There must be some connection between a company’s name and its fate. Just take for instance the Northwest Tool & Die Co. which could have been a casualty of Michigan’s troubled auto industry if not for Honda Motors.
The story goes this way; it was two years ago when the small tooling shop located just outside of Grand Rapids was getting ready to close down due to the large debt that has accumulated to almost $6.5 million and losing $11 million more money in when its largest customer, the Tower Automotive Inc. had filed its won Chapter 11 case.
Luckily for Northwest Tool it was able to seek out a contract with Honda Motor Co. which eventually saved the tooling shop from closing down and helped it to reach its 39th year. Despite the Northwest Tool’s bankruptcy filing, Honda has continued to give the tooling company work.
This continued business from Honda (the maker of Honda fuel tank cap) has enabled the Northwest Tool to finally double its staff to 83 workers and now is expected to reach $16 million this year. Anthony Chopp CEO of Northwest Tool & Die said that they have the biggest influx of new customers on the time that they were on the verge of bankruptcy. But now with all the things happening to their company, CEO Chopp said that they are still very fortunate.
Northwest Tool has been struggling to compete with other tooling companies overseas and 36 percent of Michigan’s tool and die shops have already closed down since there are not much business to compete on that, according to the Center for Automotive Research.
Jay Baron President of CAR also said that even the global market is not enough to provide all the tooling shops available. They are only enough to fill half of the automotive tooling capacity. He also added, “There’s no argument that our industry here makes great tools want great tools at lower costs. They want local quality at foreign prices. There’s the rub.” It really helps when an automaker invest on a local tooling shop.
A few years back, Honda Motors has already chosen four North American companies that produces dies and molds for auto parts. These shops handle about 16 percent of Honda’s tooling and the automaker is thinking of adding four more to its program by the next two years.
Actually dealing with local tooling companies cost more for Honda as compared to just importing tools from other countries that is according to Tim Meyers, Senior Manager in Honda’ North American purchasing division. Luckily for tool companies like Northwest Tool, Honda has this philosophy of buying parts where it produces vehicles so it doesn’t have to worry about shipping the tools from overseas or shipping them back in case of defects.
Meyers also added, “We’re trying to provide them some business stability so they can go ahead and make the investments to improve their competitiveness.”
Likewise, the company is also asking its supplier Challenge Manufacturing to employ Northwest Tool in making dies for its shape parts for the Acura RDX and MDX. And just in case Northwest Tool’s didn’t make it they have a backup plan that would supply them with their required dyed parts.