Monthly Archives: February 2014
In a ruling released publicly on February 6, 2014, the Federal Trade Commission dismissed its accusations that McWane, Inc. colluded or conspired with its competitors to fix prices in the water works fittings markets. This dismissal leaves in place Administrative Law Judge D. Michael Chappell’s complete rejection of the Commission’s conspiracy claims, which he found to be nothing more than “unpersuasive” and “unsupported speculation” that was “weak at best,” and his ultimate conclusion that “Complaint Counsel’s daisy chain of assumptions fails to support or justify an evidentiary inference of any unlawful agreement involving McWane.” In addition, the Commission overturned Judge Chappell’s ruling that McWane’s distribution agreement with Sigma was unlawful, dismissing the two counts related to those accusations. In total, the Commission dismissed six of the seven counts against McWane and the lone ruling against McWane drew a stinging dissent from Commissioner Joshua Wright.
The FTC’s dismissal confirms Judge Chappell’s conclusions that we did not collude or conspire to fix prices, just as we have said all along,” said McWane, Inc. President G. Ruffner Page, Jr. “While we are very pleased that the Commission at last dismissed these unwarranted and speculative allegations, the huge expense of these proceedings could have been better spent creating and preserving jobs for our team members.
This case is yet another example of a regulatory agency unreasonably stretching the boundaries of its enforcement powers in a way that discourages companies from investing in the US and creating jobs.
It is unfortunate that with our economy and the livelihoods of so many Americans in danger, our own government would choose to attack the very people trying to fix these problems,” said Page.
Three years ago the Commission began an examination of McWane’s marketing programs in its water works fitting business as a result of complaints from a foreign competitor. This importer of products from China, Korea and India claimed that a modest and routine rebate that McWane provided to its loyal customers was somehow anti-competitive. The Commission also raised questions about the fact that, like almost all other trade associations, the short-lived association for the fittings industry gathered limited, stale, and perfectly proper statistics about the tons of fittings sales in the U.S. Later, the FTC also accused McWane of engaging in price fixing and collusion in the fittings market, claims that Judge Chappell rejected. These proceedings involve an industry that remains highly competitive, and remains under assault from foreign importers who continue to flood the market and push the domestic industry and hundreds of American jobs closer to extinction.
Although this ruling confirmed that McWane did not conspire to fix prices, three of the four commissioners upheld a single count (of the seven), finding that McWane’s modest, brief and voluntary rebate program limited the ability of an importer of foreign fittings to fully participate in domestic fittings jobs funded by the American Relief and Recovery Act (The Stimulus Act). However, in a well-reasoned and lengthy dissent, Commissioner Wright flatly rejected this conclusion because it conflicts with both the facts proven at trial and long-standing legal precedent.
Specifically, Commissioner Wright concluded that “Complaint Counsel fails totally to establish, as it must under the antitrust laws, that McWane’s conduct harmed competition” and “[t]he record is clear there is no such proof.” Wright found Complaint Counsel’s legal arguments “at best, question begging, and, at worst, misleading,” and further noted that what was “strikingly absent” from the Commission’s decision was “any evidence establishing the requisite analytical link between what the Commission describes as ‘foreclosure’ and harm to competition.” Thus, given the “dearth of record evidence demonstrating McWane’s conduct has had an adverse effect on competition,” Commissioner Wright dissented from the Commission’s decision, finding that Complaint Counsel failed to establish a necessary element of a monopolization claim: “that McWane’s conduct was [actually] exclusionary.”
Commissioner Wright’s conclusions are consistent with those of former Commissioner Rosch, who dissented from the FTC’s pursuit of this claim at the outset, concluding that there was nothing illegal or unfair about McWane’s rebate program. When the complaint was filed by the FTC he expressed his view that: “I do not think that the Complaint against McWane adequately alleges exclusive dealing as a matter of law. In particular, there is case law … blessing the conduct that the complaints charge as exclusive dealing.”
