Bolts, Nuts, Screws, Rivets, and Washers

SIC 3452

Industry report:

This category includes establishments primarily engaged in manufacturing metal bolts, nuts, screws, rivets, washers, formed and threaded wire goods, and special industrial fasteners. Rolling mills engaged in manufacturing similar products are classified in the major group for primary metal industries (33); establishments primarily engaged in manufacturing screw machine products are classified in SIC 3451: Screw Machine Products; and those manufacturing plastic fasteners are classified in SIC 3089: Plastics Products, Not Elsewhere Classified.

Industry Snapshot

Manufacturers in this industry produce the materials that hold U.S. industry together: bolts, nuts, screws, rivets, and washers. Producing these items in lots as small as 1,000 and as large as 20 million, manufacturers make custom-ordered and standard fasteners using processes quite different from that of the screw machine product industry (see SIC 3451: Screw Machine Products), with which it otherwise shares many similarities. While screw machine product manufacturers produce goods using some form of screw machine that cuts into a metal product to produce the needed tooling, fastener manufacturers use a variety of cold-forming and rolling processes to produce simpler parts with greater strength. Both industries trace their beginnings to the early stages of industrialization, which made innovations in the field of fastener engineering possible.
According to the U.S. Census Bureau, industry shipments were valued at $9.47 billion in 2008, up from $9.02 billion in 2007 and higher than $8.1 billion and $7.2 billion recorded in 2005 and 2002, respectively. The fastener industry is remarkably decentralized, with hundreds of small shops producing the majority of fasteners. Manufacturers in the fastener industry have tended to cluster around the industries that purchased its products, which are traditionally the automotive, defense, and aerospace industries. The industry is therefore concentrated in the auto-producing states of the upper Midwest and the defense and aerospace-oriented regions of California.

According to industry statistics, there were an estimated 973 establishments engaged in manufacturing metal bolts, nuts, screws, rivets, washers, formed and threaded wire goods, and special industrial fasteners with industry-wide employment of 26,343 employees in 2009. States with the highest concentration in descending order were California, Illinois, Michigan, Texas, and Ohio. These states shared 49 percent in industry market share by number of firms. Michigan and Ohio led the nation in terms of revenues generated, followed by California.

Organization and Structure

Manufacturers in this industry produce a wide and ever-changing variety of products that fall under the general name "industrial fasteners." According to the Industrial Fastener Institute, the trade association for the industry, a fastener is "a mechanical device for holding two or more bodies in definite position with respect to each other. A high percentage of fasteners have threads as part of their design, but unthreaded items such as rivets, clevis pins, machine pins, etc., are considered fasteners as well." The industry produces fasteners using the primary manufacturing operations of heading, upsetting, forming, forging, and extruding. Fasteners primarily use ferrous metals for products, usually carbon and alloy steels. Most fasteners begin as wire, rod, or bar, which is cut to length, headed, and then threaded.

A typical hex-head bolt begins as a shaft of metal the length of which is a number of times longer than its diameter. This shaft is placed in a die, which is a metal holder that maintains the shaft's position when it is struck by a punch and is designed to impart the hexagonal shape of a bolt head to the shaft. Multiple punches are sometimes used to impart more intricate head shapes or to form harder metals. The headed shaft is then given an external thread in another cold-forming process called thread rolling. In thread rolling, the headed shaft is pressed between stationary and moving hardened-steel dies, which squeeze the material into the desired thread form. The nut that accompanies this bolt may also be cold-formed using a thread-forming tap that displaces rather than removes metal to form the interior thread. These and other processes like them constitute the major means by which industrial manufacturers produce goods.

According to the Manufacturers' Capability Guide, published by the Industrial Fastener Institute, "Cold forming is a high-speed, high-volume production process, with economical production rates determined by part size, design complexity, and degree of forming required--all factors that determine the number of blows required to form the part and thus the complexity of the tooling and equipment required." Cold-forming has the advantage of allowing the manufacturer to produce many thousands of products an hour. According to John E. Neely and Richard R. Kibbe, authors of Modern Materials and Manufacturing Processes, "Production rates on upsetting machines can be as high as 36,000/hr. for small unpierced rivets, and No. 8 size screw blanks can be made at 27,000/hr." Such economies of scale allow manufacturers to offset the very high costs of cold-forming equipment. Cold-forming also has the advantage of wasting no material, since the metal is pressed into shape rather than trimmed away by machining. It also has the advantage of allowing the metal grain to form in continuous unbroken lines, improving tensile and shear strengths and resistance to fatigue.

