This past March, the U.S. Dept. of Commerce announced new tariffs on imported steel and aluminum, increasing the cost of raw materials used to produce heavy construction equipment and parts. Despite these tariffs being applied to imported steel and aluminum all steel producers have raised prices in proportion to the implemented tariffs. Many businesses are feeling the financial squeeze, which, of course, gets passed down to consumers.

As quoted in an article in the Engineering News-Record, Kip Eideberg, vice president of the Association of Equipment Manufacturers, says that “Everyone loses in a global trade war. Tariffs are taxes on American consumers and businesses: They add costs to the manufacturer and affect U.S.-based manufacturing’s ability to compete globally.”

The news can seem pretty grim, and for many businesses, it is. PVE has been able to weather these changes, keeping our customers’ best interests at the center. Here’s how we’ve faced the changes in raw material pricing to keep the impact on our dealers as small as possible.

• As the trade war has impacted pricing on certain steel imports, we have seen costs in the US increase proportionally. However, PVE was able to purchase material in larger volume prior to our costs increasing, which has helped us control costs for a slightly longer period of time.
• We have been continuing to implement automation that has improved nesting and applied quality control improvements that have increased yields. This has helped us reduce waste, thus improving our efficiency.

Despite strong economic activity in the US, the trade war is impacting the construction equipment industry. Many manufacturers increased the prices of their products immediately to reflect higher upfront costs of steel. However, at PVE, our commitment to resourcefulness and innovation has allowed us to hold off on making pricing changes for as long as possible. The higher cost of working with steel as a raw material is going to continue to impact businesses large and small throughout the country in the coming months and potentially years. As a result of these realities, PVE will implement pricing changes starting on October 1st, 2018. This is not a decision we take lightly. We are continually striving to make improvements that will enable us to maintain our pricing structure, and better serve you.

At PVE, solving problems is serious business. When two suppliers for gears closed their doors, we decided to take matters into our own hands by producing our own.

PVE didn’t want to lose the ability to supply gears as part of our product line, so we soon began negotiations that resulted in the acquisition of a domestic gear manufacturer. This decision enabled us to not only continue to supply some final drive gears to our customers, but to expand the number of gears we offer. PVE is now strategically positioned to fill that void in the marketplace.

Bringing gear production in-house has not been without its challenges. At the outset, the biggest hurdle PVE faced was getting personnel trained to ensure the highest quality production. As part of the acquisition agreement with the former supplier, however, PVE received initial training that passed on over 40 years of invaluable gear production experience.

Another hurdle PVE has faced in starting gear production is acquiring the tooling to produce new gears. Some gears have very unique pitches and angles that require specialized tooling to reproduce. PVE has gradually been adding to our tooling to increase production versatility.

As far as quality control is concerned, PVE takes every step to get it right the first time. We start with the correct domestically sourced raw material. Quality control checks are done at the pre-machining point in production and a two other points during the manufacturing process. Any item not up to standard is removed from the batch. Once the heat treatment is completed, the gear is machined down to its final product specifications and receives the final inspection.  

PVE is currently providing final drive gears for John Deere Dozers (450, 550, and 650 series machines) and Case Dozers (310, 350, 450, 455, 550, 650, and 850 series machines). We are also working on producing all of the final drive gears for the John Deere 700H and J models, as well as the remaining gears for the John Deere 650s that are not currently covered. We will continue to aggressively look into other lines in the future.

For more information on PVE gears and other products, contact us at 330.674.0081. If you are interested in becoming a dealer of PVE parts, complete a dealer inquiry form to get started.