Die Casting in the US - 2007 (The Buyer's Perspective)

During 2006, Technology Consulting Group performed an investigation for NADCA of the impact of globalization on the North American die casting industry. Researched was a wide range of secondary sources - newspaper and magazine articles, US and foreign government statistics and reports, documents published by international accounting sources, and so forth - to establish the background for global manufacturing. Also interviewed was approximately 100 contacts, predominantly with US OEM manufacturers who purchase die castings.

The report is organized in three broad themes. First, the results - the facts that were found. Second, forecasts about the future of US offshore sourcing, particularly in China. Finally, recommendations to the die casting industry. This report was fi rst presented as a speech. So, each page of this report has a slide from that speech at the top, with comments and interpretation below.

 

TABLE OF CONTENTS

 

 

 

 

 

I  What Are The Facts ?

 

 

 

 

 

 

 

 

1.0

TCG Interviewing Program

6

2.0

US Trade Deficit & Global Trade

 

 

(A)

US GDP  

8

 

(B)

US Trade Deficit

10

 

(C)

US Balance Of Trade

12

 

(D)

US Productivity

16

 

(E)

Industrial Sectors Using Die Castings - Negative Trade Balances

18

 

(F)

Industrial Sectors Using Die Castings - Positive Trade Balances

19

 

(G)

TCG Past Forecasts On DC Purchasing OffShore

20

 

(H)

TCG Present Findings On DC Purchasing OffShore

23

3.0

OEM Interviews Results

 

 

(A)

DC Sourcing Countries Used By OEMs

24

 

(B)

Offshore Savings Experience

25

 

(C)

Purchasing Patterns - Raw, Machined, Finished

30

 

(D)

OEMs Committed To Maintaining Some DC In USA

31

 

(E)

Offshore Purchasing For Offshore Sales

33

 

         

 

 

 

 

 

 

II  A Glimpse Of The Future …

 

           

 

1.0

China Costs Escalating

 

 

(A)

OEM Beliefs About China's Future Costs

36

 

(B)

China Labor Cost Escalation

37

 

(C)

China Demographics

41

 

(D)

China Currency Escalation

44

2.0

China Capital Influx

 

 

(A)

World Foreign Direct Investment  (FDI)

47

 

(B)

China Investment In US Equities Likely

50

3.0

Forecast For US Aluminum Die Casting

53

4.0

China's Precarious Banking Industry

57

5.0

Forecast For China’s Auto Market

59

6.0

OEM Off-Shoring Experience Is Excellent

67

 

         

 

 

 

 

 

 

III  What Should We Do ?

 

           

 

1.0

Commit To Effective Marketing

72

 

(A)

Marketing Center : Basic Marketing & Market Development

73

 

(B)

Effective Marketing Contact Techniques For OEMs

75

 

(C)

Contact List Development

76

 

(D)

Post Cards & Web Site

77

 

(E)

Contact Product Design Organizations

79

 

(F)

Style & Design Issues In Die Casting

80

 

(G)

Seek Future Market Opportunities - Example: Energy & Environment

81

2.0

Develop New Business Models More Responsive To OEMs

 

 

(A)

Rapid Response Model

86

 

(B)

Off Shore Sourcing Manager Model

89

 

(C)

Design Center Model

91

 

(D)

Swing Production Model

94

 

(E)

Supply Chain Insurance Model

95

 

(F)

OEM Review Of Proposed New Business Models

97

3.0

Develop Off Shore Manufacturing Relationships

98

4.0

Pursue Off Shore Tooling Relationships

100

5.0

Improve Integration With Customers MRP System

106

6.0

Increase NADCA’s Role In Developing The NA Die Casting Industry

107

 

(A)

NADCA Capabilities Directory

109

 

(B)

NADCA OEM Newsletter

110

 

(C)

NADCA Online: OEM Comments & Reviews

116

 

(D)

China's E-Bay Of Industrial Suppliers - "Alibaba"

 

 

         

 

 

 

 

 

 

End Notes

 

 

 

       

 

 

(A)

Additional Material Available

119

 

 

  US & China Technical Education  

 

 

  US Health Care  

 

 

  Energy & Global Warming  

 

 

  Automotive Fuel Use  

 

 

  Political Issues In Asia  

 

 

 

Marketing Resources  

 

 

    Hoovers  

 

 

    Postcard Marketing  

 

 

    USPS Mailing Services  

 

 

    Web Design  

 

(B)

Staff Acknowledgement

119

 

(C)

About Technology Consulting Group

119

Item #415