Background and Development

According to The Heritage of Mechanical Fasteners, a publication produced by the Industrial Fastener Institute, "Man's conquest of nature has depended upon his ability to fasten useful things together." Ever since an axle was bound to a wheel to provide the means of moving a cart, humans have used fasteners to make life easier. People fashioned nails as early as 2800 B.C., and the first screw appeared around 250 B.C., but it was not until the fifteenth century that what is known as threaded fasteners began to be used regularly. The first printing press, invented in the same century, was held together and run by a screw. Tiny screws held Swiss-made watches together, and French mathematician Jacques Besson designed the first practical machine for cutting screws.

Many of the technological innovations that gave rise to the modern fastener industry were developed during the Industrial Revolution, which changed the Western world in the late eighteenth century. In 1760, Job and William Wyatt became the first known manufacturers of threaded fasteners. The English brothers had 59 employees in their water-powered factory and produced 1,200 gross of wood screws a week. Screw makers started up throughout England and the United States, but purchasers of their products were faced with a serious problem. Because fastener makers shared no common rules for size and thread pitch, a nut from one shop had little chance of fitting a bolt from another. Nuts and bolts had to be carefully paired, for once separated, they were practically useless.

"The one man most responsible for starting threaded fasteners on the way to becoming the high-precision, freely interchangeable, taken-for-granted components we know today was the English inventor Henry Maudslay," according to The Heritage of Mechanical Fasteners. Maudslay invented a bar lathe capable of making highly accurate and duplicable threads, and his ideas led others, including U.S. inventor David Wilkinson, to design machines that formed the basis for the new machine tool industry. Most early threads were cut on a screw machine, but in 1836, William Keane of New York invented a process known as thread-rolling that formed threads without cutting away material. That process, which later became prevalent, differentiates the fastener industry (SIC 3452: Bolts, Nuts, Screws, Rivets, and Washers) from the screw machine products industry (SIC 3451: Screw Machine Products).
In 1834, the C. Read & Company of Providence, Rhode Island, became the first significant manufacturer of screws in the United States. In 1840, Rugg & Barnes of Marion, Connecticut, became the first U.S. firm that manufactured and sold only nuts and bolts. In 1842, the A.P. Plant Company of Plantsville, Connecticut, became the first company to issue a price list and discount large orders. Other industry advances in the 1840s included machine-made nuts, which were introduced in 1844 by Julius B. Savage, and the patent by William E. Ward in 1847 for the first automatic cold-heading machine.

Fastener manufacturers benefited from the Civil War, when U.S. industry was mobilized in the production of firearms, machinery, and railroad equipment to feed a war that devoured machinery as fast as it did men. Shortly after the war, the center of the U.S. fastener industry shifted from the Northeast to the Midwest (then referred to as the West) to stay close to the expanding railroads and growing iron and steel production facilities. By the end of the nineteenth century, Cleveland, Ohio, was the capital of the U.S. fastener industry, and most of the processes for creating its products had been established.

Beginning in 1864, U.S. fastener manufacturers adopted the Sellers Thread System over the Whitworth Screw-Thread used by the British, and in 1884 the U.S. standard for screw threads, bolt heads, and nuts was established. Having different thread systems posed no problem for the two countries until they had to cooperate during World War I. U.S. manufacturers were not equipped to manufacture the British threads, and field repairs of machinery were disastrous. The fiasco was nearly repeated in World War II, but temporary adjustments helped to avert disaster. In 1931 a dozen fastener manufacturers met in Cleveland and formed the American Institute of Bolt, Nut, and Rivet Manufacturers, which in 1949 became the Industrial Fasteners Institute.

In 1964, the International Organization for Standardization (ISO) announced two universal thread systems: ISO Inch and ISO Metric. Despite occasional efforts to convert manufacturers to the metric system, the United States remains the only country in the world still tied to the inch system. This practice leads to dual manufacturing facilities and inventories, but U.S. manufacturers and the public continue to resist conversion to the metric system.

By 1969, the U.S. fastener industry had reached its peak of production when 450 companies operated 600 plants, employed more than 50,000 people, and manufactured over 2 billion fasteners annually. However, by 1984 the industry decreased to 250 manufacturers operating 350 plants and employing 35,000 people because of relentless challenges from foreign competition and dramatic changes in the requirements of original equipment manufacturers (OEMs). The biggest challenge came from foreign fastener producers, who took advantage of inexpensive Third World labor and material costs to produce cheap "standards," or fasteners that met nationally recognized product standards. The Industrial Fastener Institute reported that domestic manufacturers went from supplying 80 percent of U.S. bolts, nuts, and large screws in 1969 to 44 percent in 1984. During the same time, OEMs, especially automobile manufacturers, pressed fastener manufacturers to develop specialized products at lower costs. The production of these items sustained many companies, but it drove the smaller, less technologically advanced companies out of the industry.

