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December 1, 2000

4 Min Read
Editorial: Flying in the face of reality


Jeff Sloan

I received an e-mail after we published an article in the July issue that explored molding opportunities in Africa ("Africa: A Market With 700 Million People. Why is it Ignored?", pp. 18-22). The e-mail was written by Jade Delisi, who works at L. Weger Inc., a polishing and chrome plating business in Chicago. Jade's message to me was this: 

"We, L. Weger Inc., are outraged that your magazine would print an article that would help to put more Americans out of work. Since the induction of NAFTA and the Free Trade Agreement with China many U.S. molding or mold finishing plants have either folded or have setup shop over the borders. 

"The U.S. is currently in a recession. This is the direct result of U.S. plants downsizing domestic operations to save money on labor and property. How much longer can Americans weather this foreign storm? When will U.S. businesses realize that if the American worker is not earning a paycheck, then they cannot purchase these products? 

"I do feel that the article was written without bias and that it did show the pros and cons of having a business in Africa. However, I feel that it did not state the ramifications of downsizing the American worker. Most articles pertaining to moving moldmaking or mold finishing operations over the U.S. borders talk endlessly of lower labor and/or property costs, yet fail to mention the negative impact that evacuating the U.S. has on the economy. Perhaps next month's publication will have an article that 'slaps' the un-American American business owner." 

Then, a couple weeks later, I got a very long e-mail from Larry Erikson, vp and gm at molder Valley Plastics Inc. in Washington, IL. He took exception to another story in the July issue that described a tooling program sent to Taiwan that went horribly awry (One Saga of Asian Tooling: Salvaging a Program Gone Bad," pp. 56-58). You can read what Larry had to say but I will excerpt it here to make my point: 

"While I understand, and have experienced, a similar tale as recounted in your July 2001 article, I would also point out that this is one experience and not one that need happen with proper supplier selection and communication. Do not fool yourself into thinking that all molds from Taiwan or the Far East are substandard. . . . 

". . . I certainly do not want to see the moldmaking profession disappear in the U.S., but we must also compete with the rest of the world. On the projects that we have sent to Taiwan, in most cases if we hadn't quoted the mold in Taiwan, the entire project, including the molding, would have ended up in the Far East. We have found that we can still compete for the molding business with China. Yet, we must continue to automate and improve our productivity. 

"Domestic moldmakers must change radically and constantly to survive. They must outsource less critical components to machine shops to reduce costs and lead times; they must use the latest technologies in cutting tools and equipment to reduce expensive labor-intensive work; and they must be constantly on top of the latest technology in rapid tooling. If they do not, they will not survive. We cannot afford to lose molding jobs to the Far East because we cannot compete on the mold." 

So, who's right? Are we selling molders and moldmakers down the proverbial river, or do you just have to be more creative in finding ways to keep jobs in the U.S.? While Jade Delisi and struggling moldmakers and molders who share his views get all the sympathy I can muster, my money is on firms like Larry Erikson's. As much as we hate to see it happen, there is a natural selection in the evolution of commerce, and the injection molding industry is no exception. OEMs are in the business of making and saving money. One way to do that is to move to low-labor-cost countries—and they want their suppliers to join them. 

The U.S. is a high-technology, high-labor-cost country. We possess unprecedented brain power, we are extremely productive, and are possibly the most efficient country in the world. To survive and thrive, molders and moldmakers have to adjust their business strategies to capitalize on these strengths to give customers a compelling reason to keep jobs here. 

At the same time, no amount of creativity or technology is going to stop some jobs from going to Asia and Mexico. That's reality. And many molders and moldmakers have proven that being a proactive part of this "outsourcing" can be profitable. It's IMM's job to shed light on both of these trends, and hopefully help you find the path to success. 

Jeff Sloan

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