Subscribe to our 

Our Publisher, Wally Evans, and I attended the 19^th Annual Gabelli Pump, Valve & Motor Symposium in New York this week. Top executives from many of the major players in our industry were there to reflect on 2008 and give us some insight into 2009.

In light of the current economic climate, we were expecting doom and gloom. But that’s not what we heard.

For the most part, there was much optimism and strong strategies for proceeding into 2009, however cautiously.

As per usual at a conference like this, there were many buzzwords and key phrases that seemed thematic:

* Capitalizing on the aftermarket will be a key revenue driver for many companies.

* Many companies continue to see growth opportunities through acquisitions.

* Companies entering 2009 with a strong balance sheet seem the most confident to weather any further detrimental economic storm.

* Companies continue to look to capitalize on international growth (particularly within the BRIC nations – Brazil, Russia, India and China). James Foung, Gabelli’s chief financial analyst for the pump, valve and motor industries, believes this will promote the greatest turnaround. “The growth rate has led to expanded income in these nations,” Foung says. “They will use more water, consume more energy and travel more - all of which will affect the pump, valve and motor industries.”

* Many companies are utilizing lean manufacturing tools and Six Sigma for speed, flexibility and efficiency – both in the front office and in the factories. (Look for a special feature on this topic in the May issue of Pumps & Systems.)

* Companies will look for ways to benefit from the Stimulus Package and hope to see monetary growth and benefits, but perhaps not significantly until 2010. This will apply particularly to those companies who play in the water and wastewater sectors.

I had the absolute pleasure and opportunity to sit next to Mario Gabelli during the conference. He told me that the pump, valve and motor industries are going through a “bottoming out” process and predicts, “The strong will get stronger.”

Look for more comments and insight from the conference in the April issue of Pumps & Systems. In the meantime, let me know what you think!

In a rare move, U.S. President Barack Obama went to Capitol Hill on Wednesday to personally pitch his stimulus plan to House Republicans. They were not impressed.

The plan passed with no problem (244-188). However, not one single Republican gave support to the President’s proposal, some of them stating for the record that they felt the now $819 billion plan contains too much spending and not enough tax cuts.

It is a vote that speaks volumes to the political challenges that await the new President regarding the economy and other issues.

Monday, the debate moves to the Senate and the tax relief provisions of the bill are likely to grow enough to pick up the Republican votes the President has been courting so aggressively.

White House speakers emphasize this is just step one, and indicate that the President is not discouraged. He says he knows it will take longer than a few days to effect change and the Speaker of the House said that “you can’t report the final score of the game when you’re only in the third inning.”

How this impacts the pump industry is still unknown. In the February issue of Pumps & Systems we reported speculation from industry experts and executive association leaders on how a huge portion of this package could dramatically impact infrastructure and the water and wastewater sectors of our industry.  Let us know what you think of these recent developments, and we will continue to give you timely reports.

In our February issue, we feature the impact the new presidential administration’s stimulus package will have on the pump industry, particularly with regard to infrastructure rebuilding in the water and wastewater sectors.

We talked with several “in the loop” industry experts and association leaders who all agree that this package can only mean positive things for pump community.

At press time, Barack Obama had not yet been inaugurated and the details of his economic recovery plan were not public. Therefore, the article is pure speculation—although highly reliable speculation. We are proud to bring you this information.

Here is a taste of what you’ll read in the article:

Facing perhaps the most desolate financial outlook since World War II, U.S. President Barack Obama is expected to unveil an economic-recovery package that could include large investments in energy, education, infrastructure and health care. The amount of stimulus and how it affects the pump industry is yet to be determined.

“As of this time, it is anyone’s guess how big the stimulus package will be, but it will likely be of historic proportion from all the chatter we are hearing on Capitol Hill and in the press—anywhere in the range of $500 billion up to a trillion,” says Dawn Kristof Champney, president of the Water & Wastewater Equipment Manufacturers Association, Inc. (WWEMA). “The only real number I have heard to date is from Congressman James Oberstar who heads the House Transportation and Infrastructure Committee. He is recommending that $9 to $12 billion be included for water and wastewater infrastructure projects.”

Some sources report the package could be upward of $775 billion.

Thanks to pump-zone.com, we have the opportunity to update you daily online and continue to provide more in-depth coverage in print. We plan to cover the stimulus package story closely throughout the year through both mediums. Check my blog daily for timely reports on the progress of the package.

Do you have opinions, theories or further speculation about this package? If so, we have an excellent new forum—PumpConnect—where our readers can blog, network and discuss this and other issues with friends in the industry. We invite you to join us on this completely user-generated space created just for you!  It is the perfect place to visit daily, express your opinions, network with others in the pump community and debate critical industry issues.

Our annual “State of the Industry” issue publishes during an important time in history. With financial uncertainty in a turbulent global market, and in light of a change in U.S. presidential administrations, experts in the pump industry still find reason for optimism and approach current economic challenges as business opportunities.

Even though the optimism is a bit gentle, our expert “Executive Insights” panel of top industry leaders is particularly candid this year and provides a detailed analysis of trends, issues and strategies for 2009. Read the entire report beginning on page 24 of the January issue and let us know your thoughts.

