Tool And Die Industry Faces Uncertain Future

June 17, 2002
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GRAND RAPIDS — Local people in the tool and die industry and allied businesses report two distinct problems with respect to making the American auto industry hum again.

Their comments came last week in the wake of GM’s announcement that it is offering zero percent 60-month financing for 2001 and 2002 cars and zero percent 36-month financing for some trucks.

Several local automotive firms in the area have had to sharply curtail automotive-related production because tight security is preventing their parts from crossing the borders of Mexico and Canada.

Meanwhile, auto suppliers in both countries are finding their sub-assemblies piling up on their sides of the borders for the same reason.

The president of Grand Rapids Spring and Stamping, Jim Zawacki, told the Business Journal that the border bottlenecks probably will be resolved fairly quickly.

“What really worries me is consumer confidence,” he said.

As of Thursday afternoon, he hadn’t heard of the Big Three and the UAW agreeing to pull together — or of GM’s financing.

“If people have lost their confidence,” he added, “I don’t think it will matter what the UAW and the automakers do. It won’t make people buy cars.

“The manufacturing segment of the economy already was in a recession,” Zawacki said, “but the service industries were keeping us above water.

“But with this (the terrorists’ attacks in New York and at the Pentagon), I’m afraid we’re going to be hit by a double whammy.”

Neither he nor Joe Gill, president of Gill Tool and Die, believe the Detroit initiative will help area tool and die makers.

Gill, the incoming president of the West Michigan Chapter of the National Tooling and Machining Association, said border bottlenecks certainly are having a short-term impact upon automotive suppliers.

But he believes those problems are transitory, though they certainly are causing sporadic shutdowns and production slowdowns among automotive suppliers. His family owns a manufacturer.

“But I don’t think buyer incentives are going to make a difference to the tool and die business: not in the short term and probably not in the long term.”

He reiterated that opinion when the Business Journal asked whether current excess tool and die capacity might be used to make up for parts tie-ups elsewhere.

He said he, too, is concerned about the terrorist impact on the economy.

“About all you can do right now,” Gill added, “is just go on doing what you do best.”

Another Grand Rapids man affiliated with the tool and die industry said area shops can’t possibly fill in parts that aren’t making it into the country.

The man, who asked not to be identified, has worked in and around the industry for decades.

“First of all, the local tool and die shops don’t have contracts to do such jobs. Second, they aren’t in the same business.”

In many cases, he said, those so-called parts waiting to cross the border actually are sub-assemblies of several parts created either inside or outside the United States and then assembled, say, in Mexico.

The problem, he said, is the intricacy of the U.S. industrial system. He likened it to a vast spider web of highly specialized threads.

“It’s our weakness,” he said.

“But it’s our strength, too.”

Break a few strands, he said, and there’s momentary confusion with everyone looking around wondering, “Okay, now what?”

The bigger difficulty he and others seemed to agree is what consumers will do.

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