A long-awaited government report on the mold and tooling industry's economic woes blames a host of factors, including the economic downturn, markets migrating overseas and foreign competition. But it's unclear if the report offers a lot of ammunition for what has been a common rallying cry in the industry - trade restrictions.
The U.S. International Trade Commission's report, scheduled to be released Oct. 28, does not suggest remedies. But industry officials and the congressman who asked for the study said it provides an important jumping-off point for the industry to lobby the government for relief, including pushing for broad changes in U.S. manufacturing policy.
``It's fairly clear there is no single silver bullet or panacea that is going to make it possible for a lot of these firms to survive,'' said Rep. Phil English, R-Pa., who asked ITC to conduct the study. ``If we want to save this sector, we need to stimulate the manufacturing economy and look for carefully crafted trade remedies that give these guys some breathing space.''
English, who led the Congressional Steel Caucus in its fight for tariff protection and urged forming a tooling caucus in Congress, cautioned that the tooling industry's diversity and size make it tough to develop a broad trade remedy.
``Tool and die and mold producers generate such a highly specialized product that it is very difficult to design a trade or tariff policy that can move quickly enough [and] nimbly enough to deal with the problem,'' he said.
English's office released an executive summary of the lengthy report, which lists six major challenges facing the industry: the U.S. economic downturn, a shrinking domestic market as manufacturing moves offshore, excess capacity, price pressures, foreign competition and rising costs.
Some highlights from the report:
* The U.S. tool, die and mold industry includes about 7,000 firms, more than 90 percent with fewer than 50 employees. At least 200 have gone out of business in the past three years.
* The automotive industry absorbs nearly 50 percent of tooling, and delays in introducing new automobiles in the past 24 months have hurt toolmakers' balance sheets.
* Canada accounted for 41 percent of U.S. tool, die and mold imports in 2001. Imports from China and South Korea were relatively low in 2001, but growing fast: 191 percent and 248 percent, respectively.
* U.S. tool, die and mold manufacturers have excess production capacity of 25-30 percent.
English's Oct. 25 summary met the expectations of several association leaders who had been pushing for legislative action.
Last summer, members of those associations, as well as mold-components supplier D-M-E Co. of Madison Heights, Mich., testified before the commission and helped prepare two mold-making surveys to support the investigation.
None were surprised by the findings, which they said confirm that the issue is a serious national problem. The report also could provide a springboard for government action to address unfair trade policies, several association leaders said.
The summary laid out a specific case to look at trade practices affecting toolmakers and others in manufacturing, said Matthew Coffey, president of the National Tooling and Machining Association of Fort Washington, Md.
Going beyond that to find remedies is the next step that U.S. toolmaking groups will pursue, he said.
``What we have now is a baseline to understand problems in a global context so we can forge remedies,'' Coffey said in an Oct. 25 telephone interview.
``It gives us the ability to look at the industry worldwide and say that our [trade] mechanisms are not working well. And if those mechanisms are not working around the world, there will be severe dislocations for individual countries.''
A next step for NTMA and other groups is to form a congressional caucus to analyze the report and discuss solutions, he said. NTMA officials already have discussed the idea with several congressional members, he said.
A more viable trade policy could benefit the entire U.S. manufacturing industry, Coffey said. The tooling industry is the linchpin for much of manufacturing, he said.
``Tooling is the amoeba of manufacturing,'' Coffey said. ``If the amoeba gets killed, U.S. manufacturing will suffer.''
Another group, the Manufacturers for Fair Trade Coalition of Meadville, Pa., will use the report as a bedding to help create a national trade policy benefiting all manufacturing, said executive committee President Daniel Jepson, who owns Cranesville, Pa.-based Jepson Precision Tool Inc.
The group, which includes NTMA and the American Mold Builders Association, is working with English to change U.S. trade policy, Jepson said. Jepson traveled Oct. 25 with English to Erie and Meadville, Pa., to present a series of industry briefings on the report.
The executive summary did a convincing job of presenting the industry's job losses and cost to the economy, Jepson said.
``This gives us the ammunition we need to move forward as a national organization,'' said Jepson of his group, formed this summer.
``I wasn't surprised by anything I read. It was a confirmation of what we have been trying to tell people all along. Now we have an official U.S. document that says the same thing.''
Another lightning rod for industry action and the subsequent investigation was Roselle, Ill.-based AMBA. Former AMBA national President Olav Bradley had not seen the summary Oct. 25, but said he had heard it was a major step in the right direction for toolmakers.
Bradley, who spearheads the AMBA's trade-practice activities, said a major goal is a presidential investigation of unfair trade.
``The ITC investigation was not a cure-all, by any means, but it's a big start,'' said Bradley, president of PM Mold Co. of Schaumburg, Ill.
``Now, we have to address the unfair trade practices facing toolmakers and do something to react to this. Hopefully, the investigation will pay off in action.''
D-M-E President Jerry Lirette said the effort should look at national security implications. He added, ``Without manufacturing there is no way the U.S. is going to maintain its relative power among other countries.''
Sandy Ring, a Washington trade lawyer with Dykema Gossett plc, and counsel for the Coalition for the Advancement of Michigan Tooling Industries, said the industry should look at trade relief.
English said some protection could be warranted, but he suggested that solutions should be broader, encompassing tax law changes, capital investment incentives and ways to control rising health-care costs.