity costs and the proposed bills would only increase that. In addition to having discussions regarding the energy package, workforce development dominated most of the meetings. FIA highlighted the lack of skilled workers as a pressing issue for member companies and the negative impact on the economy due to the labor shortage. Members and staff stated the need to invest in certificate programs at local community colleges and technical schools and create an effective pathway for students at a younger age. The association’s first state lobby day was an overall success and we plan to spread this in the coming years to other states where our members are located. Thank you to Trenton Forging Company, Campbell Press Repair and Finkl Steel – Composite for coming to Michigan Lobby Day to promote the forging industry. FIA has engaged with Cassidy Levy Kent – Canada, a top trade law firm based in Ottawa and one of only three Canadian firms to achieve the prestigious “Tier 1” ranking in Chambers and Partners 2018 survey of leading lawyers in the area of International Trade and WTO matters. The Canadian branch works hand-in-hand with our U.S.-based trade counsel, Cassidy Levy Kent – USA. The association has enlisted the counsel in Canada to conduct a survey to collect information to identify unfair import competition and to better track imports in Statistics Canada data. The aim is to collect concrete responses that illustrate injury to member companies, which will lead to action by the Government of Canada to address unfairly traded imports. Please consider completing the survey if you are a Canadian forging producer. Not only will it help your

company compete on an even playing field, but it will also help the entire North American forging industry since circumvention will be prevented for all. The United States International Trade Commission (USITC) reached out to FIA back in July for a preliminary meeting regarding the investigation to assess the greenhouse gas (GHG) emissions of steel and aluminum, including aluminum forgings, produced domestically. The USITC shared that it is in the very early stages of data gathering and learning more about varying processes in the manufacturing sector to adequately frame the process. Once the agency has effectively collected sufficient data, it will survey varying facilities, U.S. or foreign-owned, that manufacture steel and aluminum by issuing questionnaires to collect GHG emissions data tied to the production of these goods. FIA shared it is more than willing to aid the agency throughout the investigation. This inquiry began from United States Trade Representative Katherine Tai who sent a letter to the USTIC back in June of 2023 requesting the factfinding mission. The goal of gathering the data is to deepen knowledge and help facilitate discussions between the U.S. and European Union (EU) regarding the Global Arrangement on Sustainable Steel and Aluminum as both aim to dissuade trade with countries that produce the same steel and aluminum parts with higher emission rates. FIA is looking forward to keeping channels of communication open with USITC to promote a level playing field for the industry. FIA has been tremendously busy spreading our advocacy efforts to places where the organization has not been active before and will continue to expand throughout North America in future years. The association’s staff could not be more grateful for all the support, and the growth over the past year would not have been possible without our incredible members. FIA is very excited to continue advocating on behalf of the forging industry in 2024! Megha M. Patel

Government Affairs Manager Forging Industry Association Phone: 216-781-6260 Email: megha@forging.org

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FIA MAGAZINE | NOVEMBER 2023

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WASHINGTON UPDATE

U.S. Carbon Tariffs – One Step Forward, One Back By Omar S. Nashashibi

Following months of negotiations, the United States and European Union (EU) failed to reach an agreement by their self-imposed October 31, 2023 deadline to create a carbon-based tariff system for steel and aluminum imports. At a summit on October 20 with leaders of the European Council and European Commission, President Joe Biden announced that the two sides would continue talks through the end of the year. Upon taking office, President Biden negotiated with the EU an agreement to suspend the 25 percent tariffs on imported steel and 10 percent on aluminum from the 27-nation bloc. In place of these Section 232 tariffs imposed by his predecessor, Washington created a Tariff Rate Quota system to allow a set amount of product to enter the U.S. tariff-free. As part of that 2021 deal, the sides pledged to finalize a framework by October 31, 2023, that the Biden administration hoped would create a Global Arrangement on Sustainable Steel and Aluminum taking effect in January 2024. The U.S.-led proposal would place a tariff on products that exceed a set carbon cost for that import into

