Gray and Ductile Iron Foundries

SIC 3321

Companies in this industry

Industry report:

This classification covers establishments primarily engaged in manufacturing gray and ductile iron castings, including cast iron pressure and soil pipes and fittings.

Industry Snapshot

The total number of gray and ductile iron foundries continued to decrease, reaching 501 in 2010, a drop from 546 reported in 2008. Although the number of foundries fell, shipment values increased to $5 billion compared to $4.3 billion in 2008. Industry-wide employment was 40,153, of which 12,204 were employed within the gray and ductile iron foundries. Each iron foundry generated an average of $14.4 million in revenues.

During 2010 the majority of foundries (16.6 percent) employed between 25 and 49 workers; 15 percent employed between 10 and 24 workers; 11.8 percent employed five to nine workers; 10.8 percent employed between two and four workers; and 10.8 percent employed 100 to 249 workers.

According to industry statistics, total gray and ductile iron foundries fell from 626 in 2004 to 546 in 2008, along with a drop in shipments from $10.7 billion in 2004 to $4.3 billion in 2008. The industry also shed approximately 17,291 employees between 2004 and 2008. Alabama and Texas shipments declined, with Michigan picking up 7.9 percent of the market share, followed by Pennsylvania, Ohio, and Wisconsin, which were responsible for nearly 26 percent of market share with $1.39 billion in product shipments.

Although production increased through the middle of the first decade of the 2000s, industry leaders considered the increase to be the direct result of the closing of a large number of foundries. While profits were up for the major companies, there was a growing concern about imports.

Organization and Structure

This industry predominantly manufactures pipes and pipe fittings, but other segments of the industry are growing in response to changing market demands. For example, the automotive industry switched most engine components to aluminum in response to consumer demands for lighter, more fuel efficient cars. While this move hurt some gray and ductile iron foundries, it forced them to find alternative markets and resulted in 52.6 percent of product share being claimed by other gray iron castings and 19.9 percent being claimed by other ductile iron castings. Only 3.9 percent of product share is from cast-iron pressure, soil pipe, and fittings, while 14 percent is attributed to ductile iron pressure pipe and fittings.

Historically, the automotive and aerospace industries were the largest customers for gray and ductile iron foundries. When demand was at its highest, the Big Three automakers each owned several foundries. In the mid-1980s, the poor financial performance of the domestic automotive and aerospace industries forced many self-contained foundries to close. Companies in these industries found that outsourcing the casting business was a less expensive alternative to underutilized plant and labor capacities.

In the 1980s and 1990s, the corporate average fuel economy (CAFE) standards mandated that automobile manufacturers produce lighter, more fuel efficient cars. As a result, the 650 pounds of iron casting found in a 1981 automobile was reduced to 350 pounds of gray iron per vehicle by 1995, falling another 40 percent by 2005. Ductile iron, however, reported some growth in the automotive industry as the mechanical properties of the metal made it an attractive alternative to heavier cast components. During the first decade of the 2000s, unprecedented volatile market conditions, particularly in the automotive industry, were placing strain on the gray and ductile iron foundries.

Background and Development

Humans have been casting metals for at least 5,000 years, as confirmed by the progression of early societies from the Stone Age to the Bronze Age, when people started extracting ores and shaping them by melting or hammering methods. The Iron Age began in Europe about 1100 B.C. Cast iron came into commercial use in the early 1700s when a mechanic named Abraham Darby and some Dutch workmen established a brass foundry in Bristol, England, where they began to experiment with iron as a replacement for brass. Because brass and iron are different pouring mediums in terms of their reaction with sand and solidification patterns, Darby faced many technical difficulties in his early experiments. With the help of John Thomas, a boy working in his shop, Darby succeeded in casting a complete iron pot. For proprietary reasons, Darby and Thomas entered into an agreement that kept young John Thomas as Darby's servant to keep the secret.

Ductile iron was not discovered until after World War II. Laboratory metallurgists at International Nickel Company noticed that the addition of a higher content of magnesium than is normally required for gray iron produced a structurally different material. When observing the material at a microscopic level, researchers noticed that the graphite particles took on a spheroidal shape, so they coined the name "nodular iron" in the United States and "spheroidal graphite cast iron" in Great Britain. The recognition of nodular iron's mechanical strength, as well as its ability to provide more ductility than other metals in its class, provided its more commonly accepted name, ductile iron. Since its release to the marketplace in 1949, ductile iron has gained acceptance as an important engineering material and has replaced many of the previous applications formerly reserved for steels and other irons. The discovery of ductile iron is considered to be one of the greatest achievements in the engineering materials community in the twentieth century.

The metal casting industry faced severe setbacks in the 1980s. During the 1970s, the industry had back orders that exceeded annual capacity, creating a seller's market that was reflected in pricing strategies and profit margins. However, shipment volume rather than quality was the key issue during the 1970s. During the 1980s, foreign competitors emerged, offering timely delivery of better-quality castings at lower prices. During the recession of the late 1980s and early 1990s, consumers turned to overseas suppliers, leaving the domestic producers behind. Consequently, U.S. foundries were operating at no more than 50 percent capacity by the mid-1980s.