Likewise, Commissioner Wright found “undisputed evidence that Star was able successfully to enter the domestic fittings industry and to succeed in expanding its business once it did enter,” and thus the “more plausible inference to draw” from Complaint Counsel’s “very weak” “indirect evidence” is that McWane’s rebate policy “had almost no impact on Star’s ability to grow its business, which, under the case law, strongly counsel’s against holding that McWane’s conduct was exclusionary.”
Our modest, short term rebate was a price cut designed to benefit and reward our customers for helping us save the jobs of our employees during a difficult economic time,” said Page. “To characterize that as unfair competition under Section 5 flies in the face of the overwhelming evidence at trial and established judicial precedent. And to claim that it somehow excluded Star and injured competition is out and out nonsense, as Commissioner Wright’s dissent shows.
The FTC’s theory rests upon speculation that the foreign competitor might have bought or built its own foundry to manufacture fittings in the absence of McWane’s rebate. This suggestion ignores the realities and history of the fittings market, including the fact that domestic manufacturing of waterworks fittings has been in severe decline for over a generation. In the 1980s, almost 100 percent of waterworks fittings were domestic and manufactured in multiple foundries around the country. By 2008, the percentage of domestically manufactured fittings had declined to less than 25 percent. In the face of this dramatic decline in sales, all of the other manufacturers of domestic fittings closed their foundries and moved their production overseas. McWane alone continued to fight for American jobs as the only remaining US manufacturer of a full range of small, medium, and large waterworks fittings. The claim that a foreign importer would have invested millions of dollars of scarce capital in this declining industry to take advantage of the one-year ARRA program lacks support and is completely illogical.
We are proud to announce that the McWane Technology group is further expanding their global footprint by acquiring Zinwave Ltd. Zinwave Ltd, a leading global supplier of in-building wireless coverage solutions, announced on February 3rd, its sale to McWane, Inc., a privately-held diversified manufacturing company based in the United States.
McWane’s financial strength and international status will allow Zinwave to invest in commercial and technical resource, customer service, customer support, geographical presence and infrastructure. It will also allow Zinwave to accelerate its product development and enhancement programs, thus ensuring that it maintains its competitive edge in fiber-based RF coverage solutions for existing and emerging markets.
Becoming part of a global organisation will enable Zinwave to increase its overall share of the rapidly growing DAS market, which is predicted to grow by more than 300% in the US alone over the next five years according to a recent report published by iGR Research.
Says Ian Sugarbroad, CEO of Zinwave:
“Our new status will give us access to invaluable resources, including McWane’s impressive intellectual property, R&D, and global supply and distribution chain. It means we can speed up product development and improve our support to strategic partners and customers, so they in turn are able to accelerate growth for wideband active DAS solutions in their respective markets.”
McWane President, G. Ruffner Page, Jr. had this to say:
“Zinwave is the perfect addition to our growing stable of high-tech companies operating under the McWane Technology Group banner. Founded in 1921, McWane is a global leader in water, waste water, fire protection and LPG tank infrastructure products and we’re proud to continue leading the way in building the durable and innovative infrastructure our world depends on.”
While Zinwave will become a wholly owned subsidiary of Birmingham, Alabama-based McWane, it will continue to trade as an independent company and maintain its established corporate identity. Zinwave’s UK presence will be maintained and will add to McWane Technology’s expanding global footprint, which includes offices in the United States, Canada and South Korea.
We are looking forward to learning more about the newest addition to the McWane family of companies. Wecome to the team, Zinwave!
For more than a century, AB&I Foundry has been producing pipe and fittings for use across the country. From its site in Oakland, California, AB&I has made components for U.S. Navy submarines in World World II and bronze statues for Market Street in San Francisco. Building off the work of founder Joseph Boscacci, AB&I products are recognized for their superior quality and craftsmanship and are 100% “Made in America” from post-consumer recycled scrap material.
But for all its history in Oakland, AB&I has been walled off from its community – literally. The foundry’s amazing work has been taking place behind a high wall tracing the edge of the property, wedged between Bay Area Rapid Transit (BART) train tracks and San Leandro Street. To transform the relationship between company and community, AB&I embarked on one of the largest public art projects of its kind in the area: a beautiful mural 253-feet long, eight-feet high containing 2,026 square feet of history and inspiration.
