Neenah’s Next Steps N


Municipal castings giant Neenah Foundry embarked on the most aggressive capital expenditure campaign in its history in 2006. The move, combined with the nosedive of the housing market, eventually contributed to the company’s 2010 bankruptcy. Now, it’s fighting its way back.


Shea Gibbs, Senior Editor


eenah Foundry, Neenah, Wis., was one of the few public metalcasting com- panies in the U.S. in 2006, when it pursued an aggres-


sive expansion effort. So when the metalcaster, a subsidiary of Neenah Enterprises Inc., had to voluntarily seek bankruptcy reorganization several years later, the affair played out methodically on the newswire. January 9, 2006—Neenah to install


new $50 million automatic molding line. November 16, 2007—Neenah an-


nounces cutbacks of salaried workers. December 11, 2008—Neenah to


close Kendallville division of subsidiary Dalton Corp. February 11, 2009—Neenah to close subsidiary Gregg Industries. July 2, 2009—Neenah hires financial advisor to assist in debt restructuring. February 3, 2010—Neenah files for bankruptcy reorganization. In the Feb. 3 statement to investors,


the company’s president at the time, Robert Ostendorf Jr., attempted to explain the events. “We’ve been going through efforts


to streamline operations and reduce expenses over the last few years, with the intent of keeping sufficient liquidity to move operations forward,” he said. Ostendorf is no longer around to


follow up on his comments. He has been replaced as Neenah’s president. But his statement has stood the test of time. Neenah emerged from Chapter 11 reorganization on July 30 in a transaction which reduced its debt by $270 million and rationalized production capacity. Oh yeah, and it still has that new $50


million molding line to help it through its recovery. “There isn’t anyone who wants to go


through bankruptcy,” said Bill Barrett, a former Neenah president who has been brought back into the fold in the


MODERN CASTING / December 2010


Neenah’s metal castings, like this detectable warning plate, can be found in municipalities all over the country.


17


Neenah Enterprises Inc. Neenah, Wis.


Divisions: Neenah Foundry, Neenah, Wis., Advanced Cast Products, Meadville, Pa., Dalton Foundry, Warsaw, Ind., Deeter Foundry, Lin- coln, Neb., Mercer Forge, Mercer, Pa.


Employees: 1,839 (890 in Neenah)


Markets Serves: Municipal, heavy truck, construction, heating, ventilating and air conditioning, agriculture, and material handling.


wake of the bankruptcy to consult on the company’s future. “But there’s a lot of excitement because much of our spending is behind us. We’ve done our spending and opened up some new markets in the process.”


The Spending Campaign


During a recent roundtable, Neenah executives said the company was careful when making the decision to purchase a new automatic molding line in 2006.


“We designed and built test patterns


and took them on our [purchasing trip],” said pattern shop manager Tim Law. “You could tell the quality was better [on the line we eventually purchased].” After performing the due diligence,


Neenah purchased a Kunkel Wagner machine it believed was well-suited to its required purpose—adding flexibility that would allow it to grow its large- section gray and ductile iron municipal castings market share and creating new opportunities for large industrial castings. “We wanted to be able to reduce our


order-to-delivery timeline to three-week turnarounds,” said Frank Headington, Neenah’s corporate vice president of technology. “We don’t think anyone else in the industry can do that.” The new molding machine, which the company said was attractive due to its robustness, mold quality and reliability, required an accompanying expansion of about 200,000 sq. ft. of manufacturing space, increasing Neenah’s Plant 2 to 500,000 sq. ft. and adding another $4 million to the total price tag.


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