Firefighters respond to fire at former LMS building

Firefighters from two area departments along with the Sebewaing police were dispatched Wednesday to a fire at the former Lapeer Metal Stamping (LMS) building in the village.

LMS opened in October 2004 after the former Tower Automotive plant closed in 2002. When LMS was accepting applications prior to the opening of the plant, about 900 people applied, according to a story published at the time by the Huron Daily Tribune. LMS closed its doors in 2008. Approximately 100 people were employed there at the time of the closure.

US to loan $5.9 bln to Ford to aid fuel efficiency

Well, this is interesting, especially when combined with a few other developments I’ll speak about after the quote.

The US government will loan 5.9 billion dollars to Ford Motor Co. and 1.6 billion dollars to Japanese automaker Nissan to invest in improving the fuel economy of their US-built vehicles, officials said Tuesday.

The loans are the first awarded out of a 25-billion-dollar program to help automakers meet upcoming fuel efficiency standards, Energy Secretary Steven Chu said at a press conference.

“These loans will help the auto industry meet and even exceed the president’s tough new fuel standards while creating jobs, reducing our dependency on foreign oil and ensuring America’s competitiveness.”

Another 465 million dollars will be loaned to electric sports car maker Telsa.

Additional loans will be awarded to “large and small automobile manufacturers and parts suppliers up and down the production chain” over the coming months, said Chu

Ford will use the 5.9 billion dollars retool plants in five states and boost the fuel efficiency of close to two million new vehicles annually.

Nissan will use the loans to modify its Tennessee plant to produce zero-emissions electric vehicles and the lithium-ion battery packs to power them.

As I mentioned above the quotes, there is an interesting tie-in for this blog. A lot of metal stamping dies, and the original production of them, have gone off-shore.

There are a determined bunch of people in Detroit (and no doubt in other places too, but I only know about the Detroit bunch) who want to play catchup and bring their toolmaking lead time and costs down, in line with off-shore toolers, in order to keep that work onshore. I’ve kept in loose touch with a few of them, belong to some of their groups on LinkedIn and other places, and in general applaud what they’re doing. I did, however, question their belief that they could bring 50% of the diemaking that went offshore back. I don’t think those dies are coming back unless and until they need to be retooled.

This may be the retooling opportunity they’re looking for/need. Retooling for greater efficiency means making better use of steel components, smarter brackets with stiffening ribs instead of using thickness to get the strength needed, use of aluminum where possible, etc. These things mean new dies, and therefore, a chance to start over again on-continent.

So this may well be a very good thing.

Auto parts makers to shed 37,000 jobs this year, Conference Board forecasts

More bad news for Canadian stampers. One can expect roughly the same results south of the border, at least in proportion.

From Yahoo! Canada Finance

The Conference Board of Canada says auto parts makers will cut 37,000 jobs, or about one third of their workforce in Canada, as the North American industry undergoes massive restructuring.

The sector has been shedding jobs for years, but this year’s losses are expected to top the total of the last four years combined.

Ontario will be hard hit by the job losses since the province has most of the parts companies.

Chrysler dealers left without vehicles

Here’s another amusing (well, probably not to the dealers) side of the Chrysler saga. From the (Toronto) Globe and Mail:

Chrysler Group LLC will start cranking out vehicles at seven of its North American assembly plants on June 29, but some Canadian dealers say they will be unable to restock their dealerships with new vehicles because they can’t get the financing they need.

Inventories have fallen to minimal levels […but many …] can’t order new cars and trucks because they are still waiting for financing approval from GMAC LLC

This is another example of cascade failure I spoke about earlier. Seemingly unrelated things combine to topple systems that should continue to work. If it were easy to get credit another way, these dealerships would not be having a problem. They might pay a little more for credit from someone else, but at the moment, all other sources are choked off, and this one is slow.

This is another bottleneck on the road to a recovery for stampers.

Chrysler plants will open in weeks: Fiat

From Canadian Manufacturing News, a Rogers publication. Some tentatively good news for stampers:

Fiat [which now controls Chrysler] announced plans to resume production at its Brampton and Windsor plants and five other North American factories at the end of June.