the U.S. or EU. Countries not party to the arrangement would pay a higher tariff rate, while products from any country below the set carbon target receive tariff-free treatment. A number of disagreements prevented Washington and Brussels from finalizing a deal this October, but President Biden in particular is committed to a carbon-based tariff at least on steel and aluminum, and in the future, possibly expanded to other imports. The EU insisted that the U.S. permanently lift, and not just suspend the 232 tariffs and quota system, while the Biden administration continues to receive pressure to retain the threat of tariffs until the EU implements trade action on imports from China and others. A carbon-based tariff is clearly aimed at China but also helps the White House 2024 reelection efforts with unions, manufacturers, and other voters in key states such as Wisconsin, Pennsylvania, and Michigan. The effort to restrict carbon-intense imports is also a key element of the Biden administration’s strategy to mobilize environmental groups and those voters important to his reelection efforts.

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FIA MAGAZINE | NOVEMBER 2023

WASHINGTON UPDATE

This is why we do not expect the U.S. to fully lift tariffs on Chinese imports, whether on steel and aluminum or on forgings from China. Quite the opposite, President Biden is seeking to coordinate efforts more closely with allies to address subsidized and dumped imports from China. It is the continued efforts of FIA and others lobbying the White House to retain the tariffs on Chinese imports regardless of talks with the EU. As the two sides continue to work on their differences on a carbon tariff, the U.S. is asking the EU to impose a 25 percent tariff on excess steel and 10 percent on excess aluminum from nonmarket economies (NMEs). Among those eleven countries listed as NMEs is, of course, China. Were the EU to agree to such rates, they would match those still in effect in the U.S. on Chinese imports of steel and aluminum. It is unclear at this time whether such an agreement would fully replace the Section 232 tariffs and also include aluminum forgings as part of the excess capacity program, which the Tariff Rate Quota system currently includes. FIA and The Franklin Partnership met with the U.S. International Trade Commission this summer to discuss how that federal agency could assign a “cost” to carbon emitted while manufacturing an aluminum forging, which the Section 232 action covers. FIA held the meeting as part of the Biden administration’s investigation into the carbon footprint of manufacturing steel, aluminum, and select related products in the U.S. that could serve as a baseline for a tariff on imports. Even if the U.S. and EU do not agree to a carbon-based tariff system, sources in Washington, D.C. indicate that the Biden administration might accept the EU imposing market access restrictions related to imports that exceed a set carbon level, including possibly a ban on imports. Whether such a program could withstand WTO scrutiny is unclear, as is whether the Biden administration would give much consideration to objections from other members of that trade body. Aside from the U.S. election considerations from both sides of the Atlantic, neither party wants to see billions in retaliatory tariffs reinstated on U.S. exports to the EU or for Washington to terminate the quota rate system, resulting in tariffs on imported steel and aluminum. The other sense of urgency is the EU’s Carbon Border Adjustment Mechanism (CBAM), for which the reporting requirements just began on October 1. The U.S. does not have a similar system that requires companies to calculate their carbon footprint and purchase credits or certificates as the EU starting in 2026. American companies and other importers of cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen to the EU must file reports on their product’s carbon footprint starting January 31, 2024. Sources indicate that the EU could expand the CBAM to goods beyond this initial scope by 2030. There are bipartisan efforts in the U.S. Senate to begin considering an American version of a carbon-based order adjustment mechanism tariffs, though that remains a long way off. In the interim, the White House pledged to not reinstate tariffs on EU steel and aluminum as the two sides continue discussions through the rest of the year on

both, a tariff on excess steel and aluminum and a more permanent carbon-based system. The status quo is untenable from the EU standpoint and the Biden administration pledged to environmental groups, unions, and the steel industry that they would move on a new tariff regime. Thus far, however, every time they report progress in talks, a setback arises. The FIA will continue to work with policymakers to maintain and expand tariffs on forgings and other Chinese imports, including carbon-based, regardless of how many steps they take forward, or back.

