Mr. Bruce Walker, Chairman, PMA International/ICOSPA Committee

15th International Congress of Sheet Metal Work
Report from the USA
Bruce A. Walker
President, Walker Corporation, Ontario, CA
Chair, PMA International–lCOSPA Committee
US Economy – Regaining Momentum
(Oil prices are the major negative)
Projected
2002 2003 2004 2005 2006
Real Growth in GDP - %
1.6
2.7
4.2
3.5
3.2
Employment Change –
(millions)
Unemployment - %
-1.1
-0.46
1.25
2.19
2.12
6.0
5.5
5.5
5.1
4.9
Consumer Price Index
1.6
(CPI) %
Housing Starts (millions) 1.71
2.3
2.7
3.1
2.2
1.85
1.95
2.03
1.86
Federal Funds Rate - %
1.7
1.1
1.35
3.2
4.5
Dollar – Trade Rate
-1.5
-12.2
-8.2
-2.5
-5.3
PMA Orders & Shipments – Sept. 2005
Year-to-date, through September, average orders are up 6% and shipments are up 7%
(Raw material prices are down from 2004, so there is real growth)
Orders Booked
1,700,000
1,600,000
1,500,000
1,400,000
1,300,000
1,200,000
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan '05
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan '04
1,100,000
September
orders
decreased
4% vs
August
Month
Average Orders Booked
12-month Rolling Average
Shipments
1,700,000
1,600,000
1,500,000
1,400,000
1,300,000
1,200,000
1,100,000
1,000,000
Month
Average Shipments
12-month Rolling Average
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan '05
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan '04
September
shipments
decreased
1% vs
August
Profit/Loss History
PMA Business Analysis Report
All Participating Companies for Each Year
2004
2002
2003
1.84%
2.26%
3.32%
$157,157
$157,326
$179,942
Value Added Per Employee
$87,487
$87,310
$91,631
Accounts Rec. As % of Sales
13.24%
13.45%
14.28%
Capital Investment – %
3.02%
3.42%
3.24%
Return on Assets – %
4.63%
6.33%
8.06%
Current Ratio
4.45
2.68
2.60
Debt-To-Equity Ratio
2.95
2.04
2.11
Average Profit (EBIT) – %
Average Sales Per Employee
4
Business Analysis Report
Source: NAM
By 2015 China’s Automobile Production Levels Will
Approach Japan and India Will Approach Korea
2015 Production Levels
Millions of Units
15th International Congress of Sheet Metal Work
Challenges
of
International Collaboration
Bruce A. Walker
President, Walker Corporation, Ontario, CA
Chair, PMA International -lCOSPA Committee
Walker Corporation
¾ Founded in 1954 in Southern California
¾ 180 associates and sales of $28 million
¾ Primary market is Japanese automotive
industry in North America
¾ Customer requirements for cost-downs
on tooling and constant price
pressure stimulated globalization
Typical Parts
Typical Parts
Walker South Korea Operations
¾ Located in Gwanju, South Korea
¾ Operations started in 1998
¾ Primary products are dies
¾ Significance to Walker Corporation –
Access to low cost tooling
Walker China Operations
*
¾ Located in Kunshan City near Shanghai, China
¾ Operations started in 2004
¾ Primary products are dies and prototypes
¾ Significance to Walker Corporation – Access to
low cost tooling and prototypes
Asian Tooling Operations
Walker has technically
trained staff and
production facilities to
produce complex
progressive die tooling
Walker can produce
progressive dies requiring
tonnages up to 600 tons
and 3.2 meters in length
Asian Tooling Operations
Walker has manufactured
over 400 tools in both
South Korea and China
Asian Tooling Operations
Benefits:
¾ Tool prices reduced by an average of 40%
¾ Tool manufacturing leadtimes have been
reduced from 14 weeks to 7 weeks
Challenges:
¾ People with automotive tooling technical skills
are hard to find
¾ Difficult to communicate technical information
¾ Constantly improving our ability to make
tooling with increased part complexity
¾ Founded in 1936
¾ Headquartered in Thomaston, CT, also have
facilities in New York and Texas
¾ One of the largest international suppliers of
precision, progressive die and deep drawn
metal stampings, slide-formed components,
wire forms, and automated and secondary
assemblies
Deep Drawn Parts
Wire Assemblies
Objective
To bring world class deep draw
stamping and wire assembly
capabilities to China to meet the
emerging needs of the automotive,
electronics and consumer goods
markets.
&
Leveraging Strengths
¾ Stewart/EFI identified a partner with experience
in China to pursue this objective
¾ Interplex Industries, founded in 1958, is a
leading global provider of precision metal
stamping, electroplating, insert and injection
molding, metal etching and assembly services
with operations in China since 1996
¾ Formed a Joint Venture to move quickly
¾ JV is supported by two “world class” entities
with over 100 years of combined experience
Time Line
¾ JV established August 2004
¾ Training of JV personnel began
Q-3 2004 and continues
¾ JV manufacturing operations
began Q-2 2005
Facility
Interplex Stewart EFI Co. Ltd., is housed
with Interplex Electronics Co., Ltd., in
Hangzhou, China. Facility has 140,000
sq. ft. and 400 employees.
Status
¾At present, new programs are initiated in the
US to help protect intellectual property
¾New tooling programs will be coordinated
though our US program management team
woking closely with our team in China
¾Initially, tools will be sourced in the US. After
development, a “turnkey” approach will be
used in sending the tool to China.
¾Ultimately, tools will be designed, built and
developed both in the US and in China.
