Automotive Stampings

SIC 3465

Companies in this industry

Industry report:

This category includes establishments that primarily manufacture metal auto parts, such as body panels, hubs, and trim pieces, usually for sale to other manufacturers or for use in assembly facilities located off-site. Those firms that utilize the stamped products in the manufacture of end products in the same establishment are categorized by that end product.

Industry Snapshot

As with all manufacturers of automotive parts, stamping firms produce for two major market components: the original equipment manufacturer (OEM) and the after-market or replacement-parts sector. Typical components include fenders, roofs, floor pans, exhaust systems, brake shoes, and trim pieces. Such large pieces require a considerable investment in tooling and scale of operation. Consequently, businesses engaged in their manufacture are usually operated by the major automotive manufacturers or contracted by them. Small components, such as brackets, valves, and hangers, do not require the same level of sophisticated engineering investment, which allows small, independent firms to specialize in such items. As a rule of thumb, automotive manufacturers contract out any stamped part needed in volumes below 200,000 pieces annually.

In the early twenty-first century, the U.S. automotive stamping industry remained closely dependent on the health of the domestic automobile market. According to the U.S. Census Bureau, in 2009 the industry reported product shipments of a dismal $16.87 billion, down from $25.13 billion in 2005. Employment had also decreased drastically, from 99,345 employees in 2005 to 65,146 in 2009. Industry experts blamed the decline in the industry on the downfall of the U.S. automotive industry as well as the overall economic recession of the late years of the first decade of the 2000s.

According to industry statistics from Dun and Bradstreet, there were an estimated 658 industry-wide automotive stamping facilities in 2010. Together these firms generated revenues of $5.1 billion and employed 67,725 people. Because the automotive stamping industry is a major supplier to automotive manufacturers, firms in the industry were concentrated in Michigan, Ohio, Indiana, and Illinois, near the major U.S. automakers. In 2010 Michigan accounted for most of the industry's revenues, with $4.0 billion, or almost 80 percent of the total. The other three states together accounted for 14 percent of industry sales, with the remainder made up by the rest of the country; all states had at least one automotive stamping establishment in operation in 2010.

Background and Development

The process, or art, of stamping metal to form hundreds or even thousands of identical parts evolved with the automotive industry. In 1912, Philadelphian Edward Budd convinced the Hupp Motor Co., the Oakland Motor Co., and Garford Motors to begin incorporating metal into the design of their car bodies instead of the traditional wood. For the next few years, cars were made using a combination of both materials. In 1914, however, the Dodge brothers moved the automotive and the stamping industries into the modern era of industrial manufacturing with an order for 5,000 all-steel touring sedan bodies.

Stamping, or cold-forming, involves the use of power-operated clamping devices. A moving die, or forming tool, presses into a sheet of metal and against a fixed die. The metal undergoes what is known as plastic deformation to take on the desired shape and thickness. Until the 1930s, the method was more art than science. Skilled artisans produced relatively simple dies and used their collective experience to effectively produce parts mainly by trial and error. They often used an array of special tools and rituals to trick the sheet metal into shape.

As the industry needed to produce more sophisticated components, the unitized body, which eventually replaced the frame entirely on domestic automobiles, was developed. Once the die design, the metal material, and the blank sheet dimensions were chosen and verified to be correct, unskilled labor could supervise the tool system as it created thousands of duplications of the unitized body. That cost-saving attribute appealed to the needs of mass production manufacturers and overcame the disadvantage of the time-consuming process of die development. The new stamping process required each individual component of the process to have a unique set of custom-designed dies.

A major advance in press design came in the 1950s with the use of numerical controls. They made the new presses more accurate, faster, and easier to set up, allowing the industry to begin manufacturing a new range of products, including mufflers, oil filler caps, some gears, engine mounts, and brackets. By the 1970s, this technology gave way to computer numerical controls. The computer allowed the presses to run more quickly and operate more precisely, creating a need for automatic systems and robot loaders and unloaders.

The growing popularity of fuel-efficient Japanese-built cars challenged the mass-production philosophy of the U.S. automotive manufacturers, particularly in the 1980s. The stamping industry felt the pressure directly. Its manufacturing philosophy prescribed large, regional facilities supplying several assembly plants in various geographical locations. However, the number of car models being produced, including foreign models, was steadily climbing. In 1986 there were 51 models sold in the United States, but by 1990 there were 90 models. The capacity of press lines in operation increased as older lines were replaced with modern, more efficient systems, which meant competition increased along with the number of required die changes.

Increased foreign competition also meant that the domestic manufacturers had to improve the quality of their product. They needed new metals with better corrosion resistance. Instead of the standard 0.04-inch-thick carbon steel the industry had been using, manufacturers began specifying Zincrometal, one-sided and two-sided galvanized and coated alloy steels. In addition, customers became far less tolerant of part variations that showed up as poor fit and finish. In 1981, many firms introduced statistical process control and began to implement just-in-time manufacturing systems to tighten the production belt. The resulting retrenching turned into downsizing and a massive reduction in production employment. Between 1972 and 1982, the number of production workers in the industry dropped from 103,000 to 74,500.

