Manufacturers of the Year

| FROM THE PRINT EDITION |
 
 

Small Company
ELECTRONIC SYSTEMS TECHNOLOGY, Kennewick

Founded in 1982 by Tom Kirchner, Electronic Systems Technology enjoyed 10 years of growth through 2007 and record sales that year. Then the recession hit. The instinctive response to a 30 percent drop in annual revenue and a net loss for the year, which is what Electronic Systems Technology (esteem.com) experienced in 2008, is to slash costs, especially in payroll.

This maker of wireless modems in the public safety, industrial control (mines, utilities, food processing, oil and gas) and federal markets didn’t dodge the cuts, but it tried an alternative to layoffs. Salaried employees trimmed half a day from their weekly working hours; benefits were maintained. Hourly employees took a full day off (recouping half their sacrifice through a state program that pays partial unemployment benefits). These measures reduced payroll expenses by 10 percent.

Electronic Systems Technology also reconfigured international sales travel, chopped office-supply purchases by 44 percent over three years and moved testing of new modems to evening hours to avoid a bottleneck in production.

Through it all, Electronic Systems Technology developed and launched new products and services for its customers. It returned to the black in 2009 and finished 2010 with a 19 percent gain in revenue and a much healthier profit. In January 2011, employee hours returned to full time, and the company embarked on development of new products that will position it for growth opportunities in applications where telephone modems and cable systems are unavailable or impractical.

Midsize Company
DATA I/O, Redmond

Data I/O CEO Fred Hume photographed by Hayley Young

Rocked by the recession, a shift of many of its potential customers to China and technology changes in its industry, Data I/O has been battling back. This maker of devices that program semiconductors reported revenue for 2010 that was up 42 percent from 2009, and turned an $811,000 loss in 2009 into a $3 million profit in 2010. Data I/O’s stock price, up 53 percent from Dec. 21, 2009, to Dec. 21, 2010, indicates that investors liked what they saw.

How did that shift happen?

Strong international sales, accounting for 88 percent of overall revenue, helped a great deal. So did attention to the financial details: Data I/O cut inventory levels by about 40 percent during an 11-quarter period, and it has no long-term debt.

The company is seeking more growth. With the exploding demand for wireless devices and consumer, automotive and industrial electronics, and all the programmable circuits within them, Data I/O figures that need will translate into more demand for its products. The marketing pitch to electronics manufacturers: Data I/O’s devices are equipped to handle the large files that are loaded onto handheld gadgets, and its proprietary designs will protect them from malware or theft of intellectual property.

This year, Data I/O plans to roll out a new software product and to boost revenue above and beyond recovery levels. In fact, CEO Fred Hume says the business might even consider acquisitions to achieve its goal. Toward that end, it has hired an investment banking firm to advise on strategic alternatives.

Large Company
Heath Tecna, Bellingham

CEO Richard Ballantyne, center foreground, with members of the Heath Tecna management team, photographed by Hayley Young

Heath Tecna, founded in the 1950s, makes the stuff on the inside of planes that most passengers never think about, but would certainly notice if it weren’t there: ceiling and floor panels, storage bins, closets, lavatories, galleys. And it doesn’t just make the stuff. It provides airlines and aircraft manufacturers with engineering services for designing the interiors of new planes or reconfiguring existing aircraft.

Heath Tecna has jumped from 285 employees in April 2010 to more than 600 now after winning the interior-package contract for a new Mitsubishi regional jet and landing other contracts with international airlines (adding $40 million in export sales in 2010). But it did more than throw additional bodies into the labor pool. It worked with Impact Washington, state government programs and Bellingham Technical College to set up an accelerated hiring and training program.

The company also placed major emphasis on lean operating principles, which shortened the time needed to build interior components, reduced the space needed for production and improved quality. Next up: moves to minimize material waste and energy consumption.

For Mitsubishi, Heath Tecna will develop and supply interiors and furnishings for the new jet, design and fabricate flight deck and cargo compartment linings, and manage the integration of other components, including water, waste and vacuum systems, crew seating and escape slides. This year, the company also will unveil interior upgrades for existing Boeing 737s and 757s.

