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Jim Teets, president and CEO, ADAC Automotive. PHOTO: JEFF HAGE

Déjà vu all over again ADAC invests in growth amid auto industry volatility

By Joe Boomgaard | MiBiz

GRAND RAPIDS — Coming out of one of

the most tumultuous periods in the history of the automotive industry, ADAC Automotive is aggressively investing in new facilities and tech- nology to position it to diversify into new clients and new industries. From essentially a break-even year in 2009, the

company returned to record profitability in 2010 and experienced sales growth of 13.5 percent in 2011 as the automotive industry regained its legs. But that growth didn’t come easy. Just ask Jim

Teets, president and CEO at ADAC. In the 19 years he’s been with the company, he’s experienced two major periods of industry upheaval that have taken their toll on many suppliers. Yet, despite the challenges, ADAC has come out the other side and is in the process of major investments that will ensure it remains globally competitive. Since its beginning, ADAC Automotive has

been decidedly auto-centric: About 99 percent of its business is currently in the automotive sup- ply chain, primarily as a Tier I supplier. While

ADAC is known for its door handles, it also recently returned to the exterior mirror business after a decade out of that market. ADAC traces its roots to 1972 with the for-

mation of A-Line Plastics, a small Grand Rapids shop that started with three molding machines and six employees. In 1975, the company incorpo- rated as ADAC Plastics Inc. and today does busi- ness as ADAC Automotive. ADAC is privately owned by the Teets family

— President Jim and Patricia (Lacks) Teets — and the Hungerford family, including Chairman Ken Hungerford and his son, VP of Vision Systems Peter Hungerford. Richard Lacks Jr. and Kurt Lacks also have minority ownership posi- tions in ADAC.

Investments to hedge against competition To ensure that ADAC remains competitive in

the automotive business, the company is investing about $20 million in a new paint facility adjacent to its Keating Avenue plant in Muskegon. About $4.7 million of that investment will go to the building itself, with the remaining $15 million going toward the new high-tech paint systems to


be housed at the facility and the retrofits through- out the company to handle the new processes. The new process will help the company reduce

scrap in the paint process by allowing for better paint coverage and preventing dirt or other con- taminants from entering the process. “The bar is being raised,” Teets said of the

competition for painted parts. The original paint line at ADAC’s Port City

Boulevard plant came online in 1995, while the Keating line started in 2000. Given the age of both lines, Teets said the company decided against retrofitting

its systems and opted

instead to build the new plant and buy the new equipment. Teets said the company spent some time and

money in looking for the right way forward. It hired some consultants from Detroit to help in that process. “We realized that, technology-wise, we were

falling behind in the paint processing part of it, and we wanted to try to regain a dominant posi- tion within our products in North America when it comes to paint. That’s what we hope to do with this new system,” he said.


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