Those who question the long-term stamina of Asian mold makers should recall what happened during the economic crisis there three years ago. A classic Catch-22 argument in manufacturing goes like this: If you're not making money, you don't have money to invest in equipment. And if you don't invest in new equipment, you'll never make money.
Asian toolmakers turned that argument on its ear. In 1997, many tool shops in China, Hong Kong and Singapore were struggling to stay afloat as both currency and the stock market were sinking fast.
Instead of retreating into a shell, governments invested in design and engineering. In Hong Kong, a partnership was formed in September 1998 with mold-software provider Unigraphics Solutions Inc. of Maryland Heights, Mo.
The Hong Kong government paid millions to train 1,100 engineers — to date — on three-dimensional, computer-aided-design and engineering systems.
The government purchased 1,500 CAD systems to disperse to tooling shops in China and Hong Kong.
Last year, Singapore's government invested US$4.2 million to train its mold engineers on new Unigraphics software. That brought Unigraphics 110 new customers, said James Tay, Unigraphics' Far East managing director.
Now, Malaysia is getting into the act. In April, it will launch a program with Unigraphics to buy a minimum of $1.5 million in software for its toolmakers.
Unigraphics officials, while not revealing costs, said that they bundled software packages for those toolmakers so they would be more affordable.
Some toolmakers on a recent trade mission to Asia, arranged by the Society of the Plastics Industry Inc., whispered about the special Unigraphics deals received by shops in China and Singapore.
It's necessary to cut through those complaints of unfair trade to get to the real issue here: Asian companies are doing their part to level the playing field with U.S. tool shops.
Right now, U.S. tool shops have a design and technology advantage over many overseas competitors. But they cannot afford to rest on past successes — or past technology — to compete. Asian companies certainly aren't resting.
Times are not yet dire, nor should North American toolmakers lock their doors and move to Asia. But North American firms need to stay on the offensive with automation, equipment and software.
Seeking partnerships in other parts of the world, whether it be Asia, Mexico or Europe, is another solution. The walls are tumbling down, and everyone needs to recognize that.
North American toolmakers like to complain about jobs lost to Asia and the advantages there in labor costs or government subsidies.
Instead, they could turn a negative into a positive by looking for opportunities. Asian toolmakers did just that in tough economic times.