News from CEED

Research Projects Explore Tool and Die Industry, "Green" Forest Products

Assistant Professor of Economics Steve Onyeiwu and student interns Katie Wheeler '06 and Lauren Destefano '06 recently published "Firm Closures in the Tool and Die Industry in Crawford County of Northwest Pennsylvania," a study that surveyed 50 tool and die companies to identify the main causes of shop closures in the county.

Despite unprecedented competitive pressures, tool and die shops in Crawford County fared better than expected in the last three years, according to the study.

The companies surveyed were divided almost equally between those that failed and those that were performing well. Among the shops that failed, the survey found:

• Poor Managerial Skills: Often shop owners didn't know how to read a balance sheet and weren't able to track costs.
• Lack of Core Competencies: Many closed shops didn't have the ability to distinguish themselves from other shops.
• Lack of Strategic Planning: Most failed shops were not prepared for industry changes because they weren't looking ahead.
• Inability to Adapt or Diversify: Often the closed companies were not willing to change how they did business, relying on only one or two customers.
• Too Small to Survive: The survey suggested that larger firms tended to do better for a variety of reasons.

In addition to identifying factors related to success and failure, the report provides recommendations for measures that may be taken to improve the outlook for Crawford County tool and die companies. A link to the report is available on Professor Onyeiwu's Web page.

Researchers from Allegheny have released a new directory to help link supply and demand for "green" forest products in Pennsylvania.

Ten years ago, Pennsylvania became a national leader in third-party certification of forest management. In 1997-98, Pennsylvania became the first state to certify more than two million acres of state forests under the Forest Stewardship Council (FSC) system. With more than forty wood-processing facilities certified to handle wood produced under FSC principles and criteria, Pennsylvania's entire forest industry has made a significant commitment to certification.

Despite the potential for certification to contribute to conservation-oriented economic development, links between certified forest product supply and demand remain weak. In the first year of a three-year joint project of the Center for Economic and Environmental Development (CEED), the Rainforest Alliance, and the Wilderness Society, efforts are being made to both understand the causes of the problem and to develop practical solutions. Research conducted this summer shows considerable "leakage" throughout the certified supply chain as wood moves from the forest to sawmills and secondary processors.

"This new directory will provide critical information that will connect environmentally conscious buyers and sellers and reduce or eliminate one of the most significant hurdles: finding sources for certified wood products," says Associate Professor of Environmental Science Terrence Bensel, co-director of the Northwest Pennsylvania Sustainable Forestry Project.

During the remaining thirty months of the collaboration, the group will continue activities such as conducting market research, providing group certification training, and distributing fact sheets for sourcing FSC-certified wood.