WASHINGTON (April 11, 2:30 p.m. EDT) — A new Commerce Department initiative to help the beleaguered mold-making sector is being met with a mix of relief and frustration — relief that the government is paying more attention, but frustration because the main solution advocated, exporting, is not seen as realistic.
The Commerce Department's Tooling Industry White Paper (see a copy of the executive summary) is designed as a follow-up to an October report from another government agency, the U.S. International Trade Commission. The commerce report notes that the industry is in the midst of what many see as a permanent restructuring: shipments down 20 percent last year and overcapacity of more than 30 percent.
Both U.S. Rep. Phil English, R-Pa., who asked for the report, and a top mold-making industry official in Washington, Matt Coffey with the National Tooling and Machining Association, called the report a major step forward because it gives the industry a much higher profile in government deliberations. English released the report April 7.
The report, among other things, calls for the government and NTMA to form a partnership to look at industry problems.
But other sources involved in the industry's campaign for government relief said they were disappointed.
“I keep hearing this export, export, export, but I don't know where I'm supposed to be exporting to,” said Dan Jepson, president of Manufacturers for Fair Trade and president of Jepson Precision Tool Inc. in Cranesville, Pa.
Most mold makers employ less than 30 people, and don't have access to the capital needed to export or set up overseas ventures, he said. Jepson said he tried setting up a partnership with a mold-making shop in Hong Kong several years ago but was not successful.
While globalization is a hotly debated topic in the industry, some industry sources argue that factors like the high value of the dollar and high labor content of molds make it tough to compete against mold makers in lower-wage locations.
“Most of us don't see developing exports as a way of combating imports,” Jepson said.
Sandy Ring, a Washington lawyer representing the Coalition for the Advancement of Michigan Tooling Industries, said the report is a good start because it puts the industry higher on the government's radar screen. But he said the report's suggestions don't go far enough.
“These proposals alone do not address many of the key issues affecting the tooling sector and small and medium manufacturing,” said Ring, who works for the firm of Dykema Gossett plc.
The report lists existing government programs aimed at helping all industries export, such as seminars, exhibitions at overseas trade shows, trade missions, help with restructuring to lower costs and export financing programs.
Commerce Department officials involved with the report could not be reached for comment.
The chief bonus is the attention the industry will get, particularly from a formal partnership that the Commerce Department says it wants to form with NTMA and other tooling groups, said Coffey, president of Fort Washington, Md.-based NTMA.
Coffey said he wants that partnership to develop a legislative agenda that the government will sign off on, such as changes in tax laws or recognition of long-term problems from rising Chinese imports. The Commerce report, on the other hand, said the partnership would be more narrowly focused to “develop and promote exportation of U.S. tooling.”
“We've gotten Commerce to say this is an important issue that needs to be paid attention to,” Coffey said. Up to now, he said, “we have not seen our cause being paid any attention to in the administration.”
Industry groups have been pushing various programs, from narrow tax breaks to extremely broad calls to “level the playing field” in trade policy. Coffey said the groups need to come together and say “this is what the industry wants.”
“The next step is to see what can reasonably be done to make this change a soft landing instead of a hard landing for the industry,” Coffey said.