All Aboard The Orient Express
“Some of our competitors are thinking that lying down in front of the train is going to stop it, but it’s not,” said Jay Groendyke, president and CEO of Synergis Technologies Group. “We don’t see
The Grand Rapids-based parent company of Capitol Concept & Engineering, Dieline, Dievelopment, Diecraft and Dielink, Synergis has formed a strategic alliance with three of
The four companies each own 25 percent of Synergis China Automotive Die Group Ltd., a company launched to manage the consortium. Through this, Synergis will be able to place a large portion of its work in
The consortium is the latest and highest profile example of a new business model rapidly gaining acceptance in the tooling industry.
“It’s a need; you can’t sell somebody a black car if they want white,” said Pat Quinlan, president of Precise Engineering in
Precise has been in
Although only engineering, assembly and tryout are done in
“We’ve been on a dead run for a year and a half,” Quinlan said.
Quinlan introduced the concept to the 17-member United Tooling Coalition, of which Precise is a founding member. Several UTC companies have been investigating the program, with one placing its first order this month. Other members have parallel efforts: Portage-based Accu-Mold launched a joint venture in
At the 250-employee Synergis, Groendyke expects similar results. The company hopes to see cost savings of 10 percent to 30 percent. In turn, cheaper pricing and a 2,500-worker labor capacity should generate disproportionate sales growth.
“We are moving work to
Early results support his optimism. The company outsourced a major set of tooling to
Jay Baron, president and CEO of the Center for Automotive Research in
Between 1997 and 2001, the import of tool and die from
From 2000-2002, West Michigan firms reported sales reductions of 20 percent to 40 percent, coupled with radically reduced lead times and price reductions of up to 20 percent. Baron estimates that
“Why are we going to
According to Baron, the market reality is not that Asian tool prices are cheap, but that
“When we started this three years ago, it was evident that our tool costs were not competitive with the rest of the world,” he said. “Our customers had figured this out. They were saying, ‘We want that cost. If you don’t go to
The first to respond to that message was Japanese tool maker Fuji Die Co. When its customers began asking for “the
“It was, ‘We want Chinese prices, but we want your name on them,’” Baron said. “That seemed unreasonable at the time, but now that it’s clear OEMs can go directly there, our companies have to work with them.”
Baron proposes that all
“Our customers are telling us they want
In this model, OEMs can achieve the prices they desire, but maintain the certainty of communication and quality a local source provides.
“They want the price, but the communication and culture there is so different, you really need someone on the ground,” said Scott Hogle, engineering manager for Ampro Tool in
An upstart division of Ampro Tech, Ampro Tool was launched to take advantage of the company’s decade of experience with
“Eventually, it’s good for
According to Baron, the tooling industry is merely following the same progression of most sectors in today’s economy. There is a redistribution of work and employment, with less work occurring in the shop and more in design and management.
“The tool and die maker is slowly becoming obsolete,” he said. “The new tooling model is much more technical, more analytical. They’re becoming knowledge workers.”