What's the future for small U.S. molders — a bloodletting or business as usual? Two hard-bitten plastics authorities pulled out their Magic Eight Balls, and promptly disagreed. The experts are Glenn Beall, a consultant and teacher who runs Glenn Beall Plastics Ltd. in Libertyville, Ill., and Irvin Rubin of New York, who wrote the seminal book, Injection Molding, Theory and Practice.
When the next recession hits, Beall fears the worst.The reason: Too many companies making too much stuff.
Small custom injection molders, he said, could become victims of their own success after years of modernizing.
Beall also points to the amount of work moving to Mexico and offshore.
"We have too many injection molding companies in the world, right? And they've become so bloody efficient, they can produce more products than we can sell," Beall said.
"I predict that when we have the next downturn, you're going to see a big weeding-out in the industry."
With the U.S. economy now enjoying its longest-ever expansion, the word "recession" seems a distant memory right now. And after the decade-long consolidation binge, those small custom injection molders that have survived may feel pretty confident.
But Beall said: "We're living in a false setting."
Labor is far cheaper in Mexico and Asia. And any molder — anywhere in the world — can buy the same technology. That means, Beall said, a small molder should start right now to specialize, to be the best micromolder, or big-part molder, or molder of ceramics it can be.
Rubin begs to differ.
Small, general-purpose custom molders always will be around, to serve a "plethora" of diverse types of customers, he said.
Instead, Rubin said he thinks that midsize molders are the ones that will suffer in this new century.
"What I see in the future is, there are only going to be two types of molders," he said.
"The huge-volume molders that mold auto parts, packaging, medical parts, the CD-ROMs — these are going to be the specialty companies. We're talking about companies with 100 machines, in that range.
"Then there's going to be the small molder that will serve the range of 12-24 machines. There's not going to be anything in between," he said.
Rubin spares no venom when discussing his views of the biggest current threat — retroactive price cuts demanded by the carmakers and other powerful original equipment manufacturers.
"It's ethical when you're negotiating a price, but after it's over and done, to go back and change the terms — that's robbery," he said.