Known for Quality

Middletown Tube Works

Middletown Tube Works has been producing specialty welded steel tubing for 21 years. The family-owned, Ohio based business passed from father to daughter five years ago – setting the company apart as one of the few certified Women’s Business Enterprises in the steel industry.
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“It is definitely a difference,” President Angela Phillips remarks. “There are very few women-owned businesses in the steel industry.”

But, Ms. Phillips isn’t looking to cash in on that differentiation. “Even though we get that designation and we maintain it, our customer base is not driven by that,” she explains. Instead, customers are motivated by the quality of the product – and Middletown Tube Works is able to deliver the quality that the industry wants. “The proof is in the pudding,” she points out. “We let [our work] speak for itself, as opposed to saying that you should do business with us because we are a woman-owned business… Our main focus has been quality since the beginning.”

It has not been easy, however. “There are definitely barriers,” Ms. Phillips admits. “It’s a male dominated industry.” She even remembers being “laughed off” by other steel industry insiders when she first took over the business. “But we continued to grow and continued to have record years,” quickly proving the naysayers wrong. In fact, the pushback has actually ensured that Middletown Tube Works’ product is a cut above, Ms. Phillips explains, because “the bar is set higher than it normally would be.”

This extra attention to quality is also essential because the company supplies a product that is particularly difficult to produce. “Our product is very specialized,” Ms. Phillips explains. “We tend to do what most companies don’t want to do – coated products that are difficult to manufacture.” These products are highly engineered, fabricated and formed tube applications carefully manufactured to customers’ exact specifications in dimension, end finish and post fabrication. All products are manufactured to a minimum of the ASTM or JIS specifications and often meet customer specifications that are actually much tighter than industry requirements. Middletown Tube Works also holds true to the rigorous requirements of ISO and TS 16949 certifications.

Middletown Tube Works’ specialized tubing is primarily used by the automotive, HVAC, appliance, packaging and mining industries. The company’s Aluminized, Galvanized and Zinc-Nickel Coated Tubing is used in a number of applications including cars, trucks, buildings, storage containers, and mailboxes. Middletown Tube Works’ 400-Series Stainless products are used in everything from automotive and truck exhaust systems to agricultural spreaders, gas turbine exhaust silencers, and heat exchangers. Available in Cold Rolled and Hot Rolled, the company’s Carbon Steel Tubing is used in automotive and appliance applications, from seating components to burners and manifolds for gas fired appliances.

The majority of Middletown Tube Works’ products are used by the heating and appliance industries, but the automotive side of the business is quickly gaining ground. The company supplies parts for the Big Three – Chrysler, Ford, and General Motors – as well as for other leading names such as BMW and Volkswagen. A tier 2 supplier, the company does not sell directly to these automotive manufacturers, but to their suppliers. Even so, the team has been careful to produce a variety of product that will eventually end up with a variety of manufacturers. “We are not supplying direct to anybody, because we want to make sure that all our eggs are not in one basket with one company. We have gotten very expansive. We are able to market what we do across multiple manufacturers.” While all automotive manufacturers “need the same type of product,” each product is designed slightly differently to meet their individual specifications.

In addition to providing a high quality product, several key strategies have led to the company’s ongoing success. Being “very fiscally prudent” has been crucial. “We make sure we don’t overextend ourselves from a financial standpoint,” Ms. Phillips explains. “The tube business is very capital intensive; you have to have a lot of money to keep it going.” From costly repairs and upgraded equipment to in-depth training programs, Middletown Tube Works is constantly funneling capital back into the business – and staying one step ahead. This year, the company made a very significant investment in a new integrated IT system – PLEX – which has given the company more efficiencies in its Management and Operating systems. Plex is a differentiator for MTW as it is designed for Automotive suppliers.

Choosing a specialization – and sticking with it – has also been important. “We don’t try to be all things to all people,” Ms. Phillips points out. “We developed our niches and we stay within those niches.” As a result, the team has developed strong, long-term relationships with clients who keep coming back for a specific, quality product. In fact, many customers have been with the company for years. “We have had a lot of the customers for 15, 18 years,” Ms. Phillip shares. “Our focus is developing those customers, meeting their needs and growing with them as opposed to new growth.” Of course, the company’s quality product also continues to attract new customers. “We still have new growth. Most of that is based on our reputation, as opposed to cold selling. Most of our business comes to us.”

The team’s willingness to meet customers’ needs under pressure is also a selling point. “We are very flexible, which is something that our customers like.” For example, “if they didn’t plan appropriately and they get in trouble because their inventory gets too low, we take up that slack for them. We can change products over [and] we can run products fairly quickly. In a lot of cases, we keep our customers from shutting down.”

No matter what the current job, Middletown Tube Works makes sure to maintain its company values. “We take it seriously,” Ms. Phillips insists. “We run it more like family. We try to support each other. The way my dad ran the business was that it doesn’t matter if you are the president or the janitor, we are all in it together. I definitely think that has been in our core from the beginning.” As a result, “we tend to be more understanding about certain things.” For instance, the company is closed on Sundays “to make sure that the employees have time with their families at least once a week.” In addition, frequent gatherings, such as family picnics, help build camaraderie within the organization.

Looking ahead, Middletown Tube Works is eager to expand its automotive division. “We are still more heavily in the heating and appliance industry, but we are growing in the automotive sector and we continue to expand the automotive sector,” says Ms. Phillips. In fact, the team predicts that the automotive side of the business may well overtake the other divisions in the near future. The company is already ISO/TS 16949:2009 certified, which specifically applies to the automotive industry, and the team puts a great deal of time and effort into automotive related research and development. “We are doing a lot of research and development with automotive companies today as their products are changing. We are helping them explore different types of steel, different types of product design to meet needs which continue to expand. So one of the biggest things coming up here for 2015 is probably R&D.”

The push to make automotive parts last longer is also a huge driver. “Automotive parts used to have a 12 year life and now it is 15 years,” Ms. Phillips remarks. “Soon it will be 20 years. They want them to last longer and be able to market them [accordingly]. There are also some regulations that are requiring them to do that.”

The team is well prepared for growth within the automotive industry and beyond. “We have installed new equipment that is faster and capable of producing more parts,” Ms. Phillips reports. “We’ve got more capacity available so we are looking at expanding our market.” However, the company will still remain carefully “within our niches,” she insists, “gaining some new business and gaining ground within that steel tube industry.”

This growth will be slow and steady, rather than dramatic. “I’d rather be the turtle than the rabbit,” Ms. Phillips laughs. With more than two decades behind it, Middletown Tube Works is well placed to continue dominating its specialty niche, while simultaneously maintaining a reasonably paced expansion. “We will have a record year this year at Middletown Tube Works in terms of revenue, so that is a benchmark for us as we continue to grow.”

August 17, 2017, 11:39 AM EDT

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