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New suppliers to auto industry mean new challenges to supplier-carmaker relations

Detroit — Electronics are creating new tensions in automaker-supplier relations.The key problem, according to a new survey: Auto makers are pressing their usual desire to whittle new-vehicle parts costs, while suppliers of advanced electronics are not eager to oblige.That spells potential trouble ahead, said Dave Andrea, principal of Plante Moran, the consulting firm that produced the 2019 North American Automotive OEM-Supplier Working Relations Index Study. The industry is speeding into a future in which new and more advanced electronics — sometimes supplied by companies new to the auto world — will hold powerful sway."One of the biggest red flags was a downgrade in the area of electronics," Andrea said about the annual report card on automotive purchasing and relationships. Plante Moran took over the study this year from industry researcher John Henke's firm, Planning Perspectives Inc.Combination of factorsAndrea said the purchasing complaints reported by electronic component companies resulted from a combination of factors, including suppliers' struggles to make a profit and reports of repeated auto maker engineering changes.Andrea warned that the arrival of advanced electrical systems will require buyers who are more familiar with emerging technologies, specific products and the suppliers themselves."If they don't start changing, there will be a rocky road," Andrea said of auto maker purchasing departments as vehicles electrify and become more connected. "But if the purchasing groups open up their relationships in how they work with suppliers in starting these new vehicle architectures, that will be helpful in building a trust factor."The question for us as we looked through the data," he said, "is whether the vehicle manufacturer purchasing departments are positioned to take on and deliver the supply base the industry's going to need as it transitions to electrified and autonomous vehicles."The annual survey looks at the supplier relations of Fiat Chrysler Automobiles NV, Ford Motor Co., General Motors Co., Honda Motor Corp., Nissan Motor Co. Ltd. and Toyota Motor Corp. Most auto maker-supplier ties improved slightly in this year's report, Andrea said.Toyota, Honda leadToyota and Honda again ranked highest, while FCA tumbled for the sixth straight year, falling to last. Nissan ended a four-year decline, posting the biggest improvement of the six auto makers, but still ranking second from the bottom.FCA issued a statement saying: "We are not at all satisfied with where we are. This feedback will help us make the kind of transformational changes we've embarked on as a business."The company said it will use internal surveys and meetings with suppliers to help improve.Daron Gifford, Plante Moran's automotive industry consulting leader, said automakers are learning how to work with suppliers that are new to the industry, including producers of software, cyberware products and artificial intelligence-based systems."The new suppliers they're having to deal with now are not so easy to deal with because they don't know the auto industry," Gifford said. "The new suppliers coming in are kind of like, 'What's this cost-down thing every year? Nah, we don't do that.' They're struggling with terms and conditions and intellectual property and who gets what on this whole thing."If the trust isn't there," Gifford said, "then the sharing of innovations gets a little difficult."source : https://www.plasticsnews.com

editor 2019-07-06

Survey: Workforce top concern for mold makers

American Mold Builders Association NixWorkforce development is the biggest ongoing challenge facing mold makers, according the American Mold builders Association's Business Forecast Report."The No. 1 challenge that all we face actually deals with recruitment and retention of our workforce," AMBA Executive Director Troy Nix said in a webinar to present the results."When we asked about the challenges, 100 percent said workforce development, locating talent. And what you see is for the last three years is that workforce development is at 100 percent," Nix said.Mold makers are beefing up recruitment and training. Some are teaming with local high schools, colleges and technical schools, he said.And Nix added that 75 percent of survey respondents said they plan to add employees in 2019.AMBA surveyed presidents, owners and senior executives of 136 mold builders. Companies with sales between $1 million and $14 million accounted for 83 percent of the total. Nix said 77 percent make injection molds, 16 percent produce molds for compression molding, rubber injection, thermoform tooling, blow molds, molds for liquid silicone rubber molding and stack molds. Another 7 percent make die-cast tooling.While current business conditions during the survey period were positive — 67 percent said business was good or excellent — the outlook for the next several months was slightly less optimistic, the survey said. In 2018, conditions were much stronger, when 81 percent said good or excellent. Nix said that decrease is a red flag.AMBA asked companies to list their most optimistic markets for 2019. The category of medical/dental/optical was first, listed by 33 percent, followed by automotive at 16 percent and consumer products at 13 percent, followed by aerospace and packaging.But at the same time, automotive was listed by 47 percent of respondents as the least optimistic market — by far the highest negative category.Nix said some of the caution is because U.S. vehicle sales are expected to drop below 17 million this year, and the industry is beginning to change to electric and autonomous vehicles.Mold makers also listed their major challenges. Nix said company size matters. Smaller companies, those under $5 million in sales, listed health care, insurance and foreign competition. Larger mold makers said continuous improvement is the biggest challenge.AMBA asked respondents what percent of revenue are represented by three expense categories expenses: sales and marketing (4 percent); employee health care (8 percent); and capital investments (10 percent).Forty percent said their backlog is up, looking back to the three prior months. Nix said that's about the same number as the last eight survey years. Profitability also stayed the course over the longer-term trend.Quoting activity was "slightly better than the eight-year averages," Nix said.

