Key notes: 4 takeaways from the International Silicone Conference

For the first time since 2018, the silicone industry came together in-person for the International Silicone Conference. During the first day of the event, speakers tackled a number of hot-button issues ranging from labor shortages to long supply chains.

Here's a look at four key takeaways from the first day of the two-day event.

Challenges are nothing new. But in a post-COVID business environment, labor shortage issues have emerged as one of the most difficult to manage.

Sara Tracey, managing director of workforce services for the Ohio Manufacturers' Association, told those attending the International Silicone Conference that addressing the issue will take more than a few wage increases. It likely will require a deep and exploratory dive into your company policy and culture.

"It is a job-seekers market," Tracey said. "They can be choosey. We have to think about, 'how do we adjust for that? Can we be more flexible? … Do we have policies that are making our job of hiring and recruiting folks harder? And can we change those?' "

The COVID-19 pandemic changed worker expectations. Many of them, for health reasons, safety reasons or child care concerns, are unable to work eight hours a day, five days a week. They may need to work four 10-hour shifts or they may require a flexible start time.

The manufacturing industry has been slow to embrace this kind of change, Tracey said, but it will be critical for the industry's—and your company's—survival.

"If they think they can have more flexibility at a job at Amazon or Target or wherever, they are going to tell you they need more money to give up that flexibility," Tracey said.

Many manufacturers already are raising starting wages and even offering signing bonuses as a way to attract talent to the industry. That's an important step, Tracey said, and it is an essential one to take, especially in the short.

"We do have to expect to pay a premium in the short term," Tracey said. " … In the long term, we will see those wages level out as we think more about how our (industry) can bring people in."

When it comes to the disruption and congestion at the U.S. ocean ports, things could get worse before they get better.

Michael Jakobsen, branch manager for DVS Air & Sea, said the challenges for ocean freight continue to mount in the wake of the COVID-19 pandemic. And, all things considered, it doesn't look like the problems will let up any time soon.

"There is a lot of disruption in the ocean market right now," Jakobsen said. "You can see about 12 percent of the entire capacity that we have for ocean freight is currently sitting idle outside of a port somewhere. That is a lot of containers sitting idle."

In the U.S., particularly, West Coast ports have seen the greatest disruptions, with vessels drifting, waiting days to bring their cargo to the docks for unloading. As challenges mount—shutdowns in China, closure of ports at Shanghai and complications arising from the war in Ukraine—the situation is likely to continue.

Moreover, Jakobsen said, unions representing longshoremen at West Coast ports are set to renegotiate contracts.

"The last time these contracts were negotiated, it delayed the cargo for a month-plus," Jakobsen said, "and that was with no significant issues across the globe."

Particularly when it comes to their applications in an evolving automotive market, silicones prove that they can contribute to a greener planet.

"Silicones exhibit high energy efficiency and energy contribution, particularly in fuel savings, increased electrical insulation and efficiency in buildings," said Alexandra Rinehart, product steward and regulatory manager at Shin-Etsu Silicones of America. "They are also a significant contributor to product longevity as they can withstand harsh weather conditions and temperatures and tout high durability."

In recent years, concerns surrounding the greenhouse gas emissions of silicone product production and the toxicity of the material have arisen. These concerns, Rinehart contends, are unfounded, especially when it's considered that there are zero restrictions on the use of silicone materials anywhere in the world outside of Europe.

Moreover, she said, the silicone industry's CO2 footprint becomes more impressive when it is considered from the perspective of a product's life cycle.

"Greenhouse gas benefits of silicone realized by all silicone and silane products used in the EU, North America and Japan are approximately 9 times greater than the greenhouse gas emissions for both production and end-of-life treatment of these products," Rinehart said.

Silicones, she said, can have the greatest impact on energy savings and reductions in greenhouse gas emissions, particularly when applied in the energy and mobility sectors. Batteries, energy storage and LED shows the greatest results, Rinehart said.

"Total net abatement in greenhouse gas emissions realized by all silicone products is in the range of 42 metric tons to 71 metric tons to CO2 equivalent per year," Rinehart said.

Prices are high. Wages are stagnant. Demand is up. Interest rates are rising.

Making sense of the economic factors that impact our lives and businesses is never easy, but Bill Wood, founder of Mountaintop Economics & Research Inc., did his best to shed some light on the trends that are emerging in a number of areas.

"How many of you are actively planning right now for an extended period of inflation in the United States?" Wood said. "I am not guaranteeing that is going to happen, but from what I heard today and everything I look at, this is going to be a wrestling match."

One of the factors that is causing the surge in prices is that consumer demand has rose exponentially during and after the COVID-19 pandemic.

"Two years ago, they were worried that demand was going to fall off and the cliff because were all going to crawl into a bunker," Woods said. " … (Now,) they're raising interest rates in an attempt to put the brakes on demand."

Whether or not increased interest rates would help to weigh on inflation is yet to be seen, Wood said. But at some point, given the cyclical nature of the economy, a recession is certain to come along.

"We are going to have another recession. Is it going to be in the next two years? I don't know. I honestly don't know."

What he does know is that when it comes to supply chains, the ground is shifting. With the push for onshoring and shorter supply chains, it's likely the industry will transition away from its just-in-time, lowest-cost mentality.

"For a long time, the bar was set at lowest-cost supplier and just-in-time (supply chains)," Wood said. "Nope. Nope. Nope. The days of just-in-time are over. The days of low-cost supplier are over. You are going to have to compete against a lot of different metrics."