Beginning in the mid-1980s, the U.S. fastener industry began to rebound. Many manufacturers allied themselves with companies in need of technically sophisticated products rather than simple standardized commodities, and the falling value of the U.S. dollar drove the prices of foreign products up. In 1985, reports began surfacing in newspapers across the country of "bogus bolts," that were graded to withstand high loads but failed in service, leading to the destruction of property and, in one case, the loss of life. The Industrial Fastener Institute began an investigation and, in 1986, urged an investigation by the U.S. Customs Service.

In 1988, after an 18-month investigation, a U.S. House subcommittee published a report entitled The Threat from Substandard Fasteners: Is America Losing Its Grip? The report stated that "the failure of substandard and often counterfeit fasteners has killed people, reduced our defense readiness, and cost both the American taxpayer and the American industry untold millions in breakdowns, downtime, reconstruction, and other unnecessary inefficiencies." The subcommittee concluded that the substandard and counterfeit fasteners at fault were largely foreign made. The "bogus bolts" controversy ended in the passage of Public Law 101c-92, also called the Fastener Quality Act (FQA), in 1990. This act provided for the "testing, certification, and distribution of certain fasteners used in commerce within the United States." Perhaps more important than the law, the investigation challenged the quality of the fasteners imported from abroad while affirming the quality of fasteners made in the United States. Passage, but not actual implementation, of the FQA resulted in a soaring demand for fasteners made in the United States because they had quality control records that were both traceable and well documented.

Surprisingly, the FQA was never fully implemented because the U.S. government was reluctant to interfere with the $6 billion U.S. fastener industry and wanted to give the industry time to establish or contract for approved testing facilities. By early 1999, more than 400 such facilities were operational. Since its passage, however, many fastener manufacturers and end users of their products have tried to water down the FQA. The U.S. fastener industry had long felt that its own internal policies, policing and record keeping would assure a safe, high-quality product and that full implementation of the FQA would only hamper the industry.

In June 1999 the U.S. fastener industry got its wish when President Clinton signed a series of amendments to the FQA, in an effort to make the legislation less burdensome. Clinton signed the legislation less than a month before the deadline for full implementation of the FQA. Supporters of the amending legislation claimed that it shifted the policing focus from government mandated regulations to more "preventive measures." The new legislation also recognized decade-long industry improvements in quality control and, for the most part, eliminated tests performed at government-approved facilities. Clinton's signing also limited coverage of the FQA to high-strength fasteners and allowed companies to transmit and store records and reports electronically. The Fastener Industry Coalition, the National Fasteners Distribution Association, and the Industrial Fasteners Institute all lobbied for the amended legislation.

In the 1990s, the fastener industry improved technology in response to demands for stronger, lighter, and easier-to-use products. This trend continued throughout the decade, especially with the growth in popularity of laptop computers. Buyers also demanded a variety of innovative and diverse fasteners such as self-locking, self-cinching, or self-sealing screws, bolts, nuts, and threaded inserts. Fastener manufacturers also worked to develop more environmentally friendly products, such as fasteners that maintain lubricity without the use of such plating materials as cadmium, a suspected carcinogen. Throughout the decade, there was much industry effort aimed at improving quality control so implementation of the FQA would be unnecessary. To this end, the industry instituted end-of-line quality control assessments and state-of-the-art manufacturing techniques, such as quality assessment on the assembly line. The result was greatly improved quality control and fewer rejects.

Although the U.S. industrial fastener industry continued to export more products, it faced challenges from foreign countries, especially Taiwan. In the late 1990s, Taiwan was the world's largest exporter of fasteners, shipping 1 billion kilograms with a value of $1.31 billion. From January through May 1999, over 56 percent of Taiwan's exported fasteners were sent to the United States. Despite foreign competition, the U.S. industrial fastener industry was expected to grow 3 to 4 percent annually. This figure, however, represented a decrease from the 9 percent growth spurt the industry enjoyed in 1998. Some analysts predicted that fastener manufacturers would face growing competition from the adhesives industry as more and more products were made with plastic, a product often best joined together by adhesives.

According to the Industrial Fasteners Institute, the United States uses approximately 200 billion fasteners each year. About 44 percent of these are used for industrial products, 42 percent are for the automotive industry, and 14 percent are for the aerospace industry. Research completed by the Freedonia Group indicated a projected 9 percent annual growth in fasteners for the aerospace industry. U.S. manufacturers were the best equipped to meet this demand since specifications usually call for high-end products that are used in critical applications.

"Intelligent fastener" technology, which was being developed at Textron and other companies in the mid-years of the first decade of the 2000s, was another area of the industry with exciting developments. Such smart technologies would allow assembly and disassembly via wireless commands from a remote location.

