Posts Tagged ‘ machining ’

One Metro Detroit county is enjoying a boom in manufacturing investment as several machining and tooling suppliers have bet on the future of aerospace by making large contributions.
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The Detroit Chapter meeting was held on March 24th at the Club Venitian in Madison Heights, MI. Craig Wiggins was one of the keynote speakers for the evening. He touched on the tooling proposal and also made some solid suggestions as to what steps we can take in the near and long-term future. One important item he touches on is the need for U.S & Canadian tooling companies to attack this brutal economy together. –Joe Brown

(Wiggins)

On this journey we met tool shops form Nebraska, Missouri, North Carolina, as well as Grand Rapids and Detroit and Warren.  From Windsor, Cambridge, Newmarket and Ajax.

It didn’t matter where anyone was from, it didn’t matter if you made dies or molds, YOU ALL HAD THE SAME ISSUES!

This is a North American industry and we are the only industry during this crisis that joined together across the border to achieve our objectives!

Along this journey we have picked up some other great friends in the industry….

From the 33^rd district (Clinton Township), Representative Kim Meltzer has been a strong supporter on our behalf. She previously stated,  Resolved by the House of Representatives, That we hereby memorialize the Congress of the United States to enact an oversight mechanism or structure to ensure that the federal stimulus assistance for the domestic automotive industry be used to pay outstanding debts due to the tool, die, and mold industry.

We’ve also had the pleasure of dealing with Thaddeus McCotter who has been an absolute pleasure to deal with. Here is a statement, as he wrote i in a plea to this political constituents…

Succinctly, our domestic auto industry (as well as nearly every American manufacturing industry) is dependent on the MTDM industry. Consequently, it is of critical importance to include MTDM manufacturers in any discussions regarding solutions for the success of the American-based auto industry. …. Thus, as the livelihoods of Americans employed in MTDM industry depend on the success of our domestic auto industry, these hardworking Americans deserve a seat at the table and deserve an opportunity to explain their ideas, proposals, and perspectives before the Presidential Task Force on the Auto Industry.

And then we have people like Joe Brown. Joe, if that is his real name, has been tremendous and shown a great deal of passion for the future well-being of the North American tooling industry. Joe has a blog for the tooling industry which has become a daily read for me. Joe also writes for the PMA and has written a fantastic article, from which the following quote comes from,…..

“For a good time, call 1-800-AMERICA,” is scribbled across bathroom stalls all over the world. How could you do this to me?! We were so good together; I didn’t think anything would ever come between us.

After everything we’ve been through together, the good times and bad times. What about the eras of great prosperity and concern? Through it all, who was there for you every time you so desperately needed from me? You asked me to change, I changed. You wanted more money, I sacrificed. You needed something quicker; I worked constantly through the night. I was selfless and now you are abandoning me.

America, I love you dearly but I’m tired of you cheating on me time and time again. And now you’re giving out your phone number?  You allow your foreign partners to levy heavy tariffs on American imports while you have become the red-light district of the manufacturing industry…..

Laurie Harbour-Felax from the highly respected consulting firm, Harbour-Felax, provided me with some crucial information just in time for our meeting with Ron Bloom and President Obama’s Auto Task Force team.  Laurie states in the study….

Our study, which found an 8% advantage for the New Domestics on average tooling costs over the Detroit 3, does not account for double tooling payments by OEMs and other parasitic costs with respect to tooling involved in a Tier 1 Chapter 11 filing which would include:

Lien maintenance fee and resources;

Legal fees for OEMs, Tier 1’s and tool sources;

Productivity declines as a result of the attention top management may spend on a customer Chapter 11;

Any resulting declines in credit capacity as a result of bad debts incurred by a tool source not receiving payment.

These parasitic costs are not evidenced in a progress payment-tooling environment as we have witnessed with the New Domestic vehicle manufacturers.

 In conclusion, our study indicates that the Detroit Three companies and their supply base currently exist in an adversarial environment.  This can change dramatically with minor changes to the working relationships (payment terms) between OEMs and suppliers.  This simple change will significantly improve the health of the whole industry.

So where do we go from here?  Well, the Tooling Proposal has two main tenants:

1.    Pay for tooling in commercially reasonable terms, instead of being paid 5-18 months after shipment, we want 90% after shipment and 10% after PPAP.

