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Manufacturer adjusts to economic slowdown by moving work from California to Tallmadge
By Jim Mackinnon
Beacon Journal business writer
Published on Monday, Sep 15, 2008
Sparks fly as a computer-controlled plasma cutter, with its laser-like high temperature torch, moves quickly over a slab of inch-thick steel plate that weighs 2,500 pounds. The 60 parts the cutter gets out of the sheet in just 20 minutes will soon be integrated into Waltco's folding liftgates — some 50 different models — that are installed on the backs of big trucks and trailers used throughout the U.S.
As its workers continue to weld, assemble, polish and paint the lifts, Waltco is making changes to cope with a slow economy that has hurt its bread-and-butter sales to new truck makers.
The company recently decided to close a smaller manufacturing operation in Gardena, Calif., south of Los Angeles, and consolidate those operations into its headquarters and factory complex off Northeast Avenue. The move resulted in about 35 hourly and salaried people losing jobs at the Gardena plant. The California site will remain open, but only for warehousing the company's truck-mounted lifts and related parts made in Northeast Ohio as well as providing space for its West Coast sales staff.
''A lot of people are faced with, 'How do we deal with a downturn?' '' said Joe Halpin, Waltco's marketing manager.
Waltco's response has been to install new technology in its Tallmadge plant, including computer numerical control, or CNC, lathes and machines, robot fabricators, powder-coating technology and the plasma cutter. (The company also has another division, across from the liftgate factory, that makes custom hydraulic cylinders.)
The company decided to proceed with a $3.2 million investment in new painting technology to make its products more durable even as the economy slowed down, according to a trade publication.
Those investments in Tallmadge helped with the decision to move manufacturing out of Gardena, Halpin said.
''When freight business is up, the need for this [liftgate] product goes up,'' he said. ''That part of the economy is certainly down right now.''
Waltco President Rod Robinson said the key lesson learned in the move is the need for a business to regularly review its strategic plan.
For example, Halpin said, should a business keep multiple facilities open, or have needs changed? Today's needs might not be the same as four or five years ago, Halpin said.
''Are all the assets and facilities you have still relevant?'' he said.
In Waltco's case, the investment in technology in Tallmadge, coupled with the lower volume liftgates made in California, persuaded executives they could stop manufacturing in California while continuing to serve their customers, Halpin said.
The new Tallmadge technology also helps Waltco with custom orders.
''It gives us a competitive edge. And we're all looking for that,'' Halpin said.
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com.
Get the full article here.
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