AURORA, Ohio—A new Philpott Solutions Group is on the way, starting by shutting down operations in China and bringing them back to its new Aurora facility.
"We're getting out of China," President and CEO Mike Baach said. "We're bringing those jobs back."
Philpott, which has another facility in Brunswick, Ohio, also had a footprint near Shanghai, partnering with local companies making small parts for its rubber line, he said.
But the company will be shifting those operations back to the U.S. with a goal of mid-year to September, said James Vaughn, Philpott's chief operating officer.
Though the total number of jobs was not disclosed, Baach said the amount is, for Philpott, "significant."
"We have plans of bringing everything we have from China here," he said.
Making the shift back to the U.S. is not a project taken on lightly. Baach said the strategy started with Greg Stafford, vice president of technology and business development for Philpott. Though Philpott has worked with Chinese partner companies in the past to reach particular price requirements for jobs, it came down to an issue of quality.
"What you find out is that the absolute dollar isn't the true cost of (working with) the company," Baach said. "When problems occur, we don't disappoint our customers."
They began to look at the costs of flying across country to support customers and making global calls in the early morning or late at night. Philpott had ended up working with a company in San Diego to inspect all foreign-made products before distribution, which was an added cost the company wouldn't have if the parts were made locally.
Baach said part of the issue was that Philpott didn't have the scale to make working with Chinese partners viable, but the company needed reliable products and control. Though Philpott's Chinese partners were well-intentioned, the results couldn't be counted on. Eventually, Stafford and Baach decided the situation was no longer tolerable.
"You don't save any money being in China," Baach said. "On a one-off basis, you think you are. But after you pull all the costs and everything together, you have no control. How do you stand behind a product like that?
"The customer doesn't care where it comes from: It comes from Philpott. We made the decision that if we can't control it, we aren't going to do it."
Another side to the issue is a focus on buying American and developing jobs in the U.S., Baach said.
"American manufacturing is still one of the best things in the world. It's good, honest jobs for our people. We've drifted a bit from that," he said. "We think if we satisfy customers and we create jobs here and stop sending our money overseas, everything gets better. In our very small way, we hope that we're leaders."
Philpott, which is employee-owned, is sticking to its core competencies by focusing on jobs here in the U.S. and moving all three of its production lines to the Aurora facility, Baach said. The goal was to build something of excellence, but in the company's own space.
"We don't try to be everything to everyone. We understand what we do well, and we know what our core competencies are," Baach said. "We're here to provide quality to our customers at a level above what they're used to. And when we do that well, our company grows."
The company has gotten its plastic injection and urethane molding lines online at the Aurora facility, and is in the process of moving over its rubber compression molding line, Vaughn said. The company focuses on the energy, steel, and rubber, plastic and urethane markets.
Philpott purchased the Aurora facility in September 2016, and went through a six-month renovation project to make it suitable for the company, Stafford said. Those renovations brought the building space up to about 43,000 square feet with a little more than 40,000 square feet of that as manufacturing space. Once that job was complete, Philpott moved equipment from some leased space in Stow toward the end of March 2017.
The company already has invested in a new injection molding machine and is running with a capital expenditure in the range of $500,000 to $1 million at this point, Vaughn said.
Stafford said the new rubber equipment began to arrive around May 2017, and has taken about a year to get in place and operating.
"We upgraded our capabilities and brought in some new equipment," Stafford said. "Those departments are up and running at the capacity they were prior to the move. As a matter of fact, they're growing."
The company will continue to add auxiliary equipment to the existing presses and bring in new presses if a particular business opportunity supports it, Stafford said.
As the Aurora location expands, the Brunswick location will remain the company's warehouse, Vaughn said.
"Everything we make here goes over there for distribution," he said. "And we're gearing up there, making room for new business. We have some old inventory we're selling. It's all about growth right now."
Vaughn said the company is right on the edge of production for its lines to consider adding a second shift. The Aurora facility includes significant room for buildout, and the company will add more equipment and labor force to run three full shifts before the end of the year. The company currently has fewer than 100 employees.