2.    Make sure the tooling proceeds make it through the Tier 1 in a trimly fashion to the Tool Source

As GM and Chrysler do not have the money to move to Commercially Reasonable Terms this has to come from the government.

So I ask everyone in this room to go back to their office tomorrow and contact every politician possible to push for the Tooling Proposal.  Call your competitors, suppliers, customers and your colleagues in other states and have them push for it too. 

Let them know we are the ONLY viable sector in this industry but we will only remain viable if we can collect the money for the goods we have delivered.

As to the “Safe Passage” of tooling funds it is obvious by GM’s actions of routing parts payments around the Tier 1 parts companies that they know that they have an issue at the Tier 1 level.  I am meeting with GM later this week to have a productive discussion on helping them and helping you folks.

The benefits of the Tooling Proposal include:

Prevention of avoidable bankruptcies in TDM (Tool, Die & Mold) sector;

Protect and stimulate employment;

Enhance liquidity for TDM sector companies (without the need for banks to amend existing bank credit facilities);

Mitigate the risk of bad debts which erode company profitability, productivity and access to credit;

Ensure a mechanism for “trickle-down” for direct loans proposed by Government to the OEMs to companies throughout the supply chain;

Ensure the TDM Sector is properly recognized as a critical supplier in any loan agreements or bankruptcy styled restructuring of the subject vehicle manufacturer;

Reduce the risk of taxpayers paying twice for the bailout: once at advancing of loan proceeds to vehicle manufacturer, and a second time when tooling proceeds from the vehicle manufacturer are diverted by the “Middleman” (the Tier 1 parts manufacturer) prior to delivery of funds to the tool source, resulting a bad debt forcing tools source to lay off employees or file Chapter 11

During this journey, I have seen this industry and these associations do some pretty impressive things.  But I have also witnessed several areas where this industry and these associations can work more collaboratively for the greater good of their industry and not simply its own membership.

I heard someone say that the 5% GST in Canada is some form of advantage for Canadian companies and a detriment to US exporters to Canada.  This boggles my mind!  GST is a tax on a consumer and not on industry where it more of a management pain in the ass than anything else. My point being is if you are so wrong about your northern neighbours, how good is your information on China!?

I have been pushing this for four months with the support of Executive Steering committees and the associations such as the AMBA, CTMA, NTMA and PMA among others.  BUT my shelf life is almost done.  This wave hits the beach for better or for worse March 31, 2009.  After that I am turning over my surfboard to this industry.  

Working together and across the border is the way to go.

In my opinion in order to be successful we must champion a new era as a North American industry of tool, die and mold shops. Not of Canadian mold makers and US die makers BUT of North American Automotive Tool Makers.

I am asking the owners of the tool die and mold shops to take the absolute love they have for their businesses and to embrace this industry as a North American collective. We gathered on February 10, 2009 in the shadows of the GM World Headquarters and Chrysler Canada’s Headquarters to launch the North American Tooling Proposal we grew.

Our voices in this industry have never been louder or collectively in sync. 

It would be shame if the path we have blazed for the past four months is allowed to grow over.

I am humbled by the support the Tooling Proposal has received from this industry. 

I am humbled by the attention it has received by our politicians and the press.

I am humbled that someone, with the support of thousands of North American companies, can get in front of the most powerful person in Automotive and get a seat at the “adult’s table” for an industry as deserving as this one.

 Thank You…

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According to governor Jennifer Granholm the Michigan Economic Development Corporation is helping 17 companies out which will in turn create about 7,000 new jobs.  Among those new jobs include 62 for Premier Tool & Die.  You can view the news video be clicking the link underneath the blurb below.

Joe Brown

• Premier Tool & Die Cast Corporation –
The company plans to locate a new, $4.2 million facility in Dowagiac.
The project is expected to create 62 jobs at the company and an
additional 46 spin-off jobs. Based on the MEDC’s recommendation, the
MEGA approved a state tax credit valued at $553,000 over seven years to
win the company’s investment over a competing site in New York. The
city of Dowagiac is supporting the project by extending additional
power capacity and anticipates approval of a tax abatement.

Click here for ARTICLE
Click here for VIDEO

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