Consolidations, mergers, buyouts and takeovers continue to change the face of corporate America, and along with it the relationship between original equipment manufacturers and their suppliers. Processors can spend much time building relationships with specific customers only to find they must start over when that customer suddenly becomes part of another, sometimes much larger, company.
Linda Stier, vice president of Geneva Precision Plastics, a 12-press custom injection molder with annual sales of about $4 million in Lake Geneva, Wis., said one-on-one, personal relationships usually disappear when a customer is taken over by another company.
``We take pride in really getting to know our customers personally,'' she said. ``We're on a first name basis with them. We know their wife's name and about their family.''
Management is the first change a firm makes when it buys another, said Duane Saville, general manager for Quashnick Tool Corp., a mold maker and molder in Lodi, Calif. ``And the purchasing agent is usually the first to go,'' he added.
``[The new company] says they won't make changes but usually within a year, they change,'' Saville said. ``So now you're dealing with a different set of people.''
Saville described a nine-year roller coaster ride Quashnick took with long-time customer Nuclepore Inc. of Pleasanton, Calif.
In 1989, Costar Corp. in Kennebunk, Maine, purchased Nuclepore.
Costar pulled many of the molds Quashnick was running back to Costar's own molding facility. Saville said the products that remained at Quashnick were not a priority with Costar, so quantities began dropping off.
Then Corning Inc. of Corning, N.Y., purchased Costar. The new company, Corning Costar Corp., looked at the products Quashnick molded and began a new marketing push.
Sales went up and so did Quashnick's production, Saville said. Quashnick ran the molds for a year, then Corning Costar pulled the molds back to its plant in Maine.
Peter Sutcliffe, vice president of manufacturing for Corning Costar's Separations Division blamed logistics problems - namely the 3,000 miles between California and Maine - that forced the company to move most of the molds from Quashnick.
Sutcliffe said that in 1994, after the company moved the assembly operations from the former Nuclepore facility in California to Maine, it made more sense to put all the molds in-house in Kennebunk.
As Nuclepore became Costar which became Corning Costar, Saville said quality standards changed.
``What used to be a problem was no longer a problem,'' he said. ``Different quality people came in who weren't aware of the history of the molds and found new problems with parts had been acceptable for the last eight years.''
Quality often becomes a big issue when OEMs change ownership.
Geneva Plastics' Stier said a change often means that new quality procedures must be implemented and standards rewritten to meet different standards the new parent might have.
Almost all the molders interviewed said they have had customers bought out, and found themselves dealing with a new company overnight. While for some of them the change might mean more work from the new parent, many of them lost work to larger molders already supplying the parent.
Trend Plastics Inc., a 58-press custom molder in San Jose, Calif., has recently been on the receiving end of the line. Many of its Fortune 500 OEMs have bought smaller companies, bringing Trend the molds from smaller shops.
``It's absolutely affecting the smaller molders,'' said Joseph A. Parlett, sales and marketing manager for Trend. ``Larger companies have established themselves with a molder where they have a lot of work going on, so when they purchase a smaller company, they bring the jobs from the smaller molder to us, their primary molder.''
Between molder consolidations and OEM consolidations, ``the bigger just get stronger,'' Parlett added.
``There's a place for the smaller molder but they're rapidly losing that place,'' he said.