Omar S. Nashashibi is a founding partner at The Franklin Partnership, LLC, a Washington-D.C. based lobbying firm representing the Forging Industry Association before the federal government. Phone: 202-715-1264 Email: omar@franklinpartnership

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FIA MAGAZINE | NOVEMBER 2023 7

ENERGY

Insights on Energy and Sustainability in the Forging Industry By Angela Gibian

Employees & Sustainability 48% of respondents said they have a dedicated staff member whose function is to oversee their sustainability program. Employees play a crucial role in implementing sustainability policies. Companies invest in education and training programs to ensure that all staff members understand the policy's objectives and how to contribute to sustainability efforts in their daily work. Employees often take pride in working for a company that values sustainability and ethical practices. Sustainable initiatives can boost employee morale and engagement, leading to increased productivity and lower turnover rates. Sustainability & Competitiveness 68% of respondents said that they believe that sustainability is important for the future competitiveness of the forging industry. Consumers are increasingly conscious of the environmental impact of the products they purchase. This has created a growing demand for sustainable goods, including those produced by the forging industry. Companies that prioritize sustainability can gain a competitive edge by meeting this demand and positioning themselves as responsible, environmentally conscious businesses. Various Initiatives Related to Energy and Sustainability Primary initiatives that FIA Member companies are focused on related to energy and sustainability are LED Lighting, recycling, tracking energy consumption, and tracking waste generation.

FIA recently conducted a survey of its membership to gather information regarding current practices related to energy and sustainability. Sustainability Policy, Programs and Goals According to the survey, 52% of respondents say they have existing policies and programs in place. In addition, 23% said that they are in the process of developing their sustainability policies. Forging companies that are committed to sustainability are increasingly developing comprehensive sustainability policies to guide their operations. These policies serve as a roadmap for integrating sustainability principles into every aspect of their business. To begin the process of creating a sustainability policy, forging companies establish clear and measurable goals and objectives. These could include reducing energy consumption, decreasing emissions,

minimizing waste, or optimizing resource utilization. Setting specific targets helps to focus efforts and track progress. Companies often involve various stakeholders, including employees, suppliers, customers, and the local community, in the policy development process. Gathering input and feedback from these groups ensures that the policy is aligned with the expectations and values of all involved parties. Some forging companies pursue third-party certifications, such as ISO 14001 (Environmental Management System) or specific industry-related standards, to demonstrate their commitment to sustainability and showcase their adherence to best practices.

Recycling

LED Lighting

Track Energy Use

Track Waste Generation

Solar Power

Other (please specify)

Sourcing Green Materials (Green Steel)

None

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

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FIA MAGAZINE | NOVEMBER 2023

Regulatory Compliance

N/A

ENERGY

The forging industry is known for its energy-intensive processes, particularly in the heating of metals to their malleable state. Sustainable forging involves upgrading heating and cooling systems to be more energy efficient. By adopting innovations like induction heating and efficient insulation, manufacturers can significantly reduce their carbon footprint. In addition, the integration of renewable energy sources, such as solar and wind power, can further enhance the industry's sustainability efforts. Recycling is another popular initiative for forging producers. Scrap materials generated during forging processes can be re-melted and reused. This not only conserves resources but also reduces the environmental impact of mining and metal extraction. The integration of closed-loop systems helps in minimizing the carbon footprint and the industry's reliance on raw materials. Industry Motivations FIA Member’s top motivations for implementing sustainable initiatives include cost savings, healthier work environments, and corporate values. None Other (please specify) Solar Power Track Waste Generation Track Energy Use LED Lighting Recycling

