Why Tooling Spend Matters to You

The photo below shows a step in the process known as “hot stamping,” wherein the material is heated before it is stamped, such that the material is sufficiently pliable to be formed without breaking the tooling: hot stamping is performed mainly for steels that are really, really strong (typically used for things like B-pillars on vehicles, so that this strength helps for safety in the case of a side collision); after the material is formed and cooled it is back to being formidable, but not formable.

(Photo: Schuler AG)

Body panels and components for the body-in-white (i.e., the vehicle before the exterior panels are fitted into place) are stamped. Which is where tool and die companies come into play, as they’re the ones who make the tooling used in the dies to form those components.

These are companies that you probably haven’t heard of, but which are essential: you need dies to make vehicles, period.

According to a study just released by Harbour Results Inc. (HRI), things aren’t looking good for people who are in the tool and die industry—and by extension for people who make new vehicles and by extension to that, people who want to buy new vehicles—because it is projected that the 2019 automotive vendor tooling spend will be $8-billion, which is a big number, but which is notably less than the $10.3-billion spent in 2017.

Laurie Harbour, HRI president and CEO, says, “We expected 2018 to reach over $11-billion. However, due to a number of vehicle cancelations and delays, we are predicting the year to be closer to $9.2-billion.”

In other words, the decline that some have suggested might happen may be happening.

She adds, “The industry is $2.2-billion below forecast through the first three quarters of 2018, resulting in a six-point dip in tooling shop utilization to 79 percent.”

Which portends that things will dip lower in 2019.

According to HRI, there are predicted to be 153 vehicles launched between 2019 and 2021. Again, while that might seem to be a good number, it is fewer than the 183 launched between 2016 and 2018.

What’s more, focusing on 2019, HRI says that the Detroit Three—which buy most of their tools in North America—are going to source tools for just nine vehicles.

And if that’s not sufficiently cautionary, Harbour says, ““This forecast is based on current data and information, but issues like tariffs, automaker restructuring, and/or an economic recession could drastically impact the forecast resulting in a dip in tooling spend as much as $2 billion,”