At Mid-States Aluminum Corp., It Is All About Progress Through People
Mid-States Aluminum Corp.
Mid-States Aluminum Corp. of Fond du Lac, Wisconsin, is a leading aluminum extrusion company. From initial design and die creation to alloy specification and in-house anodizing capabilities, here, creative solutions take shape for diverse industries.
With a $20 million expansion opening in March, there is much cause for excitement. However, it is more than the state-of-the-art facility that is being celebrated; the company is celebrating fifty-five years of the people who made it happen.
“This is an exciting, vibrant and awesome place to be,” says President and Chief Executive Officer Jim Spannbauer. “When you walk out on the floor, people do high-fives, and they want to do the right things for the business and for themselves because they know they have an opportunity to work for a company that cherishes the people in the organization. The culture here is one of the things that attracted me to it, and it really started with Joe Colwin.”
Colwin purchased the then twenty-year-old company in 1984, and that marked a turning point, as Mid-States Aluminum expanded operations to build a new facility which would eventually house all extrusion, heat treating, fabrication, and anodizing operations under one roof.
Equally significant was the company culture that Colwin developed. Three years after acquiring the company, he met with a group of employees, to develop a broader mission statement that encompassed not only service to customers, but to the employees, their families, suppliers, and the community and called it ‘Progress Thru People,’ which was legally trademarked in 1991.
“Colwin set the tone and the premise under which he wanted to operate this business, and it speaks volumes for him,” Spannbauer continues. “It’s one hundred percent opposite of what the norm is. We really value our associates and focus on their development. Forty-four of them in the last two years had a chance to advance their careers, and that means they have a better lifestyle now because most of those included a pay increase.”
“Our focus is on developing people, so we look for potential and a cultural fit when we bring people in,” Vice President of Human Resources Sue Roettger explains. “Everyone has a development plan, and they determine what position they’d like to go into, and we work with them as an organization to provide training. Through our internal development, forty-four of our three hundred associates have been promoted to different positions within the organization within the last twenty-four months, and that’s the reason we’re successful. People don’t stay in one position. They are encouraged to grow and move up within the organization. We emphasize the possibility for growth and the opportunities to stay in the company and have a long-term career.”
“We have a lot of long-time associates,” adds Vice President of Sales and Marketing Helene Nimmer. “We have a fifty-two-year veteran who will leave at the end of the year, and we work to promote our associates from within. Right from entry level, we offer tuition reimbursement programs and partner with the local technical college, high schools, and other community organizations to offer hands-on participation.”
For example, through a partnership with the Rotary Club and Big Brothers, Big Sisters, young people spend a day building small, solar-powered lights to be sent to third world countries where students do not have access to electric power for reading at night. High school industrial arts students are invited to develop a functional cooking grill, while technical college students learn to program computer numeric controlled (CNC) machines, with one hired from the program each year for the past six years.
“We like to hire people with the passion, the energy, the hunger for the job; that is what is important to us,” adds Spannbauer. “They may not have all the technical skills, but we’ll develop those skills, either on the job or we send them to college or university. We’ll work with them and be flexible on their hours.”
It is evident that a company so concerned about its employees’ growth and development is equally concerned about safety, and the 1,720 days without a lost time accident – as of December 18, 2018 – attests to the efficacy of the program. “It’s an eyes-wide-open philosophy, driven down to the individual associate level, where everyone is responsible for her or himself and the others around him,” says Nimmer.
Spannbauer concurs. “If I walk across the yellow line without safety shoes, someone will say, ‘Hey, Jim! Back up!’ People are really engaged, and understand the importance of our safety culture.”
Hand in hand with the company’s mission to put its people first is a sound business plan and a diversified market portfolio which helps the company weather market cycles. As Nimmer explains, 250 active customers from four major industries – machinery and equipment; transportation; electrical and electronics; and building and construction – make up the customer base for which Mid-States produces precision profiles and machined components with tight tolerances.
“There are advantages through diversification for the company, our associates, and our customers. Diversification means we are not tied to any one industry, so we are a stable organization that is counter-cyclical in many ways because we have industries that balance each other out. If automotive is down, we can see that other industries are up and maintain our operating levels or even grow them at times when our competitors may be struggling. Diversification brings less risk for us and for our customers,” says Nimmer.