Honorable Mention:
Bruker Elemental, Kennewick

How do you know what percentages of what metals are in a part? Hold a Bruker analyzer up to it. There’s a lot of technology behind such a seemingly simple approach. The devices from Bruker Elemental’s handheld business unit use a low-level X-ray beam to read the signatures of the specific elements in whatever is being studied. Applications include identifying metal alloys, determining the content of metal scrap, environmental analysis, mining, even art and archaeology. Started in 2000 as Keymaster Technologies, the company was acquired by the German company Bruker in 2006. Revenue and employment are growing, thanks in part to overseas sales, representing more than half of Bruker’s total handheld business.

Honorable Mention:
C.C. Filson, Seattle

C.C. Filson is a small company with an outsize reputation in the outdoor-apparel sector because of the sturdiness of its products. But Filson didn’t get to be more than 100 years old by resisting change. Among its alterations: moving to web-based sales, setting up a program to pair experienced sewers to train new hires, cutting waste by allowing customers to receive shipments in used boxes and collaborating with Levi’s on new products. For Filson, those innovations have meant revenue and employment growth; these developments allowed the company to continue making its products domestically.

Reaching Higher at Genie Industries

Reaching Higher at Genie Industries

On its 50th anniversary, Redmond’s aerial-work-platform specialist celebrates by seeking new opportunities.
 
 

As the development surge continues apace in and around Seattle, aerial booms and scissor lifts crowd every construction site — and a local company quietly thrives.

Redmond-based Genie Industries, named 2014’s No. 1 aerial platform manufacturer by Access International magazine, is not only growing in the United States, but the maker of the ubiquitous blue and gray lift machines is also aggressively expanding its reach across more than 80 countries on almost every continent.

From one man who bought the rights to Genie’s original technology in the 1960s, the company has grown to employ 1,800 in Redmond and more than 3,800 worldwide. The equipment rental industry makes up most of Genie’s business, with 90 percent of its domestic sales going to rentals and 80 percent outside the United States.

Celebrating its 50th anniversary this year, Genie appreciates Seattle’s continuing boom in real estate development but sees its greatest growth potential occurring in China and South America as developing countries abandon bamboo scaffolding and tighten safety standards with modern lift technology such as Genie’s.

“There’s a lot of pride locally,” says Matt Fearon, president of Terex Aerial Work Platforms, “but traveling around the world, you cannot believe where you see these machines.”

Genie’s roots go back to 1966, when Bud Bushnell started working for Seattle Bronze, a company that produced hoists in Kent. The business faltered, so Bushnell bought rights to the technology and started Genie — its name inspired by the hissing sound of the compressed air used to raise the machine’s operator, like a genie rising from its bottle.

Beginning a history marked by impressive in-house innovation, Bushnell acquired the patent for the first Genie hoist in 1968. It was the same year Genie’s business got a big boost from a Japanese ironworks company representative who visited the Seattle area and ordered 15,000 hoists on the spot.

Based in Kirkland at the time, Genie traced much of its early growth through the 1970s to the emergence of the equipment-rental business. The swelling demand fostered a spirit of innovation and improvement that Fearon calls “part of our fabric.” In 1974, it introduced the Genie Teletower, which carried more weight than previous lifts. In 1984, it brought out the Z-Boom, which became the world’s most popular lift by carrying workers up and over other structures and obstacles to reach a work area, thereby improving workers’ reach and flexibility with a single machine.

The Z-Boom was a “groundbreaking innovation” that was soon adopted by other manufacturers, says Karen Stash, Genie’s senior director of global product management and marketing. Another Genie innovation is the X-chassis, which allowed the company to build a machine with a larger base that provided stability and also included an expanding axle design for flexibility in storing the booms. Too, Genie was first to introduce the world’s tallest self-propelled boom and hydraulic material lifts.

Bushnell emphasized customer service, Fearon says, making personal visits to clients to see how Genie’s equipment worked in the field and how it could be improved upon, as well as identifying unmet needs at construction sites.

In addition to maintaining a research and development department, Genie encourages ideas from the shop floor and has adopted much of this input, Fearon says.

Genie moved to Redmond in 1982 and grew during the next 20 years to nearly 1,500 employees. In 1998, it opened an additional manufacturing facility in Moses Lake, making Genie the largest employer in Grant County, according to the Grant County Economic Development Council.

