Above the Line

While manufacturers around the state

and nation struggle to hang on, many northern companies are putting the last years' recession behind them, diversifying, expanding and boosting big profits.

REGION – There's been a bit of optimism coming out of the manufacturing industry as of late. Take recent comments made by Tino Breithaupt, the Traverse City Chamber's VP of Economic Development. He says some local companies are reporting "record numbers" – including revenue increases up 60-80 percent over this same time last year and employment levels returning to pre-2008 levels.

The TCBN checked in with a handful of Traverse City manufacturers for the latest news, as well as plans and projections for the coming year. Here's the 411 on some of the companies that are leading the manufacturing turnaround locally.

Grand Traverse

Container

President: Tom Schofield

Annual revenue/sales: Did not disclose

Number of employees: 80

Manufactures: Designer, manufacturer and distributor of custom corrugated boxes for the automotive, food and durable goods industries

The latest: The company made a $1 million investment to buy the former Olmsted Products building next door and connect it to its current facility. That addition gives the company a total footprint of 85,000 square feet. It also invested another $1.45 million in a new piece of equipment. Schofield says the expansion improved production flow and turnaround, increasing productivity by 33 percent. More product also means more shipping so it has added 5 more shipping docks. It also necessitates more employees. The company has already added 10 people to its workforce with an eye on adding another 15. Schofield says the expansion will also allow the company to service more of Michigan with plans to expand into the east side of the state in early 2011.

Grand Traverse Machine

President: Mike Alfonso

Annual revenue/sales: $5.4 million in 2009; projects the same or slightly more for 2010

Number of employees: 60

Manufactures: Produces precision machined components for many different industries, but primary work has been hydraulic cylinders and shock absorbers for military vehicles and the railroad industry; starting to diversify into medical instrumentation.

The latest: 2009 was the company's 4th biggest year since it started in 1966, says Alfonso. He attributes that growth, even in a challenging economy, to a more diverse customer base. And further diversifying that customer base is the company's focus over the next year. It received federal stimulus money to work on a marketing plan (up to $50,000 with a company match) to attract new business outside of Michigan. Right now, 85 percent of its work is with the state's borders and its new marketing campaign will target companies in Illinois, Ohio and Indiana. The company also recently became ISO 9001:2008 certified (a quality standard) which Alfonso says is opening up some more doors as well.

Great Lakes Stainless, Inc.

President: Terry Berden

Annual revenue/sales: $7-8 million

Number of employees: 50+

Manufactures: Up until three years ago, the company's bread and butter was building stainless steel equipment for schools and restaurants. But the economy necessitated diversification, says Berden. A $1 million investment led expansion into prisons, stadiums, airports and hospitals. Now, inventors are knocking on Great Lakes Stainless' door to have them fabricate their newly-patented steel products.

The latest: Three such inventions are slated to hit the market over the next

The latest: Three such inventions are slated to hit the market over the next few months, according to Berden. The company is fabricating the stainless steel cabinets for a new boxed wine distribution system created by Ed O'Keefe of Chateau Grand Traverse. The system adds a year to a wine's shelf life, allows for portion control and eliminates expensive packaging.

The other local invention, by Jerry Sheren of Sheren Heating and Plumbing, is a heating unit for classrooms that offers energy savings of 40 percent and also has a bacteria killing light. Great Lakes Stainless is building the steel housing for the units. The third invention is a delivery system for an additive that will be required for all diesel engines manufactured after 2010.

Berden anticipates having to add between 20 and 30 employees to meet production needs for these new products. "We had our biggest year ever last year," he says. "This year may not be as good but we have a lot of possibilities out there. We've got a bunch of young management that's like, 'Let's try this.' So, far, it's not been bad."

Olmsted Products Co.

President: Craig LaFave

Annual revenue/sales: Did not disclose

Number of employees: 31

Manufactures: Worldwide provider of specialty high-flow, high-pressure hydraulic valves and control systems to a variety of industries for the past 40 years. Its primary application is the deepwater oil and gas exploration market.

