ABSTRACT
The decline in plastics usage corresponding with weak auto demand has not picked up appreciably by the end of the 2nd quarter of 1993. Powder metal parts are reaching the point where they can compete with nickel/molybdenum steel alloys. The Big Three automakers are switching cast iron to aluminum engine blocks, along with Honda and Subaru. Critical factors affecting a decision can include: Class A Finish, physical properties, ability to paint “in-line”, ability to withstand collisions, etc. The business scenario surrounding automotive molders is focused on two major factors — cost cutting by the automakers and free trade. Molders who do begin operations in Mexico will opt for Mexican partners since the law requires minimum Mexican share in ownership of any company based in that country. The automaker’s rationale for a smaller number of larger suppliers rests on three points — improved product quality, better service and lower costs.
