Tooling sector under pressure to meet automakers' growing demand

By Rhoda Miel
News Editor

Published: October 31, 2013 5:49 pm ET
Updated: November 11, 2013 4:00 pm ET

Image By: Plastics News file photo Laurie Harbour

Related to this story

Topics Automotive, Molds/Tooling

NOVI, MICH. — The North American tool and die industry supporting the auto industry is made up of about 750 individual shops, mostly in the U.S. and Canada, which produced a combined $9.25 billion worth of tooling in 2012.

But with the North American auto industry ramping up for new products and more vehicles, those shops will soon have to support an estimated $15.2 billion worth of tooling demands, a new survey notes.

That means increased pressure on tooling firms, suppliers and automakers alike.

"That's a huge gap," said Laurie Harbour during an Oct. 31 press briefing in Novi on the result of a 10-month study conducted by Harbour Results Inc. "You're looking at a $6 billion capacity gap, and that's serious for everyone."

Concerns about tooling capacity have prompted automakers and suppliers to take a closer look at the industry, said Harbour, who also called the $15.2 billion estimate "conservative."

The Original Equipment Suppliers Association, based in Troy, Mich., launched a tooling group last year, and the group conducted the study with Harbour Results, auto industry forecasters LMC Automotive of Troy and Clinton Aluminum & Stainless Steel of Clinton, Ohio, to try and get a stronger view of the region's vendor tooling business.

The study focused on molds and dies made for both plastic and metal production by suppliers. It excluded tooling used by carmakers' in-house die stamping and molding.

Seven automakers participated fully in the study and another three provided partial data. The study also surveyed major Tier 1 suppliers and 50 tooling suppliers.

The typical car uses up to 3,000 tools for production and those tools may range from small components which require a $5,000 tool to more than $1 million for a complex mold for a part such as a front fascia. A complete fascia itself may consist not only of the main plastic part but also 35 additional tools for fog lamps, grilles and other components, noted Harbour, CEO of Harbour Results.

The survey focused on toolmakers supplying directly into the auto industry, excluding support businesses such as texture or heat-treating specialists. It identified about 125 shops in Canada – primarily near Windsor with a few near Toronto – and 625 in the U.S. Mexico has about 100 toolmakers, but almost none dedicated to the auto industry, and the bulk of those that are working in automotive are primarily focused on tool maintenance rather than new mold production, she said.

The average automotive tool shop has annual revenue of $15 million and has about 100 employees. Only 15 percent to 20 percent have more than $50 million in revenue annually.

"So you have these large, publicly-owned automakers worth billions of dollars, and their Tier 1 suppliers – many of them publicly owned and worth billions of dollars – and at the bottom, you have 750 shops worth an average of $15 million," Harbour said. "That's the food chain. [Toolmakers] are at the bottom of it, but you can't make a car without them."

If all of the existing toolmakers were operating at 100 percent of capacity, they could produce $11.2 billion worth of molds and dies, but because of the nature of the industry, with production peaking when new models are prepared for launch, then dropping off during other parts of the year, Harbour said it is more likely to expect a healthy industry to run at closer to 80 percent of full capacity.

And it is capacity that has companies concerned.

The auto industry as a whole in North America is on a rapid growth curve coming out of the recession. Production that dipped below 9 million vehicles during the slowdown is now expected to pass 15 million vehicles this year on its way to a forecast of 18 million vehicles annually, said Jeff Schuster, senior vice president of forecasting for LMC.

Watch PlasticsNews.com for more coverage from the 2013 Vendor Tooling Study.


Comments

Tooling sector under pressure to meet automakers' growing demand

By Rhoda Miel
News Editor

Published: October 31, 2013 5:49 pm ET
Updated: November 11, 2013 4:00 pm ET

Post Your Comments


Back to story


More stories

Image

Visteon in talks to sell its stake in Halla Visteon Climate Control JV

November 26, 2014 9:07 am ET

Visteon Corp. confirmed this morning that it is in discussions with a private equity firm to sell its stake in South Korean joint venture Halla...    More

Image

Canada's Papp Plastics is eyeing big opportunities with JV in Mexico

November 24, 2014 4:11 pm ET

Canadian injection molder and turnkey solution provider Papp Plastics & Distributing Ltd. will open an $11 million to $12 million joint venture...    More

Image

Indiana injection molder PRD expands

November 24, 2014 1:56 pm ET

Automotive supplier PRD Inc. is expanding its manufacturing facility in Springville, Ind.    More

Image

Can plastics return to the driver's seat?

November 24, 2014 6:00 am ET

When the June 1989 issue of Popular Science introduced three cutting-edge automotive technologies, including the latest Corvette and a powerful...    More

Image

New GM purchasing chief faces big hurdles to improve supplier relations

November 24, 2014 11:11 am ET

Steve Kiefer is moving into the eternal hot seat that is head of GM global purchasing and supply chain.    More

Market Reports

Plastics in Brazil - State of the Industry Report

This in-depth report examines the Brazilian plastics industry from a historical and geographical context. Our analysts provide insight on economic trends and forecasts, growing manufacturing sectors that utilize plastics, private investment opportunities, market environment challenges, and innovations in R&D.

Data tables and charts on producer prices, trade, plastics production and end market indicators is also included.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Injection Molders Market Report & Ranking 2014

This special package contains our 132-page 2014 Market Report on the Injection Molding segment and our exclusive 2014 RANKINGS database of 500+ Injection Molders for a discounted package price.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

October 27, 2015 - October 29, 2015Plastics Financial Summit - New York - 2015

More Events