Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Resin pricing news
    • Videos
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • K Show
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • Processor of the Year
    • Best Places to Work
    • Women Breaking the Mold
    • Rising Stars
    • Diversity
    • Most Interesting Social Media Accounts in Plastics
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • Pellets and Politics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • K Show Livestream
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Processor of the Year submissions
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics News Caps & Closures
    • Women Breaking the Mold Networking Forum
    • Plastics in Automotive
    • PN Live: Mergers and Acquisitions
    • Polymer Points Live
    • Numbers that Matter Live
    • Plastics in Politics Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Resin Prices
    • Commodity TPs
    • High Temp TPs
    • ETPs
    • Thermosets
    • Recycled Plastics
    • Historic Commodity Thermoplastics
    • Historic High Temp Thermoplastics
    • Historic Engineering Thermoplastics
    • Historic Thermosets
    • Historic Recycled Plastics
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
News
March 17, 2003 01:00 AM

Some U.S. toolmakers working with China

Joseph Pryweller
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    WARREN, MICH. (March 17, 9:30 a.m. EST) — It wasn't China that bothered Geoff O'Brien and his growing toolmaking and injection molding group, PME Cos.; it was competition from Canada.

    And it was not the low cost of Chinese molds that worried David Loehr and his smaller tool shop, Precision Mold & Engineering Inc.; it was sustaining a 49-year-old family business.

    Yet, to counter such heavily weighing threats, the companies have turned to China. They have started Global Tooling Solutions, a separate company that blends Western engineering and management skills with bargain-basement mold building using a cluster of more than 35 Chinese shops stretching from Shanghai to Shenzhen.

    That concept, called blended tooling, is one PME would like to share with other U.S.-based mold builders interested in joining the Global Tooling Systems network, O'Brien said. Especially in the automotive market, blended tooling is an emerging means of preserving business in North America while customers continue to look to China to reduce mold costs, he said.

    O'Brien's tool shop, PME-owned Proper Mold & Engineering Inc. of Warren, used to fight the idea of going to China, he said. Like others, O'Brien did not want to give up projects to Asia, and he did not see China as a threat to his business.

    But now, with more automotive jobs shifting to China and tooling price pressures escalating, he has changed his mind. Warren-based PME wants to become a leader in the movement to turn automotive tooling more global and allow national walls to come tumbling down.

    In April 2002, PME — with help from Precision — created GTS. Since October, the companies have shipped 20-30 molds a month to China, O'Brien said.

    PME, with $36 million in 2002 sales, is one of the larger tooling companies in the Detroit area, on a sprawling campus northeast of the city. He wants to be proactive.

    “I don't really see the need for our business to keep bad-mouthing China,” said O'Brien, interviewed Feb. 28 at his office. “The quality of the work will only keep going up there. We decided to suggest [China] to our customers before they suggested to us that we'd better look there.”

    PME's approach garners as much dissent as it does agreement. Moving work to Asia has become a bipolar issue among toolmakers, who seem to be split equally between those who think they need to share work offshore and those who would fight it with every muscle.

    “I'm not ready to go full bore into Asia,” said Peter Mozer, president of PME competitor Delta Tooling Co. of Auburn Hills, Mich. “The challenge as Americans is that we're exporting the demise of our trade. In the long term, you can't have all your tools built in the Far East and expect to continue to maintain them here.”

    But the realities are pressing. Another large mold maker, Triangle Tool Corp. of Milwaukee, has seen an upswing in Asian jobs, said President Roy Luther. Typically, prices are 35-50 percent lower than what can be built here, he said.

    Luther wonders whether the industry here will go downhill — whether Triangle's 240 workers still will have jobs. But he is not ready yet to partner with an Asian firm. That would be tantamount to giving up, he said.

    “What incentive does my customer have for me to partner with an Asian company?” he asked. “A customer can go to Asia and get a mold built on its own. If my price is 5 percent higher, even by partnering, what reason is there to give the job to me?”

