The recent announcement that Dow Automotive Division will supply Ford Motor Co. in South America with plastic automotive parts for the Siesta car model is a surprising development in the plastics industry. Whether this trend will continue with other resin suppliers remains to be seen.
Will other car manufacturers like General Motors Corp. and DaimlerChrysler AG follow the same strategy?
Resin suppliers following this strategy with captive plastic fabrication programs is not new. This same practice existed in the 1960s and '70s with such companies as Amoco Chemical, Celanese, Sohio, Phillips Chemical Co., Exxon Chemical and Gulf Oil. Chemicals had captive plastics fabricating operations in North America relating to housewares, custom molded products, plastic pipe and film, containers, olefin fibers and lids and closures.
Entering these captive businesses requires careful planning with regard to capital investment, technology, skilled manpower, environmental programs and competitive considerations with other fabricators who are in the same business. It is certain that fabricators in North America will be monitoring future resin supplier/end-user relationships. This is another critical business trend that fabricators in North America will be facing in 2003 — potential competition with resin suppliers.