Expert Q&A: Dan Oman on Heavy Industry
Dan Oman is a Senior Associate in Haley & Aldrich’s Heavy Industry Market Segment, which works with the automotive industry, industrial machinery equipment manufacturers, and the metals industry including foundries and steel. In this “Q&A,” Dan shares his perspective on the commonalities between these industries, discusses some of the greatest challenges they’re facing, how Haley & Aldrich partners with them to find creative solutions, and his insight from a recent meeting he attended with senior EPA staff.
Tell us about what, from your perspective, the markets within Heavy Industry have in common.
These industries, especially the steel and foundries, tend to be the bellwether for US manufacturing in that they often give us an early indication of what’s to come. Because they’re first in the supply chain, they’re a little ahead of the curve and need to be agile and respond quickly if supply is down and demand is up – or make adjustments fast to save costs if demand is down. For example, 90% of every manufactured article in the U.S. includes at least one metalcasting. If manufacturing as a whole is starting to increase, in order for that to happen foundries have to increase their production to make the castings to go into the machinery to produce goods.
As a part of these manufacturers’ supply chain, Haley & Aldrich staff need to be nimble as well. We often need to quickly alter our approach in working with them to be responsive to their needs at any given moment, and those needs constantly change.
What are the most pressing challenges Haley & Aldrich’s Heavy Industry clients are facing?
Foreign competition is huge. It’s a global marketplace and you have other countries that have much different labor and raw materials cost, different types and levels of government regulation, different ideas of value of currency - all of these factors have a tremendous impact on overseas competition. As a result, U.S. industry again has to be extremely nimble and constantly look for new ways to cut their costs and provide added value for their customers and partners throughout the supply chain.
Another trend is the intense growth in U.S. regulations over the last eight years and the struggle for manufacturers to keep up and stay on top of new regulations. Responding to regulations and remaining in compliance is a huge burden for our clients and one that can ultimately take away from strategic efforts and identifying new ways to be more competitive in a global market.
As a result of your role as Chair of the Environmental, Health & Safety Division with the American Foundry Society (AFS), you recently had an opportunity to meet with senior staff in EPA Administrator Scott Pruitt’s office. Can you share a bit about the purpose of that meeting and any of your takeaways from it?
We met with Administrator Pruitt’s staff to introduce the metalcasting industry as a strategically vital sector, raise at a high level some of the EPA rulemakings that have impacted the industry, and recommend an approach for ongoing dialog between metalcasting industry subject matter experts and key EPA policymakers.
Having been in the environmental consulting business for 40 years, I can honestly say that the mood within EPA has changed. The staff we met with were actively seeking industry input as to ways the agency could improve the business climate for industry, both through elimination of burdensome regulations and through streamlining the regulatory permitting process. Much of the discussion focused on air quality issues including PM2.5, Ozone NAAQS, Clean Power Plan, Startup Shutdown Malfunction requirements and permitting including PSD/NSR.
We also learned that the agency is looking into reinstating the Sector Strategies Program, which seeks to assign staff from the agency to different industrial segments including metals, pulp & paper, automotive, and mining. This would help facilitate dialogue between industry and the agency. For me, this was a significant change in direction on the part of the agency. With the reinstatement of this program, the agency is recognizing the role that the regulated stakeholder plays in agency policy and implementation. The Sector Strategies Program (under the Policy Office) was a very successful program and I am looking forward to the results when it is reinstated.
How does Haley & Aldrich partner with manufacturers in this market segment to help them overcome their challenges?
We find ways to assist our clients to navigate the ever-changing regulatory environment in a way that minimizes the required time frame and reduces the cost of compliance. Our ability to alter our approach for our clients helps them remain nimble and improves their ability to remain competitive. We have also sought out unconventional waste management solutions for our clients that help reduce their cost of management of some difficult waste streams. For one client, we implemented an injection system to stabilize the waste prior to the point of generation, which resulted in an order of magnitude reduction in cost for disposal.
We also help our clients cut down on labor costs through outsourcing staff associated with environmental compliance. At Haley & Aldrich our staff not only understands local and federal regulations, we understand our client’s production processes, business strategy and how the regulations impact them. Because of that, we’re able to hit the ground running and save time on getting up to speed while proactively managing our client’s risk.
Another way we work with our clients is to protect their brand reputation by staying in compliance. As everyone in industry knows and I mentioned earlier, we’ve seen a significant increase in regulations over the last decade. This has caused increased burden and cost associated with manufacturing domestically, and we work with our clients to find new ways to reduce the cost of compliance.
For example, we recently saved a major automotive client millions of dollars on a hazardous waste violation and potential negative impact to their brand reputation. We did so by using an uncommon testing procedure that gave them an early indication of waste characteristics prior to committing to conducting more rigorous and expensive testing for compliance. In addition, because of our knowledge of the industry, their business, and the regulations and regulators, we advocated on their behalf with internal stakeholders, regulators, and the community. As a result, their business did not have to halt operations, they received no fine, did not need to pursue remediation, and therefore there was no negative impact to their brand.
For more information, contact Dan Oman.