Mold manufacturing companies have long fought battles to get paid for the molds they build for OEMs. The primary problem is that in most cases, the mold supplier releases possession of the mold either to the OEM or the molder, who will perform the tryouts and mold the parts. Mold lien laws that benefit the mold manufacturer have been put into place in a few states, and in Michigan and Ohio, where the problems are often the worst because of the automotive industry, these laws have been beefed up.
According to David Lefere, a partner in the law firm of Bolhouse, Barr & Lefere, the current mold builder lien is a non-possessory lien designed to protect mold companies that must release the mold prior to tryout and validation. Lefere, whose practice specializes in tool-and-die and mold shops, noted that the law is to protect the interest of the moldmaker who ships the tool prior to payment.
“Mold builder lien laws in Michigan, Ohio, and Illinois are non-possessory and are a remedy for a long-standing problem of the mold not getting paid until after shipping the mold,” Lefere told a group of mold builders in a recent webinar sponsored by the American Mold Builders Association. “A number of years ago there wasn’t much a moldmaker could do, but now we have a bit more leverage.”