TRAVERSE CITY, MICH.-- General Motors and Toyota Motor Manufacturing North America have both agreed to consider giving a new consortium of Michigan tool and die companies the contract for future vehicle programs.
The U.S. Tooling Coalition, a year-old group of eight of the largest tool and die shops in the industry, is attempting to market its members services collectively. The effort is part of a push to help bolster the U.S. tool and die industry, which is under pressure from overseas competitors.
Jay Baron, president of the Center for Automotive Research, who has been assisting the consortium, said the approach could help established tool and die companies compete for business.
These companies are under tough cost pressure right now, Baron explained Monday, Aug. 4, between meetings at the Management Briefing Seminars. They struggle to cut 20 or 30 percent out of their costs, and then their customers come back and ask for another 20 or 30 percent.
Baron said the biggest pressure is coming from overseas competitors. Although he declined to reveal names, Baron recounted a recent consortium bid in which the group managed to reduce its proposed project cost by 25 percent. But the winning bid went to a Japanese company whose price was 50 percent lower than that, according to Baron.
Its possible that they are using a different model, which might include having some substantial part of the work done in another country, like China, Baron said.
The state of Michigan is supporting a second coalition of tool and die shops, called United Tooling International. That coalition consists of smaller companies around the state.
Baron estimates that as many as 65,000 people are employed in the automotive tool and die industry in Michigan, representing more than one-fifth of the entire North American industry.