Michigan has adopted a new mold-lien law that mold makers say is more favorable to them and that they hope becomes a national model.
The law, approved March 5 by Gov. John Engler, lets a mold maker put a lien on a mold for nonpayment at any time. It replaced a law that made it more difficult to attach a lien if the tool shop did not have possession of the mold.
Many existing mold-lien laws, including Michigan's old statute, ``are written to favor molders who are in possession of the mold, rather than mold makers who are often not in possession,'' according to a March 14 statement from the American Mold Builders Association in Roselle, Ill.
The AMBA statement said the Society of the Plastics Industry Inc. was instrumental in getting many of those laws passed, but AMBA officials say they believe the wording that favored molders was an unintended oversight. Washington-based SPI represents both mold makers and molders. SPI officials declined to comment.
The new law reflects what some mold makers say is a common problem, caused in part by changes in purchasing in the auto supply chain. Automakers and parts manufacturers commonly do not pay for tools until they approve the final part, which can be a year after the mold is made, said Dan Hess, president of injection and compression mold maker Paragon Die and Engineering Co. in Grand Rapids, Mich. That can create serious cash-flow issues, particularly for smaller mold makers, he said.
Another AMBA member who was involved in the lobbying campaign said the larger problem is customers that do not pay bills in a timely fashion. The member requested anonymity because he said the issue is a sensitive one with customers.
AMBA and three of its Michigan chapters spent about a year lobbying for the bill, which passed both chambers of the Michigan Legislature unanimously.
Some auto parts manufacturers initially had reservations about how they would be given notice if a lien is filed, said Bill Wortz, a partner in Public Affairs Associates Inc., a Lansing, Mich., lobbying firm hired by AMBA. But the legislation requires the lien to be entered into the Michigan Secretary of State's computer system, which is easy to access, he said. In the end, the bill had no opposition, he said.
The law requires mold makers to give 90 days' notice of nonpayment before enforcing the lien.
