Midwest Tooling Group Inc. in Chagrin Falls, Ohio, is consolidating some operations to adjust to the soft economy and increased global competition.
The mold maker is moving its Crown Mold & Machine unit in Streetsboro, Ohio, to Deep Hole Specialists, a machining company Midwest Tooling owns in Auburn, Ohio, near Chagrin Falls. The consolidation will reduce overhead and improve productivity, said Midwest Tooling President Mike Adams. He said the consolidation will be completed this year.
Crown Mold's move reflects lower business volumes and the need to retrench, Adams said. He said Crown Mold has 26 employees, down from 70 in early 2000, just before the country's manufacturing downturn began.
Adams said Crown Mold will take a hard look at market niches that are not as vulnerable to foreign competition because they require sophisticated dies and molds. He cited as an example the development of new tooling for automotive components.
Midwest Tooling since mid-2000 has reduced its total employment to 150 from 220, a decrease of more than 30 percent.
``A lot of the employment reduction is related to improved productivity,'' Adams said.
Midwest Tooling bought Crown Mold in 1990 as the first company in what is now a portfolio of five tooling businesses. Besides Crown Mold and Deep Hole, it owns Fremont Plastic Molds in Fremont, Ohio, and Penco Tool Inc. in Ashtabula, Ohio. Midwest Tooling recently formed a unit out of Crown Mold known as Crown-Pultrusion, which makes special dies for plastic parts makers.
Adams said Crown-Pultrusion has good prospects for growth because the company is serving a portion of the construction industry that is substituting plastics for wood. Crown-Pultrusion will move at the end of the year to Deep Hole from Crown Mold.
Penco Tool and Fremont Plastic Molds are not affected by the consolidation. Penco makes injection and compression molds and Fremont makes molds for blow molders.
Foreign competition has hurt Crown Mold's operations, Adams said. He said major tooling customers such as General Electric Co. and Royal Appliance Manufacturing Inc., the maker of Dirt Devil vacuum cleaners, have gone to China and Mexico for tooling. Last month, the U.S. International Trade Commission released a lengthy study indicating that the tool and die industry is under intense pressure from low-cost global competitors.
Overcapacity in the domestic industry also is a problem, said Mark Teague, executive vice president.
``I would say that 25 percent of the country's mold makers will be out of the industry by the time this downturn is over,'' Teague said.
Yet Adams said pockets of strength exist within the company.
``Fremont is having a record year producing aluminum tooling for the blow molding industry,'' Adams said. ``Fremont is cutting delivery times and running machinery unattended to improve productivity.''
Adams said Midwest Tooling's sales will be about $20 million this year, off 15 percent from two years ago when the downturn began. Adams said he is crossing his fingers that the economy may be turning around.
``October was our best month for sales in the last 18 months,'' he said. ``We have had four good months in a row, and we think the economy is coming back. There have been 30 months of pent-up demand, and the economy has nowhere to go but up.''
Adams said planning is under way for a possible expansion of the Deep Hole plant to 53,000 square feet from 35,000 square feet once the economy improves.