A Japanese tool and die company is building a plant in Meridian, Miss., to handle die repairs for Japanese and European transplant automakers.
The move by Teikuro Corp. is good news for the Southern transplants, which have complained for years about having to truck their stamping dies hundreds of miles to Michigan and Ohio for overnight repairs.
But it's not such great news for the U.S. tool and die industry. The Meridian plant may dash the hopes of some older U.S. companies that have been looking for new automotive customers.
U.S. die companies have been courting the transplant auto industry with little success since the 1990s. The big problems are cost and geography.
The Japanese and European automakers are mostly in the South. The U.S. die industry is concentrated in Michigan. The cost of setting up more convenient branch operations in the South is simply too great to warrant the expansion, says Jay Baron, CEO of the Center for Automotive Research in Ann Arbor, Mich.
"There are hundreds of tool and die companies in Michigan, but they're mostly mom-and-pop shops," says Baron, who has been trying to help the Michigan-based industry through a group called the United Tool Coalition. "It takes more than a single customer. If a Michigan company knew that they could get both Toyota and Mercedes-Benz, they'd be down there in a minute."
Teikuro has managed to do just that. The company plans to supply Toyota, BMW Manufacturing Corp. of South Carolina, Nissan North America Inc. in Tennessee and Mississippi, Honda Motor Manufacturing of Alabama LLC, and also the Big 3.
According to Teikuro's vice president of U.S. operations, Michael Houseman, who will set up the Mississippi plant, Teikuro has a commitment to open plants wherever Toyota operates around the world. Houseman also has opened die shops in Germany and Turkey.
The $2.5 million Mississippi plant was prompted by Toyota's latest project: a full-scale Tundra pickup plant that will open in 2006 in San Antonio. Toyota wanted the supplier to locate on the San Antonio truck plant campus, but Teikuro demurred, Houseman said. That would have put Teikuro into the same bind as its Michigan competitors: being too far from other customers. "Toyota recognizes that we need to work with other customers," Houseman said as he boarded a plane for Japan to present the plant's design plans.
Die repair works on a 48-hour turnaround, Houseman explained. "We get a call from the factory. We send a truck to pick up the die, usually on a Friday. We drive it to our plant, fix it, and have it back up and running Monday morning."
The state of Mississippi will pick up the tab for training skilled die workers for Teikuro, he added.
Baron says his efforts to unite the transplant auto industry with Michigan tool and die firms will go on.
"The need is bigger than just repairs," he says. He believes Toyota, Nissan and Honda all want to use more U.S. companies to produce and maintain dies. Last summer, he led a tour of Toyota engineers through Michigan to show them the tool and die resources that are available.
"The message we're getting from Toyota is that our shops are very competitive," Baron reports. "We just need to be more cost-competitive, and we need to be closer to them."