Implementing sustainable initiatives in forging companies is not just about adhering to ethical principles and environmental responsibilities; it can also be a smart business strategy. Companies often have multiple motivations for incorporating sustainability into their operations. Sustainable initiatives can lead to significant cost savings over time. Forging companies that reduce energy consumption, minimize waste, and optimize resource usage experience lower operational expenses. For example, upgrading to energy-efficient equipment and technologies can result in reduced utility bills, and recycling materials can cut down on procurement costs. The forging industry's reputation is also top-of-mind when it comes to sustainability. Companies that demonstrate their commitment to reducing their environmental footprint are more likely to attract responsible partners, investors, and customers. A positive reputation can lead to increased business opportunities and long-term growth. As forging companies continue to develop and implement robust sustainability policies, they not only reduce their environmental

Sourcing Green Materials (Green Steel)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

impact but also position themselves as leaders in a more sustainable and eco conscious manufacturing sector.

Regulatory Compliance

N/A

Reference: FIA Energy & Sustainability Survey results as of October 16, 2023

Market/Consumer Demands

Cost Savings

Corporate Values

Company Reputation

Cleaner/Healthier Work Environment

All of the Above

Other (please specify)

0%

10%

20%

30%

40%

50%

60%

Angela Gibian is the Deputy Chief Executive of the Forging Industry Association (FIA) and the Executive Director of the Forging Foundation (FIERF) She is also the Managing Editor of FIA Magazine. She can be reached by email at angela@forging.org or by phone at 216-781-6260.

FIA MAGAZINE | NOVEMBER 2023 9

ENERGY

When FIA member Alcorta Forging Group (Alcorta), a leading international forging operation with headquarters in Spain, made its first U.S. acquisition, it got a quick lesson in the quirks and complexities of U.S. power markets. But thanks to an introduction by James Warren, President and CEO of the FIA, and the handiwork of FIA power procurement partner Transparent Energy, the forger found its way to a better contract – not once, but twice – netting over $280,000 in annual savings. Forging Case Study: Alcorta and the Power of Competitive Electricity Procurement By Nancy Gardner

A Rude Welcome to U.S. Energy Markets In 2022, Alcorta made its first U.S. acquisition, purchasing a forging manufacturing operation in Michigan. Unbeknownst to the global forger, the company it had acquired was in an electricity contract that was about to expire, which led to several months of paying a “holdover” rate once the original contract ran out. That holdover rate was quite expensive and weighed on the company’s bottom line. Alerted of this vexing situation by Ruben de la Pena, Alcorta’s Corporate Development Officer, James Warren, FIA President and CEO, suggested a simple fix: contact Transparent Energy, a trusted FIA partner who had successfully saved FIA members hundreds of thousands of dollars while reducing energy-cost risk through its competitive procurement process. An introductory meeting was made; Transparent Energy impressed with its knowledge of the local power market and its competitive procurement process; and a new partnership was born! Wielding Competition to Reduce Energy Prices Because of peculiarities in the Michigan power market, only two energy suppliers could price Alcorta’s electricity load. But whereas some would see a market of two as one of “paucity,” Transparent Energy saw it correctly for what it was: an opportunity for Alcorta to get a better deal . With Transparent Energy on its side, Alcorta re-approached the incumbent supplier about its current rate. When informed of the forger’s interest in having Transparent Energy run a competitive procurement on its behalf, the incumbent supplier immediately offered a better rate. As a result, Alcorta signed a new 12-month agreement with the supplier at a full $0.02/kWh less than the holdover rate – a savings of over $120,000! But the story gets even better. Because Transparent Energy closely monitors energy markets on behalf of its clients, it is able to find opportune times in the market to get customers into even better contracts. Finding just such an opportunity in April 2023, a full seven months before

