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U.S., Canadian Progressive Stampings Exports Primed to Pop
Of the different segments in the tooling construction and metal stamping industry in the U.S. and Canada, one in particular could see a spike in activity at least in 2010-2012 on behalf of OEM assembly plants transition to Mexico. »
Canadian Tool Shops Embrace Brighter Days
With the incredible amount of financial support provided to the banking industry it's a shame many machine tool, die and mold companies are struggling to access financing. »
Auto Suppliers Push For Relief in Washington, D.C.
The OESA was testifying before politicians yesterday to request what many of us have been griping about–dwindling access to credit.
Auto suppliers urge Senate to do more to help industry
David Shepardson / Detroit News Washington Bureau
Washington — The nation’s auto suppliers urged the Senate Friday to boost credit to the struggling industry.
Dave Andrea, vice president, industry analysis & economics for the Original Equipment Suppliers Association, testified today before the Senate Banking, Housing and Urban Affairs Subcommittee on Economic Policy urging Congress and the Obama administration to take new steps to help suppliers.
The administration created a $5 billion supplier support program for General Motors Co. and Chrysler Group LLC Tier 1 suppliers in March — a program since whittled down to $3.5 billion that many argue is inadequate and doesn’t cover enough suppliers.
Andrea urged the Senate to assure sufficient capital for restructuring, consolidating, and diversifying the industry; address specific needs of small suppliers for sufficient capital for ongoing operations; and create technology funding programs that support long-term innovation.
"Bankruptcies are happening and will continue to happen," said Neil De Koker, president and CEO of the Original Equipment Suppliers Association. "Suppliers continue to struggle under the weight of this economic crisis, and we are eager to work with the members of the Subcommittee in a coordinated effort to preserve the industry’s employment base and technology innovation going forward."
But officials in the administration note that there haven’t been as many bankruptcies by suppliers in recent months as forecast. The Motor & Equipment Manufacturers Association had predicted 50 to 60 additional supplier bankruptcies in the months following GM’s bankruptcy filing.
But MEMA notes at least 47 suppliers sought bankruptcy protection this year — including Visteon Corp., Metaldyne Corp. and Lear Corp.
And suppliers have for the most part been able to get private financing during bankruptcy — though some have relied on automakers for part of their bankruptcy financing.
Last month, GM said it would speed payments to suppliers. Starting Nov. 1, it will pay suppliers weekly rather than every 47 days.
Michigan Gov. Jennifer Granholm met with top Obama administration economic advisers in early August, seeking $1 billion for a program to help suppliers obtain credit to diversify into other businesses. The state has a $12 million pilot program to offer loans to Michigan suppliers on a much smaller scale.
But so far the administration has shown no appetite to do more to help suppliers.
One area for which suppliers might get help is if the administration agrees to their request to increase the limits for loan programs within the Small Business Administration as current limits typically do not cover the investments suppliers make to assist with the design, engineering and tooling for a component on a new vehicle program.
Automotive suppliers are the largest manufacturing employers in eight states: Indiana, Kentucky, Michigan, Missouri, Ohio, Oklahoma, South Carolina and Tennessee. They employ more than 500,000 people directly.
Die & Mold Shops Report Bump in Activity, Credit “Clunkers” Program
Several tool, die and molding companies have stated an increase in production thanks in part to the "Cash for Clunkers" program. Nobody knows if this spike in tooling demand will sustain once the program ends. However, many of these toolers have fortunately hired back laid off workers and expanded current employees’ working hours.
One beneficiary has been Concours Mold, a highly respected injection mold company with plants in Ontario and Alabama.
Joe
Chrysler Dealer Thinks SUV Demand May Surprise….
Here’s another good feature by Scott Whipple at The Bristol Press, composed from his interview with the largest Chrysler dealer in Connecticut. Hearing the views and beliefs from a GM or Chrysler auto dealer at this point in time is quiet interesting.
Fiat good for Chrysler but don’t count out SUVs….
Chrysler’s new global partnership with Italian carmaker Fiat is loaded with question marks. At this stage, it’s uncertain which models will stay and which will go.
In Connecticut, Ken Crowley, who heads the Crowley Auto Group, wants to lead his dealership out of this latest financial wilderness with products that appeal to his customers. His eight dealerships, located in Bristol, Plainville and West Hartford, offer a wide variety of vehicles, both foreign and domestic. Crowley tells anyone who will listen that he has the vehicles consumers want.
In 2000, when Crowley’s Chrysler-Jeep dealership in Bristol sold 866 new vehicles, he was named Chrysler’s Northeast Dealer of the Year.
Those days have turned hellish for the seven Chrysler dealers in the state who were stripped of their franchise earlier this year. Crowley is determined this won’t happen to him.
Recently, Ken Crowley talked about the future of Chrysler and what he believes is necessary for his dealerships to survive under the gimlet eye of a new and watchful presidential administration.
Press: How would you assess Chrysler’s position in the state?
Crowley: Things are a lot better now since the merger. We got in and out of bankruptcy quickly. Twenty-five percent of all Chrysler dealers sell 50 percent of the cars. And, 50 percent of the Chrysler dealers sell 90 percent of the cars. Many of those former dealers sold less than 100 cars a year and had other franchises on the showroom floor; that bothered the manufacturer.
Press: What’s your sales target?
Crowley: If 5,000 cars are being sold a year in Bristol and Chrysler has 10 percent market share the company expects me to sell 500 cars. If a dealer sells only 100 cars a year the company views that as 400 lost sales.
Press: Then you feel you dodged a bullet?
Crowley: Though we’re in a competitive business I’m truly saddened by those dealers who are now out of business. There but for the grace of God go I.
Press: Not all dealers lost their franchise because of low sales…
Crowley: Some may have been overextended. Like Holley Dodge [in Middletown} when they acquired Town and Country Chrysler-Jeep. I know Bob Holley and his son, Glenn — they’re good people.
Press: Chrysler factories are taking a two-week summer break in July, then coming back with something Fiat is introducing called World Class Manufacturing. Can you tell me what that is?
Crowley: It’s a fresh approach that will help us meet the challenges we’re facing. With World Class manufacturing you have to be fast, you have to be efficient. World Class is process driven — the emphasis is on zero defects and doing things right the first time.
Press: What effect will Fiat-Chrysler’s new chief executive have?
Crowley: [Sergio] Marchionne [Fiat-Chrysler chief executive] took over Fiat in 2004. Since then he’s brought them light years ahead of where they were. Chrysler will start getting Fiat’s technology, which is important because Fiat makes small cars — the kind Chrysler will be turning out. They have developed the small engine technology we need.
Press: And, Chrysler has the sport utilities.
Crowley: Right. It’s a nice match.
Press: What happened in terms of car sales?
Crowley: We were building cars the American consumer wanted, then gas prices rose and the market changed quickly. Chrysler didn’t have an arsenal of small products. We [dealers] saw cars dropping 50 cents on the dollar in terms of value. We knew this was ridiculous. People still wanted sport utilities.
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