Auto Tool and Die Shops Face Existential Threat: Electric Vehicles

As electric vehicles become the new norm among American citizens, moldmakers need to prepare for the inevitable switch from internal combustion engine (ICE) vehicles to electric cars.

Harbour Results, Inc. (HRI), a business and consulting firm for manufacturers, just released the results of the Harbour IQ in-depth study on the current state of the automotive vendor tooling industry. The analysis predicts that 2020 automotive vendor tooling spend in North America will drop to $6.8 billion from an estimated $8.7 billion in 2019.

Tesla electric vehicle

Electric vehicles like Tesla are running auto tool and dye shops out of business.

“This year–2019–was a culmination of significant change and instability in the automotive marketplace. From unique mobility models and new automakers to advancing electrification and autonomous technologies to uncertainty in the economy and global trade landscape, the only thing we are certain of is that the industry will continue to change at a rapid rate. This is impacting automaker profitability, which means platforms will be commonized, trim models will be eliminated, and OEMs will be leveraging reductive design to save money,” said Laurie Harbour, HRI president and CEO. “These factors are significantly impacting the health of the North American tool and die industry and resulting in reduced tooling spend…Flexibility and the ability to manage their business is the only way tool makers can survive,”

Along with an estimated decrease in tooling spend, HRI also predicts up to 75 mold and die shops in the region will close within the next three to five years.

“This forecast is difficult for us to share. We are passionate about helping the NA manufacturing industry remain competitive. However, the ongoing marketplace change and competition from low-cost countries–specifically China–has already impacted tool- and diemakers. In 2019 we saw at least 10 shops close and more than 2,000 workers laid off, and we see this trend continuing,” said Harbour.

“As the tooling market contracts, it is important that shops position themselves for the future. Leadership needs to push for edginess and eliminate complacency, and it also is important that tool shops continue to put plans in place to shore up weaknesses, maximize technology and talent, and control costs.”

2 Comments
  1. As electric vehicles become the new norm among American citizens . . .

    Sorry, that is not a given. Many of us wouldn’t trade in our gasoline engines if you gave us an electric car. I can fill my car in 10 minutes or less. Let me know when electrics can fill up in 10 minutes or less.

    • People said similar things about horses, like why do we need to stop for gas?…when the car was invented…”If we asked the people what they wanted, they’d ask for a faster horse.” – Henry Ford

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