- people on the move
TD Still Strong
The truth, however, is nothing of the sort.
“You don’t hear about the companies that are either steady or not moving backwards,” said Jim Zawacki, president of GR Spring & Stamping. “All you hear is the negatives.”
Capitalizing on opportunities with “new domestic” automakers like Nissan, Honda and
While there are notable exceptions, the Business Journal had little trouble finding machining firms with growing revenue and employment.
Nationally, forecasts from the American Mold Builders Association (AMBA) and National Tooling and Machining Association show the industry’s best conditions since 1998.
In fact, the industry turned the corner months before the well-publicized rebound of the office furniture industry. Since its low point in early 2003, total
“The tooling industry is in a much more stable position than it has been in a long time,” said Michelle Cleveland, vice president of The Right Place Inc. “In the past year, these shops have been getting busier and busier. Many will speak about their backlog of work.”
While that’s still true, the advent of broadband Internet opened up the
Combined with an overall economic downturn and a shortage of new vehicle launches, the emerging markets created an estimated 25 percent to 40 percent global overcapacity, according to The Right Place.
From 2000-2002, West Michigan firms reported sales reductions of between 20 percent to 40 percent, coupled with radically reduced lead times, price reductions of up to 20 percent and customer demands for upgraded technology and more involvement in the design process.
The NTMA estimates that 30 percent of the country’s toolmakers have shut their doors since 2000, eliminating more than 100,000 jobs. Five years ago, there were 57,000 highly paid tool-and-die workers in
Regionalized tool-and-die statistics are not tracked.
In that time,
“The mold builders and die makers thought hard to find ways to stay alive,”
That included short-term production and specialized machining, finding ways to keep highly skilled labor and new technology in use. Technology upgrades and lean initiatives were aggressively pursued.
Those firms that were able to stabilize cash flow capitalized on the recent surge in demand created by the upcoming launch of 47 new vehicle platforms — compared to 15 in 2000 — according to automotive analyst IRN Inc.
“When you release new models, you have to have new tools,”
“They have been very busy adding value to be the best solution for their customers and have figured out how to take cost out with multiple firms working together.”
In partnership with The Center of Automotive Research (CAR) in
One of three groups formed in CAR’s collaborative experiment, UTC is a 17-firm effort to teach the fiercely competitive and individualized industry to leverage collaborative efforts of workload balancing, lean methods, functional build, product design, improved tool standards and purchasing power.
“Our business has grown substantially,” said Pat Quinlan, president of Precise Engineering, a UTC member. “The tooling sector is more robust than it was a year ago, but I think that because of the efforts that we have put forth with the UTC, we’ve done some additional growing beyond what other people are doing.”
Quinlan said that the downturn “woke a lot of people up.”
“We need to be prepared for the next downturn when we need to be 15 percent cheaper,” he said.
This summer, UTC has facilitated intense process improvement programs and other innovations.
Precise has had success selling the UTC’s workload balancing as a package, attracting a larger and more diverse clientele. It has branched from the domestic automotive market into office furniture and the new domestics.
Earlier this month, representatives from the largest new domestic, Toyota Motor Corp., visited Precise’s
Martin hasn’t given up on the domestic OEMs. He has taken a promise from General Motors that a 20-percent price cut would be enough to keep its business, and has set that as a goal.
Most of Accu-Mold’s strategies revolve around differentiating itself from the offshore competition, such as building specialty molds that the foreign competition has difficulty with.
In partnership with the Kalamazoo Valley Community College M-TEC, Accu-Mold is developing a mold design center of excellence at
“It’s all the things involved with the total cost of tooling that you are not going to get from Chinese companies,” said Dave Muir, process and IT manager for Paragon Die & Engineering. “They are not going to be innovative in tooling; they are going to copy other tooling that they’ve seen.”
The UTC has embraced this philosophy in a surprising way.
Precise Engineering recently hired a sales manager in
Another tooling surprise is the eight
West Michigan Precision Machining has doubled its headcount in the last eight months. President Phil Allen, a 25-year industry veteran, launched the now 15-man job shop at the trough of the downturn in 2003, and has guided it to nearly triple-digit growth in each of the past two years.
“I opened when we started to see the light at the end of the tunnel,” he said. “It’s been pretty busy and I don’t see a drop. My customers have huge backlogs like I haven’t seen in years.”
His biggest challenge is finding employees. During the downturn, the apprentice programs all but stopped, and weary students looked to other fields.
Allen credited much of his firm’s success to workload sharing with other firms. While he has practiced this for years, he recently joined a formal coalition to qualify for the state’s Recovery Zone package.
HS Die & Engineering also practices the collaborative model, but has not joined any coalition. Kent Hanson, HS director of engineering, said that business is steady, but there is no backlog. He has noticed a great deal of business coming back from overseas because of delivery and quality issues.
“Many of us were thinking that tool and die was being hit with a structural downsizing that it may not be able to recover from,” said George Erickcek, senior regional analyst for the W.E. Upjohn Institute for Employment Research. “That may have been the wrong analysis. It’s looking more and more like a cyclical shift.”