“For our customers, from a design perspective and a product perspective, we get to see various products that are designed across different industries, and so we can help our customers with new trends. If we have a lighting customer who is doing something innovative, we could bring that to the attention of a customer who is building agricultural or medical products or vice versa,” Nimmer says.
“Diversification is important for stability,” she says. “Even within the industries we supply, we are not tied to any one customer, and we have diversity within them. We have large customers, but we are balanced, so our largest customer is not more than twelve percent of our total business. We have a lot of competitors who are not as diversified as we are and are very much tied to a single industry or one customer, and that is a risk for the people who work there and for communities tied to the business.”
But in spite of all the meticulous business planning, the ten percent tariff on aluminum is worrying for the entire industry. “Definitely a concern,” said Spannbauer. “We import a little over half of our aluminum from Canada, and the tariffs have caused a lot of upset in the market and unprecedented pricing instability in the past year, and that has led to nervousness. We’ve had to deal with customers who were unable to get products because of the supply constraint. Canada is the number one trading partner with the US, and the tariffs have influenced all the metal markets within North America with regards to market price.”
On December 6, 2017, Mid-States Aluminum announced a $20 million investment in a high-efficiency 3,100-ton extrusion press line and a fully-automated material handling system to augment its existing 2,200-ton extrusion press in place since 1999, and to add a 36,000-square-foot expansion to its 245,000-square-foot facility. Construction started in July, and the new equipment, which takes over a year to build, had just arrived this past December and was being installed as we spoke.
“We have a lot of construction going on associated with the expansion, but have also upgraded current areas of the plant. This past year, we have relocated about 20 machines in our fabrication area to streamline the flow of operations; we have updated lighting and painted many areas as well to modernize the facility and make it a clean, bright place. Our associates have done a wonderful job of managing the reorganization while at the same time getting product out the door,” Roettger said. “Manufacturing has a stigma that it’s low-tech and dirty and dark, but our facility is the opposite. It’s bright and clean, and we’re open to customers or public tours any day of the week on short notice.”
“What the expansion and new equipment means, and I’m going to get technical here, is that we’re going from billets to logs. We normally buy the raw material in 18 to 28-inch lengths, and with the new equipment we will buy up to a 25-foot-long piece and cut to whatever length billet we need, so it has a much greater flexibility,” adds Spannbauer. “Additionally, the new robotic cells included in the expansion mean an incremental fabrication capacity for us. In the industry, we talk about pounds, and aluminum is lightweight, so there are many more pieces than pounds, but those cells will be responsible for 3.5 million pounds of metal, so we’ll have huge capability improvement over our current systems.”
“Of course, there will be a ramp-up period for us, as there’s a lot of learning to do first, so it won’t be operating at full capacity right away,” says Nimmer. “But we’re fully engaged with the manufacturer of the equipment to provide training, so we can get on top of it and smooth out the learning curve.”
And how will automation affect staffing? Will there be layoffs? “There’s absolutely no job loss with automation,” says Spannbauer. “We have automated on a regular basis for the last ten years, and we automate high-volume, repetitive jobs. With this expansion, we’re adding at least thirty-nine jobs, and we will not replace anyone, but we will increase the skill-level because of the new equipment, and it opens up opportunities for associates to develop themselves.”
“We have a long history of bringing in automation, and our associates know what we’re doing is making the plant more efficient and safer,” adds Roettger. “They trust us, and they know this will give them more opportunities, not fewer, so we don’t have to fight that stigma when it comes to automation. They know the company has their best interests at heart,” she says.
“The future is bright,” Spannbauer continues. “We’ve gone from 250,000 square feet to 286,000 square feet, and in a couple of years we are looking at an additional expansion just under 100,000 square feet that will balance out the new extrusion capacity with additional anodizing capabilities, manufacturing, and packing space.”
That is where long-term planning comes in. “We’re not just looking at what we’re doing tomorrow; we’re looking at a five-year business plan, and we’re studying the horizon for our associates. It’s not for us individually or for the company but for our associates who work here, to make sure they have a vibrant business in which to work, to support their families, and to support this community,” concludes Spannbauer.