Kentucky home suits Atlantic India Rubber just fine

HAGER HILL, Ky.—Tucked away in the unlikely location of the Appalachian Mountains in Eastern Kentucky is a factory owned by a couple who don't want to be rich rubber barons.

“We make money, we set sales goals—probably should set them a little higher—but we're not greedy,” said Irene Morris, who with her husband, David Morris, own and operate Atlantic India Rubber Co. “We don't want to be millionaires. The government would get all that money, anyway.”

Self-described as “normal people,” the business the Morrises own is anything but typical in the rubber industry, from its location, product line and plant to the couples' backgrounds.

Start with the products: 96-year-old Atlantic India has an enormous amount of tooling, and a catalog of 14,000 standard rubber parts, grommets, gaskets, bumpers, lab stoppers, tips and caps, bushings, seals and extrusions. Mostly they are the kind of items whose production has migrated overseas where labor costs are cheap, although the firm also custom makes orders.

Then there's the equipment. Atlantic India runs five double-entry compression and transfer presses, and there's no high-volume injection press purchase on the horizon.

“We actually could use a bigger press. We had some opportunities we had to pass on because we didn't have a press big enough to run,” said David Morris. “Maybe someday we'll buy a bigger one.”

Now turn to the company's location. Try to find Hager Hill on a GPS, and you could end up in a ditch—the mountains play havoc with satellite navigation and send you down narrow roads to somewhere else, often washed out from a July storm that caused enough flooding to bring FEMA into the area.

“Around here you have to go south and north to go east and west,” David Morris said, driving in circles to go up and down the mountains. That said, the firm's 48,000-sq.-ft. building is just off a major highway and easily visible with a bright orange-on-white paint design.

But Eastern Kentucky? What's the appeal for a rubber parts distributor-turned-manufacturer to operate in very rural coal country, where there are virtually no other factories.

It started a dozen years ago, when Jim Green, then owner of Atlantic India, decided to move his operation out of Michigan and Ohio to where he grew up, Johnson County, Ky.

“That was a good old boy thing,” said Irene Morris, president of the firm. “His business was in Columbus, but he'd come down here and visit with all his buddies. They told him, "You should put something down here.' “

Green lived in Florida, and the Morrises ran his business. While Atlantic India had started as a manufacturer, for 30 years it primarily had been a distributor. Irene Morris had helped Green recover tooling held by customers of a previous owner, and she and David Morris agreed with Green that manufacturing should be centralized.

The Morrises—who met when they both worked for Controlled Rubber Products Inc. in South Haven, Mich.—came to Hager Hill to check out the facility Green bought.

“It was a mess. The outside didn't look bad, a big lot and concrete building, but after we came and looked around, it just didn't look like it would work,” Irene Morris said. The structure had been a warehouse for lumber—it had no offices and needed extensive renovation.

Neither Irene nor David Morris wanted to live in Columbus—both grew up in a small-town atmosphere, she in Michigan, he in Ohio—but relocating to rural Kentucky was something else.

“I wasn't all that up for moving down here,” Irene Morris said. “He was the one who said yeah, we can do it,” and they relocated—to the plant.

“We really didn't have anyplace to live. We put a bed in my office and lived here for almost two months before we found a house.”

Trying to ship product while moving a company was a challenge, to say the least, Irene Morris said. “It was pretty wild. Him and I, we didn't really have any employees. We did most everything ourselves.”

Only one other Atlantic India employee made the move, and Irene Morris' son, Donny, came to Kentucky and worked for six months or so at the start, although he recently returned to the business.

Despite the hardship and chaos, the couple didn't miss one ship date during the relocation, supplying customers via inventory. The first couple of years were difficult, but the firm has been profitable since.

Getting employees to work in a plant was a problem. The absence of industry in the area meant there was a lack of qualified candidates, Irene Morris said, and David Morris pointed out starting wages for a coal miner was $50,000.

“We didn't even make that much,” Irene Morris said. “We were doing starting pay of maybe $7-$8 an hour.”

Still, the company—which employs 10, including the Morrises and two part-time trimmers—has a number of long-term employees, some of whom have worked there for more than a decade.

