(Nov. 26, 2008) — To celebrate the 20th anniversary of Plastics News in 2009, we continue with our weekly countdown of the Top 20 stories covering issues of lasting impact. Plastics News staff members voted on the stories. The series will end with the No. 1 story in our 20th Anniversary special edition March 16.
The series will end with the No. 1 story in our 20th Anniversary special edition March 16.
No. 15: Mold Makers Under Pressure
Mold makers spent the 1980s and 1990s adjusting to a changing world.
Entrepreneurs who made the molds used throughout the plastics industry's infancy were getting older and hashing out retirement plans. Shops that began with just a couple of toolmakers had to figure out how to transition into more formal companies that could be sold or moved into the hands of a second generation of mold makers.
Technology was coming more heavily into play, with computer-assisted design and manufacturing requiring that companies invest more in equipment to keep up.
Customers like those in the auto industry were pushing prices down and pushing payments further and further back.
Then came China and the global tooling revolution, and suddenly the 1980s and 1990s were seen as something of a golden age for mold shops.
By 2000, toolmakers were no longer competing with the shop down the street. Instead they were bidding for work against firms half a world away and with companies whose payrolls were a fraction of theirs.
Fifteen North American mold makers went to China in early 2000 to see this new world for themselves, and the owner of one California shop said he discovered a mold being made in Shenzhen that he had bid on and lost.
The international trade pressure only increased from there. Automakers began requiring their suppliers to buy tools from China, and mold makers in North America found themselves laying off workers or bidding below cost to just keep jobs in place in hopes that things would get better.
Some firms made snap decisions to partner with Chinese mold makers, only to find they had not done enough research, and wound up on the hook for costly repairs to molds that were not made to proper specifications.
But at the same time, some toolmakers managed to grow through international expansion. While embracing lean manufacturing to lower labor costs at home, they also took their time to make the right connections overseas, bringing them more business in design at home, along with more international contacts.
The pressure has not eased for even these successful mold makers, however, and the past 20 years are littered with the names of firms that made all the right moves, but still found themselves caught when an important customer went bankrupt or payments dried up.
With the ongoing credit crunch and a global recession looming, one thing is certain: life is not going to get any easier for toolmakers anytime soon. Rhoda Miel is a
Rhoda Miel is aPlastics News staff reporter based in Detroit.