취재부 2019-05-15

LS Mtron Has Signed a Cooperation Agreement on MuCell Technology Development with Trexel, a Leading

-LS Mtron Has Signed a Cooperation Agreement on MuCell Technology Development with Trexel, a Leading Foam Molding Company - The demand for foaming molding which specializes in product light-weighting is expected to increase with the needs for lightweight automotive and electronic product packaging.LS Mtron has signed a cooperation agreement on Mucell Technology development with Trexel(USA), a leading foam molding company to strengthen cooperation for foam molding technology, in order to respond positively to the future growth of the foam molding market. Foaming molding, which has been recently growing, specializes in product light-weighting as a technology for molding into plastics in a microcellular foaming state. For this reason, not only the global market but also the Korean market are scrambling to apply it, starting with the automobile industry. The demand is expected to grow further not only because of the needs for light-weighting due to the expansion of electric vehicles, but also for various electronic products packaging. Trexel, which LS Mtron has signed a Cooperation Agreement on the MuCell Technology Development with, is a leading company in the field of foam molding with long experience and know-how in foam molding technology since 1995. It holds more than 50 patents on foam molding technology, and the name MuCell is registered by Trexel to refer to microcellular foaming techniques and materials. LS Mtron is strengthening its technical development cooperation with Trexel to provide customers with the necessary technical support and further promote the popularization of foaming technology.“MuCell is an outstanding technology that satisfy both weight lightening and quality of products, and will contribute to customer productivity improvement and cost reduction." said Seung-Dong Park, head of Mtron Injection Research Center. He added ”Based on the foam technology and know-how, we will develop injection molding system for foaming, so that we can respond to any foam molding products of our customers."CTO Kyung-Nyung Woo, head of Technology Development Division, said, "Through this agreement, we will cooperate not only for current Micro cell technology but also for future Nano cell technology development to continuously strengthen lightweight technology."http://www.lsinjection.com

Editor 2019-04-26

West Pharmaceutical adds presence in India, South Korea

-West Pharmaceutical adds presence in India, South KoreaWest Pharmaceutical Services Inc. opened a new digital technology center in Bengaluru, India, and expanded its presence in South Korea.The Bengaluru site, which spans 17,000 square feet, will serve as a global center of excellence for West's digital and transformation team, alongside teams based in Exton, Pa., and Eschweiler, Germany, according to a company news release.Investment details were not disclosed.The DTC is part of West's efforts to reach out to customers through digital marketing, digital manufacturing and automation.West is recruiting technology professionals for the facility in areas such as network security, cloud architecture, ERP and applications development. The teams will work to support West's efforts in e-commerce, digital marketing, the SAP S/4 Hana (ERP) Cloud business suite rollout, digital manufacturing and product development, including artificial intelligence, the Internet of Things and smart devices.West has had a presence in India since 2014, with a manufacturing plant in Sri City and a commercial office in Hyderabad.The company also expanded its presence in South Korea through a new sales office, West Pharmaceutical Services Korea Ltd. The office is a result of West's purchase of the distribution business of GIS Korea Ltd., a privately owned medical device and health care products distributor serving the South Korean market, and which previous was West's distributor in the Asia-Pacific region.Details of the purchase were not disclosed.The combined local insight of the GIS Korea team with West's global manufacturing reach will better serve customers and position the company for growth, according to Karen Flynn, senior vice president and chief commercial officer for West.GIS has partnered with West since 2003, building a network of customers across segments, West said. GIS, which has been operating for more than 95 years, distributes integrated containment and delivery solutions in pharmaceutical, biologic, generic and medical device customer groups.West, headquartered in Exton, Pa., is a manufacturer of packaging components and delivery systems for injectable drugs and health care products. It has locations in North and South America, Europe, Asia and Australia. It reported net sales of $1.7 billion in 2018.To obtain reprints or copyright permissions:E-mail: pnreprints@crain.comVisit: Reprintssource : https://www.plasticsnews.com

