TD Industry Struggle Continues
The struggle has been sufficiently difficult to spark some unusual special legislation in
Anecdotes abound concerning the alarming numbers of established shops in the Grand Rapids SMSA that have gone out of business thanks to the cumulative impact of at least five factors:
- The fall-off of orders during the protracted recession.
- The fall-off of orders due to overseas outsourcing.
- Unprecedented automotive OEM price-reduction pressure on all suppliers.
- Consolidation of several major banks that has dried up accustomed sources of small business credit.
- Sharply increased credit requirements stemming from OEMs' new practice of delaying payment until new models are in the showrooms.
As the Business Journal has described in the past, those same factors caused clusters of competitors in the industry to begin working tightly together two years ago in high-productivity strategic networks.
Fortunately or unfortunately, nobody locally knows precisely how many tool and die shops in the region have had to close.
State and federal departments of labor don't maintain current databases on such a relatively small component of the manufacturing sector.
Accordingly, The Right Place Inc. doesn't have an exact picture of what has happened in the tool and die industry here, either.
And George Erickcek, the Upjohn Institute economist to whom The Right Place referred the Business Journal, agreed that regional data are not available for the tooling component of manufacturing.
"There's just no way to tell how hard the
And though industrial production nationwide is starting to post major increases month by month — reflected locally in sharply rising purchasing indexes — it's not clear whether that process reaches into tool and die shops at this point.
What is clear from Michigan Department of Labor and Economic Growth data is that employment in both the automotive parts and office furniture sectors — and thus, presumably, among their tooling and molding suppliers — has done anything but grow.
In 2000, for example, about 30,700 people were employed in automotive parts in
That number dropped precipitously in 2001 to about 23,000 and since then has sagged even further — to about 21,300 workers as of June.
Presumably, that number will rise later in the year as two major office furniture manufacturers retrench by bringing jobs back here from other states. But whether that change in strategy will boost
Of course, trying to look at the tool and die industry by statistical inference is a chancy thing.
Productivity in manufacturing, for instance, reportedly has risen sharply, militating against more hiring, possibly a phenomenon occurring within the tooling sector, too.
The Business Journal learned that while many tooling and molding shops are very busy, they are demanding substantial amounts of overtime work from their existing staff rather than accepting the tax and benefit penalties of hiring more workers.
"You also hear a lot of companies are very busy and doing a lot of overtime work," one mold maker supervisor said. "But what you also hear is that they're finding it pretty hard to make any money."