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February 26, 2007 01:00 AM

Canadian mold maker closes down

Michael Lauzon
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    Another auto-intensive mold maker has gone bankrupt.

    Hallmark Technologies Inc., one of the biggest injection mold builders in the Windsor, Ontario, area, locked its doors Feb. 15. The 34-year-old private firm employed about 150, but in better times staffed roughly 180. Hallmark billed itself as a lighting and multimaterial specialist with an injection molding business to complement its tool building.

    The bankruptcy was the latest blow to the Windsor area, which has seen mold shops and plastics plants close and cut jobs as Detroit's economic troubles work their way through the supplier chain. Windsor is especially vulnerable because the auto industry supports about a third of the local economy.

    Hallmark suffered from general mold market conditions as well as its own particular circumstances, said Dan Moynahan, president of Platinum Tool Technologies Inc. in Oldcastle, a small community just south of Windsor. Moynahan will become president of the Canadian Association of Moldmakers on March 1.

    Nearly all mold makers for the automotive industry wrestle with tough payment terms, typically waiting 18 months to get paid for a mold after they begin work on it, Moynahan said in a telephone interview. This causes cash flow problems.

    Offshore competition from low-wage countries continues to grow and automotive original equipment manufacturers encourage it. OEMs pressure Tier-1 suppliers to source more and more molds offshore, sometimes bypassing the bidding process among North American shops.

    Hallmark did not compete well under these conditions, said Moynahan, who worked for Hallmark for 20 years. The firm did not invest sufficiently in new equipment, and although it was a nonunion shop, it incurred high employee costs related to vacations, perks and employee seniority, he said.

    Adding to its woes, the firm underwent several management changes, going from privately held to publicly held and back to private again, Moynahan said.

    Like many other mold shops, Hallmark established global connections to try to control costs and build bridges for new work. It boasted of an alliance it made last year with Japanese mold maker Yamaguchi Seiki Kougyo Co. in Tomioka.

    Moynahan said offshore partnerships are not for everyone. Although OEMs might push for more, he has heard about enough failures that his company avoids sending mold work overseas. Some of his competitors are trying joint ventures in Asia, while others are turning into mold brokers, making 10 percent commission on molds they subcontract in Asia.

    Moynahan will discuss offshore competition in a CAMM forum he is planning for March 8 in Windsor. He is inviting mold-shop owners to air out their issues and devise strategies to compete.

    His efforts could get an indirect boost from Windsor's new economic development officer, Matthew Fischer. Fischer said the region needs an attitude shift to weather the automotive downturn that has hurt local manufacturing.

    Moynahan said Hallmark's closure will add to Windsor's unemployed skilled workforce.

    Hallmark managers could not be reached for comment. The firm's trustee, Grant Thornton Ltd. of Toronto, did not respond to requests for information.

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