A major impediment to improved efficiencies in U.S. stamping plants was the age of the equipment inventory. According to the thirteenth American Machinist inventory of metalworking machinery, almost one-half of all U.S. metal forming equipment was at least 20 years old in 1983. Much of this equipment was cumbersome, designed for long production runs with long periods of shutdown for maintenance and die replacement. During the 1980s, rebuilt and upgraded parts for these presses rose to 29 percent of all machine tool manufacturers' shipments. Even with the efforts to modernize, however, some machines could not be made competitive with the newer, more flexible Japanese technologies.

One of the most important battles for the U.S. industry to win was the challenge of the rapid die change. Traditionally, U.S. stampers took hours and sometimes days to change the dies in their machines. With the lines shut down for maintenance, only one shift out of three working, and a warehouse full of finished product inventory in case of an unexpected breakdown, such long change-out times had not been a problem. However, with just-in-time production methods, inventories shrank to only hours of reserve parts, and the number of die changes increased to several per day. In contrast, in Japan during the early 1980s, die changes took 10 minutes, using small armies of workers. By 1991, Hirotec Corporation of Hiroshima could consistently change a die set in 80 to 90 seconds, using just three men.

The difference between the United States and Japanese stamping processes was in equipment design and planning. Older U.S. machines required the complete removal of the old die before a new one could be installed. To do that, workers had to unfasten bolts and brackets. Having placed the new die, they would then set the piston stroke height and adjust the die position. Japanese presses use hydraulic clamps to hold standardized dies and have openings on either side to allow the new die to be inserted as the old is withdrawn.

To remain competitive, in the early 1990s the big three U.S. automakers (Ford Motor Company, General Motors Corporation, and Chrysler Corporation) spent billions of dollars for new presses and new stamping plants tied to particular assembly facilities. The on-site stamping plant produces all the major parts required for the assembly of a specific car, cutting down on transportation costs and increasing the efficiency of shorter production runs. However, in 1991 the Big Three still had 22 major regional facilities that would be expensive to abandon and replace.

To increase the efficiency of those older plants, the industry began to standardize the die heights and improve the die designs and body panel designs to reduce the number of strokes needed to complete the forming process and reduce the amount of scrap steel produced. Formed parts almost always require multiple hits by the die or a series of dies to take the desired finished shape. Reducing the number of strokes required increases in the rate of production and the life of the die. U.S. molds typically average 5.5 hits per panel compared to less than 3.5 for Japanese systems.

During the early 1990s, the competitive need for higher efficiency through better quality control and increased flexibility prompted the automakers to rethink their stamping arrangements and manufacturing philosophies. The traditional method of sourcing parts from several suppliers working from a manufacturer-supplied design gave way to a more cooperative and interactive approach. Copying the Japanese method, the manufacturers began to involve specific suppliers early on in the design stage and to require them to provide much of the engineering expertise, which reduced costs to the manufacturer and allowed the supplier to maintain an economy of scale in its actual production. It also led to fewer but larger suppliers. At the same time, manufacturers moved to on-site stamping plants equipped with sophisticated technology that effectively automated the process from start to finish. The increased efficiencies allowed the industry to compete effectively with foreign firms and to resist pressure from other materials like aluminum and plastics.

The value of industry shipments remained fairly constant from the late 1990s into the first decade of the 2000s, rising from $23.6 billion in 1997 to $24.8 billion in 2002 and $25.13 billion in 2005. Employment decreased significantly during this time, falling from 126,137 in 2002 to 99,345 in 2005. By 2009, there were only 65,246 employees in the industry. Of these, about 77 percent were production workers earning an average of $23.57 an hour.

In the late 2000s, the metal stamping industry faced many challenges, such as increased raw material prices, pressure from automotive industry OEM customers to cut costs, and increased competition from low-cost offshore stamping plants. From 2007 to 2008, North American light vehicle sales declined by about 3 million units, from 16.2 to 13.2 million vehicles. In fact, dealerships were packing their lots with used vehicles since they offered a larger profit margin compared to a new vehicle.

The industry was weathering the storm brought on by the overall stagnant economy. However, "At that time economists labeled the economic climate as a downturn," Vicki Bell noted in The Fabricator in January 2009, adding, " Since then it officially has been called a recession that some say is second only in severity to the Great Depression, a global event that began in 1929 (80 years ago) and ended in the 1930s or early 1940s for different countries." The total number of U.S. auto metal stamping plants was expected to be almost cut in half by the mid-2010s, especially if high steel and energy costs persisted in cutting into stamping firms' profit margins.

Current Conditions

At the start of the second decade of the twenty-first century, most participants in all sectors of the auto industry would agree with Myra Pinkham's summary in Metal Center News that "2009 was one of the worst years in history for the North American automotive industry." In 2009, both General Motors and Chrysler filed (and, with the U.S. government's help, emerged from) Chapter 11 bankruptcy, and, according to information from Dave Andrea of the Original Equipment Suppliers Association as reported in Metal Center News, "About 60 major automotive parts suppliers--including at least 20 of the top 100 companies--declared bankruptcy in the past year, not including a number of smaller companies that chose to liquidate without trying to restructure."

