To: Our Valued Customers

From: Hayes Manufacturing Management

RE: RAW MATERIAL SURCHARGE

As some of you may already know, the manufacturing sector is experiencing crippling price increases from the steel and aluminum industry due to the following factors:

Click here to review contributing factors

Click here to view an interesting article on scrap prices

Click here to view another interesting article regarding steel pricing

Our raw material suppliers are working closely with us to do what they can to give us the best possible pricing. They are working in a volatile market right now and, in some cases, can only quote firm prices for an hour at a time. Steel mills are canceling contracts without any notice and are refusing to honor contracted pricing. Prices are expected to climb in May and June and are projected to peak in the next quarter.

Because we are facing 50% price increases for our raw materials, we will be forced to implement a raw material surcharge for certain products. The surcharge will be added to future quotes, as well as purchase orders (you will receive a faxed confirmation that will include the surcharge).

Please understand that this has not been an easy decision. We regret any inconvenience to you or your customers, and hope that we can go back to business as usual in the very near future. In the meantime, we appreciate your support and, as always, if you have any questions or comments, feel free to give us a call (231) 879-3372.

Coupling Misalignment: Don’t Let This Happen to You!

Flexible couplings are a great invention and perform well under a variety of conditions. The design of a flexible coupling allows them to perform under circumstances that are less than ideal, but even the best flexible coupling is destined to fail in a hostile environment where two connected shafts are misaligned.

Yes, we can hear what you’re thinking, “I never worry about aligning shafts with a flexible coupling and I’ve never had a problem.” You, then, are either very lucky indeed or replacing couplings sooner than your competitors.

Quite often, customers come to the Hayes coupling experts when they’re dealing with repeated coupling, bearing, gear, seal and motor problems. They’re looking for answers and, quite often, one of the reasons could be misalignment.

Misaligned shafts put excessive stress on the coupling and all the attached components. It may happen immediately or it may take months, but misaligned shafts are a well-known source of failures.

So, check for good shaft alignment when you install a flexible coupling. It could save you a lot of time, money and aggravation in the future.

Click on the PDF link above, for easy step-by-step instructions for proper coupling alignment!

A Women-Owned Small Business

Dear Customers:

Many of you, in order to comply with Federal Government Contracting regulations, need to identify which of your supplier have special certifications/classifications. On the attached Supplier Identification Form, you will find the areas in which we have designated as applicable to Hayes Manufacturing, Inc.

There are separate pages following the Supplier Identification Form that contain related definitions. A website also is listed below each question to further describe the related concept.

In addition to circled designations, which apply to our company, we would also like to designate our company’s North American Industry Classification Code (NAIC). Hayes NAIC = 333613. This is a classification code that represents the primary product or service of our company.

Hayes Manufacturing, Inc. - SUPPLIER IDENTIFCATION FORM

1) A small business concern as defined by SBA? Yes

2) A Woman-Owned, Small Business? Yes

3) A certified HUBZone, Small Business?No

4) A certified small disadvantaged business? No

5) An 8(a), Small Business? No

6) An American-Indian Owned Business? No

7) A Veteran Owned Small Business? No

8) Service Disabled Veteran Owned Small Business? No

* A yes answer to HUBZone, small disadvantage business and 8(a) requires that a copy of your certification be attached and returned with this form.

Federal Contracting Designation Definitions

1. NAIC- North American Industry Classification Code – A classification code that represents the primary product or service of company. Determine by reviewing following web site

2. Small Business Concern — A business concern eligible for assistance from SBA as a small business is one that is organized for profit, with a place of business located in the United States. It must operate primarily within the United States or make a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor. Together with its affiliates, it must meet the numerical size standards as defined in the Small Business Size Regulations, 13 CFR 121 and can be found at the following website http://www.sba.gov/size/indexguide.html. Self-Certification

3. Woman-Owned Small Business — A business that meets the following criteria: (a) Is at least 51 percent owned by one or more women; or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more women; and (b) Whose management and daily business operations are controlled by one or more women. Self-Certification

4. HUBZone—Historically Underutilized Business Zone. To qualify as a HUBZone small business concern the firm must be: (a) Small; (b) Located in a "historically underutilized business zone" (HUBZone); (c) Owned and controlled by one or more U.S. Citizens; and, (d) One that at least 35% of its employees reside in a HUBZone. SBA Certification Required

5. Small Disadvantaged Business - A small business must be at least 51% owned and controlled by a socially and economically disadvantaged individual or individuals. African Americans, Hispanic Americans, Asian Pacific Americans, Subcontinent Asian Americans, and Native Americans are presumed to quality. Other individuals can qualify if they show by a preponderance of evidence that they are disadvantaged. All individuals must have a net worth of less than $750,000, excluding the equity of the business and primary residence. Successful applicants must also meet applicable size standards for small businesses in their industry. SBA Certification Required

6. 8 (a) Business—To qualify for the 8(a) Program a firm must: (a) Be a small business, (b) Be unconditionally owned and controlled by one or more socially and economically disadvantaged individuals who are of good character and citizens of the United States; (c) Demonstrate potential for success. Also, the individual's net worth, after excluding the individual's equity in the firm and the equity in the primary residence, may not exceed $250,000. SBA Certification Required

7. American-Indian Owned Business — Refers to any business owner who is a member of any Indian tribe, band, group, pueblo, or community which is recognized by the Federal Government as eligible for services from the Bureau of Indian Affairs (BIA) in accordance with 25 U.S.C. 1452(c) and any "Native" as defined in the Alaska Native Claims Settlement Act (43 U.S.C. 1601). That same person must have 51% or more ownership in the firm, as well as daily control of the firm’s management decisions. Self-Certification

8. Veteran Owned Small Business — A small business concern where: (A) Not less than 51 percent of which is owned by one or more veterans (as defined at 38 U.S.C. 101(2)) or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more veterans; and (B) The management and daily business operations of which are controlled by one or more veterans. According to 38 U.S.C. 101 (2), “veteran” is defined as “a person who served in the active military, naval, or air service, and who was discharged or released therefrom under conditions other than dishonorable.” Self-Certification

9. Service Disabled Veteran Owned Small Business — A small business concern where: (A) Not less than 51 percent of which is owned by one or more service-disabled veterans or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more service-disabled veterans; and (B) The management and daily business operations of which are controlled by one or more service-disabled veterans or, in the case of a veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran. A service-disable veteran means a veteran, as defined in 38 U.S.C. 101(2), with a disability that is service-connected, as defined in 38 U.S.C. 101(16). From U.S.C. 101 (16), the phrase service connected (in terms of service disabled) means: “with respect to disability or death, that such disability was incurred or aggravated, or that the death resulted from a disability incurred or aggravated, in line of duty in the active military, naval, or air service.” Self-Certification

Hayes Manufacturing helps community get ready for a busy summer season, by assisting in the towns new Historical Walk.

Article Attached

This patent is approved for use by Hayes Manufacturing and all of its customers.

If you have any questions regarding this Patent, or the use of Hayes Products in your application, please call us at (231)879-3372

Hayes works with Black Sea Research & Development, LLC to design a solution for the existing Porsche 928 spline drive situation . Check out the details attached.

Hayes Manufacturing Inc. has been granted a Federal Trademark for The Original Hayes Flywheel Coupling.

We filed for this Trademark due to the increased amount of Hayes Flywheel Coupling look-alikes in the industry. We’ve worked hard to develop our couplings; while others have just reverse engineered and accepted the credit.

Hayes will continue to work hard to design and develop products that answer the call of our trusted customer base. Thank you for all your support in 2006 and we can't wait to exceed your expectations in 2007.