Editor 2019-04-26

2019 likely to be challenging year for plastics machinery

2019 likely to be challenging year for plastics machineryFor plastics machinery, 2019 will be a challenging year, especially for injection presses, the biggest equipment category and a bellwether for the overall plastics industry.Thanks to tax reform, 2018 started with a lot of excitement in the equipment market. The big news was the immediate, 100 percent depreciation of capital investments for U.S. processors. This was supposed to spur machinery sales. Some experts even expected it to supercharge investment.But the days of processors buying machines in a speculative fashion, for business they expect to come, seem to be over. Now processors don't order injection molding machines unless they have orders in hand. Other machinery sectors with much longer lead times, like blown film lines, are more insulated from that harsh reality.The U.S. injection molding machine market held up in 2018, probably reaching the 4,000-unit level for shipments for a fourth year in a row, according to industry officials. Shipments probably dropped modestly, around 5 percent, they said.But what about the coming year? The automotive sector is the wave that lifts all boats when it comes to injection molding machinery. U.S. light vehicle sales have been at 17 million units for several straight years, and that high level has sparked investment in big-ticket, large-tonnage presses. But that glory period looks to be ending, with a modest decline expected in 2019. Already, large-tonnage machine sales were down this year, several industry officials said.Some other issues that will impact machinery sales in 2018 include:Tariffs and tradeThe backdrop for plastics equipment — and indeed, the entire U.S. manufacturing sector — is a trade war that consumed most of 2018. This included tariffs against Chinese goods and retaliation by China, tariffs on steel and aluminum which are the building blocks of machinery and molds, conflict over the North American Free Trade Agreement and threatened U.S. tariffs on automotive imports.President Donald Trump cranked up the volume — and the tweets — about global trade issues. Everything hitting at once caused uncertainty that dampened press buying for a few months around mid-year while plastic processors tried to figure it all out. Costs increased for components, molds and machinery from China.Early next year, NAFTA may be replaced with the United-States-Mexico-Canada Agreement. That could return some stability to North American manufacturing.The economy and the environmentAll eyes will be on the U.S. economy and, as the recent swoon in stock markets around the world shows, the global economy. Yes, United States manufacturing is largely still intertwined with the rest of the world.The fundamentals of the U.S. economy remains strong. Unemployment is just 3.7 percent — the lowest in nearly 50 years — and people are getting pay raises.Investors are looking closely at what the Federal Reserve Board will do about interest rates. If rates go up, higher mortgage rates will impact the construction sector, a major market for plastics that includes extruded window profiles, vinyl siding and pipe.Most injection molding machinery executives interviewed for our story said presses sold for new capacity far outweigh those sold for replacement. But as new machinery sales come under pressure from a slowing automotive sector, replacement sales will become more important, as well as the always-significant parts and service.Packaging continues to be a growing area for plastics. But the main question is whether negative publicity about single-use plastics will begin to impact the market, including machinery sales.Plastics remains a growing industry, full of innovation and forward-thinking people. Those attributes will be even more important in 2019, a year of change.You can read all the details this week in our machinery outlook package. Plastics News reporters Bill Bregar and Audrey LaForest interviewed 40 machinery company executives for the stories on Page 1 and Pages 8-13.

