Forbes, January 12, 1987

The Decline of the Master Craftsman

by Susan Gilbert

At the Tedco tool and die shop in Greenville, R.I., an elderly man wearing an oil-spattered smock spends two months hand-grinding and polishing a metal sliver to a tolerance of one-third the width of a human hair. Although his labors seem out of another age, the metal slivers will soon become part of a custom-made die to punch out millions of tiny staple-shaped connectors for microchips. Even today, in an age of robots and automated factories, the manufacture of most things still begins with a tool and die maker using techniques that made New England's tinkerers and toolmakers world famous more than 100 years ago.

The tool and die industry survived hard times during the recession of 1981-82 that slowed U.S. manufacturing. But now the country's 12,000 tool and die shops face a new and more damaging threat- foreign competition. Laments Tedco's President Robert Vincent, in a complaint heard throughout the industry, "Anything we can do, the Taiwanese can imitate and make more cheaply."

Once the world leaders in crafting one-of-a-kind tools and dies that press these tools, Americans over the last five years have seen their dominance slip badly. The related machine tool industry has lost almost half its U.S. market to less expensive imports. Similarly, sales of imported tools and dies in the U.S. rose 16% in 1985, to $250 million, while U.S. exports stagnated at $210 million.

Having hired American master craftsmen to teach them the requisite skills, many Asian competitors now produce tools and dies of the highest quality. Many foreign tool and die makers, moreover, enjoy such generous government subsidies that they can sell their wares in the U.S. for little more than American shops must pay for raw materials alone. Domestic machine tool manufacturers will benefit from recent presidential action limiting machine tool imports from Japan, Korea, West Germany, and Switzerland. But when these cheap imports disappear, domestic tool and die makers that use these machine tools will see their margins shrink.

At Ideal Tool & Manufacturing in Chicago, sales are down to $5 million, from $6 million in 1981. "Our business is hurting because our big clients are either manufacturing abroad, like John Deere, or they are so hurt by foreign competition that they have cut back on manufacturing altogether," say President Eric Sund.

Big manufacturers, such as United Technologies, don't mind paying more for U.S.-made tools so long as their workmanship remains high. Distressingly often, now, that isn't the case. "Our biggest complaint with American firms is their high degree of errors," says James Holloway, a manufacturing manager for Pratt & Whitney, a division of United Technologies. As a result, when Pratt & Whitney went shopping two years ago for $46 million worth of precision machinery and tools, it took its business to a West German firm.

U.S. firms can, of course, still produce tools and dies of unrivaled excellence. Take Surface Finishes Inc., a small ($1.5 million 1986 sales) shop in Addison, Ill. It numbers among its clients none other than Nippon Electric Co. Of Japan, which buys "flats"- very level discs used as a standard for gauging the flatness of a surface.

Just how skilled are the company's craftsmen? For much of this year they labored to hand-grind and smooth out electron microscope lens parts to within 20- millionths of and inch of perfect flatness. (By comparison, most other tool and die shops work to one-ten-thousandth of an inch.) Says Mark Drzewiecki, 36, who worked at the shop for 20 years before buying it in 1984, "If the U.S. were that flat, its topography would not vary by more than five feet."

Unfortunately, companies like Drzewiecki's are rapidly becoming the exception to the rule. With business uncertain for many U.S. tool and die makers, there are neither the positions for new apprentices nor the money to train them. And without apprentices, the unrivaled levels of skill that have been passed to this country for more than a century are rapidly being lost.

"Our master craftsmen will retire in five to ten years, and I don't have people to replace them," says Ralph Klingler, general manager of toolmaking for the Janler Corp., a tooling and machining company in Chicago. About 6,000 tool and die apprentices completed training programs in 1985, down from 16,000 in 1979. Most operate the new computer-controlled machines that now design and cut tools at many shops.

"If the steel industry falls on hard times, at least its most precious resource lies waiting in the ground to be mined when business picks up again," notes Murray Gerber, owner of Prototype Plastic Mold in Middletown, Conn. "But the tool and die industry's most precious resource is its master craftsmen. If they are lost, it will take generations to replace them."

So what is to be done? One important step urged by the National Tooling & Machining Association is to streamline the process by which U.S. companies can bring lawsuits against foreigners suspected of illegal dumping. At present it's virtually impossible to prove a foreign shop is dumping tools and die in the U.S. market because of inadequate government trade records.

But proving the existence of dumping is only half the problem. As the law is presently written, even if a U.S. law is presently written, even if a U.S. tool and die maker can prevail in court, any damages awarded would go not to the aggrieved plaintiff but to the U.S. Treasury. That hardly seems fair, since the plaintiff's legal costs often can exceed $250,000.

Thus, the association successfully lobbied to introduce a bill into Congress that allows the companies themselves to collect. Those reforms alone won't solve the industry's troubles, but they are certainly a step in the right direction.