Sonus follows same path with new name

WARREN, Mich.—Sonus Engineered Solutions may have a new name, but its mission remains the same.

The formerly-named Novo Motor Acoustic Systems Inc., a supplier of automotive parts designed to reduce noise, vibration and harshness, recently rebranded to Sonus. The change was designed to help put its private equity owner, 3P Equity Partners, in a better position to pursue acquisitions to support its rubber and plastics business.

Sonus President Tim Droege said he pursued the private equity deal, which closed in 2015, to help the firm grow in a very competitive market. Since the deal, Sonus has hired new engineers, added four new plastics injection molding machines and has its sights set on increasing its presence globally.

"If you look at one of our big product lines, which is air induction systems, we're competing with the large global companies," Droege said. "It's pretty tough for a company our size to compete with that, not so much that we don't have the capabilities, but the perception is we're the little guys. So I really wanted to bring in some private equity partners with access to resources to help us grow. Now if we need new machines, new software or new technology, they'd be able to help us acquire that. Our customers were quite happy with the deal."

First venture

Droege said Sonus was 3P's first venture into automotive. In the same year, the private equity firm closed on another deal bringing a Slovenia rubber parts producer into its portfolio and allowing Sonus to have a partner in Europe under the same umbrella.

The Slovenian company produces small precision molded rubber-like grommets, bellows, convolutes and air ducts, among other products utilizing a proprietary technology that gives it a competitive advantage in the convolutes business, Droege said.

This is just the beginning, he said. With annual sales of about $44 million, all of Sonus' business is with the Detroit 3, and Fiat-Chrysler is its biggest customer. Since the merger with Fiat, the OEM now has a strong presence in Europe, which in turn opens up opportunities for Sonus.

"Customers want you to be where they are," Droege said. "That would be the next step. The No. 1 priority for us is to take what we have here and make a carbon copy of it and expand our capabilities to Europe."

Sonus employs about 110 people at its 120,000-sq.-ft. site in Warren, focusing on NVH products using plastics, urethane foams or rubber. Most of the firm's business comes from powertrain components like acoustic engine covers, complete air induction systems and different densities for polyurethane foam for injector covers, pump covers and fuel rail covers. Sonus also deals with some anti-vibration components and rubber-to-metal bonding, precision molded rubber—convolutes, bellows, door grommets, tailgate grommets, and coupling elements or isolators.

Droege said business has shifted during the last 10 years—about 20 percent deals with the rubber or urethane foam side compared to about a 90 percent focus in the firm's early years.

Calculated risk

Sonus is not the firm's first name change. Before the facility was named Novo Motor Acoustic Systems it was the North American tech center for Woco Group. Droege joined the company in 2000 as the Chrysler account manager and worked his way up to vice president by 2008.

Not the best time to be buying into the automotive industry—the Great Recession had just hit and two of the firm's biggest customers, General Motors Co. and Chrysler (prior to its Fiat merger), had filed for bankruptcy.

Woco, like most companies, took a long look at its portfolio. But before it could divest or spin off the Warren unit, Droege stepped in and, with some partners, purchased the firm in a deal that closed in 2009, rebranding it to Novo-MAS.

Even though the industry was facing hard times, Droege was confident the business could make it through until reinforcements came. The company already had some new programs booked for 2010.

"The group here is a fantastic group of people," Droege said. "Most of the engineers, the development people, the NVH group, they've been here as long as I have. So really it was a matter of kind of rolling the dice and hoping we could make it through 2009 and the first half of 2010 because that's when the production started off the new business that we booked. I knew if we could just do it for a year, or year and a half, and make it through, we'd be OK."

While the company received full payment from both GM and Chrysler during the bankruptcy process, there were still hard times. Both OEMs halted production in the summer of 2009, which led to Sonus doing the same thing and requiring some temporary layoffs.

But once the industry recovered, Droege said the firm has been on a solid growth path ever since.

"We made it through," he said. "It was tough, but we made it. There were a few sleepless nights in 2009. There was a point where I couldn't sleep. I'd go to bed at 10, wake up at midnight and come into work."

Support-focused

Sonus has found its niche within the NVH segment of automotive. But that doesn't do the firm justice; it has a number of technical capabilities that allows it to compete in a very competitive automotive environment.

Droege said the company can both produce parts and provide engineering services with the same type of support that engineering service companies do with design and development, and component testing. And then the firm can turn around and produce the same parts.

He added that being a smaller company allows it to make decisions quickly and provide customers with a more personal touch.

"A company our size shouldn't be able to play in the sandbox that we play in," Droege said. "But because we have all of the technologies that all the larger companies have, we can compete with the larger companies because we're fast, flexible and have competitive pricing because of our low overhead. Our customers appreciate that they can call one of our guys here and get an answer. It doesn't take two weeks to run it up the flagpole."

He sees plenty of opportunities on the horizon because all the major new technologies that OEMs are trying to develop have inherit NVH issues. The trends to increase fuel economy and reduce carbon dioxide emissions both lend themselves well to Sonus' mission because he said the path to those goals include new NVH hurdles.

"Every new technology and every new trend that's out there is a new opportunity for us," Droege said. "It may be changing or modifying a product line slightly, but now is a great time in the automotive industry to be involved with NVH. No matter what they're doing, there's going to be a lot of NVH issues to solve."