TRAVERSE CITY, Mich. -- General Motors and Toyota Motor Manufacturing North America Inc. have agreed to consider giving a consortium of Michigan tool and die companies a 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 said last week 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.
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 North American industry.
This move by GM and Toyota is significant because it indicates that two major automakers are receptive to the idea of supporting the North American tool and die industry.
GM and Toyota were the first two automakers approached by the consortium. The consortium will approach other automakers later.