Solid Height - Spring Manufacturers Institute

S tatistics
North American Spring
Industry Perspective
Springmakers specializing, finding niche markets to
capture business that’s difficult to move to low-cost countries
on exactly how many springs enter
North America from low-cost countries (LCCs)
are difficult to come by. To begin with, springs
are lumped into categories with other metal formed
products, and the metal formed products category
is quite broad. To compound that, springs are being
exported as part of assemblies. While an exact dollar
figure to cover the impact of business lost to LCCs
is difficult to pinpoint, there is hardly a manufacturer
in North America who has not been touched
by offshore manufacturing.
In the beginning of the offshore manufacturing
trend, North American metal formers were able to rely
on their ability to produce higher quality products
than were available from LCCs. What springmaker
has not savored the story of a manufacturer who
moved business to Asia but had to bring it home
due to quality and delivery issues? As time has
marched on, though, expertise in metal
forming has grown exponentially in
these countries, primarily due to
foreign investment and support.
Sourcing metal formed products
overseas, which was at
one time simply a trend, has
become business as usual for
major manufacturers across
North America. Moreover, at this
stage, most of it is not coming home
due to a lack of quality, though there may
be other reasons to bring it home, as we will explore
in this article.
Many manufacturers in low-cost Asian countries
have stepped up to the plate, in terms of developing
the resources they need to compete on a global basis.
Bit by bit, they have chipped away at every level
of the business so that many are now world-class
suppliers of metal products from the idea stages to
the finished products. No longer are U.S. and Canadian
engineers always required for the design stages.
LCCs have impressive talent pools to work through
engineering issues. Tooling can be done quite competently
overseas. State-of-the-art manufacturing is
available in Asian countries. Lead times for shipping
are more reliable. It’s all here – or, rather, there.
The result is that we are on the way to a fairly
level playing field except for two issues: labor and
fuel costs. North American labor is high, but ship-
“Asian manufacturers
are making solid
inroads in the springmaking business.
India is there. Malaysia is there.
China is making progress...”
~ Bill Dagoe, Chamberlain
Spring
By Raquel Chole
Special Contributor
Global Market Update
ping from Asia is increasing in price daily, as the
cost of fuel continues to rise. The labor issue may
ultimately be the LCCs’ Achilles heel, though. As
the labor force in LCCs grows accustomed to steady
income, the hunger for a better life comes with it,
which, will lead to higher wages and result in higher
manufacturing costs for LCC production. That has
become the light at the end of the tunnel for North
American springmakers and manufacturers in
general.
In China today, the markets for automatic washing
machines, refrigerators and automobiles are
fairly exploding now that Chinese workers have the
disposable income that comes with steady employment.
Higher wages and some level of employment
benefits (holidays, vacation days, insur-
ance, etc.) will also be required to
satisfy workers’ needs. This will
drive manufacturing costs
higher and narrow the gap
between North American wages
and Asian wages.
How long before major
manufacturers come back to
North America? No one can say
for certain; however, leaders in our
industry are now more hopeful than
ever before. There are two reasons for this more
positive attitude: First, the cost of doing business in
LCCs is ever rising due to increasing labor and fuel
costs. Second, because surviving North American
springmakers are finding niche markets to capture
business that is more difficult to move for one reason
or another.
Chamberlain Spring
Richmond, British Columbia, Canada
Chamberlain Spring Ltd. makes hot- and
cold-wound springs for automotive OEMs and the
aftermarket. Chamberlain neutralizes the shipping
issue by including fully prepaid shipping and brokerage
as part of quotes on springs that will ship
within North America.
Bill Dagoe, springs group general sales manager,
says Asian manufacturers are making solid
SPRINGS July 2006 13