Oct. 29, 2014

Trade Groups Lose More than Just a Member
 
Readers may have noticed that the Copper and Brass Servicenter Association's monthly shipment report has been missing from recent issues of Metal Center News. The data on service center shipments of various copper and brass products has long been a standard in MCN's Association News section. The red metals community has used CBSA's stats as an important benchmark for decades. But at present the report is on hold—temporarily, we hope.

CBSA, the Overland Park, Kan.-based trade group, is still working out how to present shipment data to its members and industry watchers following the exit of one of its largest members, ThyssenKrupp Materials North America. The Southfield, Mich.-based service center company—the sixth-largest metals distributor in North America in the most recent MCN Top 50—is one of the few truly large players in the otherwise small world of copper distribution. Without TK's shipment data, CBSA's report is no doubt incomplete.

TKMNA's resignation from CBSA was not a reflection of the trade group, but a decision that came from above. Its German parent, ThyssenKrupp AG Materials Services, has cancelled its memberships in hundreds of trade organizations around the globe. The Rolling Meadows, Ill.-based Metals Service Center Institute also lost a valuable, active member with the decision from TK's corporate office.

"This withdrawal does not impact in any way the company’s continued commitment to our strategic materials distribution and industrial services business activities in the United States, Canada and Mexico," the company said in a statement announcing its intent to cancel all of its association memberships. Unfortunately, the move does impact the associations and their various initiatives, among them the sharing of shipment data.

ThyssenKrupp did not specify the reason for the move, but it seems obvious the company is taking every precaution in the face of intense scrutiny by regulators. Certain of its operations in Europe have faced allegations of price fixing and other antitrust issues in recent years, costing the company big fines and prompting it to take a proactive and aggressive approach to compliance. Part of that compliance push has included a review of its executives’ activities in various trade associations, "to give employees extra certainty on how to conduct themselves in dealings with competitors," according to the company’s website.

The company now espouses a zero tolerance policy regarding unethical behavior by its staffers. As the website states: "ThyssenKrupp has a clear commitment to ensuring compliance with the law and internal policies: violations, particularly of antitrust and anticorruption rules, will not be tolerated under any circumstances."

One way to avoid even the appearance of impropriety by employees is to bar them from venues like trade association events where collusion with other companies could conceivably take place. But that extreme degree of caution comes at a price. It hurts the company's standing in the marketplace and it hurts the industry's trade groups.

Hopefully, ThyssenKrupp's decision will be short-lived for the company itself, and an example not followed by others. Associations such as CBSA and MSCI need their support and participation—not just for shipment data, but for leadership.

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