Okuma MCR A5CIIClick image to enlarge

Many manufacturing companies open their doors focused on a certain industry or market segment, only to expand well beyond the initial business plan.

So it is with XL Tool Inc., which was originally a part-time tool and die shop doing work for the automotive and appliance sectors. That was in 1993, and when one of the original partners decided eight years later that it was time to move on, owner Gord Jokic hired vice president of operations Chris Hergott to help grow the business.

Slow but steady growth

A machinist and toolmaker by trade, he was quite successful. Today, this ISO 9001:2015 shop has 50 employees, a 3400 sq m (37,000 sq. ft.) plant in Kitchener, a stamping facility in Querétaro, Mexico, and has recently earned its N299.4-16 nuclear certification. It also made a substantial investment earlier this year in an equally substantial machine tool, an Okuma MCR-A5CII double column CNC high-speed machining center from EMEC Machine Tools Inc. in Mississauga.

It’s not XL Tool’s first Okuma. Far from it. There’s also an MU-5000V five-axis vertical machining center (VMC), an MB-46VAE three-axis VMC, a Y-axis LB4000 EX II and GENOS L300MW CNC lathes, both with live tooling, and an M560-V vertical with a five-axis table. XL Tool's well-equipped production floor boasts numerous other manual and CNC lathes and mills, surface grinders, and wire EDM machines, among them a 4-meter (157 in.) X-axis horizontal machining center from Awea, an 800-ton Bliss tryout press, and the latest addition, a 1600-ton Blow straight-side stamping press.

It’s the Okumas that have perhaps had the biggest impact on growth over the past decade, however. “We started buying Okumas around ten years ago and quickly found that you just can’t beat them,” says Hergott. “They’re reliable, extremely accurate, and there are rarely any difficulties. Yes, there’s less expensive equipment out there, but there's a reason they’re called mother machines.”

The MCR-A5CII came on the heels of a 1400 sq m (15,000 sq. ft.) expansion late last year. Hergott explains that they brought in the five-axis mill to accommodate ever-larger part requirements. Some of this can be attributed to XL Tool’s fairly recent nuclear certification, its ongoing work in oil and gas, and as the company name indicates, a continued commitment to tool and die. “It’s primarily because of all these larger, increasingly difficult parts that the Okuma’s five-axis capability is so important to us,” Hergott says.

Expanding markets

XL Tool’s core business remains the designing and building of metal stamping dies for a wide range of industries, with automotive high on the list. These include progressive, transfer, and draw dies, many boasting in-die tapping and in-die nutting capabilities. Many of the tools not shipped to the OEM or Tier supplier make their way down to the plant in Mexico, where automaking remains a strategic and important market sector.

When not making high-end stamping dies, XL Tool does custom machining for the nuclear industry, as well as its customers in the automation field. Here again, the MCR-A5CII has opened doors to new opportunities, in large part due to its accuracy and robust metal removal capability. Still, there’s one problem that Hergott continues to struggle with: skilled labour.

“Nobody wants to work," he says. "We can't even find a shipping and receiving person, let alone a good machinist or tool and die maker. I know that most shops have the same problem these days, which is why automation is growing at such as rapid pace. But you can't automate a one-off part for the nuclear industry that takes a week to machine and has flatness tolerances in the microns. There’s just no way.”

To help improve this situation, Hergott gives significant amounts of time back to the industry as the president of the CTMA (Canadian Tooling & Machining Association). He says the group is aggressively promoting the trades in Canada, working with high schools to get involved with manufacturing and garnering industry support from local governments.

Unexpected obstacles

To this last point, another challenge is government regulation, as well as the US trade war with China. Hergott notes that he purchased the Okuma two years ago, but due to COVID-related supply chain disruptions and overly stringent building codes that brought the expansion to a crawl, XL Tool couldn’t take delivery until one year later. Fortunately, Okuma was willing to work with him on storing the machine until the plant was ready.

As for the trade war, the Trump and then Biden administrations’ tariff policy has created an unexpected and unfair situation—American companies are buying tools from Chinese manufacturers, having them shipped to Canada (which does not impose tariffs), and then importing them to the States. Add to that rising material costs and shipping rates, hugely increased lead times on most everything, and an overall shortage of containers, and the supply chain outlook appears grim, at least in the short term.

Despite all this, Hergott has no regrets over the new machine. “Like all of our Okumas, it’s an amazing piece of equipment,” he says. “It’s probably the busiest machine in the shop right now. And regardless of all the current trade issues and government interference, we’re on solid footing. Canada’s nuclear industry is strong. Its automotive business is strong. GM and Ford have stayed, Toyota's here big time, and we see a lot of electric vehicle activity in Canada. Best of all for us, these companies see value in our tooling. That’s because we’ve built great facilities with cutting-edge equipment. Now, if we as a country can just learn to utilize our manufacturing capabilities and lock our doors a little bit more, we’re all going to be in great shape.”

KIp Hanson is a contributing editor with Shop Metalworking Technology magazine.

 

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SMTCL's COO Jerry McCarty says SMTCL, considered among the world's largest machine tool builders, will be manufacturing in the US by the end of 2015.

A manufacturing factory in North America will complement SMTCL's current manufacturing facilities in Europe (Germany) and Asia (China). "The United States was chosen because that is where our customers are and we know that we can find workers and vendors that have the dedication to quality that we need", McCarty stated in a press conference at IMTS earlier this week. "We will employ Americans and this facility will be managed by Americans. I can also tell you that although we will continue to use the world's best components in our machines, we will also use a number of local US vendors to provide contract machining, fabricating, and electronics."

The site of the new manufacturing facility has not been determined, but McCarty says SMTCL-Americas will begin manufacturing VMCs and expand with other products as the market dictates. 

SMTCL plans on purchasing or building a 100,000 square foot facility and employing between 100 to 120 employees. "We will need manufacturing engineers, machine assembly technicians, and service technicians, as well as purchasing, accounting, and general management professionals," said McCarty.

McCarty added that he hopes to be manufacturing in the US by the end of 2015. "These machines will be shipped to our customers in the United States, Canada, and Mexico and we look forward to helping our customers compete in the world economy."

SMTCL produces 80,000 machine tools each year and has revenues of $2.9 billion. The company has more than 300 products in its machine tool line-up.

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