The April 29 issue of Plastics News had a Perspective from a Chicago-area mold maker [``Mold buyers need big picture,'' Page 6] that highlighted the amount of work that has vanished to China due to cost advantages. Injection molders also have felt the pain of losing new programs to this magic country that seems to have cornered the market on constructing cheap tooling and fabricating products 30 percent cheaper than the average American company.
The excuse used to be that labor unions were driving wages so high that we could not compete. I can assure you that being a nonunion shop has no advantage in our industry. Most of our customers have been with us since our inception in 1990 and remain loyal. While we have grown in sales volume due to our commitment for extreme service to our customers and our forced aggressiveness in pricing, our margins have shrunk considerably because of the inability to pass on increasing overhead costs to our customers.
If margins are continually reduced by overseas pressure, the molder will resort to not replacing his older machines and eventually succumb because he will not have the equipment to be competitive. I believe we could grow further in sales volume with a larger building and additional machines and, even though we are proceeding with this plan, we remain wary because of the erosion of business to foreign markets. Over the last three to five years we have been hit with ridiculous insurance increases, nominal tax and utility increases and of course wage increases to maintain good people. These normal annual increases are not accepted [by customers], but when the oil and plastic companies raise their pricing it is generally accepted with no questions asked.
I have a will to survive and have recently returned from an international trip that was designed to form alliances with my competition. The thinking is if an American corporation has a multiple tool package for manufacture, some might not be feasible to run stateside and some will be. At least it provides us an option to keep some of the work here instead of losing the entire program to a foreign market.
Our government has to set up agencies to monitor and keep the big business crooks in check and to impose higher import taxes, or eventually the United States will indeed become nothing more than a service-orientated country and not the manufacturing giant it once was. You would think that our government would insist that its agencies purchase American-manufactured goods to support their Small Business Administration loans, but that's not the case. We in fact have a government contract and recently found out our competition is producing the same product in a foreign market. To our credit we were within 1 percent of their price and the contract was still split 50-50.
Why this country continually focuses on offering incentives for imports from other countries rather than exports to other countries is mind-boggling as well as self-destructive.
Stellar Plastics Corp.
St. Charles, Ill.