CUYAHOGA FALLS, OHIO - When ProMold Inc. President Steve Schler started his tooling company in 1977, his decision was made easier by the fact that he enjoyed taking risks.
Now, close to a quarter century later, he is taking another chance with his Cuyahoga Falls-based company. This time the decision flies in the face of a tooling downturn that has hit the U.S. industry hard. Schler is spending $500,000 this year to expand his mold-making facility and buy one of the fastest milling machines on the market.
That figure is far from modest for a company that regularly records between $1 million and $2 million in annual sales and has only 10 employees.
While several other toolmakers in the Akron, Ohio, area are sputtering or near death, ProMold's investment decision belies that parched landscape.
``I'm pretty selective in my risk,'' Schler said during a July 26 interview at company offices in the Akron suburb. ``But my belief is that automated equipment, coupled with our experience, can help us make the strides to stand up to the competition. You can call me a fully optimistic conservative when it comes to running my business.''
For many toolmakers, 2001 has been fraught with more risk than optimism. ProMold, a custom injection mold maker with a strong backbone in medical and electronics work, has not been immune. With the economy still soft, some ProMold customers have taken as long as six months to pay bills, and a few accounts have become delinquent, Schler said. Sales were fairly flat for the past fiscal year, which ended June 30.
Meanwhile, competition from China toolmakers has hit ProMold, as it has others. Eggshell-thin labor costs paid by Chinese mold shops have driven prices down to where it is sometimes difficult to compete, said ProMold sales and engineering manager Scott Peters.
``The amount of work we and other tool shops have to bid on has been really declining,'' Peters said. ``But the work by Chinese shops has been going through the roof.''
So what is a U.S. tool shop to do? Other small mold makers in the Akron area - a region dotted with many long-time shops - have struggled.
Another injection toolmaker, Akron-based Lakes Mold & Machine Co., was forced to lay off its 11 employees the week of June 16 while it settles a cash shortage with its bank, said owner Joseph Bosz.
The company hopes to reopen soon with a new focus, making molds for thermoset processing. Thermoset components such as electrical connectors and switch boxes remain a strong market, and the company has some experience with those products, Bosz said.
The switch would take Lakes Mold away from its core appliance and automotive areas, where business either is slow or moving offshore, said Bosz, who founded the company in 1974.
``I'm 61 years old, and I've never seen anything this ugly,'' Bosz said. ``We'll weather it, and we'll come back. But in some cases, there's absolutely no way to compete with China. We've seen projects with 100 new molds to bid on, and 93 of them end up going to China.''
Another Akron-based shop, Kohler Mold & Machine Co., is closing its doors and getting out of the business of making rubber and plastic molds, said President Dorothy Polson. Its 13 employees already have been terminated, she said.
``I'm not really upset about it,'' said Polson, in the midst of selling the company's assets. ``We just decided it was easier to close than to continue to fight it. All of manufacturing is in a battle.''
Catching a wave
ProMold also recognizes that battle. But Schler's response is to fight by becoming more efficient, sending molds out the door more quickly than before. With global competitiveness, mold lead times have decreased from 12 weeks just a year or two ago to four- to five-week delivery times today, Schler said.
At the Cuyahoga Falls company, that has meant a switch to automation and the need for fewer people to perform tasks that once took the attention to detail of a journeyman toolmaker. The move actually started in 1994, when the company added a 24-station electrode changer and a computer numerically controlled die-sinking machine
In 1999, ProMold added more robotics to its existing equipment, replacing the need for some manual work.
Now the company has speeded work by purchasing one of the industry's gold-plated tools of rapid delivery, a high-definition, high-speed milling machine that costs about $250,000. The Mikron machine, installed in June, grinds tools at a cutting speed of close to 800 inches a minute, with a spindle that turns at 42,000 revolutions per minute.
It is one of the industry's quickest machines, complete with computer controls and sophisticated laser-cutting devices.
And while merely another piece of equipment, the device also becomes a display case for how ProMold plans to compete. Its small staff keeps the company from running more than one shift, but it plans to operate around the clock with automated equipment but no floor workers, Schler said.
``Others are falling all over each other trying to figure out ways to compete with China's labor costs,'' Schler said. ``If we don't need workers to run our machines to make molds, our labor costs are zero. Automation means we can supply more with less.''
The company is more than doubling working space to back up Schler's plan. By the end of the year, an added 12,000 square feet will be completed at the existing facility, giving ProMold about 20,000 square feet of tooling room. The company plans to set up a separate mechanical room to hold auxiliary equipment before opening the expanded space and moving equipment.
ProMold got its start across the street, at a 3,800-square-foot building. Schler said business today is poor, but that pales in comparison to Schler's formative years, when he immigrated with his family from Germany with little more than a few suitcases.
His father, a trained mold maker, always told Schler to pursue his dream of opening a tooling shop. Today, even though the current climate is a bit difficult, he does not regret that path.
Schler currently serves as president of the Akron chapter of the National Tooling & Machining Association, and his goal is to help local companies learn to help each other instead of butting heads.
``We're trying to develop our networking skills,'' Schler said. ``We have a lot of independent people that never went to business school but have done well as toolmakers. But today, we might need to think a little differently about management skills and how we can help each other.
``Automated equipment is one way to get ahead, but people skills are another.''