Quality, currency and logistics weigh in favor of US parts makers’ case

Jul 01, 2010 | 09:53 AM | Frank Haflich

The bottom line rising material and logistics costs, along with currency factors and speed of turnaround, are dimming the shine of offshore sourcing by U.S. parts suppliers. But whether an all-out shift in gear is looming remains to be seen.

In a trend whose progress has been marked mainly by anecdote and example, one recent experience by Jerry Zeitler, president of Die-Matic Corp., serves as a typical illustration that "reshoring" is for real, at least for part of U.S. industry. Zeitler late one Friday received a request for quotation (RFQ) from a so-called Tier 1 automotive supplier for work then being sourced in Asia for one of the Detroit-based Big Three automakers. But "escalating material, logistics and currency" factors were prompting the supplier to review the possible recall of the work back to the United States, and it was asking for domestic companies to bid on the job.

Moreover, it wasn't likely to be just a one-off inquiry. The customer, who is looking to "localize" additional production, told Die-Matic, based in Brooklyn Heights, Ohio, to expect additional RFQs.

Die-Matic, which provides metal stampings and specializes in progressive dies and assembly fixtures, had been losing work to Asia for the past 10 years or so. Not only were the prices charged by the Chinese for tooling cheaper than domestic, but at times "they just threw it in" with the aid of subsidies as export tax rates, Zeitler said. "A lot of that has gone away," he said of the subsidies.....