Meanwhile, an issue that will certainly be discussed during 2009 is the stimulus package proposals in response to President-elect Obama’s goal of creating 2.5 million jobs by 2011.

The U.S. Conference of Mayors released a report on December 8 (the same week we went to press with this issue of P&S) listing 11,391 “ready-to-go” infrastructure projects in 427 cities in search of economic stimulus funding. “Ready-to-go” in this report means implementing the projects quickly in 2009 with a goal of completing them in 2010.

This 803-page report documents 2,536 water and wastewater projects valued at $15.4 billion for a total of 133,193 jobs.

In the coming months, there will be much water-cooler conversation within our industry about this topic, and Pumps & Systems will be covering it in print and online. We would like to hear from you about this as we anticipate much debate. There are many ways for your opinions be heard. Contact me directly or visit our online forum—PumpChat. In addition, we now have an online social networking community—PumpConnect—which is a Facebook-type format and the perfect place to express your views on this and other topics.

Happy New Year!

This month, Pumps & Systems wrapped up our busy 2008 trade show schedule with a visit to Orlando for Power Gen International. It was a great show. More than 17,000 industry professionals from 76 countries were expected to visit the exhibit hall that featured more than 1,200 companies.

Pumps & Systems strives to stay on the forefront of industry trends, topics and technology. We attend more tradeshows than any other pump-related magazine, which provides us direct insight into our coverage of a myriad of applications. In 2008, our publication was represented at 14 trade shows, distributing about 5,600 magazines in addition to our monthly circulation of 42,500-plus.

In 2009, our industry presence grows even stronger. Look for P&S at 20 trade shows this year, covering the entire United States with international stops in India and Germany.

Next month, we release our annual “State of the Industry” report featuring Executive Insights from many top-level industry leaders. Nowhere else can you find a more complete and expert account of what to expect next year.

As the leading voice in the pump and rotating equipment industry, P&S will expand our coverage in 2009 of ongoing issues such as maintenance, reliability and energy efficiency while also attacking subjects like aging infrastructure, installation issues, advancements as well as the future of instrumentation, aftermarket and other topical and critical industry issues important to our readers. Our ongoing coverage continues to focus on pumps, the entire system and all its components.

We constantly look for ways to improve Pumps & Systems, with the needs of our readers as the key motivator. As we enhance our print coverage, we make tremendous efforts to improve our exposure online through www.pump-zone.com. We launched a Live Webinar Series and have industry experts contribute blogs. Our popular forum—PumpChat—continues to be the best resource for pump professionals to find answers from experts and colleagues. This year, look for an expanded social networking community.

Through our print and digital magazine editions, Pumps & Systems is now read in 113 countries—covering six continents—and our readership grows every day.

As you can probably tell, we are excited about 2009 and all its possibilities. Let us know what you would like to see in Pumps & Systems.

There are more than 300 million people living in the U.S., and each person uses an average of 100 gallons of water every day. That water must be brought to us, and it must be taken away.

These are sobering facts I learned from an interesting documentary on PBS, “Liquid Assets: The Story of our Water Infrastructure.” Just 100 years ago it was difficult for people to imagine turning on the tap and getting clean water. Today, that is an expectation.

Water infrastructure is a modern engineering marvel. But because it is buried, we often take it for granted. The documentary explains that roads cave in and bridges fall apart so the concern is that the infrastructure that cannot be seen is also falling apart. It is old and has not been upgraded, replaced or fixed. Experts predict that by 2020, 85 percent of our current infrastructure will have reached the end of its useful life.

Our water infrastructure is vital for disease protection, fire protection, basic sanitation, economic development and for our quality of life. The documentary claims that we have about two million miles of pipe in this nation – an infrastructure that our great grandparents installed and one that has basically been unchanged since.

In the 1950s and ‘60s, there was a push to build wastewater treatment plants across the U.S. to protect public health. Today, with evolving technology, the waste travels through multiple stages of treatment removing tons of solids, settling out microscopic particles and introducing bacteria that consume and decompose the toxic materials.

In population centers like Los Angeles, the scope of this task is staggering. The Hyperion Sewage Treatment Plant serves four million people, processes 350 million gallons of sewage and removes 500 tons of solids daily. What happens if the infrastructure that protects the clean water coming in and transports the waste back out deteriorates?

Shirley Franklin, Mayor of Atlanta and diligent advocate of repairing the city’s water works, says, “You don’t put a roof on a house one time. You don’t fix the plumbing one time. You don’t get your hair done one time. If we don’t continue to invest in repairing our infrastructure for the next 20 years, we’ll find ourselves back at the same point when we didn’t have direct access to clean water. If we don’t protect our water, we will be without water. We will be without industry . . . we will be without jobs . . . we will be without a healthy economy. And our people will be sick. So, we don’t really have a choice.”

So what is being done about this critical issue? The first obstacle is the funding gap. Our original infrastructure was built on government subsidies. While municipalities are responsible for maintaining systems and source supply, the standards that protect water are established at the federal level. The next obstacle is the daunting task of repairing and replacing these complex systems.

