OVERSEAS BUSINESS JUST WAITING— AND WAITING—FOR U.S. TOOLMAKERS

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LA QUINTA, CALIF. — The world market is wide open to American mold builders and designers, but most have yet to take advantage of the potential.

According to a study published by the Society of the Plastics Industry Inc., in 1994 the United States recorded a negative trade balance of $839 million in the number of molds imported to this country compared to the number exported overseas. That figure was more than three times the $258 million deficit recorded in 1989.

Although more current numbers were not available, the situation probably is not much better today, said Lori Anderson, director of government affairs for SPI, based in Washington. Few mold makers have attended SPI's five trade missions overseas or logged into the association's Knowledge Network Internet site sponsored by its International Trade Advisory Committee, Anderson said.

``There's a huge fear factor [in working overseas] among small mold-making shops,'' said Anderson, who spoke about trade opportunities at the SPI Molders & Moldmakers Conference on March 15 in La Quinta. ``It's intimidating when mold makers don't know whom to contact or even how they're going to get paid for a job done in a Third World country.''

However, avenues for help are navigated easily, she added. Besides SPI, information is available from such sources as the Department of Commerce, the U.S. Small Business Administration, the Export-Import Bank of the United States and the U.S. Agency for International Development.

Some mold builders say that, like it or not, the world will continue to be brought closer to home.

``If you're not thinking globally, you're not on the same page as the rest of the planet,'' said Gerald Hobson, president of Hobson Mold Works Inc., a maker of blow molds based in Shell Rock, Iowa. ``There's a huge market overseas that wants our mold quality and service. It's a good opportunity to move into a market growing much faster than ours.''

As much as 15 percent of Hobson's business is contracted overseas. Hobson, whose company records about $8 million in annual sales, flies to the Pacific Rim three or four times a year to meet with customers and distributors. Blow molded automotive bumper beams and other tools are made in Hobson's Iowa plant and shipped to such locations as China, South Korea and Malaysia.

``It's strange to me, but in the 10 years I've been doing this, I haven't seen many other American mold makers there,'' Hobson said. ``Instead of complaining about the work that's shipped out to Asia from the states, we should be doing business in those regions.''

Some companies don't have a choice but to do that.

About half the business at Colonial Machine Co., a custom injection and compression mold maker in Kent, Ohio, comes from the pipe fitting industry. When its customers make parts from PVC in South America, Trinidad and Mexico, the company must follow, said Vice President Mike Rankin.

The firm has representatives in those countries to work with local plants and stir up new business, he said. Colonial's small precision parts normally arrive at a customer location within a week after leaving the Ohio shop.

``When you only have to ship a tool once, time is not as big an issue,'' Rankin said. ``It doesn't really matter where you ship from, as long as you have a local presence in those countries.''

Shipping overseas can make good business sense. A study by the National Manufacturers Association in Washington reported that manufacturing companies that have continued to export since the late 1980s have experienced 20 percent faster employment growth than other companies that do not export or have stopped the practice.

The tooling industry is becoming more of a global village, said Larry Navarre, business development manager of D-M-E Co., a mold equipment supplier in Madison Heights, Mich. Tools made in one part of the world frequently are used to mold parts in another, he said.

``One reason is to support multinational companies,'' he said. ``Mold makers are increasingly making their presence known as specialists internationally.''

The process also is occurring in reverse. One of Japan's largest mold makers, Gifu Seiki Inc. of Gifu, Japan, recently opened a 45,000-square-foot plant in Sterling Heights, Mich., to provide injection and prototype molds to Japanese automakers in the United States. The company had been doing business with those companies for many years.

The new location, at the heart of the American auto industry, will help Gifu Seiki U.S.A. Inc. expand to do work for domestic carmakers, said Gifu Seiki President Atsuhiko Fujii.

``We have 40 years of mold-making experience in Japan,'' said Fujii, whose company employs 50 people. ``We made the move to globalize as a leading manufacturer because we can't afford not to do that. It gives us an edge in the market.''

The Michigan-based division, which expects to record $8 million to $10 million in sales during 1997, has installed two injection presses with clamping forces of 150-1,500 tons to verify molds. Gifu Seiki also has a separate delivery department responsible for ensuring on-time completion of the company's grille and interior molds, he said.

Other overseas companies work through agents. For instance, On-Time Mold Lda. of Marinha Grande, Portugal, has a U.S. representative to drum up business for the company, a consortium of 45 small and medium-sized Portuguese mold shops.

Due to labor costs and favorable exchange rates, the Portuguese shops can build a mold for at least 15 percent less than in the states, said Herbert Samuel of Industrial and Technological Corp. of Silver Spring, Md., the company's U.S. representative.

``People buy from us because of the bottom line, not because it's exotic to do business in Portugal,'' he said.

Bottom-line profit also sends some U.S. companies overseas. Snider Mold Co. Inc., a Mequon, Wis., maker of injection molds for the automotive and recreational markets, does as much as 30 percent of its business overseas, said James Meinert, international marketing director. Not only are terms sometimes better than in the United States, but a large down payment sometimes is made upfront, he said.

``The first mistake a tool shop can make is to try to do business in those countries while sitting at a desk,'' Meinert said. ``You've got to think and act locally by traveling to the region. You'd be surprised how different the culture can be in various parts of the same country until you're actually there.''

Meinert said he spends as much as one-third of his time jetting to places such as Mexico, China and Brazil and working with distributors in those countries. He does it to follow the lead of his customers, which include Detroit's Big Three automakers, and to gain a competitive advantage.

Meinert also has gone on trade missions sponsored by SPI and the Commerce Department to China and South America. While on the missions, plastics industry members have met with embassy and Chamber of Commerce officials and had one-on-one meetings with potential customers.

``Some people got the wrong idea that trade missions are boondoggles or glorified vacations,'' Meinert said. ``The other side of it is that you have the opportunity to get new business and learn firsthand about a country's culture.''

One of the most difficult aspects of working overseas can be the flight, Hobson said. A one-way trip to China can chew two days from a busy schedule.

``I gauge my time by whether it's a one-book or a two-book trip,'' Hobson said. ``My last China visit would have been longer than that, except one of my books was the New Testament.''