The industrial fastener industry shipped $8 billion in products in 2005, up from $7.2 billion in 2002. The number of employees declined from 44,768 in 2002 to 39,817 in 2005, and the number of production workers, who earned an average hourly wage of $17.82 in 2005, dropped from 33,369 to 28,959 over the same time. The entry of China into the manufacturing sector affected sales for U.S. companies, along with supply and cost of raw materials.

Global shipments of fasteners totaled $49 billion in 2007. The automotive industry was responsible for 37 percent of consumption followed by the construction industry with 18 percent. Based on region, demand was highest in Asia Pacific with 35 percent of fastener shipments, followed by the U.S. with 29 percent of shipped goods. U.S. fastener exports totaled $2.3 billion, whereas U.S. fastener imports were $3.8 billion.

In 2008, total combined washer shipments were $48.8 million with 14.7 percent in industry share. Manufacturers of pins totaled 164 factories with 15.3 percent in market share, $150.2 million in sales, and 767 employees. There were more than $1.9 billion metal washers shipped from a total of 140 manufacturers who controlled 13.1 percent in market share with 5,843 workers. The 119 manufacturers of metal screws shipped a total of $543.5 million in screws with 11.1 percent in market share employing 4,033 workers. The 48 manufacturers of rivets captured 4.5 percent of market share with shipments totaling $142.9 million with 822 employees.

U.S. fastener manufacturers underwent a period of consolidation, which left the industry with larger companies that turned their focus to global expansion whether by exports or overseas acquisitions. In 2008, the U.S. fastener manufacturers offered "just in time" (JIT) delivery and specialized design/engineering services with the goal of providing higher margin products that can be sheltered from open global competition," according to the Industrial Fasteners Institute.

The fastener industry wasn't without its share of challenges brought on by the weakened economy, such as the aerospace industry, which cut back on orders. Increasingly, the fastener industry was dealing with elevated prices following a surge in the price of steel. For instance, the price of a hex bolt increased 16.4 percent in January 2008. That was after the price had already increased by nine percent in latter part of 2007. "No one can say for sure when prices will stabilize or come back down, unless the rapidly stalling economy reduces demand for everything," according to Rob Harris of the Industrial Fasteners Institute.

Current Conditions

According to the Industrial Fasteners Institute (IFI), industrial fastener production revenues totaled $10.63 billion in 2008 and were initially estimated at $10.76 billion for 2009, but the Institute, in its annual industry summary, acknowledged that that number was likely not reached due to poor economic conditions during the year. U.S. consumption, which included $4.10 in imports and $2.71 billion exports, totaled $12.02 billion. Reflecting decreased demand, in 2009 imports dropped by 37 percent, and exports were down by 21 percent; specifically, imports totaled $2.65 billion and exports totaled $2.03 billion.

The fastener industry operated at just over 59 percent capacity in 2009. Again, reflecting the difficult economic environment, the Industrial Fastener Institute reported that 84 percent of fastener firms cut jobs during 2009, and of those firms that do so, 50 percent reduced their employee numbers by more than 10 percent.

Particularly hard hit by the economy was the U.S. auto industry, which account for roughly one-quarter of all fastener revenues. Sales by units of U.S. autos were down by over 21 percent during 2009. The aerospace, which accounted for over 13 percent of industry revenues, was not as hard hit by the recession, as it was buoyed by missile and military sales. Nonetheless, although overall sales were up by 4 percent in 2009, orders and backlog for the entire aerospace industry dropped roughly 33 percent for the year. Industrial applications such as appliances and construction machinery were also depressed in 2009, as both residential and nonresidential construction fell off sharply. Medical equipment application was, however, a segment that was growing. In 2009, fasteners for the end use of electro-medical and electro-therapeutic equipment only generated revenues of $198 million.

According to a report by Jeff Dietrich, a senior analyst for Trend Research, in the November/December issue of American Fastener Journal, the industry had survived the worst of the recession during 2009 and in 2010 was making its way slowly back toward positive growth. According to Dietrich 's report, quarterly production of bolts and fasteners was up by 19 percent. In August 2010, production was 2.5 percent higher than the previous year and the highest recorded in 13 months. Although still well below 2008 levels, economic indicators boded well for the fastener industry. For example, capital goods, industrial machinery, aircraft, and appliances were all increasing in production rates.

Industry Leaders

Illinois Tool Works (ITW), with headquarters in Glenview, Illinois, was the largest producer of industrial fasteners in the United States, with total sales of $13.88 billion in 2009 and 59,000 employees.

Other industry leaders were Textron Inc. and Fastenal Company. Textron, in Providence, Rhode Island, reported sales of $10.5 billion in 2009 and had 32,000 employees. Fastenal Company, in Winona, Minnesota, reported 2009 sales of $1.93 billion and had over 12,000 employees.

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