What If There Was No Tooling?

19 December 2013 Dashboard Insights Blog

Having worked for Automotive Industry clients for over a decade, not once did I ever have one tell me that they could not make the products they wanted because there was no tooling. However, a recent study by Harbour Results Inc. says that the Automotive Industry better worry about tooling. As reported by Automotive News, the study concluded that there is already a 40 % bottleneck in the ability to make vehicles. Other concerning statistics: within 5 years, the industry will be $6 billion short of tooling capacity; new models over the next 5 years could need as many as 3,000 new tools; and North America lost one-third of its tooling manufacturers in the most recent recession.

So what does this mean for the industry? Well, if you have a supplier, you better make sure that they have the capacity to make your products. You should review your current contracts and consider how they may be impacted by a shortage in tooling. Who will bear the burden of that economic issue? Will it excuse performance, or as the buyer, will you be left short of product.

How will it impact your costs? Will you have to get tooling or product outside of North America that you currently get locally? The impact on the time to fill orders, on the ability to meet demand and to ensure that your business operates at the capacities necessary could be materially impacted. Combine these facts with an aging workforce and an ongoing shortage of skilled labor and there really could be a tooling crisis in the Automotive Industry that is acute and sudden, but plainly predicted.

Get ahead of the curve. Review your contracts. Forecast your needs. Be prepared. No tooling means no parts. No parts means no product. No product means no sales.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Related Services