John Greene of FL Sales walks us through the market of foundry equipment during the COVID-19 pandemic.
About this segment of Blackbird TV
Guest: John Greene, President, FL Sales Inc.. To learn more about our guest, visit FLSales.com, or call 440-498-8484.
Recorded: September 28, 2020
Published: October 26, 2020
Segment transcript
My good friend John Green from FL Sales in the Cleveland area Ohio. I’ve known John for a million years. What do you see right now in in market values, relative to your particular space of the foundry industry? Has COVID impacted what you do? Absolutely. I would say the best word is “topsy-turvy” probably. If you look at machinery sales, when COVID struck, basically sales dropped to almost nil, very, very little, when the PPP money came out, we saw a huge influx of sales. We had a good month, to two months until the money disappeared, and then after that was gone, we literally dropped off the map again. You have to remember that what we sell—buy and sell—equipment we’re not buying and selling what I call capital programs that much. Where you’re selling a half a million dollars worth of equipment or a million dollars of equipment. In the foundry industry, it’s a little bit different because it’s not like a CNC machine where it costs you a thousand bucks to disconnect the electric, take four bolts, and put it on a fork truck. Most of these are integrated into a complete system, and in most cases it costs more to take out and move the machine than it does to buy the machine so we tend to see these as capital projects and for example our warehouse we have about 20,000 square feet, we have about 600 machines. Not any machine weighs more than about 25 or 30,000 pounds and we, our normal sale in buying and selling or sales might be forty to fifty thousand dollars. We’re not selling a quarter of a million dollar CNC machine that takes up a ten by ten space, so we see the volume being a lot less than a CNC shop would have, and and for that reason we’re not doing major capital programs, now, we’re selling a lot of small stuff. David: So that’s been the change that you’ve seen, just to reiterate. So the changes that your sales continue however, you’re seeing less of the larger projects coming through that require on the other end of it you’d be one component and maybe a much larger project where they’re putting in new conveyors and there’s a lot of soft costs involved in those things. You’re seeing less of that. John: Absolutely. In fact, i’ve talked to three different OEMs, suppliers of new foundry machinery, they have said that they’re filling out orders for the year. They are seeing inquiries, but, no orders for next year to speak of, in September / October is the time frame when they start getting all that influx of orders for example EMI Osborne who’s right here in cleveland, we know the owners very well, and they said they’re finishing up several million dollars worth of projects for this year, but he said they have nothing on the books so far for next year. David: Wow, that’s a dark cloud. The equipment that you are selling now out of inventory, is your price stability there? Have you had to make any adjustments to price, or are prices holding up? John: Prices are holding up we’re selling a lot of items of spare parts, and we’re selling a core machine, not a lot, but prices are holding steady right now. David: Well that’s good news, and i’m seeing that across many many sectors where prices are steady, and in some cases, price stability is actually a price increase and there’s a high demand for some items depending on what sector it is. John: But, as always, late model equipment brings good money, older stuff is very difficult to sell, and you know that. David: Yeah, absolutely right. On current values, John Green of FL Sales, thanks for your time this morning. John: You’re welcome, thank you very much, David.