It was quite interesting reading your Page 6 editorial (``Shielding U.S. firms: tax reforms vs. tariffs,'' Page 6) and the Mailbag letter from Jason White of Innovative Design & Manufacturing (``Turn `free trade' into fair trade'') in your Dec. 23 issue.
First your commentary: Not only is the tooling industry being hard hit, plastic custom molders also are not doing well. Large manufacturing companies in the automotive, appliance and other industries are sourcing parts from overseas and Mexico, and American companies are demanding that domestic custom molders meet foreign pricing plus carry their receivables for 90 days.
Your mentioning of ``encouragement'' by Rep. Phil English will not solve the problem. This does not keep the doors open or hand out paychecks to American labor.
I might also mention that all the ``experts'' (these are guys who have never run a business, let alone a molding business) say that we need to upgrade our equipment to be competitive. Obviously, these folks have not been to the lending institutions lately. Very few financial institutions are loaning money to purchase new equipment unless the company has an impeccable balance and profit/loss statement. The same goes for working capital to carry those 90-day terms.
I have a suggestion: Why don't you send your people out to visit the molders with less than $10 million in sales for their comments, or maybe work up a questionnaire which you could print in your newspaper with an e-mail response?
You folks at Plastics News should be more aware of what is happening in the custom molding business as you keep listing every week companies that are going Chapter 11 or just going out of business. I am willing to bet you $5 that 60 percent of the automotive custom molders are unprofitable.
Mr. White failed to mention that for his company to acquire new equipment, he has to put up all his assets, including his home. The great point he did mention is that America is losing its skilled labor force.
Some day, the aforementioned ``experts'' will be wringing their hands.
In closing, if Wal-Mart and others want to push foreign goods, let's tax them with a nondeductable tax that would make the foreign product competitive with goods made in the USA. I don't shop at Wal-Mart and encourage all my friends and 40 employees to shop elsewhere.
Richard E. Kelch
Ashton Plastic Products Inc.