By 1995, the foundry industry had been cut in half from 1955 levels, when the number of establishments involved in ferrous and nonferrous casting across the country was 6,000. Only 3,100 establishments remained in 1995, with approximately 700 engaged in casting gray and ductile iron. However, due to technological advances and capacity gains through consolidations, output per remaining producer rose.

Gray and ductile iron foundries rely on the health of the U.S. economy to spur growth within their industries. The increase in new housing starts in the late 1990s had a corresponding increase in demand for gray iron needed for boiler and radiator castings, valves and fittings, and pumps and compressors. The industry also was aided by an increased volume in exports of heavy equipment, such as diesel engines and farm and construction equipment. At the same time, plastics replaced gray iron, which also was apparent in the refrigerant and air conditioning markets.

The automobile market was expected to sustain ductile iron growth into the twenty-first century as the preferred replacement for forged gears and shafts in power transmissions. Specialty industrial machinery, such as those used for paper, printing, and plastic manufacturing and for farm and construction equipment, were expected to maintain the demand for ductile iron. The development of austempered ductile iron (ADI) allowed this metal to challenge forgings and cast steels in operations requiring strength and durability.

The foundry industry increased its worldwide marketability by certification through the International Organization for Standardization. This series of certifications, referred to as ISO 9000, offered distinct competitive advantages for those who qualified and passed the certification audit. Although the audit was intensive, the result was the receipt of an internationally recognized benchmark standard, which signified that the recipient was paying attention to details and distinguishing itself as a manufacturer of quality castings, engineered with integrity.

In 1995, industry shipments were only 33 percent of the tonnage shipped in 1978. Gray iron reported a huge decline between 1978 and 1982, dropping from approximately 18.5 million tons to 9.5 million tons. During the remainder of the 1980s, gray iron shipments continued to decrease. In the mid-1990s, they leveled off at approximately 6 million tons per year. Ductile iron, however, showed growth in shipments beginning in 1982, continuing a trend that had started in 1966. In 1994, shipments of ductile iron surpassed 4 million tons for the first time since the metal was invented. Ductile tonnage was expected to surpass gray metal by 2000. The growth of ductile iron was largely due to increased recognition as more economical and structurally sound than gray and malleable irons. In some cases, it can replace steel forgings and welding.

For all its rhetoric of improving industry standards, in practice the industry shrugged off the ISO 9000 accreditation initiative as unnecessary unless customers required it, which they did not, making the issue moot. Only 13 percent of companies in the gray iron industry and 33 percent in the ductile iron industry bothered to acquire ISO 9000 accreditation by the late 1990s, 20 percent of gray iron producers anticipated seeking accreditation in the future, and half the ductile iron industry felt compelled to seek future certification.

According to the U.S. Census Bureau, the industry reported 619 gray iron foundries in 2002. These firms shipped $9.79 billion worth of goods and had 66,513 employees that year. By 2004, these figures had climbed slightly, with 626 gray iron foundries employing 62,519 and shipments valued at $10.7 billion. In 2005, the industry shipped products valued at $11.79 billion. States with the majority of iron foundries were Ohio, Wisconsin, Texas, Pennsylvania, and Alabama.

In 2008 gray and ductile iron foundries shipped $758.8 million in goods. In terms of revenues, manufacturers of cast iron pipe and fittings led in industry shipments totaling $1.53 billion. Gray iron castings, not elsewhere classified, were another significant sector, with 33.3 percent of market share and nearly $1 billion in product shipments. Manufacturers of ductile iron castings captured $624.1 million of the industry total.

Between economic instability and the downturn in the automobile industry, some companies were forced into Chapter 11 bankruptcy protection, including Grede Foundries Inc. in June 2009. Grede announced plans shortly afterward to shut down plants in Michigan and Kansas in an effort to survive. The company's Greenwood, South Carolina, plant where it produced gray and ductile iron parts for the automotive, industrial, recreational, and agricultural markets, had been closed in April 2009, as a result of the "automotive downturn," according to the August 20, 2009, edition of Metal Casting Design.

Gray iron casting shipments recorded a 20 percent drop in 2009, while imported iron castings increased by 50 percent, adding to the metal castings industry's woes and resulting in further foundry closings. Shipments of ductile iron castings were projected to decrease 18 percent to 3,262,000 tons in 2009.

According to the 2007 Modern Casting Census of World Casting Production, China was at the forefront of gray iron castings with production that reached 15,460,176 metric tons, followed by India with 5,332,000 metric tons and the United States with 3,889,000 metric tons. China led in ductile iron castings as well, with production totaling 7,698,396 metric tons, followed by the United States with 3,890,000 metric tons and Japan with 2,044,055 metric tons.

Current Conditions

By 2009, Modern Casting's Census of World Casting Production reported that China continued to lead in production of gray iron castings with 17,000,000 metric tons, followed by India with 5,050,000 metric tons and the United States with 2,409,483 metric tons. China also continued to lead in the ductile iron castings segment as well, with production totaling 8,700,000 metric tons, followed by the United States with 2,553,725 metric tons and Japan with 1,364,644 metric tons.