    Meanwhile, in the Chicago area, toolmaker ranks have been sliced by a lack of business since 2002. The Chicago chapter of the Roselle, Ill.-based American Mold Builders Association responded by launching a letter-writing campaign to get Congress to look at the trade imbalance in manufacturing, said Bill Cermak, chairman of the chapter's Save American Manufacturing Committee and a tool engineer for Pro Mold & Die Inc. of Roselle.

    To date the effort has generated about 900 letters, many of them expressing outrage at work moving to China, Cermak said.

    “We're trying to get Congress to admit that there is a problem,” he said. “We are transferring all our technology to China and teaching them how to run manufacturing. It will come back to bite everyone in the butt one of these days.”

    That gale of protest has its opposite view, said Loehr of Precision Mold, started by his grandfather in 1954. The Warren company has weathered the same hard times as others. But the company decided that the world has changed, that the only way to grow business is to make China work for it and not against it, he said.

    Precision Mold joined with PME and Supply Windows Inc., a Dublin, Calif.-based provider of engineering tooling support and networking in China, to run GTS. All three have ownership stakes in the venture, right now focused on automotive tooling.

    The mold shops continue to manage projects, sending work to Asia when economically viable, while keeping most design and engineering functions in the United States.

    Supply Windows, started last year by former executives of GE Plastics, LNP Engineering Plastics Inc. and Hewlett-Packard Co., has 11 engineers working in China and more than 60 tooling shops in its database.

    “I think that toolmakers who survive will have to market globally,” said Tom Connors, Supply Windows' operations director and former global procurement manager for electronics maker H-P. “H-P and Dell [Computer Corp.] are pushing toward a computer market in China, and so are automakers, and they are all seeking the lowest worldwide costs.

    “The winners are going to be the guys looking at this not as a threat but as an opportunity.”

    Supply Windows is working with other North American mold shops in China and has a customer base that includes Sun Microsystems and several large consumer-products producers. The company monitors jobs in Asia and offers design and engineering tools over a private intranet site.

    Global Tooling uses that same concept. PME engineers have built a sophisticated Web site that allows customers to send a mold package out for bid to a pre-qualified Chinese tool shop. GTS helps narrow the choices and works through the management and project details.

    The Web site sets timelines and schedules, offers status reports, communicates engineering changes, e-mails files and photos, and offers a chat room to discuss issues.

    Hot-runner systems can be a difficult commodity in a still-developing China. System supplier Plastic Engineering and Technical Services Inc. of Auburn Hills, Mich., is working with the company to ship manifolds to China, said PETS President Pat Tuman.

    And Chinese mold makers are notorious for using softer, less-durable grades of steel, some of which toolmakers complain can be cut like butter. So Chicago-based mold-steel supplier A. Finkl & Sons Co. has joined with GTS to ship heartier, P20-grade steel to China.

    GTS does not want any surprises in the finished molds, said A. Finkl sales Vice President Tim Nealt. Nealt said O'Brien is a risk-taker and said GTS' success is an educated gamble.

    “There's some inherent danger in exposing a low-cost competitor to your customers,” Nealt said. “But there has got to be a way for the Detroit-based mold makers to protect themselves from the downside or minimize the risks. [O'Brien] is stick-handling through that maze, but it's not for everybody.”

    The venture expects to save customers at least 10-15 percent on most jobs, O'Brien said. That is below the 35 percent cost reductions from some Chinese mold makers. But for those projects, the hidden costs, longer shipping times and cultural barriers can eat up the extra savings in a hurry, he said.

    “We monitor everything in the life cycle of the mold and warranty our work,” O'Brien said. “That's a big difference.”

    By offering the 10-15 percent savings, Proper Mold officials can compete better with their neighbors in Canada, where exchange-rate differences sometimes lower prices, O'Brien said. In the automotive market, Canada, especially the Windsor, Ontario, area, is a major player.

    O'Brien is recruiting noncompetitive tool shops to join GTS. Elite Mold, a maker of small automotive tools in Sterling Heights, Mich., is ironing out the details to join the new network, said President Bob Mandeville. After much internal debate, Mandeville decided that the comfort level of working with another reputable shop outweighed the risks.

