“If you haven't noticed, the tool and die business model is broken,” John J. Basso, president-Diversified Tooling Corp., says during the Management Briefing Seminars here.
“We have to reduce our costs. We cannot build production dies for the prices our customers want us to build them for,' he says.
Diversified Tooling's customer pool includes Detroit's Big Three auto makers andMotor Corp.
“Normal high-volume production vehicles are not selling 250,000 (units) anymore,” says Basso.
“Today they are selling 50,000 to 60,000 per year. That's driving the die costs down because you can't take a 200,000-unit die and prorate it over 60,000 cars for four years. In order to survive, I have to reduce tool costs.”
Basso also reveals the company must become creative with tooling in order to win the business of auto makers trying to retool plants on a shoestring.
In revamping its Hermosillo, Mexico, plant for theFusion, Mercury Milan and Lincoln Zephyr, Ford Motor Co. came to Diversified Tooling with a “low budget,” Basso says.
The constraints forced Diversified back to the drawing table, where it came up with two lines of flexible dies capable of hammering out eight parts.
Basso insists product-development personnel at OEMs need to keep up on the latest tooling trends and communicate the importance of function over cost with purchasing officials, who often are more concerned with the bottom line.