Manufacturers throughout North America share many of the same concerns: winning new business in the face of a possible U.S. recession, cutting operational costs, competing with low-cost countries like China, and getting paid quickly for their work.
Companies centered around the Detroit region have seen even more difficulties as production has slowed again and again from major automaking customers.
And now mold makers and molders on the Ontario side of the Detroit River are dealing with a complication they have not seen for 30 years - a strengthening Canadian dollar that is worth the same, or even more on some days, than the U.S. dollar.
That means that a contract they won a year ago could be worth 10-15 percent less by the time they get paid. Wages originally set to compete against a strong American dollar mean that Canadian shops now pay more to employees than U.S. shops. With US$100 billion worth of trade goods passing through the Detroit and Windsor crossing each year, that adds up to big money.
On its own, the exchange rate issue is not enough to hurt most companies, but when added to the difficulties already facing the industry, it is making it harder to compete. Richard Myers, who was forced to close his M2M International Ltd. tooling company in Wallaceburg, Ontario, because of nonpayment by some customers, said the currency issues also played a part in the decision.
``Ninety-eight percent of the issues are the same on either side of the border,'' said Cy McGrath, chairman of the Canadian Machine, Tool, Die & Mould Federation and an adviser to the Canadian Association of Moldmakers.
But the international border running between Detroit and Windsor, Ontario, is becoming a stronger issue for that remaining 2 percent of business as companies face the impact of a slowing auto industry.
``You've got two currencies separated by a quarter of a mile,'' said McGrath, who is general manager-Canada for tooling parts firm Progressive Components International Corp., based in Wauconda, Ill.
Currency fluctuations are a normal part of doing business, but since 1976, Canadian and U.S. trade has been built around a stronger U.S. dollar.
>From 1998 through 2002, the Canadian dollar was worth less than 70 cents in the United States. But in September, the Canadian dollar caught up with the U.S. dollar and by October it passed it. Since then, the two currencies have traded at or near parity, with the Canadian dollar at times worth as much as US$0.03 more than the U.S. dollar.
That changes the economics of doing business for Canadian firms that see most of their sales to U.S. firms.
``Margins are getting crossed,'' said Dan Moynahan, president of automotive injection molding toolmaker Platinum Tool Technologies Inc. of Oldcastle, Ontario, and president of CAMM in Windsor.
In many ways, the dollar value does not make much of a difference for toolmakers. They were already paying U.S. prices for their supplies and competing with U.S. companies, he said.
But there is a difference when it comes to the bottom line, he noted. Consider the example of a Canadian toolmaker with annual sales of C$10 million that does 70 percent of its work for U.S. companies and is paid in U.S. dollars.
When the U.S. dollar was worth 20 U.S. cents more than the Canadian dollar, that $70 million in U.S. sales meant an extra C$1.4 million on the books.
``Now, to do $10 million in sales in a year, you've got to make a full $10 million,'' Moynahan said. ``You're having to work harder and spend more to make the same numbers at the end of the year.''
At the same time, wage adjustments that Ontario companies made during the 1990s to hold on to talented employees are now costing them more because of the change in dollar values.
As recently as 2003, a Canadian company might have to pay C$80,000 to retain an engineer who could otherwise bolt to a U.S. job just a few miles away that would pay US$60,000. Machine operators could count on C$5 to C$10 extra per hour to bring their wages to parity with their U.S. counterparts.
Now the dollar values have changed, but the wages haven't.
``You're talking about somebody's pay,'' said Jeff Mengel, a partner with consulting group Plante & Moran PLLC in Chicago. ``You don't want to go up to them and say that they're going to have to take a pay cut now because of the currency. It really puts them in a bind.''
As a result, Canadian toolmakers are adapting more automation, seeking out new customers beyond their automotive base and finding ways to specialize that will give them an edge in winning new business, Moynahan said.
Beyond the currency issue, though, molders and mold makers on either side of the border near Detroit also are dealing with more-complicated shipping rules at border crossings in place since the Sept. 11, 2001, attacks, McGrath noted.
Add to that the uncertainties about what will happen during the Canadian Auto Workers union negotiations later this year, which could impact overall vehicle production in Canada, said Laurie A. Harbour, managing director of consulting company Stout Risius Ross Inc. in Southfield, Mich.
``We've got customers looking to in-source back here because of the exchange rate,'' she said.
If Canadian plastics suppliers can successfully find new business outside the auto industry and its links to U.S. customers, they should benefit in the long run, McGrath noted. After all, Canada's dollar has increased in value because its economy is growing, thanks to its status as an oil exporter. Outside of the pocket of stressed businesses in the auto sector, employment rates are at a seven-year high.
``It's a lot easier to buy into the doom and gloom than to buy into the opportunities that are there,'' he said. ``There are shops around town that are doing well. You've got to ask yourself how you can diversify to make the most of what they've got.''