Quality Float Works Benefits From The Weak Dollar
Monday, December 24, 2007JEFF YASTINE: The U.S. dollar has been beaten down this year, but the dollar’s downfall may be a boom to many small U.S. businesses. The National Association of Manufacturers says this year exports are up across the board for everything from airplanes to the nuts and bolts it takes to build them. Diane Eastabrook takes us to a nearly century-old family firm that is finding new customers on foreign soil.
DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: At Quality Float Works, business couldn't be better. The Schaumburg, Illinois-based company makes floats, hollow balls used to level liquids. The firm's products are found in everything from gas pumps to aircraft carriers. Sales this year are up about 5 percent over last. Quality Float Works President Sandra Westlund-Deenihan knows why.
SANDRA WESTLUND-DEENIHAN, PRESIDENT, QUALITY FLOAT WORKS, INC.: I would say a good 13 percent of our business has grown because of the weakening dollar. It has affected our international market.
EASTABROOK: For many American manufacturers, the weak dollar has been a shot of adrenaline in an otherwise sluggish U.S. economy. The U.S. Commerce Department says exports grew more than 12 percent in the first 10 months of the year, while imports increased only around 5 percent. The hottest markets for exports were Canada, Mexico, China and Japan. The National Association of Manufacturers thinks the growth in exports will continue for a few more years. But NAM's chief economist David Huether says the weak dollar is just part of the story.
DAVID HUETHER, CHIEF ECONOMIST, NATIONAL ASSOCIATION OF MANUFACTURERS: Growth overseas is strong, not only in Asia, but in south central America and Europe as well. So if the dollar would appreciate modestly, I still think as long as growth overseas maintains a good pace, that we will continue to see solid export growth going forward.
EASTABROOK: Still, companies like Quality Float Works are quick to point out that it takes more than currency fluctuations and economic growth to open international doors. Equal doses of imagination and marketing are also needed. Quality Float Works' international business actually took off after 9/11. When the U.S. business climate began to deteriorate, the company decided it had to find a way to diversify. The company, started by Deenihan's grandfather, had been making pretty much the same basic product and selling it in the U.S. since the beginning of the 20th century. But Jason Speer, Deenihan's son and the company's vice president and general manager, saw potential abroad. He helped create an entire float assembly that could be used in water purification systems.
JASON SPEER, V.P. & G.M., QUALITY FLOAT WORKS, INC.: In developing countries they don't have the infrastructure with the water and sewers. A lot of them have giant water tanks on the tops of their house. So one of these would just be right in there, and when the water level starts to rise up to the very top, it will shut it off.
EASTABROOK: Deenihan says that single idea helped Quality Float Works tap markets around the world.
DEENIHAN: Thirty percent of the market in Poland is agrarian and so I am exploring their infrastructure and how these valve assemblies can be used to be integrated into their livestock applications.
EASTABROOK: Deenihan is confident the relationships her company has cultivated with foreign firms will continue if and when the dollar strengthens and that could help this family firm thrive for many more generations. Diane Eastabrook, NIGHTLY BUSINESS REPORT, Schaumburg, Illinois.