contract expiration, Transparent Energy approached Alcorta with a compelling renewal offer. As a result, Alcorta renewed with the incumbent supplier for an additional year – at a lower rate that will deliver an additional $160,000 in savings in 2024. “Power is a major operating expense both across the forging industry and for us at Alcorta,” said Ruben de la Pena, Corporate Development Officer, Alcorta Forging Group. “Through the help of the Forging Industry Association and Transparent Energy, we were able to turn the competitive dynamics of the U.S. energy market to our advantage to net significant initial savings. We also value that Transparent Energy went above and beyond to identify future savings opportunities for us. Those efforts are set to deliver an additional $160,000 of cost reduction in 2024 – or more than $280,000 in total – which goes straight to our bottom line.” Nancy Gardner VP, Channel Partners & Associations Transparent Energy Phone: 732-288-5126 Email: ngardner@transparentedge.com

FIA MAGAZINE | NOVEMBER 2023 10

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ENERGY

Tax Opportunities in the Climate Law By Omar S. Nashashibi

While speaking at several manufacturing conferences late last year, I told attendees that they should fire their CPA if they could not find a way to save or make money after three major bills became law: the Infrastructure Investment and Jobs Act (IIJA or infrastructure law), the CHIPS and Science Act (CHIPS or Semiconductor bill), or Inflation Reduction Act (IRA or climate law). One year later, let us look at where opportunities stand for forgers and other manufacturers to bring home a piece of the billions in government support available under the climate law President Biden signed on August 16, 2022. I suggest looking at federal government funding opportunities through four pillars: the product you manufacture, the process by which you manufacture it, its end use, and the facility in which you are manufacturing that product. Then there is the type of funding to consider: tax incentive, grant, or loan. Some of these come with enhancements that increase the credit and deduction amounts for paying workers the local prevailing wage for work on facility construction and for hiring workers from a registered apprenticeship program. While I am not a CPA or financial advisor, I do encourage manufacturers to explore the potential opportunities identified by consulting a professional and learning more by exploring on their own some of the opportunities identified. Any descriptions of the tax incentives in quotations are taken directly from the IRS, or Departments of Treasury or Energy. Having worked for manufacturers since 2002, I find that starting with a familiar tax provision helps businesses understand the

opportunities and the Section 179D energy efficient commercial buildings deduction is a prime example of how the climate law modified or created nearly two dozen tax provisions. Most manufacturers use the Section 179 small business deduction provision when purchasing depreciable equipment and other assets. Effective January 1, 2023, the IRA expanded a related subsection, 179D, to allow commercial building owners to improve their energy efficiency by deducting the cost of new interior lighting systems; the heating, cooling, ventilation, and hot water systems; or the building envelope if the installation reduces the total annual energy and power costs by 25 percent (https://www.irs.gov/pub/irs-pdf/p5817g. pdf). To assist businesses of all sizes in having a better understanding of opportunities available, the IRS in October 2023 released a one page summary listing many of the new changes (https://www.irs. gov/pub/irs-pdf/p5817g.pdf). Among those listed is the Section 45X Advanced Manufacturing Production Credit “for domestic clean energy manufacturing of components including solar and wind energy, inverters, battery components, and critical materials.” The details on 45X are important as only products listed in the text are eligible for the credit and it varies such as $2.28 per kg for solar structural fasteners or $.02 for a wind blade. This credit is earned over time as opposed to a one-time credit. An upfront credit that has drawn interest is an expansion of Section 48C, the Advanced Energy Project Credit, that now includes projects, “which reequips an industrial manufacturing facility with equipment designed to reduce greenhouse gas emissions by at least