“We don't get a lot of walk-in applicants—people just don't know we are here. But we've got some really good ones, and they stay,” Irene Morris said.

The dearth of industry also made it difficult to get support for the business. “If we need parts, electrical help or whatever, it's not here to be had,” Irene Morris said. As a result, they still call on people in Michigan they know to provide help. Preferred Compounding Corp., based in Barberton, Ohio, supplies Atlantic India with mixed rubber.

Five years ago, the Morrises got wind Green was planning to retire and sell the business. They were concerned the company could end up sending production out of the country, and they approached him about the possibility of acquiring Atlantic India.

“We told him if we can do this, we want to stay here,” Irene Morris said. “We were vested—we put a lot of time, a lot of ourselves into this. And we did a lot of training with the employees. We were like family.”

The Morrises got help from the Mountain Association for Community Economic Development and the Southeast Kentucky Economic Development, developed a business plan, and applied for $1.3 million in loans, half of which came from the U.S. Small Business Administration.

It was against their natures to be so far in debt—they don't even like credit cards. “We're in debt more than we ever have been,” Irene Morris said. “People say, "Wow, you own that business!' I say, "No, the bank does.' I'd like to be out of debt someday before I'm too old and decrepit.”

The company has thrived for some time. The couple wanted it to break $1 million in sales, and it finally did so and today is surpassing sales expectations. Irene Morris said the firm should have revenues of $1.5 million to $2 million this year.

About half the company's sales are generated from products it makes itself, and 70 percent are produced in America. Its customers primarily are distributors, and end users range from Harley-Davidson Motor Co., to Oshkosh Corp., to Boeing Co. and Deere & Co.

For example, Atlantic India produces bushings used for Harley-Davidson. For Boeing, the firm makes an item used on doors, a non-critical application—”we do a lot of non-critical stuff,” Irene Morris said. Its grommets go on military vehicles manufactured by Oshkosh, and it supplies items to Arctic Cat Inc. for snowmobiles.

Most of Atlantic India's competitors are distributors that were former customers, she said, and India has emerged as a site of manufacturing competition. She said the company's edge is quality, reliability and speed—Atlantic India has so much tooling, a large inventory and huge catalog, it can ship items out very rapidly.

“If you have a different application and I have the tool, I can offer it to you in four, five or six materials, even silicone,” Irene Morris said. “And I can ship it to you right now. If we have to, we'll break into production to get it to you—there's no reason for you to have a line down if we have the tool here.”

Atlantic India can ship items to customers immediately or the next day. “People remember that, and we pick up business that way,” she said, as well as by word of mouth. The products are distributed broadly, and very little business actually goes to customers in Kentucky.

Atlantic India can offer a variety of rubbers, and Irene Morris works with customers in finding the right material for the application.

Both owners have more than 20 years of experience in the rubber business. An admitted “morning person,” U.S. Army veteran David Morris handles production, opening the facility around 5 a.m. every weekday. He does the production scheduling, running the machinery and training. “Now I'm back in roofing (another skill he acquired in the past). The roof is leaking.”

His wife, whom he describes as a “people person,” works out of the office and manages sales, purchasing and ordering, and is experienced in and does lab work. She started in the business trimming rubber—which she hated—and has broad experience in the field, from production to management, even as president of the union at Controlled Rubber before she moved into management.

Irene Morris is the 51 percent owner of the firm, and her husband, who is secretary-treasurer, holds the remaining 49 percent. The division was done so they might get business designated for “woman-owned” companies, particularly in government sales. That hasn't happened yet.

“I would probably need another couple employees to do that,” she said. The company operates one shift, five days a week, with the owners usually working a little more than 40 hours a week.

“I come in on Saturday and sit at my desk for three hours and get a week's work done,” Irene Morris said.

The Morrises' goal—20 years down the line—is to be debt free and sell to Atlantic India employees. Until then, they are happy with how it is progressing.

“As long as this business can support itself and pay its bills, and I can take home money and live comfortably, to me it doesn't have to do anything else,” Irene Morris said.