Based at least on anecdotal evidence, toolmaking was the hardest-hit sector of the North American plastics industry during the recent economic downturn.
With so many small companies, it was a sector ripe for consolidation. (As you can see by the ranking chart on Page 10, even a mold maker with annual sales of $20 million is a giant in this market.) Many of the firms were undercapitalized and in need of expensive new technology to compete with overseas competitors.
But the biggest problem of all that they faced was completely out of their control: Molding work was moving offshore, and many customers naturally look for toolmakers near their molders.
It was a recipe for catastrophe, and many well-known toolmakers went out of business.
For a while, it seemed that every week we were reporting on bad news from the mold-making community. On top of that, our editorial pages were constantly filled with letters from concerned toolmaker readers. Many writers wanted tariffs on imported molds or some other trade barriers. Many lamented the lack of support they were getting from processors and original equipment manufacturers. There was even talk of a mold makers' march on Washington.
Through all the turmoil, though, there were some bright spots.
Many mold makers were doing what they needed to survive. They were investing in automation. Specializing in new technology. Partnering with companies overseas. Becoming leaner. They were proof that the North American mold-making sector was not going to dry up and blow away.
This week's special report offers more evidence of toolmakers' resilience. MSI Mold Builders Inc., El Dorado Molds Inc., Concours Mold Inc., Eifel Inc. and Tech Mold Inc. are success stories, and these companies are just a few of many.
Still, the fundamentals of the market have not changed much. You can go back a decade or more and see stories about mold makers facing the same challenges: Globalization is going to continue to put pressure on North American toolmakers. Small companies that specialize in a specific market or do work for a handful of large customers will remain very vulnerable to downturns.
It's tempting to say the downturn is over, and that mold makers are sailing calmer seas. But they know from experience that it won't take much to upset the ship and send some firms crashing to the rocks once again.
In the mold-making industry, some things don't seem to change.
A lot of big names in the toolmaking business from a decade ago aren't around anymore - but many of the names haven't changed.
In 2001, the first year Plastics News ranked mold makers, we found 20 firms with sales above $22.5 million. Of that group, 15 remain in this year's Top 20.
The data indicates that growth in this market is awfully scarce.
This year our No. 1 company has estimated mold-making sales of $115 million; in 2001 it was at $100 million. The average sales of the 2001 Top 20 was $36.95 million, today it is $43.5 million.
That's not a scientific sample, but it indicates average annual sales growth of about 4 percent. Not exactly worth celebrating, but at least it's moving in a positive direction.