Obstacles &
Observations
Obstacles:
¾ Language and finding local skilled talent
¾ Infrastructure was lacking
¾ Finding suppliers for raw material,
lubricant and tooling components
¾ Confusing government regulations
Observations:
¾ Patience, planning and diligent follow-up
are required for success
¾ Customers appreciate our strategy to
support their global growth
Manufacturer of Deep Drawn Metal Stampings
Trans-Matic Company Profile
Founded:
Annual Sales:
Employees:
Key Markets Served:
1968 - Holland, Michigan
$65,000,000
300
OEM Automotive
Builders Hardware
Household Appliance
Office Furniture
Power Tools
Plumbing
Others
51%
22%
9%
5%
3%
2%
8%
Trans-Matic Strategy
“Manufacturing Capability in Close
Geographic Proximity to Customers”
Headquarters Facility:
Midwest USA
Holland, MI – 1968
Satellite Facility 1:
Southeast USA
Sanford, NC – 1980
Satellite Facility 2:
Southwest USA Mesa, AZ – 2002
International Facility:
China
Suzhou, China – 2005
Trans-Matic Mfg. Co., Inc.
Holland, Michigan
Trans-Matic Mfg. Co., Inc.
Sanford, NC and Mesa, AZ
Southwest Production Center
Mesa AZ
Southeast Production Center
Sanford NC
Trans-Matic Precision Metal Forming
(Suzhou) Co. Ltd. – Suzhou, China
China Strategy
Rationale:
¾ Global customers require global suppliers
¾ Trans-Matic can continue to experience growth,
profitability, and security through customer
proximity with our global customers
Main Objectives:
¾
¾
¾
¾
International presence
Support our customer’s growth strategy
Location in a major growth market
Exposure to a different way of operating
China Strategy – Timeline
Secure Facility
Complete 2005
Business License Registration
Complete 2005
Transfer of Initial Production
Equipment
Transfer of U.S. Ex-Pat Personnel
Sept – Oct 2005
Recruit Chinese National Personnel
July 2005 (on-going)
Commence Initial Production
March 2006
Expand Production Capability and
Customer Base
2006 (on-going)
January 2006
China Strategy – Observations
Obstacles
Pleasant Surprises
Lack of specialty steel
suppliers
Assistance from Industrial
Zone – Suzhou New District
Lack of capable secondary
process or plating, heat
treating, cleaning
Infrastructure -- City of Suzhou
Lack of seasoned senior
management personnel
Complexity of regulations
Availability of skilled workers
Speed
Batesville Tool & Die
and
Troqueladora Batesville de
Mexico
Batesville Tool & Die – Overview
¾ Founded in 1978 in Batesville, Indiana
¾ Stampings mostly for the automotive market
¾ Specializes in deep draw, heavy gauge, and
difficult parts
¾ Project sales of $80,000,000 in 2006
¾ Currently 450 associates
Why A Mexican Venture?
¾ Opportunity to secure a large amount of
startup business
¾ Already shipping 20% plus of our product
to Mexico
¾ Needed to be strategically located in a low
cost country
Troqueladora Batesville de Mexico
¾ Founded
in 2000 in
Queretaro, Mexico
¾ Stamping and value
added operations
¾ Sales of $12,000,000 in
2006 and $17,000,000
in 2007
¾ Current plant size of
50,000 sq feet with
45,000 sq feet
expansion in
progress
Challenges and Outcomes
Challenges
Outcomes
At first, 100% of sales were with
one customer
2006 largest customer will be
54% of sales and by 2007 the
largest will be 39%
Lack of tool & die makers – All
tooling came from Indiana Plant
In-house tool & die maker
training in Mexico is improving
needed skills
Mass departure of companies
from Mexico to Asia
Trend has slowed and there are
now tremendous opportunities in
Mexico
Language and Culture – During
first 2 years, managed by
Americans
Now 100% managed by Mexicans
who are all bilingual
Results/Summary
¾ Have a vibrant growing business in Mexico
¾ Operating in a very competitive environment
¾ Becoming more technical in stamping,
welding, assembly, and tool & die
Pridgeon & Clay
¾ Founded in 1948 -- Donald V. Clay and John Pridgeon
¾ Headquarters in Grand Rapids, Michigan. Facilities in
Franklin, Indiana and Apostag, Hungary with Asian
partnerships in Korea and China
¾ Full-service, value-added designer and manufacturer
of metal stampings and assemblies for the
automotive industry.
¾ Services include A2LA accredited lab testing with
design validation and component life cycle testing for
Ford, GM, and DCX
¾ Annual sales over $200,000,000
¾ 5 plants and 1,118 total employees
Hungary Operations
¾ Located in Apostag, Hungary
¾ Primary products are dies and stamped
metal parts
¾ Significance to P&C – Point of entry to
Europe and access to low cost labor
Hungary Operations
¾ Technically trained staff
and production facilities
allows fast response to
increasingly complex
production and technical
service requirements
¾ Wide variety of
progressive die presses
allows stamped parts
requiring up to 800T with
progressive dies up to 4.5
meters in length
Pridgeon & Clay Results
¾ We have had aggressive growth (minimum
50%per year)
¾ Management and technical human resources
are hard to find
¾ Marketplace acceptance has been excellent
and we are penetrating the customer base
that we have targeted
¾ Provides increased opportunities for us by
supporting our customers on a global basis
15th International Congress of Sheet Metal Work
Challenges
of
International Collaboration
Bruce A. Walker
President, Walker Corporation, Ontario, CA
Chair, PMA International -lCOSPA Committee