When American Commercial Industries Inc. acquired Kardam Man- ufacturing Ltd. earlier this year, it hardly created a ripple of interest in the rapidly consolidating metal-stampings supply base.
But the deal illustrates what is happening with stampers: A consolidator, looking to increase its customer base, geographical reach and product mix, acquires a privately owned company, this one with a plant in Windsor, Ontario, and $13 million in sales.
ACI, of Troy, Mich., continues to search energetically for new acquisitions. President Larry O'Dowd sees ample opportunities for independent suppliers as the captive stamping operations of automakers continue to focus on large components, such as exterior body panels.
'Anything else that can be stamped can be outsourced,' he says.
The days of the small, privately held stamper, long a mainstay of the highly fragmented sheet metal business, may be numbered. As automakers push for better quality, lower cost and more timely delivery, independent stampers are finding that they need a certain size, a certain economy of scale to fund these activities. And then there is the demand from automakers to beef up design and engineering capabilities, which are essential to creating modular systems.
'It's going to be a lot tougher for the mom-and-pop stampers to survive,' says Al Kovach, president of Budd Co.'s stamping and frame division.
The trend toward more low-volume niche vehicles will also add risk to a supplier's business. That is because automakers are asking suppliers to finance the cost of tooling more and more, Kovach says. Automakers and their stampings suppliers agree to amortize the cost of tooling in the cost of the part or component, but what happens, he asks, if a niche vehicle doesn't sell?
The largest independent stampers, such as Budd, Magna International Inc. and Tower Automotive Inc., have developed a set of capabilities that allow them to function almost as an extension of the automaker's own stamping operations.
Budd, for example, announced last month that it was selected as the primary supplier of exterior body panels for a new sport-utility that BMW plans to build at its plant in Spartanburg County, S.C. Budd, a Troy, Mich., unit of Thyssen Budd Automotive Co., says it will supply doors, hoods, fenders, body sides and roofs for the vehicle that BMW plans to start building in 2000.
For some niche vehicles, automakers rely heavily on suppliers.
Magna International's Drive Automotive unit supplies BMW's Spartanburg plant with the entire body-in-white for the Z3 roadster.
Ogihara America Corp., a Japanese owned firm with plants in Howell, Mich., and Birmingham, Ala., produces body panels for the M-class sport-utility built in Vance, Ala.
South Charleston Stamping & Manufacturing Co. of Charleston, W.Va., is producing floorpans for the Mercedes-Benz sport-utility.
Kovach says Budd recently received orders for 'several' new niche vehicle programs in the 2001-2002 model years. But he expects automakers to continue to supply their own stampings for their biggest sellers. 'The OEMs want to keep the high-production vehicles in their own factory,' Kovach says.
Global reach is increasingly important for stampers. In the last four years, for example, Tower Automotive of Grand Rapids, Mich., has completed six acquisitions and invested in joint ventures in Mexico and Brazil. Tower's $700 million acquisition of A.O. Smith's Automotive Products Co. in April 1997 expanded its presence in China, Japan and South America.
Oxford Automotive Inc. is adopting what Senior Vice President Don Campion refers to as a 'pay as you go' strategy in expanding its operations in Mexico, where it has plants in Saltillo and Silao. The Silao plant, which opened in May, supplies metal blanks to a General Motors truck plant there. But the facility can easily be upgraded to a stamping operation if Oxford can expand its business.
The Troy, Mich., company also expanded its global reach earlier this year with the acquisition of Eaton Corp.'s leaf spring suspension division. The deal brought Oxford another $130 million in sales, a plant in Indiana, two in Ontario and a joint venture in Venezuela.
Move to satellites
Automakers, for their part, are shifting to smaller dedicated stamping plants adjacent to assembly plants. Traditionally, car companies have relied on massive, regional stamping centers that shipped parts to a number of assembly plants. The new satellite stamping plants will lower shipping costs for components, reduce inventory at assembly plants and allow managers to respond more quickly to quality problems.
Ford Motor Co. is building a 100,000-square-foot addition to its Kentucky Truck Plant in Louisville to supply doors and roofs for the new Super Duty F-series pickup. The operation will also supply Explorer and Mountaineer body sides for the nearby Louisville Assembly Plant.
General Motors is doing much the same thing in Doraville, Ga., at its minivan assembly plant. GM is completing construction of a 'contiguous' stamping plant to produce body panels in Doraville. GM planned 'every detail' of the new plant in accord with its lean manufacturing production system, known within the company as the GM Competitive Manufacturing Process Guide.
John Couretas is a Detroit-based staff reporter for Automotive News