editor 2018-12-25

Forecast sees slowing tooling market

The number of North American automotive launches has softened this year, and that’s hitting mold and die makers, according to a third-quarter report from Harbour Results Inc. and the Original Equipment Suppliers Association.All automakers building vehicles in North America had planned more than 60 model launches in 2018, but 23 of them — or about a third — were canceled or delayed, consultant Laurie Harbour said.Harbour had initially predicted 2018 would be a boom year for tooling — with tooling spend hitting a record of more than $11 billion, up from an already-strong 2017 spend of $10.3 billion. But the reduction in new models — the lifeblood of investment in new plastics molds and stamping dies — has taken a toll. On top of that is a global automotive slowdown.The North American tooling sector generates a significant part of business from the Detroit Three: General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles NV. Those automakers will continue losing market share in 2019, she said.“When the Detroit Three get a cold in the marketplace, the rest of the tooling industry gets the flu. And that’s what we started to see in 2018,” Harbour said in an Oct. 31 webinar with news reporters to explain the third-quarter report and the forecast for 2019.However, Harbour said there is some good news. Some of the 2018 launches will get pushed out into 2019 to help level spending on tooling for the next three years. Harbour Results now thinks the 2018 tooling spend will be about $9.2 billion, about $8 billion in 2019 and 2020, and return to $9 billion in 2021.“We really think we’re going to see a more consistent market,” Harbour said.She said the tooling industry is seeing new quoting activity in the third quarter of this year, as companies see requests for simulation reports and up-front validation activity. For 2019, that means the first half should be active as tool steel is cut, then show a little activity in the second half, Harbour said.But the report from Harbour Results, based in Southfield, Mich., puts some numbers on a slower-than-expected 2018 for the tooling industry that serves the important automotive market. In the third quarter, because of the launch delays and cuts, the tooling spend was $2.6 billion — $2.2 billion below the forecast number.Global trade pressures and the global economic environment will continue to be volatile, she said. Harbour said issues like higher tariffs, automaker restructuring, and more-costly resin and gasoline — along with an economic recession — could lop as much as another $2 billion off the forecast for coming years.“There are a lot of headwinds facing the automotive market,” she said.Capacity utilization at toolmakers dropped six points, to 79 percent in the third quarter. In 2017, Harbour said, most tooling firms were operating at more than 100 percent of capacity, which drove large tooling companies to outsource to smaller mold and die shops. But Harbour thinks that outsourcing work will dry up as big toolmakers keep work in house during the slowdown.And she said tooling shops are seeing payments stretching out, after quick-payments in 2017. Work-on-hold climbed 6.6 points in the third quarter, to 15 percent, which Harbour said is not the highest ever, but still a significant level.Harbour called the slowing payments “a troubling metric” that is impacting financial and cash flow of tooling firms.Harbour Group monitors 11 large toolmakers — both die maker and mold shops — and she said these big players have invested in technology to become more efficient. They are profitable, so they have the ability to reduce pricing and manage margins, something that some small shops can’t match, she said.That means smaller shops can get squeezed.“As the tooling market contracts, it is important that shops, specifically small shops that benefited from the increased outsourcing in 2017, prepare for the future,” Harbour said. “It is important that tool shops continue to focus on improving operations, smart investment in people and technology and strategic planning to remain competitive in the near and long term.”Toolmakers also need to diversify their markets, she said.

Aeyoung Park 2018-11-05

EUROMAP 84 for extrusion published as Release Candidate

The working group EUROMAP 84 deals with the standardization of OPC UA based interfaces for extrusion.Experts from ten leading European extruders and extrusion lines manufactures are working together with control systems manufacturers and MES suppliers on standardized information models to facilitate an efficient networking of the extrusion line to central computers/MES as well as within the extrusion line itself. As with all EUROMAP recommendations, these are manufacturer-neutral.In EUROMAP 84, first basic specifications will be made, and the extrusion line will be modelled as a whole. This foremost serves to control the overall production (for example throughput, product quality, energy consumption) and to manage production jobs. Particularly for the latter, a new concept was necessary because the existing job management model of the injection moulding world could not be transferred to extrusion. Next, the various components of an extrusion line will be examined separately to record all important process parameters.The drafts of the following parts have now been published on www.euromap.org/euromap84 as Release Candidates and are thereby made available to the interested public:Part 1: General Type DefinitionsPart 2: Extrusion linesPart 3: ExtrudersPart 4: Haul-offsPart 5: Melt pumpsPart 6: FiltersPart 7: DiesThese parts will be validated in test implementations before they are going to be published as final versions.Additional parts for further components of an extrusion line are in preparation.

