A depressed market for machinery has promoted the North American seller of Mitsubishi injection presses to scale back its U.S. operation streamlining its sales structure to assure continued viability and profitability.
Effective March 31, MHI Injection Molding Machinery Inc. will no longer stock a U.S. inventory of machines made by Mitsubishi Heavy Industries Ltd. of Tokyo.
Bensenville, Ill.-based MHI will sell the presses only through a network of manufacturers' representatives. MHI officials billed the actions as a restructuring.
Under the plan, the company will lay off direct sales staff including Kevin Gipson, its national sales manager, and several regional sales managers. Axing full-time, direct sales people will enable MHI to cut costs, the company said.
We need to streamline our operations to assure continued viability and profitability of our company, MHI President Kiyoshi Ikuta said in a Feb. 18 news release. Mitsubishi is committed to the continued sale and servicing of Mitsubishi plastic injection molding machines in the North American market. Our full array of products and services will continue to be available to our customers.
According to MHI, future new-machine orders will be filled directly from Japan. There will be no changes to MHI's service and spare parts operations; the firm will continue to support the stable of Mitsubishi presses used by its U.S. and Canadian customers.
The news of MHI's scaling back spread through the plastics machinery industry in recent weeks. It was a topic of conversation and speculation at the Plastec trade show in Anaheim, Calif., held a week before the official announcement. MHI informed customers of its restructuring in a letter sent in mid-January.
The rumor on the street is Mitsubishi is pulling out of North America, and that's definitely not true, said Tom Geddes, MHI's general manager of engineering. As part of the restructuring, Geddes will become MHI's new national sales manager.
MHI remains committed to U.S. service and parts operation, Geddes said. That includes retaining employees such as Mike Wehrle, who remains as general technical manager. That was a critical aspect of the letter we issued to our customers, Geddes said.
He would not say how many direct sales people will be laid off. It's unfortunate anytime you lose people you always lose good people. But it's dictated by the economic times, Geddes said in a telephone interview.
He said MHI is talking to its manufacturers' reps, hoping to retain them within the new overall sales structure.
It's basically a decision that, if a rep feels that it will have a negative impact for not having the inventory, then [salespeople] can elect to not represent us, Geddes said. But most of our reps have elected to stay with MHI.
The move to end U.S. inventory reflects the changing U.S. market, Geddes said. As U.S. injection press sales have plummeted to below 3,000 machines in 2007 and 2008 the Japanese model of stocking large numbers of standard machines, ready for quick shipment, no longer makes economic sense, he said.
Mitsubishi set up the U.S. operation with MHI in 1989. In happier times, U.S. molders would order new presses in batches of 5-10 machines. That's become less common: Processors now want customized presses for specific jobs, often delivered in work cells with robots and other auxiliary equipment. Sales of all plastics machines have been stung by the sharp economic downturn.
Geddes said Mitsubishi wants to move away from general-purpose machinery in global markets. The goal as we go forward is to try to market more technology-based machines, to have more of a value-added aspect to the machines, he said. That means building presses to order, instead of stocking them in warehouses, he said.
MHI will continue to actively seek new customers and will exhibit at NPE2009, Geddes said.
The restructuring is not an attempt to just pull back and hide. We'll be looking for new accounts, he said.
MHI wants to sell off its remaining U.S. inventory. In the current weak market, can buyers expect cut-rate pricing? It's not going to be a fire sale, but obviously, we're pricing [machines] attractively. We want to move the inventory, Geddes said.