The auto industry has always been tough. Suppliers have to meet automakers' demands to turn out top-quality parts, on time, in volumes that make most other industries pale in comparison.
The downturn in production and sales from North American automakers has not helped. Nor have rising raw material prices and the increase in fuel prices that has cut into product lines like sport utility vehicles that were once considered profit makers.
For years, suppliers knew there was no room for a second mistake. But with the auto industry getting even tougher, it is becoming clear that there is no longer room for even the first mistake.
Miss a deadline, and automakers will re-source the work to a competitor. Have problems with quality, and the next contract will go elsewhere, even if you fix the problem quickly.
Have problems with financing - even if your quality or delivery never suffers - and the customers will go elsewhere. It does not matter if customers used to love you.
Just ask Gerald Edwards, whose Ypsilanti, Mich.-based Engineered Plastic Products Inc. received multiple awards and enough new business to warrant building a new plant in Lima, Ohio, just a year ago.
But the cost of that plant and rising resin prices pushed the company into Chapter 11 bankruptcy protection to restructure its debts in March. Rather than a smooth transition with new financing, the company was forced to shut down because the same customers who used to praise EPP decided they no longer needed it.
The work went to other molders. The equipment, including nearly new presses in Lima and equipment at three different sites, will be sold in a series of auctions Sept. 12-14.
Yes, some larger companies have been allowed to fight back against price cuts or lost business, but only because they provide vital parts or such a large quantity of parts that their customers cannot exist without them.
Most small and midsize molders do not fit into that category, and there is an abundance of them anxious for more work to fill idle presses. It simply is easier, from the automakers' perspective, to shift the work to solid firms than to put time and effort into helping ailing ones.
No one is condoning that philosophy, but it increasingly is becoming a reality.
With that backdrop, it has become even more important for auto suppliers to pay attention to the details that can help their long-term survival prospects: controlling costs, producing quality parts, following lean manufacturing principles and making investments in equipment and technology that will make them vital to their customers for years to come.