Standards Spotlight: American Foundry Society

Founded in 1896, The American Foundry Society (AFS) is a member-based organization with about 1,100 corporate members. Based outside of Chicago in Schaumburg, Illinois, AFS is the leading voice and resource on technical, management and advocacy priorities for the metalcasting industry. Of these 1,100 members, there are approximately 377 foundries in the U.S. today that have expertise making valves and pipe fittings, and many other foundries that forge valve bodies and components for companies around the world.

According to AFS, the states with the most foundries today are Ohio, Wisconsin, Michigan, Pennsylvania and California — not surprising to see the traditional “Rust Belt” states account for the majority of the highest density of foundries in the country.

Aluminum is the metal with the most facilities reporting having expertise in, followed by iron, copper, steel, zinc and nickel. Other metals that make up the balance include superalloys used in the manufacture of specialty valves. Industry growth forecasts from AFS estimate a slow but steady growth over the next five years for foundry revenues, as well as a small increase in number of total industry employees.

With the recent spate of tariffs, the foundry industry is one that seems likely to be impacted — and it has been. AFS says the industry has had a total industry tariff cost to date of $1 billion, based largely on the 30% China tariffs, and this is having a moderate impact on foundries in the U.S. Despite this, when surveyed nearly 70% of members forecast very positive to neutral business outlook for the next 12 months, with just over 30% anticipating a somewhat negative impact. The most worrisome issues today are the demand for castings, labor shortages and the regulatory environment, and chemical and materials cost inflation, followed closely by tariffs.

Yates said the industry is seeing a fair amount of vertical integration, with services consolidation, foundry ownership groups covering multiple alloys instead of focusing on one or two, and OEMs building or buying their own foundries. There is also a push to modernize and expand existing foundries to meet the market needs, with some foundries offering new value-added services such as design and engineering, patternmaking and tooling, coremaking and more. These new services provide additional revenue streams and expansion of core offerings.

He continued sharing that reshoring continues to occur due to tariffs and Department of Defense requirements for U.S. made materials and shipbuilding. Technology is being adapted and adopted by foundries including incorporation of additive manufacturing, automation and robotics, AI and industry 4.0 tools and systems.

Reshoring, however, will not be quick. Over the past decades, a massive number of U.S. factories have closed due to globalization, which helped to create a massive loss of manufacturing jobs. The U.S. Bureau of Labor Statistics cites over 7 million jobs lost since 1980.  Bringing both new manufacturing facilities or foundries back to the U.S. brings benefits, including a more reliable supply chain, security of intellectual property, quality control and flexibility not easily found with overseas suppliers. But continued offshoring, a burdensome regulatory environment and workforce issues like knowledge transfer and succession planning continue to impact the stability of the foundry industry in the U.S.  

AFS offers members access to The Reshoring Initiatives TCO Estimator (Total Cost of Ownership). Because many sourcing decisions are price-driven, companies often miscalculate the total cost of offshoring. The AFS website says: “According to The Reshoring Initiative, most companies make sourcing decisions based solely on price, oftentimes resulting in a 20 to 30% miscalculation of actual offshoring costs! The Total Cost of Ownership (TCO) Estimator is a free online tool that helps companies account for all relevant factors — overhead, balance sheet, risks, corporate strategy and other external and internal business considerations — to determine the true total cost of ownership. Using this information, companies can better evaluate sourcing, identify alternatives and even make a case when selling against offshore competitors.”

AFS is just one of many organizations with a significant relationship to valve and actuator manufacturers that we will continue to follow and work with at VMA. For more information on AFS, go to afsinc.org.