Wisconsin Stamping Plants Feel Pinch of Higher Steel Prices

Craig Fitzgerald, a Southfield, Mich., attorney to automotive parts suppliers tells the Milwaukee Journal Sentinel, “I think we are going to see some bankruptcies and quite a number of sales.”

According to figures from Wisconsin’s Department of Workforce Development, the state has more than 2,000 metal fabrication businesses, employing more than 68,000 workers at an average pay of more than $39,000 in 2003.

The Precision Metalforming Association, Cleveland, tells the Journal Sentinel that some of these plants are too small to remain competitive and that many are disappearing as their owners reach retirement age.

Rising steel prices are contributing to the demise of small fabricators, as they are unable to pass their price increases on to their customers, the Journal Sentinel reports.

“It is almost impossible to amend contracts,” Chuck Norris, president and CEO of Mechanical Industries Inc., Milwaukee, tells the paper. “I have contracts that, over the next three years, I am required to give price reductions. Meanwhile, my costs are going up.”

Norris says that his company is shying away from long-term customer contracts to avoid selling parts for less than it costs to make them. Another fabrication shop based in Manitowoc, Wis., will not do business with automakers and appliance companies because of the think profit margins.

The Precision Metalforming Association tells the paper that 32 percent of its 1,300 member companies lost money in 2003. The numbers could be worse this year as companies face thinner profit margins and try to keep their contracts away from foreign competitors.

To read the full Milwaukee Journal Sentinel article, visit www.jsonline.com/news/state/nov04/274474.