The Bottom Line

An Iraqi boy looks at wreckage at the site of a car bomb in the town of al-Khurna, near the southern Iraqi city of Basra, June 8, 2007. ESSAM AL-SUDANI/AFP/Getty Images

The Bic pen — it's a simple piece of molded plastic. That makes the famous pen an oil-based product.

At Bic's Milford, Conn. plant they make "3 million writing instruments, 2-and-a-half million shavers and 1 million lighters everyday," according to Ken Brannin, Bic's vice president of U.S. production.

It's Brannin's job to keep a rein on energy costs. "It's a battle that we fight daily," he said.

A battle that's become a war. Worldwide, the cost of Bic's raw materials soared 35 percent last year. The firm is not alone.

The power surge in energy prices has attacked the bottom line of American industry. One reason the manufacturing sector is in recession — heavy industry uses about 40 percent of the nation's natural gas.

The chemical industry is the biggest user of electricity. The cost is killing companies like Dow Chemical. The oil based materials it uses jumped $600 million in the first quarter. Dupont's raw material costs shot up $1.3 billion last year. The chemical giant has laid off 5,300 workers in what its chairman calls "the worst conditions in our industry in a decade."

American companies have been caught off guard.

"They take about as much care using energy as most businesses do about using photo copier paper," said energy consultant Oliver Dawson. He has found many companies don't even monitor their lighting or air conditioning usage.

"And if just those two things alone were managed by U.S. business, almost everyone one of them could save 10 percent without spending any money," he said.

At Bic, they attack energy costs by firing up the factory during off peak hours.

"We fire up Sunday nights just before midnight. We use much cheaper electricity. We pay much cheaper prices," explained Brannin.

Employee suggestions have also contributed thousands of efficiency ideas — like wrapping insulating blankets around heaters.

"So now we have a double energy savings. More heat goes into the plastic to melt it. Less heat goes into the air," said Brannin.

Which cuts down on air conditioning costs. For American companies the challenge may only intensify.

"If the price of energy goes up and they don't do anything to control it, then that cost has to be passed on to their customers. Or they have to reduce the amount of other things that they buy," said Dawson.

Either way, it slows down the American economy. So businesses are monitoring the power meters like never before — trying to turn down energy costs and erase the red ink.



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  • CBSNews.com staff CBSNews.com staff

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