FIA MAGAZINE | NOVEMBER 2023 12

ENERGY

20 percent.” The base rate for the credit is 6 percent, with up to a 30 percent credit rate allowed for projects meeting prevailing wage and registered apprenticeship requirements. This provision operates differently than others as businesses must first apply to qualify prior to making a claim with the IRS. The first round of applications closed on July 31, 2023, with decisions expected by the end of March 2024. Sources indicate that the Treasury Department will initiate the second round of allocations next year. (https://www.energy. gov/infrastructure/qualifying-advanced-energy-project-credit-48c program) There are other less obvious aspects of the tax code that may bring opportunities for manufacturers. Many may typically think of carbon capture and sequestration technologies as limited to energy production facilities. The Credit for Carbon Oxide Sequestration under Section 45Q allows a taxpayer to claim as a Section 45Q tax credit the equipment used to capture and sequester carbon oxide that would have been released into the atmosphere were it not for the purchase and installation of the qualifying equipment. The credit amount varies depending on when it is placed into service and the facility must store the carbon captured in “secure geological storage.” (https://www.irs.gov/forms-pubs/about-form-8933) Another possibly overlooked provision under the IRA may be Section 45W, the Credit for Qualified Commercial Clean Vehicles. Businesses can claim an unlimited number of these nonrefundable tax credits when they buy a qualified commercial clean vehicle that may qualify for a clean vehicle tax credit maximum of “$7,500 for qualified vehicles with gross vehicle weight ratings (GVWRs) of under 14,000 pounds and $40,000 for all other vehicles.” (https:// www.irs.gov/credits-deductions/commercial-clean-vehicle-credit) If your facility is located “within low-income communities or non urban census tract,” you may qualify for the alternative fuel refueling property tax credit by installing qualified vehicle refueling and recharging property. Manufacturers could potentially complement the clean vehicle credit with this, the Section 30C Alternative Fuel Vehicle Refueling Property Credit, which, subject to depreciation, “equals 6 percent with a maximum credit of $100,000 for each single item of property.” (https://www.irs.gov/credits-deductions/ alternative-fuel-vehicle-refueling-property-credit) The IRS continues to release guidance on many of the Inflation Reduction Act provisions and taxpayers should constantly work with their tax advisor to monitor changes. When I consult with manufacturing businesses about how the government impacts their operations, I strongly advise them to first identify key deadlines. Many of these tax provisions begin to phase out, some in 2029 and eliminated entirely in 2032. Businesses should work their way backward from the time these provisions start scaling down and plan any major capital investments around those dates to ensure equipment is placed into service ahead of key deadlines. The same applies for application deadlines.

Many of the tax savings opportunities I identified are for activities the business may have conducted regardless of the Inflation Reduction Act’s incentives. Companies should consider how they could benefit from the expanded and new tax provision, as despite the political disagreements over the climate law, thousands of manufacturers have a chance to save millions. As I said one year ago, it is time to have that conversation with your CPA.

Omar S. Nashashibi is a founding partner at The Franklin Partnership, LLC, a Washington-D.C. based lobbying firm representing the Forging Industry Association before the federal government. Phone: 202-715-1264 Email: omar@franklinpartnership

SAVE THE DATE!

April 19-21, 2024

2024 FIA ANNUAL MEETING OF MEMBERS

The Broadmoor Colorado Springs, CO

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EQUIPMENT & TECHNOLOGY

Hot Isothermal Forging (HIF): Meeting Industry Demands with an Innovative Solution By Dr. Serdar Tuncel, Axel Roßbach, and Cihangir Demirci

