Novi, Mich. — Mold makers faced disruption during the pandemic followed by supply chain problems, material cost increases, labor shortages and competition from China. Demand lightened, too, forcing some companies to either fold or change direction.
In March, HS Inc. of Grand Rapids, Mich., laid off 58 people — nearly a quarter of its workforce — in a shift from tool and die operations, which dated back to the company's founding in 1969, to only automation solutions.
Superior Die Set Corp. in Oak Creek, Wis., is at a crossroad currently. The family of founder Kasimir Janiszewski will either sell the facility or close it Nov. 20 after 100 years of operations. The decision is based on many factors, "including our current outlook of the domestic market and Superior's fit therein," Frank Janiszewski, co-chair of the board of directors, said in a Sept. 21 news release.
More than ever before, the tooling and mold making industry is under attack, according to Lisa Lehman, business development manager of Harbour Results Inc., a manufacturing consulting firm based in Southfield, Mich.
"The cost of doing business is much higher than it's ever been," Lehman said while moderating a panel discussion about the future of mold making at the Injection Molding and Design Expo, held Sept. 20-21 in Novi.
"And while our wages used to be the best in manufacturing — more than any other trade — even production wages are now higher. It's making it more difficult for toolmakers to find labor," Lehman continued. "China continues to put pressure on us. Supply chain and material cost challenges are all over the place. These pressures have forced several mold makers out of business in the last two years."
Panelist Tom Barr, president and owner of TK Mold & Engineering in Romeo, Mich., said his company recently started taking on injection molding work for the three presses it has for mold trials.
"We're looking at some low-volume work, things that will help us improve cash flow," Barr said, adding that molding jobs have come in from the automotive, consumer goods, medical and defense markets.
Barr has been in the business since 1985, "loving every day what I do," he said, but the challenges are mounting.
"Years ago, there was a cycle that every six years would dip and be somewhat of a recession. This time it seems we're getting attacked by several different things, whether its interest rates, retaining employees, cost of living upgrades. There are four or five things attacking the business right now. If it's not that, it's offshore competition, so we really have hunkered down," he said.
For mold work that does materialize, the payment terms have been harder with some tool shops taking on financial risk for customers even though it interferes with their own cash flow and new projects.
"More responsibility is being put on the tool shops financially and from a technical standpoint," said Bill Frye, another panelist and North America business manager of Simoldes Tools, a Portugal-based mold maker.
Frye described Simoldes as a privately held, family-owned company with annual sales of about $100 million generated from facilities in 11 countries that employ about 1,000 people.
Simoldes officials are watching cash flow, keeping an eye on receivables and staying in close contact with customers.
"We can only control what's in our reach," Frye said. "Internally, we're looking at processes for streamlining and being in tune to our customers, making sure we hang onto the ones we have. ... It's tough in these times. Everyone is doing the same thing, just trying to hang on."
Recession worries continue to loom, and the United Auto Workers strike brings more unknowns, Lehman noted. "A lot of things we haven't seen yet could come to fruition," she said.
Still, new opportunities are on the horizon for companies that hang on and adapt.
"What we are optimistic about is that we'll see more demand over the next three years than we've seen [in a while]," Lehman said. "And this is largely driven by new ICE [internal combustion engine] products, and of course we're all talking about BEV [battery electric vehicles]. So, there's about 140 new BEV parts that will come to life."