During 2010 gray and ductile iron foundries product shipments totaled $699.5 million, a decrease from $758.8 million shipped in 2008. The largest industry sector based on shipment values in 2010 were manufacturers of cast iron pipe and fittings, which generated nearly $1.9 billion in revenues. Gray iron castings, not elsewhere classified, held 31.9 percent of market share with shipped products totaling $1.35 billion in 2010, an increase from 2008 shipments of nearly $1 billion. Also in 2010, about 51 manufacturers were responsible for 10.4 percent of industry share, producing ductile iron castings valued at $747.7 million.

Worldwide, 65 percent of iron castings produced were in gray iron in 2009, while 35 percent of iron castings produced in ductile iron. In 2009 gray iron shipments totaled 2,409,483 metric tons, with shipments of ductile iron castings declining to 3,889,000 metric tons in 2009 compared to 2,553,725 metric tons in 2009.

Demand from wind turbine manufacturers was boosting demand for ductile iron. North American Ductile Iron Co. (Nadicom) planned to build an $85 million foundry in Iowa City, Iowa, to manufacture "machine components for wind turbines" to supply Siemans wind turbine manufacturing plant. A second ductile iron foundry was anticipated to be built by Fundiciones Wind Energy Casting, or Fundiciones W.E.C., to supply the Siemans wind turbine manufacturing plant in Hutchinson, Kansas.

Industry Leaders

Industry leader Amsted Industries Inc., which acquired Varlen Corp. for $790 million in a 1999 merger, generated $2.8 billion in 2007 sales. Memphis-based Mueller Industries Inc., which owned its own railroad in the West and its own gold mine in Alaska, garnered $2.5 billion in 2008 sales. Although Birmingham, Alabama-based Citation Corp. posted $650 million in fiscal 2003 sales, the company filed for bankruptcy protection in 2004, citing rising steel prices. Citation's recapitalization plan was approved in 2007, when the company reported estimated revenue of $714.7 million. It was taken private by Kelso & Company, a management and investment firm.

Amstead Industries Inc. posted revenues of $1.92 billion in 2009 with a workforce of 7,350 employees at an estimated 50 plants worldwide. Citation Corp. and Grede Foundries Inc. merged, creating Grede Holdings LLC in February 2010 with headquarters in Novi, Michigan. Grede Holdings LLC is controlled by private-equity firm Wayzata Investment Partners LLC. The company operates more than a dozen foundries and two machining plants where 2,700 employees produce gray and specialty iron castings, making it one of the top diversified foundries in North America. Mueller Industries Inc. reported revenues totaling $2.06 billion in 2010 compared to $1.55 billion in 2009, with 3,600 employees. The company acquired a number of assets of Tube Forming, L.P., a subsidiary of Wolverine Tube, Inc., on December 28, 2010. Mueller had operations throughout the United States, Canada, Mexico, Great Britain, and China.


In general, most labor-intensive occupations in the gray and ductile iron foundries reported continued workforce reductions beginning in the 1990s. The most substantial reductions of 30 percent or more included worker supervisors, plastic and metal machine workers, plastic and metal grinding machine operators, maintenance workers, electricians, and machine tool cutting operators. Reductions of 20 to 30 percent were indicated for fabricators, assemblers, hand workers, general laborers, precision workers, molding machine operators, inspectors, welders, truck and tractor operators, and mechanists. The only gains in employment were projected for hand grinders and polishers.

Average hourly compensation in the industry was substantially higher than in other manufacturing industries. In 1994, the industry's average hourly wage was $15.22, while the average hourly wage for other manufacturers was $12.09. In 2005, the average wage rose to $18.12 for all 76,448 production workers in iron and steel foundries. Industry-wide employment decreased to 45,228 workers in 2008.

Research and Technology

Conditions in the iron foundry industry, especially ductile iron operations, improved during and after the 1990s. The U.S. government was interested in replacing many forged steel components with cast ductile iron. Specifically, the U.S. Navy researched the possibility that ductile iron projectiles were more lethal than those made from steel. Other contractors looked for less expensive alternatives to forged steel components, such as ductile iron, which could be used in low-stress applications. However, more research and development was needed for this material because other, lighter-weight materials were replacing ductile iron in low-stress applications. Ductile iron's low production cost was enticing to both manufacturers and consumers and served as one of the primary incentives for its use.

Cast thermal analysis, or numerical modeling/simulation, was used to improve quality and productivity in the foundry through pattern design optimization. The benefits of using numerical modeling were substantial, especially in relation to cost savings associated with time and material waste. Computer technology displaced the standard "pour and pray" method of metal casting and helped engineers optimize casting designs.

For the overall foundry industry, the advent of rapid prototyping technology was one of the most exciting advances of the 1990s. Rapid prototyping is a computer-integrated method of accelerating the step between design and manufacture of the part. Under normal circumstances, a foundry took weeks to construct a pattern, and core boxes if necessary, from an original design. With rapid prototyping, the process took only days, and in some cases only hours, to create a limited production pattern. This technology offered a substantial competitive edge, especially considering the accuracy it engendered for quoting prices.

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