Focus on FKMs helps to drive Eagle Elastomer's success

CUYAHOGA FALLS, Ohio—For Eagle Elastomer Inc., it's all about value.

The custom mixer and extruder works exclusively with fluoroelastomers and some perfluoroelastomers, because it's a higher-quality material.

Exclusivity has paid off for the firm.

"In our business, there are a lot of ways to reduce the cost, and over the years, there's been a push to reduce cost and sometimes at the detriment of the material," said President Regan McHale. "We've made a decision not to do that. We've lost some business because of that, and we accept that, but we also have a large clientele of customers that demand that—customers that can't afford to put in defective seals or materials that are substandard."

Eagle has three primary business units: custom mixing, extruded products and sheet products. McHale said the sheet side of the business accounts for less than 2 percent, while the other two areas are split about evenly.

The company primarily serves the oil and gas, aerospace and chemical processing industries. The firm also supplies automotive, semiconductor, power generation and life sciences, and it recently has been involved with wire and cable.

On the extruding side, Eagle works with O-ring cords, tubing and custom profiles.

The company compounds to its and its customer's formula specifications. Eagle can perform granulate, calender the batch into thin sheeting, strip for injection presses, pelletize and offer a variety of colors. Eagle also can run batch sizes ranging from two to 1,000 pounds, which allows its customers to scale up slowly.

McHale said Eagle strives for value on both sides. If the company feels one of its customers—particularly ones with limited experience working with fluoroelastomers—is being too aggressive in its initial purchasing, Eagle first will make sure the product works the way its customer envisioned, then scale up slowly. That decision might cost Eagle a bigger sale in the short term, but Eagle's more focused on the bigger picture.

"We don't work for the sale. We work for the repeat sale," said Technical Manager John Allen.

Neil McHale, Frank Primovero and David Brown founded Eagle Elastomer in 1983. McHale's three sons—Regan, Liam and Neil—work for the business. The younger Neil is vice president of operations and Liam is finance and human resource manager. Primovero's son, Anthony, is the plant manager.

Eagle started as one facility in Stow, Ohio, grew to a second in Cuyahoga Falls, and eventually launched a third in Salt Lake City, Utah, in 1994. In 2001 the firm combined all three facilities into the 21,000-sq.-ft. one it operates today in Cuyahoga Falls. That's also the time when Regan McHale took over as company president. The firm still only operates the one facility and has 42 full-time employees.

Over the years the firm has become more efficient through new technologies, but has not expanded since it opened this factory. That may change in the coming years, as Regan McHale said the firm has the space to add approximately 17,000 square feet if it chooses.

"We are, though, fairly full," he said. "One of the things that we will have to start looking at probably in the next three to four years is expansion. But we're going to try to do some things to manage it."

The firm also has built strong relationships with the technical staffs of its customers and suppliers.

"We work very collaboratively with our polymer suppliers, and that has been a huge benefit to us," Neil McHale said. "Sometimes when they have programs they're working on, they come to us because they know we're so specialized in this area."

Eagle empowers its employees to help make the manufacturing process better through a variety of teams. One team helped develop an automated method of curling the extruded cords; prior to that, an operator had to sit and manually make sure the cord wrapped properly. Three of its four lines now incorporate the automated curling process.

Increased automation always seems to raise a concern about job security. But Eagle was not looking to reduce its headcount with the new technology.

"It's all in an effort to become more efficient," Regan McHale said. "We believe the operator is the key to the success of our manufacturing. We may be adding more computers to become more efficient, but the operator still controls it. We're just making the operator more efficient through these processes versus replacing the operator."

And after the lengths the firm went to protect its employees during the 2009 recession, it will take more than automation to reduce Eagle's headcount.

Like most companies, 2009 was a tough year for Eagle Elastomer. The firm lost 35 percent of its volume and went into the red. Management made a business decision to protect its employees.

"The most important thing is our employees," Regan McHale said. "We put a lot of effort into training and development of our employees.

"We do our best to compensate them through gain sharing programs. That's been huge for us."

The firm cut profit sharing and bonuses, and top management and ownership took pay cuts during the downturn.

Eagle also offered voluntary furloughs where employees could opt to take a week off without pay.

The company president credited the firm's small debt as well as its access to capital as big advantages, noting that he drew on some of that capital to maintain its work force.

"We did a lot of cleaning and painting, junk work and make work," said Gary Smith, an extruder operator with 11 years of service. "They were losing money on it, but they wanted to maintain the staff and the experience they had. I think they were happy they did it. When it picked back up, there was no recall. We hit the ground running."

When the storm passed, Eagle had managed to survive without a layoff.

"A lot of companies that folded at that time got rid of a lot of people with experience," said Adam Hines, a process technician who has been with the company for more than 19 years. "A lot of times during those times people start cutting at the wrong part of the meat to stay afloat.

"This company understands that it's the experience that keeps us at the top of the list. Yes, we all made sacrifices, cutting our bonuses and stuff, but that's easy stuff. That's something we could all absorb because at the end of the day we all still had our jobs."

Eagle also invests in training its employees. Two of the firm's executive staff—Quality Assurance Manger Charles Christie and Process Development Manager Brian Chandler—have logged more than 20 years with Eagle and took advantage of its college reimbursement program.

Full-time associates who have completed at least one year of service can get up to 80 percent of their college tuition—plus books—refunded on a course-by-course basis if they get a B or better in the course. If the employee gets a C, the firm will refund 50 percent of the cost of the class, and it won't reimburse for anything lower.

Jason Bockmuller, a seven-year employee who works in the mixing department, is taking advantage of the program.

He takes two classes a semester, including summers, at Cuyahoga Community College and is pursuing an associate's degree in business. He hopes to continue on and earn a bachelor's degree.

"You don't need a union when the management respects the employees," Smith said. "They pay us fairly, and the benefit package is pretty lucrative. Everything a union would provide they give freely."