In 2001, construction screeched to a near halt amid the turn-of-the-millennium recession, necessitating a different path to growth. Connecticut-based Terex Corporation, a maker of cranes and other massive manufacturing equipment, bought Genie in 2002, providing an infusion of cash, technology, new factories and global markets.

Terex opened new Genie-owned factories in China, Italy and the United Kingdom, not to outsource work but to get equipment to international customers faster, says Chad Hislop, one of two engineering directors at Genie. The Terex acquisition also brought with it a factory in Rock Hill, South Carolina.

The factories are strategically situated so international customers can receive the products they order at the same speed North American customers do — in about two weeks. That helps the company offer the same level of service in each market. “You have to have local people who are building in the local markets,” Fearon explains.

Developing countries remain Genie’s biggest area for growth, he adds. In addition to the move to better safety standards, there’s an uptick in building projects. Meanwhile, the North American market is cooling off from a manufacturer’s perspective. Terex reported first-quarter sales in its Aerial Work Platforms business were flat, at $520.2 million, compared to the same period in 2015.

The rising markets today are in China and Western Europe, Fearon says, but Genie also hopes to capitalize on South American markets where developing countries are improving infrastructure, building airports and modernizing ports.

Genie has three factories in Redmond, where the company builds scissor lifts and other products. Workers operate under a regimented lean manufacturing schedule, performing assigned tasks in 10 minutes before moving on to the next machine. A total of 10 hours of work goes into each machine. Genie’s international factories employ the same Lean approach.

“The sun never sets on the Z-45,” Hislop quips, referring to a Genie boom that lifts workers nearly 52 feet in the air.

Genie remains headquartered in Redmond to maintain the small-business spirit the company was founded upon and to retain the talent and loyalty of workers, many of whom have stayed with the company for decades.

“You can’t easily duplicate years of experience,” says Fearon, who believes the Pacific Northwest culture draws many employees and clients to Genie. A new administration office, which opened in Redmond within the past year, is a nice addition. Overlooking hills of evergreen trees, Fearon calls it “a fantastic place to bring customers.”

New digs or not, Genie’s customer base is loyal and enthusiastic. Tom Hammerslag, the owner of Great Lakes Access, an aerial-lift dealer in Grand Rapids, Michigan, likes Genie products because Genie genuinely likes his patronage. “The Genie guys care,” Hammerslag says. “You go to the factory [and] people hug you. They’re warm and welcoming because Genie always knew they needed their customers more than their customers needed them.”

Paul Zaremba, principal at SkyKing Lift Rentals in Bloomingdale, Illinois, adds that Genie stands above the competition because of its history and its innovation. “It’s real simple,” he says. “They make stuff that other people don’t. We tell other vendors, ‘If you don’t want us to buy from Genie, then you need to compete with them, and you don’t. You don’t make a 3232 [scissor lift], you don’t make a push-around [aerial work platform] and you don’t make a Z-30 [self-propelled articulating boom].’”

While Genie has expanded globally to remain competitive, Fearon insists “Redmond is an important part of our past and our future.” So much so that, when Genie engineers are offered positions abroad, they’re loath to leave the Puget Sound region.

Part of that attachment is no doubt attributable to living in such a geographically blessed place as the Seattle area. But Fearon believes Genie’s commitment to continuous improvement fosters a sense of community and loyalty that’s hard to match.

The philosophy, he says, is instilled in temporary and permanent workers alike in the hope that whatever they learn at Genie, they will apply to their work at Genie — or wherever they go next. “At Genie,” Fearon says, “we feel that anybody who sets foot in Genie will walk away with a higher set of skills than when they walked in the door.”

PARENTING ISSUES
In June, Genie’s parent company, Terex Corporation, abandoned merger talks with China’s Zoomlion Heavy Industry Science & Technology Company. Terex had consented to an acquisition by Zoomlion for $3.4 billion, but talks fell apart, with both sides blaming the other for the failure. After terminating discussions with Zoomlion, Terex agreed to sell its Material Handling and Port Solutions business to Konecranes of Finland for $1.3 billion. That deal is expected to close next January. Terex had earlier planned to merge with Konecranes before Zoomlion came forward with a seemingly sweeter deal.