German Form Tool Maker Opens U.S. Manufacturing Facility

With all the concern about the flight of manufacturing to low-wage, third-world countries, it's easy to lose sight of the fact that the United States remains a major market for machine tools and related products, and companies continue to establish manufacturing facilities in the United States to serve that market. A case in point is Schwanog Siegfried Guentert GmbH (Villingen-Schwenningen, Germany), a producer of insert-type form tool systems (inserts and holders) for single- and multi-spindle automatic lathes. The firm is represented in this country by GST Tooling Corp. (Roselle, Illinois), and for the last 6 years or so, it has taken orders for tools manufactured at Schwanog's plant in Germany.

Although the tooling manufacturer developed a loyal following in this country, many customers were reluctant to make major commitments to a firm whose manufacturing was located overseas. It became apparent to the company that to gain a larger share of the form tool market in this country, it would have to establish a manufacturing presence in the United States.

Accordingly, Schwanog has opened a manufacturing facility in Warsaw, Indiana, which is convenient to its customer base in Indiana, Michigan and Ohio. Clemens Guentert, who recently became president of the firm following his father's retirement, explains that where previously the holders and inserts for the form tools were completely produced in Germany by grinding and/or the wire EDM process, blank holders and inserts will be stocked at the Warsaw plant. All profiling operations for U.S. orders will be done there.

Schwanog believes that the Warsaw plant improves its competitive position in a number of ways. "Tools that we provided on a trial basis to prospective customers frequently performed better than the tools they had been using," Mr. Guentert notes. "However, the customer would have to pay $60 or $70 in shipping charges in addition to import duties, which increased the total cost of the tools to a point where we were no longer competitive. By manufacturing the tools here, our prices become more competitive with domestic tooling manufacturers.

"Our U.S. plant also enables us to provide faster delivery times on tools," he continues. "Before, it might take 3 or 4 days just to ship the tools from Germany to a customer in the United States. By manufacturing here, we have decreased the travel time, which means we can fill orders that much faster.

"Perhaps most important, with our Warsaw manufacturing facility we are demonstrating a commitment to the American market," he emphasizes. "Hopefully companies that were reluctant to purchase from us in the past or that were unwilling to trust large orders to an ‘overseas supplier' will be more inclined to give us the work now that our manufacturing and delivery capabilities are comparable to the domestic suppliers they dealt with in the past."

The Warsaw plant manufactures tooling in inch sizes for Acme machines and similar older U.S.-made machines and metric sizes for European machine tools. Customers who have grinding or EDM capabilities can purchase blank holders and inserts and profile the form tools in-house, or they can purchase the form tools profiled, coated (if required) and ready to insert in the machine. "We are selling more finished form tools than tool blanks," Mr. Guentert reports. "Although some of our customers can do their own profiling in-house, they recognize that we specialize in those operations and that we have the production processes and skilled personnel needed to ensure optimum tooling."

With its new Warsaw plant, Schwanog hopes to increase its sales to the U.S. market.