    “Only about 1 percent of automotive work is going to China,” Mandeville said. “But this is really about beating the snot out of Canada. If it's managed properly, this is very doable.”

    Canadian shops are not sitting on the sidelines for blended tooling. Reko International Group Inc. of Oldcastle, Ontario, for instance, is starting to send some of its work to China, South Korea and other Asian nations, said Chief Operating Officer Gordon Young.

    The company is partnering with Toronto-based Global Precision Molds Inc., owned by three tool shops in China and one in South Korea. Global Precision provides program management, sales and engineering for those companies, said Vice President Jim Prokopetz. The company has exported 300 molds from China since it was founded three years ago, Prokopetz said.

    Reko has other reasons to venture into blended tooling in China. “Fighting it and setting up a false economy here doesn't help anybody,” Young said. “The sooner we get China up to speed and the quicker the cost structure is set up, the more the prices there go up. And the less competitive they will be.”

    Another Canadian company, M2M International Ltd. of Wallaceburg, Ontario, has partnered with Tokyo-based tool builder Ikegami Mold Corp. since the late 1980s. Now those companies are looking at partnering on projects for both the U.S. and Asian markets, said M2M President Richard Myers.

    Already, some M2M tools have been run at Ikegami shops in China and at other Asian tool shops working with M2M, he said.

    “China offers a window of opportunity that we need to take advantage of,” Myers said. “But I'd be concerned about working through a broker there. You have to pay attention yourself or you could get hurt.”

    Getting hurt is what concerns many U.S. companies. Going to China can produce its share of headaches too, said Jeff Mengel, who heads the plastics consulting group at Plante & Moran LLP. It is not an easy decision to make, nor one that always produces profit for everyone, he said.

    “I don't know if it's going to be a necessity, unless it is in your customer's mind,” said Mengel, based in Auburn Hills, Mich. “But the bigger question is the tool industry's future. It is going through a substantial metamorphosis and trying to reinvent itself. There have to be changes made.”

    Longtime toolmaker PME has gone through many of those changes already. The company has expanded its molding operations after opening a plant in South Carolina. It has built a large prototyping and product-development building in Warren.

    Now it is looking at further expansion in Asia. The company hopes to set up a design and engineering company by midyear in either China or India, O'Brien said. The global campaign continues. O'Brien likens it to a baseball pennant race.

    “All of it is geared for low cost,” O'Brien said. “We're not trying to hit home runs, just lots of singles. Those win games too.”

    RECOMMENDED FOR YOU
    Patio doors get a boost with new production, designs
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    Plan to extend chemical recycling in Illinois hits roadblock
    2
    Biden sets US goal to replace 90% of plastics with biomaterials
    3
    Redline's ‘outrageous cultural behaviors' retain top employees
    4
    Industry sees Biden bioplastics goal as serious signal
    5
    Trinseo: Equipment failure blamed for latex emulsion leak
    SIGN UP FOR OUR FREE NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Tire Business
    • Urethanes Technology
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • K Show
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • Processor of the Year
        • Best Places to Work
        • Women Breaking the Mold
        • Rising Stars
        • Diversity
        • Most Interesting Social Media Accounts in Plastics
      • Newsletters
      • Resin pricing news
      • Videos
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • Pellets and Politics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • K Show Livestream
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics News Caps & Closures
        • Women Breaking the Mold Networking Forum
        • Plastics in Automotive
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
        • PN Live: Mergers and Acquisitions
      • Editorial Livestreams
        • Polymer Points Live
        • Numbers that Matter Live
        • Plastics in Politics Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
      • Processor of the Year submissions
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Resin Prices
      • Commodity TPs
        • Historic Commodity Thermoplastics
      • High Temp TPs
        • Historic High Temp Thermoplastics
      • ETPs
        • Historic Engineering Thermoplastics
      • Thermosets
        • Historic Thermosets
      • Recycled Plastics
        • Historic Recycled Plastics
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified