An anonymous letter to the editor appeared in the summer issue of the American Mold Builders Association's newsletter. The writer, a mold maker from the Detroit area, expressed concern because one plastics company owes five mold-making shops a total of $2.5 million. The writer complained that the plastics company already has received money for the molds from its customers and used the funds for something other than paying the mold shops. The writer's shop alone is owed $500,000 by four plastics companies that cannot pay their bills.
The point this writer makes is that mold makers need ``complete ownership of molds until paid in full,'' and wants Michigan's laws amended to provide means for shops to repossess molds in cases where the molder defaults.
This is not a new problem. Several years ago I wrote an article for Plastics News about mold lien laws and how mold makers can protect themselves.
The solutions to this problem begin with the mold maker. First, get a written contract with the molder outlining terms and conditions for the mold build, including a payment schedule. With a signed contract in hand, the mold maker can at least prove breach of contract in court. Many mold makers fail to do this bit of diligence, believing that a purchase order number is good enough.
Second, if the payment schedule begins to slip, all work on the mold should stop and the molder and the molder's customer notified that work will not resume until the payment is received.
Now before all you molder's send a lynch mob after me, let me say that this tactic might not be tactful, but it gets results. I know. I've done this in my past life as an injection mold saleswoman.
The molder was extremely upset that I dared to go around them to their customer, letting the customer know that this molder didn't pay its bills. But the customer told the molder to keep the payment schedule or find a new customer. No original equipment manufacturer wants its project deadlines jeopardized by a molder that will not pay.
Third, do not be afraid that getting tough with molders will make them mad, resulting in them going to your competition for the next job.
All you lose is a non-paying molder.
If after all that mold makers continue to work on a mold, investing hundreds of expensive man-hours in a project that isn't being paid for in a timely manner, then you get what you deserve. In fact, maybe you should think about a new profession.