Special Feature >>Editorial:
Reflecting on Taiwan Hand Tool
Industry Through the U.S. Hand Tool

Supply Chain Crisis
從美國手工具供應鏈危機，檢視台灣手工具產業發展

Talent Gap

Exiting Hand Tool Manufacturing?

Hardware & Fastener Components - no.62/2024

The Missing Puzzle in U.S. Hand Tool
Manufacturing
Last March, Stanley Black & Decker announced it wasclosing the highly automated hand tool manufacturing plantin Fort Worth, Texas, which had been established for 3 and ahalf years and cost 90 million U.S. dollars, mainly producing
the "Craftsman" tools which is a brand acquired by Stanley.
This move is to save US$2 billion in costs. Before long, thisMarch, Stanley announced the closure of the US$31 million
manufacturing plant in Fort Mill, South Carolina (which
produces "DeWalt" brand tools), also for cutting costs. Words
emerged that Stanley was looking to reduce its bases in Asia.
The Wall Street Journal devoted an article to explore why
the leading American hand tool company cannot produce
hand tools in the United States. It said the company just can't
figure out how to make wrenches, and criticized that the Fort
Worth factory sought to use unprecedented high automationand efficient production to bring the luster of "Made inAmerica" back to the United States, but that in the end it
proved to be a huge failure due to slow production speed andequipment problems.
In fact, Stanley was not the one that fired the first shot. In2020, Ideal Industries announced the closure of its WesternForge brand (once the largest screwdriver manufacturer in theUnited States) and its U.S. factory. In 2017, Apex Tool Groupannounced the closure of the Armstrong brand and South
Carolina factory.

032 惠達雜誌

Back to the Stanley case. Internal sources pointed out that the Fort
Worth factory was originally going to produce high-quality hand
tool products that could compete with "Chinese prices" through thedevelopment of unique automation technologies new to the industry.
These technologies aimed to convert manual manufacturing processes
into automated production and at the same time significantly improve
product yields, but something went wrong in the process. Wrenches andratchets become misshapen after passing through the press, resulting
in millions of dollars spent on equipment adjustments. There is also theissue of sockets not being fully punched. In other words, the yield target
couldn’t be reached. Another problem was losing experienced seniorcraftsmen with in-depth knowledge of tool making at the time, which
added to the predicament. This reveals the problem of technical talent
gap at the Fort Worth plant.
Automation technology can solve many problems in thischallenging era, but successful technology research anddevelopment must be supported by talents with professional
manufacturing knowledge. In the manufacturing of hand tools
such as wrenches, even with automated machines, "humanowned craftsmanship" is still critical. Developing and tuning
automated machines may sound simple to laymen, but in fact, whether
it is forging or heat treating, the professional knowledge and flexible
thinking of human brains are often something that automated machines
cannot easily simulate or match. It is quick and simple to think with ahuman brain, but it will be very complicated to convert into a computer
program. Therefore, experienced talents are indispensable.

Lack of a Full Supply Chain
Beyond that, there are structural issues. A long time ago, "Madein the U.S." once dominated the manufacturing market, but now
manufacturing in places outside the United States has become thenorm. For years, U.S. manufacturing has spread production overseas toreduce costs, which comes at the cost of sacrificing an intact domestic
supply chain. Just like the fastener industry chain, hand tools also
require a specialized industry chain. The key competitivenessbrought by a domestic industrial chain is the rapid acquisition

Special Feature >>Low Price Competition
In addition, more and more people just want to buy hand tools
with lower cost, and there are many imported low-price hand tools
in the U.S. market. Amid low-price competition from overseas
peers, it is a big challenge for American hand tool companies tofind a balance between high labor costs and price reduction.

