LAS VEGAS — Global economic development poses a serious challenge to domestic plastics processors, an active leader of the Society of the Plastics Industry Inc. said. "Our customers look to molders and say, `Quality and delivery are givens, [and] the only differentiation is price,'" said David Hidding, vice president of Dana Molded Products Inc., an Arlington Heights, Ill., blow and injection molder.
"That makes it extremely difficult for custom molders in the United States because we are at a price disadvantage when it comes to any sort of labor-intensive work," he said. "If it is an automated job, we can make it as cheap as you can elsewhere."
Assembly requirements make it "more and more difficult to compete against global competition like that in China or Mexico," said Hidding, who was interviewed Feb. 22 at the annual SPI Molders Division conference in Las Vegas.
Within the Washington-based trade group, Hidding chairs the division, is a member of the national board and heads the processors council.
Some 30 years ago, "all of the TVs sold in the United States were made within 200 miles of Chicago," he noted.
"Now, none of them are made there. That's not new, but we are seeing more and more of our customers move their assembly operations. It is becoming more incumbent upon molders to figure out how to either get the parts there or compete," Hidding said. "It's a hard problem. We are at the bottom end of a market."
He noted that small molders have limited resources and cannot readily pick up and start a new facility elsewhere.
"The pool of customers is shrinking because assembly operations are moving away. Molding has to follow."
Dana employs about 85, occupies 155,000 square feet in two facilities and has annual sales of more than $8 million.
"We used to consider ourselves midsize," Hidding said. "Now we consider ourselves small; $25 million is midsize."
Hidding remains dubious about bidding for custom molding business through auctions. A letter he wrote to Plastics News in October 1998 discussed the trend and drew reaction.
"FreeMarkets was offering jobs up for bid [and] wanted a very high percentage on sales commission from basically running an auction," Hidding said. "They didn't support customers. They didn't call on the customer. They didn't do any of the customary services, but they wanted a 5 percent commission."
Commenting on newly appointed SPI President Donald K. Duncan, he said: "The molders division stands behind him. We are anxiously awaiting his good work."
Hidding believes new programs may help reverse SPI's recent membership losses.
"We recently had one company join the SPI because they found out, for example, about the safety committee," Hidding said. "The new horizontal standard was going to cost this company $6 million, so they realized they ought to be part of specifying the standards. They joined just because of that, and they came in at the highest level.
"That's one type of value," he said.
He ticked off others: member discounts on SPI publications and programs, an emerging "distance learning initiative" that employs televised training, worker certifications, the OrientMe employee retention effort and ISO and QS training documentation.
About 90 people attended the Feb. 23-25 Molders Division conference, which focused exclusively on electronic business.
"The programs such as this one are designed to help member companies save money or improve their process," Hidding said.