According to a 2011 report by IBISWorld, the automotive stamping industry "had a wild ride" during the recession of the late 2000s. The industry was predicted to recover by 2015 but continue to face challenges. According to the report, "While demand is forecast to rise as the economy recovers, the ramp-up in production of smaller vehicles will hurt growth since smaller cars require less of this industry's product, causing revenue gains to be modest."

There were an estimated 300 stamping plants that manufactured automobile body parts representing 38.2 percent in industry share valued at more than $5 billion in 2008, with a workforce of 19,976 workers. Manufacturing of rim pieces, including moldings, accounted for 5.4 percent of market share and about $1 billion in shipped products. Automobile hub cap stamping contributed $74.3 million, while automobile stamped or pressed metal fenders shipped amounted to $51.7 million in products. The automobile stamped metal operations of tops generated $19.8 million with eight plants.

Industry Leaders

The largest stamping firms in the OEM portion of the industry remain the automotive manufacturers themselves, but those firms outsource about 25 percent of their new car stamping requirements to independent firms. In the early 2010s, one of the largest of the independent stamping firms was Tower International Inc. (formerly Tower Automotive) of Livonia, Michigan. Founded in 1955 and led by CEO Dugald K. Campbell, Tower took the lead in the stamping industry for the first time in 1999. Tower filed for Chapter 11 bankruptcy in 2005, emerging in 2007 after selling most of its assets to private equity firm Cerebus Capital Management. In 2010 Tower employed 7,800 people in 2010, down from 11,000 people in 2006, and generated almost $2.0 billion in 2010 sales, down from approximately $2.5 billion in 2008.

Shiloh Industries Inc. of Valley City, Ohio, was another industry leader. Shiloh reported 2010 sales of $457.2 million and had 1,377 employees. Founded in 1950 as Shiloh Tool & Die Manufacturing, in 2010 the company had nine manufacturing plants in North America. General Motors accounted for about 34 percent of the company's sales.

Martinrea Metal Industries Inc. in Troy, Michigan, was a subsidiary of Martinrea International Inc. of Ontario. Founded in 1912, the company pioneered the development of metal stampings throughout the early part of the century, racking up such firsts as the first four-door, all-steel sedan body (Dodge), the first all-steel unitized body (Nash), stainless steel "streamliner" trains of the 1930s, the Navy's Conestoga RB-1 stainless steel cargo plane built during World War II, the prototype for the French Citroen, and the all-plastic-bodied 1954 Studebaker Coupe.

Workforce

Traditionally, the large stamping plants, using large quantities of relatively unskilled workers, have operated with union labor. The main unions are the United Auto Workers (UAW) in the United States and the Canadian Automobile Aerospace and Agricultural Implement Workers (CAW) in Canada. However, many transplant operations have tried to use non-union labor throughout their operations, including the on-site stamping plants.

With the shift to advanced automation at the newer plants, the traditional union stance of clearly defined job descriptions and classifications was giving way to more flexible arrangements like Ford's Modern Operating Agreement at its Wayne, Michigan, on-site stamping facility. That agreement specifies only one category of production worker. Each worker receives training on the entire manufacturing process to produce a teamwork approach. Displaced by sophisticated automation, the number of unskilled operators continued to decline. In their place, skilled tradesmen and craftworkers design and maintain the complicated production machinery and its robot servers. The technical expertise of industry production workers has increased rapidly as the industry adapts to new production techniques and strategies, the challenges of new metal alloys, and the competition of plastic alternatives. Industry-wide employment continued to fall from 99,345 in 2005 to 65,146 in 2009, according to the U.S. Census Bureau.

Research and Technology

Modern stamping plants used advanced technology to redefine themselves. Once the labor-intensive blacksmith shop of the auto industry, stamping taps the skills and ingenuity of its workers to produce machines and computer monitoring systems to do repetitive work. At a fully automated plant like Ford's $600 million Wayne, Michigan, stamping plant, for example, human operators are used only to load raw steel into the plant and to remove the finished product at the end of the production line. Automatic guided vehicles follow roadways of wires embedded in the factory floor carrying bar-coded metal to the correct storage area or the next press that needs that particular type of material. Transfer presses pass the metal down lines of six or eight similar machines to form complicated components. The completed parts exit the production area and enter the transfer area, where operators manually check them and rack them on a conveyor. Their next stop is the assembly facility.

Transfer presses need less production floor room, but they often achieve only 25 to 30 percent operating efficiency because of their complexity. Less complex, easier-to-repair robot systems may become the technology of choice where the need for flexibility dominates. Robot systems appeal to small-batch producers like Budd Company. A "hard-tooled" automation system like a transfer press line may need expensive retooling every few years, but a "soft-tooled" robotic system can be upgraded by reprogramming and minor physical relocations.

The computer also improved new die design and raw material usage, reducing both the production costs due to waste and the design time needed for the evolution of a new car. Such programs can reduce the skilled labor hours needed for die face design 50 percent, die face manufacture 30 percent, and die tryout and corrective modification 30 percent. Such improvements went a long way in reducing the traditional domestic car manufacturers' five-year new car design period, putting it in line with Japanese design periods of two or three years.

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