The U.S. Leaves a Vacant Spot for
Taiwan and China to Fill In
Taiwan's hand tool manufacturers are in sharp contrast to theFort Worth factory. There are approximately 2,400 hand tool
manufacturers in Taiwan with nearly 50,000 employees. Seventy
percent of these manufacturers gather in central Taiwan to forma very special industrial cluster in the world which comes witha complete supply chain, covering dies making, heat treatment,forging, electroplating, assembly, as so on from processing tofinished products. This cluster creates an output value exceeding
NT$130 billion a year. More than half of the hand tool products
supplied by international brands are actually made in Taiwan. For
example, Yih Cheng Factory based in Taiwan is the leading OEM
manufacturer of American screwdrivers, with an annual output ofmore than 35 million screwdrivers.
Although Taiwan faces shortages in water, electricity,workforce, land, and funds, its hand tool industry still
possesses sufficient "craftsmanship". Even if it does nothave the most advanced automated production technology
comparable to European and American counterparts, it can
respond to various demand from global customers in realtime. Coupled with the support of a complete supply chain,finished products in full sets can be provided to overseas
buyers. Craftsmanship and supply chain are the keys tothe success of Taiwanese hand tools. On another note, theHannover Messe this year can also give us some inspiration.
This exhibition showcased the latest technologies in the fields ofautomated robotic arms, smart manufacturing, and Industry 4.0.
Upon the requirements of unmanned, automated and systematizedmanufacturing, the manufacturing industry is facing cost pressures
for upgrade and transformation. However, the industry can’t afford
to stop the pace of transformation, so companies must modify
their practices as they go. Strategic alliances for new energy
technologies have emerged in Europe, and coupled with the ESG
and CBAM trends that have followed, the development of newenergy policies will change the design and manufacturing of tools
in the future. Should it be regarded as a crisis or a turning point?
That is for you to make a judgement upon.

To that, the big players of Taiwan hand tool industry have been
upgrading themselves to create high-value products for highend industries. For example, Proxene Tools continues to delve
into technology and has launched adjustable wrenches for theU.S. defense and aerospace industries. In addition, it introduced
robotic arms into its factory, redesigned its workstation flow,
introduced automated warehousing, and successfully set up asmart production line that increases production capacity by 30%.
Today, Proxene Tools is one of the top three industrial adjustablewrench manufacturers in the world, accounting for a quarter of themarket.
In recent years, there has been little growth in the production
capacity of hand tools in Europe and Japan, and some of the major
American factories have closed down, so some orders have beenredirected to Proxene Tools. Even so, that doesn’t mean Taiwan
hand tool manufacturers have no tough competitors. China's “redsupply chain” has caused intense low-price competition withTaiwan. The price of Chinese DIY hand tools is only half the pricein Taiwan. Therefore, the big players of Taiwan hand tool industry
are transitioning to high-end professional-grade tools and carbon
reduction.
Not only that, Taiwan is using its supply chain advantages tobuild an all-star alliance of hand tools. Machan International
will be the leader in forming a strategic alliance with six wellknown Taiwanese hand tool manufacturers, including K&WTools, Kuang Yuang Industrial, Gong Maw Enterprise, ProxeneTools, Lucky-Brand Industrial and Yih Cheng Factory. They
will be collaborating to provide solutions to global buyers. On
another note, these companies are advised to learn from thesuccessful experience of Taiwan fastener industry. The fastenerindustry in Taiwan has begun to shift from pure manufacturing
to marketing, and the overall scale of this industry is larger thanthat of the hand tool industry. Among all fastener manufacturers
in Taiwan, more than 35 companies account for 50% of Taiwan's
total fastener export value, including many large companies witha turnover above 100 million US dollars. Only when a company islarge in scale can it have enough capital to step out of the box ofpure manufacturing and go ahead with mergers and acquisitions,as well as create brands or establish marketing and warehousingbases overseas. If Taiwan hand tool industry can cultivate largescale enterprises of international scale, they can drive the positive
development of small and medium enterprises in the entire hand
tool supply chain.
Taiwan and China are actively filling the gap left byAmerican hand tool manufacturing. The lesson to takeaway from this story is to cultivate a specialized supply
chain. U.S. Secretary of Commerce Gina Raimondo wasinterviewed in the CBS News program "60 Minutes", where she
told the host: "We have the most sophisticated semiconductors
in the world." The host asked her if 'we' include Taiwan. She
replied it's "fair" to include Taiwan in her use of “we.” The samerevelation has occurred in the U.S. semiconductor industry, which
many readers have already witnessed. The importance for thehand tool industry to maintain its own intact supply chain is selfevident.
Copyright owned by Fastener World / Article by Dean Tseng惠達雜誌

Hardware & Fastener Components - no.62/2024

and exchange of technical knowledge, raw materials
and tools domestically, the improvement of overall pricecompetitiveness through a mechanism of coexistence
and mutual benefits, and the ability to provide complete
suppor ting ser vices. This is the key piece of the puzzle
that the U.S. hand tool industry does not possess. Even if U.S.
manufacturing has returned in recent years, rebuilding the U.S.
hand tool supply chain is not something that can be accomplishedin the short term.

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