In the little corner of the car business where skilled machinists repair broken dies through the wee hours of the night and perfect the tools that will turn out smooth body panels, an alarm bell is ringing.
The American tool and die industry is shrinking. But having adequate tooling support is crucial for the recovering industry to keep production and sales strong. (See box, Page 26.)
Over the past eight years, one-fifth of North America's tool and die shops have disappeared, according to data from the U.S. Bureau of Labor Statistics. And the sector focused on automotive needs may have declined by as much as a third, according to another estimate.
Yet new-car sales are surging. Automakers are expanding model variations and adding 3.5 million units of annual North American vehicle manufacturing capacity, according to a Morgan Stanley study. All of that creates new pressure on the smaller pool of shops.
Some industry watchers now wonder if the nation's diminished automotive tool and die infrastructure is a choke point that will disrupt the car business.
"I honestly don't see a solution to this," says Scot Sharland, executive director of the Automotive Industry Action Group, a problem-solving agency created by automakers and Tier 1 suppliers. "It's just a matter of time before the repercussions start to show up."
"Quality problems," Sharland grimly forecasts. "Supplier crashes. Higher prices. Production interruptions. Launch delays.
"This is a perfect storm coming together," he says. "Auto plants are running three shifts and weekends now. What do you think's going to happen when a die breaks on a second shift on a Saturday and there's not a shop available to come to the rescue?
"And it's worse in Mexico than it is here," Sharland adds. "Automakers are expanding is Mexico -- and there's virtually no tool and die industry there."