Electric and Gas Welding and Soldering Equipment

This category incorporates two industry subsectors: welding and soldering equipment manufacturing and power, distribution and specialty transformer manufacturing. According to the industry statistics, 545 establishments operated in these industries for 2009. Industry-wide employment totaled approximately 16,225 workers. Total annual sales for the industry were valued at more than $2.45 billion in 2009. Companies in this industry tended to be small to medium in size, with more than 50 percent employing less than 5 workers and nearly 90 percent employing less than 100.

Lincoln Electric Holdings Inc., of Cleveland, Ohio, had revenues of $1.73 billion and nearly 9,000 employees in 2009, making it the largest producer of arc welders and welding equipment by sales. Chesterfield, Missouri-based Thermadyne Holdings Inc., with 2009 sales of more than $346.65 million and 1,800 employees, was another leading manufacturer of gas equipment, arc accessories, and plasma cutting equipment. In October 2010, Thermadyne was acquired for roughly $422 million by the private equity firm Irving Place Capital. These companies ' primary competition was from London-based ESAB Group Holdings Ltd., which is one of the world 's largest manufacturers of welding and cutting equipment. Originally a Swedish company founded in 1904 Elektriska Svetsnings-Aktiebolaget (ESAB) is owned by Charter International. ESAB distributes its products worldwide and has manufacturing operations in China, Germany, Sweden, and the United States. In 2009 ESAB had revenues of $35.6 million.

As a whole, shipment values for welding and soldering equipment manufacturers reached about $5.1 billion and $5.2 billion in 2008 and 2007. These figures represented a decline from $7.5 billion in 2002, a decline of more than 23 percent. The industry was able to stabilize between 2002 and 2004 with a slight increase to $7.6 billion in shipment values.

In 2007, nearly 55 percent of shipment values for the power, distribution, and specialty transformer manufacturing industry were derived from producing power and distribution transformers (except parts), while 17 percent came from fluorescent lamp ballasts. Arc welding machines and related components or accessories accounted for approximately 15 percent of shipment values for the welding and soldering equipment manufacturing industry in 2007, while another 13 percent made metal arc welding electrodes. The industry was looking forward to computerized and electronic innovations in the 2000s, including such enhancements as computer-aided modeling for welders, along with advances in automation and robotic technology.

In 2008, according to the U.S. Census Bureau, total value of shipments for all welding and soldering equipment manufacturing totaled $5.06 billion. Of that total, arc welding machines and components (excluding electrodes) accounted for $1.73 billion, or 34.2 percent. Metal arc welding electrodes accounted for $1.10 billion, or 21.7 percent. Resistance welders, components, accessories, and electrodes accounted for $562.5 million, or 11.1 percent. Gas welding/cutting equipment, parts, attachments, and accessories accounted for $467.1 million, or 9.2 percent.

According to industry statistics, in 2009, California, Michigan, Texas, and Ohio were the top states by number of firms. According to the number of employees, Ohio led the nation with 4,912 employees; Michigan followed with 3,555 employees.

At the beginning of the new century and into the mid and late years of the first decade of the 2000s, a decline in auto production and shipbuilding hit the industry hard. Also, according to the U.S. Department of Labor, long-term employment is projected to decline about 14 percent and 24 percent between 2004 and 2014 for the other general purpose machinery manufacturing industry and the electrical equipment manufacturing industry, respectively. From 2006 to 2016 output is projected to grow more slowly than GDP. Productivity growth is projected to continue such that employment is expected to continue to fall, although at a slower rate than in the previous decade.

As did all industries related to the U.S. auto and construction industries, the welding equipment industry saw demand plummet during 2009 as both auto sales and the real estate market came unhinged. U.S. auto sales fell by over 20 percent during 2009, and new housing starts fell to historic lows. As a result, many welding equipment businesses were motivated to slash costs to get through the year. For example, Thermadyne cut its payroll by 600, from nearly 2,600 employees in 2008 to 1,800 in 2009. Although the company 's sales declined from $516.9 million in 2008 to $347.7 million in 2009, the company 's cost-saving measures kept the firm in the black, posting a net profit for the year of $4.2 million.

Lincoln Electric 's revenue 's dropped from $2.48 billion in 2008 to $1.73 billion in 2009. However, like its competitor, Lincoln Electric was able to remain profitable for the year, although the firm 's return on investment declined from 18.6 percent in 2008 to just 4.3 percent in 2008 and net profit fell from $212 million in 2008 to $49 million in 2009. To reduce costs, Lincoln Electric closed to plants in Europe and reduced fixed overhead, which included a reduction of the company 's workforce by several hundred. Company chairman, president, and chief executive officer John M. Stropki referred to 2009 as "one of the most severe and longest economic downturns in our Company 's 115-year history."

The business environment was more friendly during 2010, but the economy remained volatile. The industry rebounded somewhat during the year, although considering the depressed demand of 2009, recovery was expect to take time. Nonetheless, the worst of the economic slump appeared to be over. In October 2010, Lincoln Electric announced that its third quarter sales were up 17.5 percent over a year ago. Stropki noted in a company press release, "I am cautiously optimistic that the global recovery will continue as we focus on market share gains and achieving our international our international expansion objectives."