Becoming a Lightweighting Leader
Shape Corp. is a full service supplier of custom metallic, plastic, composite, and hybrid solutions. A tradition of process and material advancements has positioned the company as an innovative driver of lightweight components and systems.
Shape Corp. primarily serves the automotive sector, but has supplied a diversified collection of non-automotive industries throughout its history. Founded in 1974, the company remains a privately owned, family company. Shape employs more than 3,500 global team members in North America, Europe and Asia.
Shape works primarily with steel roll forming, thermoplastic injection molding and pultrusion, but recently acquired Magnode, an aluminum extruder, to meet the growing aluminum needs of their customers.
Shape’s aluminum journey started in 2011, as they began exploring aluminum solutions for lightweighting vehicles. Lightweighting, as it is known in the automotive industry, is about optimizing components through engineering, part geometry and material selection to reduce the mass of vehicles.
Over time it became apparent that a lack of vertical integration in Shape’s aluminum supply chain was leading to a significant inability to meet customer needs. To help remedy this, Shape began collaborating with Magnode as an aluminum supplier, and it became apparent that the two companies had more to offer each other.
“We started interacting with Magnode and getting to know their team, thinking they could potentially be a supplier for us,” says Shape Executive Vice President of Strategy and Innovation Jeff Piper. “About 18 months ago, we realized there was an opportunity for us to work together in a stronger way.”
It started with Shape’s President Mark White and Chief Executive Officer Gary Verplank meeting with Magnode President Martin Bidwell. The talent, capabilities and cultures of the two companies aligned to fill gaps in the strategies of each and the conversation quickly moved toward partnership and eventually acquisition.
Shape knew that aluminum would be a key for their lightweighting future. Being a large-scale supplier for the automobile industry, Shape was already proficient in many materials, but with the acquisition of Magnode, aluminum was immediately elevated to a core offering.
For Magnode, the acquisition means being able to bring a product that it has perfected over 70 years to the global market. “The opportunity to merge with a company like Shape,” says Martin Bidwell, president and chief executive officer of Magnode, “means that we’re able to take these unique capabilities that we have, combine it with their capabilities and display it to the world. Not just to my little world, but to the entire world.”
Magnode has always been a smaller extruder and currently employs 225 team members. It has remained family-owned and privately-held for all of its 70 years. Throughout that time, the company has developed the ability to make small and large extrusions from 17 inches in diameter down to half an inch in diameter. The company expertly works with aluminum, enabling its extrusions to be structurally strong and made with tight tolerances. Shape identified these qualities as valuable additions to their culture and what the company could offer customers.
The message coming from the automotive industry is that there is a lack of aluminum extruders with the capability to meet the predicted growth. An extruder needs quality credentials, metallurgical expertise and the ability to build and fabricate structural parts. There are very few extruders up to the task, which makes the Magnode acquisition a strong move for Shape.
“Magnode has had to survive in a very demanding market for a long time,” says Martin Bidwell, “When you’re in that position and you’re a smaller company, you have to become very good at many things. We’re very good metallurgists; we deal with parts that most extruders do not; we have large press capabilities; we’re able to hold very tight tolerances. We’ve had to learn these sciences. We never intended to be the largest extruder in the US, but we’ve done a very good job at seeking out complex shapes that are structural in nature, larger than most, that demand tight tolerances, and require a lot of fabrication.”
Magnode has developed, over many years, a set of skills that differentiate it among competing extruders, and as the automotive industry moves full-speed toward lightweighting, Shape and Magnode will work together to apply that skill to give the best possible value to customers.
Shape and Magnode’s automotive aluminum experience includes components like engine cradles, airbag housings, anti-vibration pods, cross-car beams, bumpers, racks, reinforced safety bars and door components. By combining the strengths of both companies, the possibilities become endless. The combination of Shape’s tremendous engineering in ultra-high strength steel and other materials, and Magnode’s ability to make technical, metallurgically-sound, structural extrusions is promising.
Beyond the automobile industry, Magnode also provides aluminum products to markets including building and construction, consumer electronics, consumer durable goods and many more. The company has significant contacts and relationships within these industries that will enable Shape to expand in these directions as well. Aluminum is a versatile material, and the acquisition of Magnode brings with it many opportunities for these two companies to grow together.
Since the official announcement of the Magnode acquisition, Shape and Magnode leadership has invested a great deal of time visiting customers to offer insight into what the acquisition will mean for them. During this time, the feedback has been overwhelmingly positive.
One important aspect of the acquisition for Magnode was that it could continue to grow in as many areas as possible. “We didn’t want to turn Magnode into an aluminum bumper corporation,” says Bidwell. “We don’t plan on exiting any market segments. We will pursue opportunities together.”
Both companies are committed to making this acquisition a partnership and will use their combined assets to become much stronger together.
The acquisition truly presents a great deal of opportunity for growth to both Shape and Magnode. As the automotive industry’s demand for aluminum grows, Shape and Magnode are prepared to meet it.
“We’re going to take full advantage of that,” says Bidwell. “We are capable. We’ve been in automotive for 50 years, and we’re very capable of producing aluminum for this market. You take our experience; you take Shape’s global platform, and you take a world that is demanding that we lightweight vehicles. I think you’re going to see one of the strongest companies in the world.”