Nearly 25 mold and tool shops could go under by 2012: study

A new study of the Machine, Tool, Die and Mold (MTDM) industry in Windsor-Essex has found that more tool shops will close in the coming years, and action must be taken to help companies diversify into new market sectors.

The diversification study was conducted by Lean Design Canada, Inc., which interviewed 45 companies and collected survey data from approximately 140 companies. The study was undertaken by the Windsor-Essex Development Commission (WEDC) with the grand provided by Minister of Economic Development and Trade Sandra Pupatello.

The survey predicted that an additional 18 to 25 shops will close in the region in the next three to five years, with seven to 10 of those lost in 2008 alone. The survey said that at least eight of the companies will fail due to bankruptcies and reorganizations of the Tier 1 supply base, six companies will close due to cash flow issues, and four will close due to a lack of succession planning. An additional seven companies will close because they did not take action to change.

“It is late in the cycle and therefore impossible for a complete turn-around to take place,” said the study. “The fact that so many shops have closed can actually help the survivors who may have resisted change, new technology, new methods, and new processes to embrace change and develop new customers unaffected by the economic cycles of the automotive industry.”

The WEDC is also sending out a survey that will allow the commission to help tool shops prospect for new opportunities outside the automotive market, in areas such as medical, aerospace, oil and gas and defense.

Additionally, the WEDC is undertaking one-on-one Lean Manufacturing training delivered in partnership with Lean Design Canada, Inc. for 20 companies as a pilot study for the Communities in Transition program. The Ministry of Economic Development and Trade will fund 50 per cent of the effort, while the other 50 per cent — approximately $5,000 each — will come from the companies.

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