Every once in a while, an event takes place that causes a shift in the plastics industry landscape.
We're not talking about a trend, but an honest-to-goodness event — something that you can point to and say, ``That was a turning point for this industry.'' The recent General Motors Corp. strike has the potential to be such an event.
This wasn't clear at the time. The strike, which started in Flint, Mich., shut down most of GM for about eight weeks this summer. It was newsworthy, certainly, but neither side looked like a big winner. And the strike didn't appear to do much to change the fundamental battle between GM and the United Auto Workers, or their basic differences over outsourcing.
But in the wake of the news comes word that GM is making a quick switch to plastic fuel tanks, away from steel tanks made by GM's Delphi Energy and Management Systems unit. As Plastics News reported Aug. 17, during the strike GM had asked outside suppliers for bids on plastic fuel tanks for several passenger-car models.
Industry insiders figured the request for bids was just a strike ploy designed to rattle the union. Some of the suppliers didn't even submit serious bids, according to sources. But GM was serious. Although few suppliers are talking on the record, it's apparent that three blow molders are picking up some very significant business: ABC Group Inc. of Rexdale, Ontario; Visteon Automotive Systems of Dearborn, Mich.; and Cie. Plastic Omnium SA of Paris.
If GM sticks with this decision, it could signal a big shift in the battle between steel and plastic fuel tanks. Until now, GM was very slow to move away from steel.
Maybe the fuel-tank decision is a hint of even bigger changes at the Detroit-based dinosaur. GM executives know they must cut costs to compete with their much-leaner competitors over the long haul. A big part of the equation is to outsource more work.
If GM is successful in the fuel-tank effort, it certainly will be emboldened to try again. The reality is, it doesn't have much choice. But victories in this war have been difficult and costly. GM leaders need some success to fortify their resolve, and to prove to Wall Street that they are serious about improving their profit margin.
Based upon experience, we know GM's strike-inspired brainstorm isn't the last word. The UAW doesn't give ground without a fight. Even if GM does outsource more work, the UAW simply will redouble its effort to organize supplier companies.
But perhaps five years from now, plastics processors will look back at this absurd strike and realize that it marked a major step not only in the market for plastic fuel tanks, but in GM's long shift toward outsourcing parts production.