Aeyoung Park 2018-11-01

PE, PS, PET prices up; PP down; PVC flat

Market forces sent North American commodity resin prices in different directions in September, with polyethylene, solid polystyrene and PET bottle resin prices up, regional polypropylene prices down and PVC prices flat.All grades of PE moved up by an average of 3 cents per pound, according to market sources contacted by Plastics News. Market analyst David Barry with PetroChem Wire in Houston said that ethane feedstock was the big driver in the September PE price hike.Ethane-based ethylene cash costs averaged more than 21 cents per pound in September, which Barry said was the highest level since January 2012. Those costs were running 10-11 cents for the first five months of the year.Barry added that he believes that PE makers were able to export more in September to keep the market balanced. "The reports I'm getting are that the Gulf Coast and East Coast warehouses are busy," he said.The September PE hike followed a chaotic pricing month in August, which ended with 3-cent-per-pound reductions for most grades of low and linear low density PE and for film and other flexible grades of high density PE.Prior to the August declines, regional HDPE and LDPE prices had been flat for four consecutive months. LLDPE prices had been flat for two straight months after sliding 3 cents in May.Backed by new production capacity, export sales of PE had fueled U.S. and Canadian PE growth in the first eight months of 2018, according to the American Chemistry Council. Exports of LLDPE in particular had exploded, growing almost 90 percent vs. the same period in 2017.LLDPE exports, combined with domestic demand growth of almost 5 percent, lifted total regional LLDPE market growth to almost 23 percent for the period.HDPE exports from the region were up an impressive 30 percent for the seven months. Those levels and domestic growth of almost 8 percent created eight-month HDPE growth of almost 12 percent. Growth in LDPE exports was more modest at 9 percent. That combined with domestic sales growth of almost 2 percent produced seven-month LDPE growth of almost 4 percent.North American PET bottle resin prices surged up an average of 6 cents per pound in September after a 2-cent hike in August. Market watchers cited tight supplies of purified terephthalic acid and other raw materials as reasons for the increase. The 2-cent August hike had canceled out a 2-cent drop that hit the market in July.Regional solid PS prices bumped up an average of 2 cents per pound in September after being flat in August. The September hike was sparked by a price increase for benzene feedstock, which was up 10 cents to $2.98 per gallon.North American solid PS sales have struggled so far in 2018, dropping more than 4 percent through August. Exports have provided a bright spot, growing more than 16 percent and somewhat reducing the impact of a 5 percent drop in domestic sales.PP heads downPP was the only major commodity resin to see lower prices in September. Average selling prices for the material were down 1 cent per pound, giving back half of a 2-cent hike that the market had seen in August.Resin prices for PP in September again followed the path of propylene monomer feedstock. Prices had been flat in July after surging a combined 15 cents in May-June.North American PP sales were down almost 1 percent through August. Flat domestic sales were made worse by a decline of almost 35 percent in export sales.Some domestic PP end markets have fared well in spite of the overall decline. Sales of PP into oriented film were up almost 14 percent for the eight-month period. Sales of the materials into injection molded caps and closures grew more than 7 percent.Regional solid PVC prices were flat for the fifth consecutive month in August, although market sources said that increases of as much as 2 cents per pound could take hold in October. A small Oct. 9 fire at a Westlake Chemical plant making PVC feedstock VCM in Plaquemine, La., isn't expected to have much impact on the PVC resin market.U.S./Canadian PVC sales were strong through August, climbing 5.4 percent vs. the year-ago period. Domestic growth of just under 2 percent was bolstered by a jump of 13.5 percent in export sales. Among end markets, rigid pipe and tubing showed eight-month growth of almost 2.5 percent. That segment accounted for more than 46 percent of all domestic PVC sales during that period.At the macro-feedstock level, West Texas Intermediate crude oil prices began September at $69 per barrel but had climbed to $75 by the end of the month. Regional prices for natural gas rose from $2.85 per million British thermal units to $3.05 in the same comparison.

Aeyoung Park 2018-10-29