The latest: Since 2005, Olmsted revenue values have increased approximately 50 percent every year, says LaFave. However, he doesn't mince words in describing the current market as "difficult." To meet that challenge, LaFave says the company has diversified its offering base by adding specialized service staff, allowing it to generate revenue with increased field support and maintenance of critical components. Also, the company has invested in R&D projects, giving it a competitive edge with products for unique applications.

Quantum Sail Design Group

President: Ed Reynolds

Annual revenue/sales: More than $30 million worldwide

Number of employees: 137 worldwide; 21 employees at its U.S. corporate headquarters in Traverse City

Manufactures: Sails for all types of sailboats including cruising, racing, multihull, super yachts, and more than 40 one-design classes. It also handles all design and sales of the sails. Sail types include both traditional woven polyester and its proprietary Fusion M membrane sail.

The latest: Formed in 1996, Quantum Sail Design Group is now one of the largest sail makers in the world with sail making facilities in Traverse City, Spain, Malaysia and South Africa. This July, Quantum added a new affiliate in Palma de Mallorca (Spain) specializing in sales and service for the super yacht market (sailboats over 60'). Boats equipped with Quantum sails are making news in world-class events including the Olympics, Audi MedCup Circuit, America's Cup, Volvo Ocean Race, Tour de France a la Voile, and the Velux 5 Oceans Race.

Skilled Manufacturing, Inc. (SMI)

President: W. Dodd Russell

Annual revenue/sales: Did not disclose

Number of employees: 153

Manufactures: SMI Auto produces precision machining for drive train components, power steering brackets, oil pans and other automotive assemblies. Products include steering column shift actuators, air intake manifolds, engine front covers, and housings. SMI Aerospace serves the private jet, commercial airline and defense industries with components including cabin pressurization manifolds, engine shaft lubrication, and landing gear hydraulic manifolds. SMI Specialty supplies components to the recreational sports, marine, automotive and energy industries. Products include custom motorcycles, hot rod custom parts and accessories, Big Jon marine downriggers and wind turbine parts.

The latest: Just last month, U.S. Sen. Carl Levin and the U.S. Department of Agriculture visited the company to announce nearly $7.8 million in guaranteed loans to SMI. The loans, issued by the Bank of Northern Michigan, will allow the company to restructure its debt and buy equipment. Late last year, The Michigan Economic Growth Authority approved a state tax credit for SMI valued at $571,210 over seven years and the City of Traverse City approved a 12-year industrial facility tax abatement worth more than $13,700 per year and a 6-year personal property tax abatement on new equipment worth almost $26,700 annually. The company is also in the process of adding some 75 new workers in addition to sub-contracting work to other area parts suppliers.

The Plascon Group

President: David Peterson

Annual revenue/sales: Did not disclose

Number of employees: 48

Manufactures: Through several divisions, the company provides specialty plastic packaging and equipment for the food service, institutional, pharmaceutical and bulk packaging industries. Plascon Films produces blown plastics used to produce trash can liners, box liners and packaging bags. Plascon Packaging provides packaging and food processing equipment to the food service and food processing industries. Plasport produces flexible dry and liquid liners for the bulk packaging industry. It also manufactures bio-processing bags for the pharmaceutical industry. Plascon Inc. provides work programs for community rehabilitation programs and correctional facilities for the production of plastic bags. One of its partners in this effort is Grand Traverse Industries.

The latest: The company is in the process of adding nearly 18,000 square feet of manufacturing and warehouse space. This is the third expansion in five years with an investment of $995,000 that includes new equipment as well. It's currently looking to add a marketing person and a sales director as part of its plan to grow its staff by 12 in the next two years.

Plascon Packaging recently inked a partnership with D C Norris & Company Ltd. of the United Kingdom, one of the largest food processing equipment suppliers in the world that makes Plascon the exclusive North American distributor of its products.

And coming soon…

Century 3+, a subsidiary of Century Inc.

Keep an ear out for big news coming soon from Century 3+. Jim McManus, new business development manager, says the company has three deals in the works but all is hush hush until the end of September. All the deals, McManus says, involve diversifying its business with new products. The company made big waves last year with its new "light weighting" process (essentially a way to mass produce lighter and stronger automotive parts), which caught the attention of the U.S. Department of Defense. BN

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