BAJA CALIFORNIA, Mexico—Automotive supplier Morgan Polymer Seals invested in new injection molding equipment and custom vision inspection technology as part of an ongoing growth strategy to gain a competitive edge in an increasingly cost-conscious market.
Now the manufacturer of rubber and plastic sealing components for powertrain applications finds itself poised to gain business for the extra capacity in a way no one imagined: by picking up the slack in a global supply chain kinked by the coronavirus pandemic.
To prepare, the privately held company has stocked raw materials, built up inventory and is doing what it can to help the 500 employees stay healthy physically and emotionally, including taking the temperature of everyone entering the manufacturing plant and offering paid sick leave.
At the Morgan Polymer headquarters in Baja, company officials are monitoring manufacturing delays in China and Europe while they enact plans to maintain safety while keeping their 23-year-old operation going.
Founded in 1997, the privately held, mid-size company has seen a decade of year-over-year growth and now produces some 96 million parts a year for original equipment manufacturers such as Ford and General Motors.
Todd Tesky, Morgan Polymer vice president of sales, and Sam Morgan, marketing director, told Rubber & Plastics News how they are balancing inquiries from customers about filling more orders with the needs of employees during this time of heightened uncertainty.
"Our deliveries are going out and we're on schedule but this is not business as usual," Tesky said. "We've had a lot of customers worried about disruptions. The supply chain is stressed but we're taking proactive measures."
While the sales team works on quotes for take-over business from places hard hit by COVID-19, a health committee implements plans to protect the Morgan Polymer work force at the plant and support them at home if they become ill.
New routines are in place at the facility, Tesky said. Everyone who can work from home is doing so. Trained personnel are taking the temperature of employees at the plant under the direction of a staff doctor, and the company is offering full pay to personnel sent home due to sickness.
"We're using an abundance of caution by screening visitors and encouraging in-person meetings to be conducted by phone or video conference," Tesky said. "It's a daily conversation and we're evolving our policies as the situation develops. Beyond the physical toll, we are also sensitive to the emotional impact of this situation. We want to sustain a mentally sound work force, as well as a physically healthy work force."
The guaranteed paid sick leave means no one has to worry about being turned away at work and then missing a paycheck, Morgan said.
"If people are worried about coming in with a fever and being cast out and sent home without pay, it will increase stress levels," he said. "And if people are stressed and not sleeping, they won't be able to perform. We're making high precision parts that go into automobiles. Things have to be done right. That's why we're going to continue full pay and benefits for those who need to work from home or go home because they're sick."
Finding a Plan B
Meanwhile, overseas, Tesky said automotive suppliers in China and now Europe have been increasingly stunted by COVID-19, leaving many OEMs to either wait for product or pay for expensive air freight.
"Some of our key partners have approached us and asked us to quote some business that was coming out of China and Europe because they've had some 1-2 week delays on getting parts," Tesky said. "They're trying to put contingency action plans in place. They want a Plan B if they can't get components."
In some cases in China, managers have been running the production plants, according to Tesky.
"That's allowed them to get out parts, but I don't know how sustainable that is," he said.
To prepare for any influx of work, Morgan Polymer pre-ordered raw materials to support production requirements for both its automotive sealing and transmission filtration business units. The build-up of materials includes a specialized filter mesh sourced from Italy.
The company also has four weeks of finished goods on hand to ensure there's no disruption in its supply base.
"We're debt free and have a significant cash position that allows us to make decisions like this and tie up money in inventory to ensure our customers aren't disrupted," Tesky said.
When he talks to customers about what Morgan Polymer can do, Tesky said take-over tooling also has come up. It isn't easy, but if a company can't wait six to eight weeks for a new tool, it's an option.
"Most OEMs would probably consider take-over tooling to be a last resort, but we have successfully launched tooling from our competitors and continue to offer this as an option to support our customers," Tesky said.
Morgan Polymer has seen year-over-year growth for 10 years, according to the sales executive, so equipment was purchased to support the steady addition of business.
"Last year there was a significant issue regarding price increases," Tesky said. "Well before COVID-19, I was in talks with customers on take-over business because of the stressed supply base in terms of people passing along price increases. We haven't passed along any price increase to our customers and we try to capitalize on that."
The company has invested $2 million over two years into presses, vision inspection technology and additional technical resources, including personnel. The new presses are energy efficient and gave Morgan Polymer a significant boost in capacity to support new business related to prices, COVID-19 or otherwise, Tesky said.
For employees, Morgan Polymer has medical staff available around the clock. They offer routine checkups, monitor health needs and provide information regarding work-related health concerns.
The company also has a subsidized cafeteria that sells healthy food at deep discounts to the work force. Since the COVID-19 outbreak, extra cleaning and hygiene measures also have been taken.
Now Morgan Polymer is adding paid sick leave to its benefits.
"We're able to still pay employees because we're a sustainable business without debt," Morgan said. "We have a safety net to handle a situation like this and continue operating."
He credits his father, Kevin Morgan, the company founder, with looking out for all employees from the C-suites to the production facility, which houses 31 plastic and rubber injection molding machines and 17 vacuum presses.
"This all speaks to Kevin's leadership," Morgan said. "He's committed to providing a healthy work environment. It's great on a regular day-to-day basis and it feels all the more important when our world is going through something like this. You can have great technology but at the end of the day you have to have dedicated great people.
"We've got that and we want to make sure they stay in good health and a solid emotional state."