In addition, parts stamping, engine and transmission factories that feed those plants also will restart June 29, Chrysler said in a statement.

Ford Has No Plans to Match Rivals’ Scaled-Back Production

I’m glad to hear someone is worrying about the supplier base (stampers amongst them)!

From the Wall Street Journal:

Bill Ford, Jr., the Dearborn, Mich. auto maker’s executive chairman, said that the precarious state of auto parts suppliers remains the company’s greatest concern after Chrysler filed for bankruptcy protection

Lowered demand

This is the second in a series of discussions of developments over the last 6 months.

How is demand for manufactured goods holding up?

Here’s the picture in Canada.

Real gross domestic product (GDP) declined 0.8% in the fourth quarter, weakening progressively each month. This was the sharpest quarterly decline since 1991.
Declines in the production of goods (-2.4%) were widespread as domestic and foreign demand weakened. Except for agriculture, all other goods-producing sectors receded. Manufacturing (-4.3%) led the downturn, experiencing a sixth consecutive quarterly decline.
Business investment in machinery and equipment contracted 7.5% in the fourth quarter. All categories recorded declines, notably automobiles, trucks, and industrial machinery.

From: The StatsCan web site.

OK. So how are things doing in Britain?

Picture’s not much different there.

Manufacturing output decreased by 6.5 per cent in the three months to February 2009 compared with the three months to November 2008 and was 12.2 per cent lower against the same three month period a year ago.


And how about the US?

The Canadian economy contracted at an annualized rate of 3.4% in the fourth quarter, compared with a 6.2% decline in the US economy.

So, all other things being equal (lots of other things aren’t), it’s tough for a low-margin business like metal stamping to stay healthy in such a volume downturn.

Minority-Owned Suppliers Suffer: Tight Credit, Auto Slump Hurt Firms

There’s a lot more to this article, more about Lapeer and other small and medium sized stampers, but I found this part interesting. They are phrasing it in terms of minority suppliers, but in my experience it’s true of many small suppliers, regardless of their minority status.

Dave Bing, CEO of Detroit-based Bing Group, said Lapeer’s problems illustrate the bind facing many minority automotive suppliers as steel prices escalate and customer volumes decline.

Most minority suppliers are small to mid-size companies with weak balance sheets that find it difficult to fund expansions without additional financing, Bing said. But the banking industry is reluctant to invest in the troubled automotive industry.

‘Gerry and I have been friendly competitors for the last 30 years,’ Bing said. ‘I’m sorry to see what he is going through, but it is not different than what all of us are going through.’

Lapeer Metal Stamping in Sebewaing closing

Huron Daily Tribune
Right before Labor Day, this town has received news no town wants to hear — one if its largest employers will be closing its doors.

According to a Lapeer Metal Stamping representative from the Lapeer corporate office, Lapeer Metal Stamping in Sebewaing will be shutting down by the end of 2008. The representative stated he did not want to comment at this time about the reason behind the impending closure. The representative would not give his name because the company requested that employees not talk about the closure.

Michigan wary of McCain trade message

Jim Zawacki, chairman of a metal-stamping manufacturer in Grand Rapids, Michigan, was apologetic but firm as he doled out some “straight talk” to John McCain, the Republican presidential candidate, at a town hall meeting this week.
Though Mr Zawacki has donated $1,000 […] to the Arizona senator’s campaign, he said he disagreed with Mr McCain’s commitment to free trade and challenged his suggestion that Michigan’s staggering 8.5 per cent unemployment rate could largely be fixed by retraining displaced workers at community colleges.

“Where are you going to find teachers to teach them? What we need to do is control some of these trade issues. What we are asking for is fair trade,” he said.

Mr McCain has admitted he has “a lot of work to do” to win over the likes of Mr Zawacki. This week, he travelled from Ohio to Wisconsin to persuade voters to reject “isolationism” in favour of an economic agenda centred on tax breaks for small businesses, free trade and cuts in government spending.

Many Republicans are betting their candidate’s message will resonate in the home state of the big three US car manufacturers.

Jim isn’t against Free Trade, but he wants it to be fair trade. Like most small stampers, he’d be OK with free trade on a level playing field.