Let us know what you think about our country’s aging infrastructure and look for continued coverage on this topic in Pumps & Systems in 2009.

We went to press this week with the December issue of P&S, in which we ran a feature story on “The Impact of the Rising Cost of Raw Materials.” This has been a critical concern in our industry this year . . . in particular with the escalating costs of steel, copper and aluminum in combination with increased labor costs in China and throughout Asia.

Our industry has felt some relief in recent months, but it is a trend that deserves further attention in 2009.

Since we put the December issue to bed, I finally had a little time to read my second favorite periodical, Tennis Magazine. Ironically, I opened it directly to a feature story on  . . . you guessed it . . . the rising costs of raw materials used to manufacture tennis equipment. It is always interesting when perspective slaps you right in the face.

According to the article, the cost of carbon fiber (the primary building block of most racquets) has doubled in the past two years while materials used to make tennis balls (petroleum, rubber and resin) are also feeling the squeeze. Just like in the pump and rotating equipment industries, manufacturers and distributors are looking for ways to pass the increases on to the customer without pushing themselves completely off the market share map.

It may seem like a stretch, but it is all relative. Am I willing to pay $2.99 for a can of balls instead of $1.99?  Of course. Maybe I’ll wait till next year to buy another racquet (I have five of them, after all).

But when it comes to how these increases affect our industry, the price is significantly higher. When a pump goes down because a motor needs to be replaced and the cost of steel prevents that from happening, the impact is much more crucial.

When natural disaster strikes, it is most often water that kills.

Whether it is the lack of safe water to drink or the overwhelming amounts that overtake communities, water is responsible for 90 percent of the deaths following a natural disaster.

ITT Corporation has decided to do something about that.

On October 20, 2008 at WEFTEC in Chicago, ITT announced a strategic partnership with Mercy Corps and Water for People as part of its corporate philanthropy program. The partnership and program, ITT Watermark, includes a three-year, $1 million commitment to help provide safe water during emergencies created by natural catastrophes such as floods, droughts and earthquakes.

“We are passionate about business, but also committed to a greater cause,” says Colin Sabol, Vice President, ITT Fluid Technology. “Water is our business every day, and ITT is passionate about giving back to the community we serve. When disaster strikes, what people need is a deployable, rugged treatment system. We can provide that for them.”

It is sobering to think of the natural disasters we have witnessed in our lifetime, including the Indian Ocean tsunami, Hurricane Katrina and the recent China earthquake. We often see companies in our industry step up to do what they can to help meet the water needs of the affected communities.

It is encouraging to see corporations identify a problem and then spring into action to use their resources to help solve it. At a time when the global economy seems to monopolize our attention, it is heartwarming to realize that many companies turn their focus from making money to making a difference.

What’s the latest in innovative pump marketing? How about a traveling road show in the form of a 32-ft x 60-ft rock-star style tour bus. Grundfos unveiled a state-of-the-art Mobile Education Center in September at its USA headquarters in Kansas City. Pumps & Systems VP of Sales George Lake and I were there for a sneak preview.

It was impressive, to say the least. Complete with a 35-seat high-definition theatre and working demonstrations of most of its products, Grundfos plans to take the tour to at least 64 North American cities in 14 months. A brainstorm of Marketing Manager Steve Dickson, the idea is to take the products to the customers and distributors and then train them on site.

According to Marketing Development Manager Ed Smiley, the key initiatives are to expose Grundfos to those who might not otherwise see their broad scope of offerings, to educate end users and, of course, to build market recognition and market share.

We are deep into what many consider the heart of trade show season, and we continue to see fresh, creative ways to market products and services. While this concept will not likely replace the traditional trade show, it is nice to see companies find new ways to fuel the imagination and recognition of our industry.

P&S Managing Editor Alex Ferretti and I had the pleasure of spending a day this week at the Geiger Smith-Koch Mid-Atlantic Pump & Process Equipment Symposium in Aston, PA. What an absolute BLAST!

Not only did we get to take apart and assemble a centrifugal pump, a magnetic drive pump, mechanical seals and a rotary gear pump, but we got to hang out with some of the coolest and most fascinating pump guys around.

Even though we had to endure a little Big Ten football conversation when I wanted to talk SEC, it was fantastic spending time with the guys who really make a difference in the pump plants. These are the people most of us never get to meet, but they are the heart and soul of our industry . . . the people who work tirelessly and expertly to repair your pumps when they are down. I was really impressed with their knowledge of the innerworkings of the equipment and their expertise in the details of their craft.

Thanks to Ernie, Dave, Steve, Carmen, Toby, John, Chris, Kelly, Brian and all the great folks involved with the symposium. And especially thanks to Leigh and Henry Peck for allowing us the opportunity to participate in such a fun and informative hands-on event. Thanks, too, to Mark, Xander, Blair, Matt and all the other guys on my assemble teams who patiently endured all my questions, guided me through the process, kept me from damaging the equipment (and myself) and let me use the hammer!