Automakers must come up with innovative ways to reverse a dangerous decline in the number of tool and die companies supplying the North American industry.
Auto and vehicle parts manufacturing is booming. But the number of shops making the tools and dies that keep factories humming is shrinking. In 15 years, the number of tool shops plunged from 9,000 to 5,500, so the problem is immediate.
What's ahead? Quality problems, supplier crashes, higher tooling prices, production interruptions and vehicle launch delays, warns Scot Sharland, executive director of the Automotive Industry Action Group.
But the tool and die industry also is trapped in a long-term decline. Extreme business cycles make recruiting hard enough, but fewer young people want to go into manufacturing, let alone tool making that requires years to master.
Auto assembly and parts making are spreading further into Southern U.S. states and Mexico, but the tool and die sector isn't. Often family-owned, tool shops seldom leave the Detroit area. Few tool makers move to the South or open branch offices there, worrying about relocating workers or finding new local ones. A bigger question is where to relocate to. Outside Detroit, auto production is scattered.
Short-term, tool makers can only keep recruiting and training. Longer-term, the entire auto industry must work to build a healthy tooling sector. And it must reach out to other industries and to universities, foundations and governments.
Manufacturers might sponsor vocational training and help universities develop manufacturing research centers. Isolated automakers and suppliers could jointly guarantee some orders to tool makers that open locally. States luring assembly plants with big incentives might earmark some to attract tool makers as well. It's time to focus on machine tools.