About the Outstanding Growth Awards T
he annual Outstanding Growth Award honors a local company that demonstrates sustained growth in sales, profi tability, employment and community involvement.
Past winners include Wolverine World Wide Inc., National Heritage Academies, Rockford Construction Co., Herman Miller, Elan Nutrition, Butterball Farms Inc. and Perrigo. The 2012 winner is ADAC Automotive. Eligibility requirements include: • $10 million minimum in annual sales • Demonstrated growth in sales, profi tability and employment as well as continuing community involvement.
Each year, the Outstanding Growth Award winner is asked to provide a 45-minute
presentation on the challenges faced — and strategies used — to build a track record of growth. The presentation is delivered to a sell-out crowd of approximately 400 of the area’s top executives, business owners and fi nanciers. The award itself is actually two awards: a large perpetual trophy the winner gets
temporarily and a smaller replica that the winner gets to keep. ACG decided to take the “Stanley Cup approach” — the winning company gets its name imprinted on the large tro- phy and they get to keep it for a year before turning it over to the next winner. The winner of the Western Michigan chapter’s Outstanding Growth Award may also be
submitted for nomination for the ACG’s National Outstanding Growth Award, given annu- ally by ACG Global at its prestigious Intergrowth Conference.
Past winners: 2004: Wolverine World Wide Inc.
2005: National Heritage Academies Inc. 2006: Rockford Construction Company 2007: Herman Miller Inc.
The company plans to retrofit the Keating
plant in 2013 and decommission the Port City paint line in late 2014. The approximately 20,000 square feet of space will be absorbed by the com- pany’s molding or assembly operations. “This whole thing is really a three-year pro-
cess, but the real heavy capital investment is this year. We’re dumping in right around $17 mil- lion of the $20 million in this year. Our cap ex is the highest its ever been in the history of the company,” he said, noting that in addition, the company has also invested in a new ERP system, which it is implementing in 2012. Given the large investments in the new facil-
ity, Teets said the company has to keep its finan- cials under strict control. He said the company remains confident in industry growth projec- tions of U.S. light vehicle sales around the 14 mil- lion unit range, up from 12.7 million in 2011. “Some people in our company said it’s too bad
we didn’t do (the paint system) a year ago so we could be enjoying the fruits of the rebound. But we really did it the West Michigan conservative way. We couldn’t do it in ’09, and in ’10 we were still in recovery mode building back up the muscle that we cut out of the organization,” Teets said. “Here we are breaking ground on a new
72,000-square-foot paint system and dumping in $20 million. If somebody said I’d be doing that back in July of 2009, I’d say you’re crazy,” he said. Even if the industry were to decline, he said
ADAC would benefit from the new line because it is more efficient and can accept larger prod- ucts. Moreover, the planned targeting of new
REPRINTED COURTESY OF MIBIZ 2008: Elan Nutrition
2009: Butterball Farms Inc. 2010: Perrigo
2011: Service Express Inc.
customers would hopefully be able to offset any industry decline. “We can’t just hang our hat on this new paint
system. We obviously have to execute and do a lot of other things well. This new paint facility, we hope, is going to be a door-opener to a lot of additional opportunities over and above what we have today.”
Push for diversifi cation The new paint facility is a major part of
ADAC’s push for better product diversity and customer diversity. The investment in the new paint systems will help both the company’s bread-and-butter door handle business as well as its efforts in mirrors and elsewhere on the vehicle. The new technology will expand the size
range of exterior parts the company can paint, and it helps ADAC improve the quality of its paint coverage on injection molded products to meet or exceed what customers are expecting, Teets said. In particular, ADAC has its sights set on woo-
ing more relationships with more Asian auto- makers. Currently, the company does about 85 percent of its business with the Detroit Three. Ford and Fiat-Chrysler were nearly tied in 2011 as ADAC’s largest sales volumes. “That’s a very heavy concentration in Ford,
Chrysler and GM, but that’s OK. Right now, they’re riding the crest up,” he said. While the company has “made some inroads” with Honda — which accounts for about 10
percent of ADAC’s business — and worked on projects for Nissan, it still needs to work at broad- ening its customer base, including with Toyota, Teets said. ADAC does some business with the European
automakers, mostly through its Vehicle Access Systems Technology (VAST) Alliance. Teets said the alliance, with its global presence, is help- ing ADAC better reach global automakers, and particularly those with operations in North America. Teets said ideally, ADAC would be able to
diversify both in terms of customers and indus- try to avoid some of the dramatic cycles in the automotive industry. Currently about 70 percent of ADAC’s business is in door handles. The company has tried to translate its techno-
logical molding and painting capabilities to other industries. One success is a contract with American Seating Co. to mold urban bus seats at ADAC’s Saranac plant. The company is also pursuing busi- ness in the appliance and electronics fields. “I’d love it, within five to six years from now,
if we could have between 10 and 15 percent of our total sales be in non-automotive to help buf- fer that rollercoaster you get within automo- tive,” Teets said. “It’s so easy to make a manage- ment by objective statement like that, but how do you do it? If you want to call on a Whirlpool or an Electrolux, what you might be making for them has to fit your core competencies and your process capabilities. Or you have to expand and
Continued on page 4 ACG-WESTERN MICHIGAN 2012 OUTSTANDING GROWTH AWARD 3
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