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November 1, 2001

4 Min Read
Sound Off: Living and working in Asia

Editor's note: Sound Off is a forum for readers to voice their opinion on a variety of topics. Sparked by recent articles about building tools in Asia, the following was submitted by Patrick McGrath, an engineer working in Asia managing moldmaking projects. A previous Sound Off on this topic, written by Larry Erikson of Illinois Valley Plastics, ran in the September issue of IMM (see pp. 86-88). 


Patrick McGrath, tooling engineer, Taipei, Taiwan

I'm an American engineer living and working in Asia. I have my own design and tooling sourcing/project management business (www.visioneering.com.tw) in Taipei. Today will be a fairly typical workday for me. This morning I have to go to a gaugemaker called Fong Yi in Taoyuan to review design drawings for a set of gauges for a Mazda project. This afternoon I'll be doing final sampling of a tool in Hsin-Chuang at a sampling shop with no English name; then I'm on to a texturing shop in the area called Yun Da to review an eight-tool graining project being completed for me. I have to be finished by 6:00 p.m. so I can make my daily 2-hour Chinese language class at the National Taiwan Normal University in Taipei where I've been studying for the last six months. 

I also can't forget to make my travel plans for next week's trip to a Visteon molding facility in Rayong, Thailand. I'm working with two toolshops from Taiwan on a new Visteon project, and we need to hold mold design reviews. 

I've been living this way now for the last three years. My business travels have taken me from South Korea to Malaysia and Shanghai to Mumbai. During this odyssey I've developed a different perspective on the tooling industry here in Asia as compared to the prevailing opinions in the U.S. 

The outlook is that Taiwan's tooling industry will all but vanish in another two years.

For example, the hard reality in Taiwan is that the tooling industry is in much worse shape than in the U.S. Taiwan is barely 100 miles from mainland China where the average moldmaker's wages are one-tenth what they are here in Taiwan. There's been a giant sucking sound in the last two years in Taiwan as toolshop after toolshop has shuttered its doors and either moved to China or gone out of business. Large tools and some precision tools are still being built here but none of the shop owners I know from Taipei to Tainan expects that to last more than another two years before that business, too, is lost. The outlook is that Taiwan's tooling industry will all but vanish. This reality is mirrored in last quarter's economic growth rate of -2.35 percent in Taiwan, the biggest contraction ever recorded. 

I'm somewhat better prepared than most Taiwanese to deal with this shock. I was a toolmaker in the U.S. in the late 1970s and early 1980s when America was going through the same economic trauma of global competition. I reacted by riding the wave of globalization all the way through engineering school where I got a BS in mechanical engineering, to the shores of Asia itself where I'm trying to learn the ways and the language from the inside out. 

These "Asian Tigers" (Taiwan, South Korea, Malaysia, Singapore) that were dishing out the pain to American workers in the 1980s are now on the receiving end. I talk to them about the need to create intellectual value, which proved to be our salvation in the U.S. 

Living here has also given me another perspective on what ails America, and what really makes it so hard to be a worker in the States. The most eye-opening difference is how societies here focus on the business of doing business, lightening the burden on workers and their employers, and improving their competitiveness. 

In the U.S., 30 to 40 percent of a toolmaker's salary goes to the government, and health care is paid on top of that. I imagine the employer's tax bite is comparable. Here in Asia, however, the average worker's pay is half or less of what it is in the U.S. but only 10 percent at most is deducted from wages and that covers all health care, including dental. Many Taiwanese workers actually end up making more than U.S. workers because of profit sharing and stock options and bonuses tied to company performance. I remember much talk about profit sharing while working as a toolmaker in the U.S., but it never seemed to materialize in any meaningful form. Here, toolmakers believe they'll be rewarded if they make the scheduled T1 date. And they're right. 


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