(March 24, 2003) — Bruce Braker, president of the Chicago area's Tooling & Manufacturing Association, likes to tell the story of the hot dog salesman during the Great Depression.
It seems the guy was hard of hearing, could not see well and did not read the newspapers. He just continued to sell hot dogs, increasing his meat and bun orders, buying a bigger stove.
Then one day, his son told him about the big economic depression. So his father cut down on meat and bun shipments, took down his advertising and watched his business dry up overnight.
“You're right, son,” he said. “We certainly are in the middle of a Great Depression.”
Braker's point is this: Anyone can tick off a list of problems with North American toolmaking. The offshore threats to business, the excess capacity and the viselike demands for lower prices and more services have nipped away at the industry's prominence.
But some toolmakers refuse to let the death of their businesses become a self-fulfilling prophecy. Braker would be forgiven for decrying the crisis affecting mold shops. In the Chicago area, more than 300 tooling companies have left the market since late 2000. He would have a right to feel as staggered as a punch-drunk boxer.
But he doesn't. Neither do many of the tool shops in our March 17 Mold Making & Design special report. Many of the top firms actually saw their sales grow in 2002. Some even had banner years.
At the same time, you have to wonder how many other firms are faring, how far down the chain those good times extend. Only a few might be benefiting, as too many toolmakers chase too little business. On balance, more shops are struggling than are celebrating.
It might only be coincidence that fully half of the top 20 toolmakers in North America, ranked by sales, are based in Canada. Maybe that teaches us another lesson: Those shops in Canada seem to be doing something right. A favorable exchange rate cannot account entirely for their success. Truly, both the successful Canadian and U.S. shops share some common traits. Either they are looking to do more business in the Far East, where many of their customers are, or they are using technology as a linchpin to keep their work here. Some are doing both.
That sounds like smart business in a world that might never be put together the same way again, like Humpty Dumpty after he fell from that wall. Those companies have pursued opportunities by using automation to their advantage and by networking with other shops to expand their business. Those companies now are built on speed. Lead times that tool shops never would have imagined five years ago — tools built in less than 12 weeks — today are mandated as part of a successful blueprint.
We don't want to sound like Pollyannas. There are those shops that can't compete in their end markets or that don't have the resources to rebuild after losing business abroad. Consolidation has been a cruel necessity. It takes money to automate. And it takes some guts to give up a major slice of your sales to work with a Chinese shop or even one a lot closer to home. It takes risk-takers to cope with the changes. And, even so, not all such shops thrive or even survive.
Still, there is hope amid the problems and the uncertain end date of war with Iraq. As the hot dog vendor might say, you can always choose to ignore the Depression.