In the world of advanced manufacturing, the emergence of isotherm forging plants marks a significant milestone. This leading-edge technology is designed to manufacture workpieces with near-net shape precision, all within a controlled, constant high-temperature environment. The advantage of this process lies in its execution under vacuum conditions, with both the tools and workpieces maintained at constant forging temperature. To date, the complete isotherm forging lines within the industry have been developed by the aerospace industry suppliers themselves. They used their own knowledge to meet the certification requirements of aircraft turbines and aerospace industry material qualities. These suppliers procured the individual units such as the isotherm forging press, vacuum chamber, and heating unit as well as the isotherm tools themselves to develop the entire interfaces. SMS group is well-known as a full-line supplier. Recently, its engineers brought together ideas and technologies from different areas of the company and have come up with a new solution. Elevating Industry Standards through Integration With more than 150 years of forging press equipment experience, SMS group has combined the proven vacuum technology used in secondary and tertiary metallurgy, which is standard in these isothermal forging plants. The integration of the tool tower (die stack) and state-of-the-art heating technology, along with the process know-how of experienced engineers has produced an optimal system ready to accommodate a diverse range of future materials. This new approach eliminates the need for complex interfaces. Compelling Investment Factors Based on valuable feedback from our customer base, established sectors like aerospace and energy require components capable of withstanding elevated mechanical and thermal stresses. Meeting these requirements involves the capability to produce large components using innovative materials. This emphasizes the importance of cost-effective solutions that result in substantial savings, making isothermal forging plants a smart investment decision. Benefits and Features SMS group has developed a complete Hot Isothermal Forging (HIF) line seamlessly integrated without the need for interfaces.

This innovative approach builds upon established and time-tested technologies. Key features of the HIF-line: • Precise forging operations • Strict temperature control within a narrow range • Prevention of redox reactions • Elimination of potential negative material properties such as macrostructure and micro-crack formation With the added advantage of stable production within the forging process, the reliable and consistent components result in safe and rapid certification of processes, resulting in lower costs for the aerospace industry. In the HIF-line process, a stable synchronization of temperatures between the workpiece and the dies is maintained throughout the entire forging procedure. Achieving this balance is made possible through the use of vacuum heating furnace technology, which heats both the upper and lower dies and the workpiece. (Fig.1). • Optimization of the metallurgical parameters • Enabling the easier production large turbine discs • Full automation

Fig. 1: Die stack heating at “HIF-line.”

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EQUIPMENT & TECHNOLOGY

One notable innovation is the utilization of ceramic blocks for thermal insulation of the tools. These ceramic blocks prove highly effective, particularly under the tremendous forging forces. Moreover, this insulation plays a crucial role in safeguarding the press components from excessive heat. (Fig. 2)

Fig.3: Hot Isothermal Forging line (HIF) from SMS group The approach to power management includes the power supply for the furnaces as well as ancillary supply and operating systems, ensuring seamless operation throughout the forging process. To oversee and manage the entire HIF-line, A control and monitoring system is used. This system is integrated into a broader digitalization framework. Additionally, the system is supported by SMS group´s Digitalization Platform, “Management Information Diagnostic Indication System,” enhancing the overall efficiency and reliability of the forging process. Conclusion As a full-line supplier, SMS group introducing the newly developed HIF-line, represents a culmination of the hydraulic closed-die forging, vacuum and furnace technology, and tool expertise. It merges decades of experience in the designing and constructing hydraulic driven closed-die presses for both conventional and hot die forging that will prove a major benefit to the industry. Based on the past several years of experience in the production of turbine parts for the aircraft and aerospace industry with the HIF system, it would be wise for the industry at-large to use this technology for the production of parts for high-temperature power plant turbines. Dr. Serdar Tuncel SMS group Inc., USA Email: serdar.tuncel@sms-group.com Axel Roßbach, SMS group GmbH, Germany Email: axel.rossbach@sms-group.com Cihangir Demirci SMS group GmbH, Germany Email: cihangir.demirci@sms-group.com

Fig.2: Die stack with insulation. The concept of a HIF unit is based on round, multi-vacuum chamber design with the key components illustrated in Fig. 3. 1. Hydraulic closed die forging press 2. Loading and unloading chambers with integrated furnaces for heating of the work pieces 3. Unique charging chamber with integrated manipulator 4. HIF chamber with combined heating furnaces for the upper and lower dies 5. Tool chambers for exchanging of the upper and lower dies 6. Vacuum slide gates 7. Charging chamber with integrated handling cars for upper and lower dies The hydraulic system is characterized by tightly controlled strain rates, which enable precise speed and force control. This system is designed with an energy saving concept in mind and boasts a dynamic behavior system for the hydraulic unit, optimizing overall performance. Heating furnaces are equipped with multiple zone heating elements, allowing for precise temperature control and uniform heating. To ensure the quality of the final product, a monitoring system is implemented for both workpiece and the dies. The vacuum unit with integrated mechanical vacuum pumps and filter systems reaches the required vacuum level for the HIF process.