With the city’s former luster dulled by years of economic uncertainty, AB&I’s efforts not only help beautify, they remind the community of all it has accomplished while inspiring it anew.
“Our story is one worth telling, and our city is in desperate need of beautification,” said Kurt Winter, AB&I’s general manager. “The walls around our neighborhood are constantly tagged by graffiti artists, so we decided to take action and turn our own facility into a canvas for the benefit of everyone in the community. The art is beautiful, and so too is the message behind it.”
Instead of bare walls, commuters on the BART train and drivers cruising on San Leandro Street are presented with a striking tableau of milestones, memories and moments of genuine civic pride. Block by industrial block, AB&I is transforming its community while celebrating both local history and its own. Initial scenes in the mural depict Boscacci making ornamental castings for the city and the foundry’s work on behalf of the nation during World War II. Later images illustrate AB&I’s pride in its city and neighborhood, with iconic renderings of the Oakland Zoo, the Oakland Raiders football team, Fox Theater and the Christ of the King Cathedral at Lake Merritt. The richly detailed mural also honors team members who have worked at AB&I across its history.
Murals have long been used to celebrate achievement, highlight important issues and inspire future generations to greatness. From Michelangelo to Diego Rivera to contemporary art prankster Banksy, the mural is art in one of its most vital forms – directly engaging us in our everyday lives, sharing beauty and inviting new optimism for tomorrow. With so much value in the images, finding the right artist was paramount. Luckily for AB&I, acclaimed Bay Area painter Jean Bidwell from Castro Valley embraced the commission and embraced AB&I’s commitment to community and sustainability by including visuals celebrating the foundry’s accomplishments alongside those of the surrounding community.
“We have a long history of social and environmental responsibility,” said Winter. “This is yet another contribution we are making to improve our community, and it’s one we hope will inspire for a long time to come.”
AB&I’s deep involvement in its community goes far beyond the pigments and personalities used in the mural. For over two decades, AB&I has made environmental concerns a top priority, investing $10 million in environmental technology and training to set an industry standard for cleanliness and environmental responsibility. Its community faces more threats than just environmental ones, which is why AB&I has also helped law enforcement get guns off of the streets by taking in over 50,000 weapons and melting them down. This provides local law enforcement a cost-free way to permanently keep guns out of the wrong hands. AB&I also gives specialized confined space rescue training to new Oakland firefighters.
There’s been a lot to celebrate in the more than 100 years since Joseph Boscacci cast his first iron in his backyard. And now, there’s an appropriately sized canvas for this story to finally be shared with the community.
We just hope that there is room enough saved on the wall so that AB&I’s future accomplishments can be artfully memorialized too!
At the McWane family of companies, we make the pipe, valves, fire hydrants and fittings that together build our nation’s water infrastructure. With more than 25 foundries and manufacturing plants across North America, we are the largest manufacturer of waterworks products in the country.
McWane was founded in 1921 in Birmingham, Alabama, by J.R. McWane as the McWane Cast Iron Pipe Company. Over decades, McWane acquired numerous companies to aid in its efforts to supply the country with clean water and removing waste safely.
Over the years, McWane’s pursuit of perfection has led to consistent and positive recognition. The company has received a substantial amount of awards by division and also through McWane as a whole. McWane proudly boasts recognition in the Occupational Safety and Health Administration’s (OSHA) Voluntary Protection Program (VPP) which recognizes exemplary health and safety programs. Fewer than 1% of all U.S. workplaces have earned admission into the VPP, and no other company in the waterworks foundry industry has a single plant in the VPP program. McWane has seven.
Today, the company is led by Chairman Phillip McWane and conducts business throughout North America and the world. Its major plants by industry include four pipe facilities, four valve and hydrant facilities, seven soil pipe and utility fittings facilities, seven tank manufacturing facilities and one fire extinguisher facility.