FIA MAGAZINE | NOVEMBER 2023 15

MAINTENANCE

Navigating Your Way Through Project Timelines for Equipment Repairs and Upgrades in the Steel Forging Industry By Jeff Fredline

Ram, Wrist Pin and Connections As with the crankshaft, main bushings rotational clearance can be measured. Rough dimensions can be gathered, which will allow for acquiring accurate costing. If you can obtain the rough dimensions, you can have new bronze castings manufactured so that they are on the shelf waiting to be machined as soon as you have the finished dimensions. Ordering castings ahead of time could save you several weeks. Driveshaft Assembly, Flywheel and Clutch Brake Assemblies Normally, you will have the necessary documentation in your files to determine what components will need to be on hand and pricing and delivery dates can be received in advance. If you plan to order new bearings and seals, verify the identification numbers, order them ahead and have them on the shelf ready when you need them. Emergency Breakdowns There are no easy answers for breakdowns. When a breakdown occurs, it is always a challenge and timing is sometimes more important than the cost of the project. When the machine goes down, the first step should be to put together an evaluation team to analyze where you are really at. Sometimes disassembly and inspection must be the first step. Ask the questions: what is damaged, what needs to be fixed and what do we need to get operational again? Once you can determine what the scope of the project needs to be, you can begin to plan the timeline and see where you might be able to improve. Prevention Work to Identify and Prevent Before It Occurs Much has been discussed over the past few years regarding the importance of Preventative Maintenance. If we apply the principles of 5S, Inspection and Benchmarking, most of the emergency breakdowns can be prevented and repairs planned more cost effectively. The establishment of accurate timelines will forever be a challenge for mechanical, electrical, and hydraulic system repairs. There will always be unknowns to be dealt with. The goal should be to manage and control what you can, and then plan for any unknowns.

Post-Pandemic, obtaining service and materials in a timely manner has become more difficult than it has been in years past. Things are improving, but we are still a long way from where we would like to be. Purchasing new machine components such as main bushings, crankshafts, bull gears, ram assemblies and other components are a challenge. There are some things you can prepare for ahead of the project that will save you money and headache. Determining the Potential Working Scope To accurately project the scope of your project, precision inspection of the condition of your machine should be the first step. Spending a day or two completing a complete machine inspection, either by your personnel or from a qualified supplier, is time and money well spent. I recommend that you add two weeks to the estimated time you believe it will take to complete the work. The following areas should be inspected: Frames Inspect frames for cracks and excessive wear. Any damage should be marked, measured, have pictures taken and recorded so that they can be discussed during the creation phase of the working scope. Repair of damaged frames and components can also be time consuming, however through inspection discovery you can get more accurate pricing estimates and a timeline before beginning the process. Crankshaft/Eccentric Shaft and Bronze Shaft Support Bearings The rotational clearance between the shaft and the main bushings can be easily checked using hydraulic jacks to lift the weight of the slide assembly and crankshaft. Check the total movement between the crankshaft and the frame of the press on both the right hand and left-hand side of the machine. If the clearance is beyond the recommended levels, you will know that the bushings will need to be replaced. No matter who is going to make the repairs, you can get the price and delivery time of the bushings. If a new crankshaft is needed, get the price and delivery estimate, and include it in the working scope. Note that it could take over a year to obtain a new crankshaft or main drive gear for a press. Tip: Bronze bushing castings, both rough cast and finished machined, can be obtained from McHenry Brass in Kentucky and Advance Bronze in Ohio. I’ve found that often their pricing and lead times are better than from OEM suppliers.

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