By DAVID GREEN
General Broach Company's general manager David Graham doesn’t have to think back very far to remember when the company was on shaky ground.
“There was a period when a lot hit us at once,” Graham said. “We've gone through some choppy waters.”
Now, as 2007 unfolds, he’s convinced he can speak of those times in the past tense. Where so many manufacturing firms—including broach companies—have gone out of business, Morenci’s General Broach is not just surviving, it’s flourishing.
In September 2001, when the terrorist attacks in the U.S. ended up affecting much of the business climate, more than 90 percent of General Broach’s business was tied to the automotive industry.
Automotive tanked, Graham said. Excess inventories from the 1990s boom destroyed demand.
“Many of our customers went bankrupt,” Graham said. “Others cancelled contracts. The ones that remained only dealt with low-cost suppliers.”
Then gas prices rose. Corporate scandals blossomed. Outsourcing to other countries increased. Medical costs skyrocketed.
“As Doyle [Collar] used to joke, if it weren’t for bad luck we’d have no luck at all,” said Graham.
With this came an announcement from General Broach’s owners at Utica Enterprises that Graham can only describe as a good news/bad news scenario.
“After 10 years of lobbying, they said they were going to give us management of the machine division,” he said.
The Morenci plant had always been the home of perishable broaching tools.
“The tools we produce are used on the machines built by our sister division,” Graham said. “We need our machine division to be viable to support our tooling division.”
The transition was not an easy one. “We were handed a complete turnaround situation,” Graham said. “That division came to us with almost no customers, no sales, and no revenue. About all we got was a lot of warranty work.”
“When you're at the bottom, the only way you can go is up,” added production manager Larry Stover.
Before moving forward, General Broach had to spend a lot of time mending relationships. Warranties were honored and credibility was steadily rebuilt among customers.
“We knew we had to think strategically,” Graham said. “We made some errors along the way, but we kept moving forward.”
“Those mistakes became doors of discovery for us,” Graham said.
One of the doors that opened for General Broach is production broaching.
Graham said the company turned away from broaching production parts years ago.
“We had to because we were competing with our own customers,” he said.
Now there’s a market due to the inability of many companies to invest in new equipment. General Broach built an inventory of equipment by trade-in or by purchasing at greatly reduced prices, often due to bankruptcies.
“We have people who know machines and people who know broaching,” Stover said. “Why shouldn't we be doing this?”
General Broach’s production division has even teamed up with Versacut in Morenci to produce parts for Chrysler.
The aerospace industry
Another strategic decision was made to aggressively pursue work in the aerospace industry.
Industry forecasts were predicting high demand, a supplier shortage, and few competitors. The only thing needed was the willingness to take a giant leap forward.
“The status quo is the easiest place to be,” Graham said, "because it's comfortable. But we couldn't preserve the status quo with margins eroding and customers vanishing."
It was either cut wages, cut jobs, or change, Graham said.
It was a contract with Pratt Whitney Aircraft that swung the doors open.
“Once we were certified by Pratt, we had instant credibility,” Stover said. “Aerospace companies knew if we met Pratt's tough requirements, we could handle theirs too.”
"It took a while," Graham said. "We had to develop new skills and new attitudes, invest in new technology, and change processes developed years ago for automotive."
These were sound investments, Graham says. "Not only have we kept our work force working and maintained wages, we've been able to hire more people."
General Broach’s work force has grown more than 50 percent in the past 36 months, Graham says. "We now have the highest sales backlog in the history of the company—in all three divisions."
Meeting the challenge
Right now it’s General Broach that customers want, with automotive rebounding and aerospace inquiries arriving from as far away as Europe and India.
But success has its price.
Plans were drawn up in 2000 for an expansion at General Broach. Property was purchased and "then the bottom fell out," Graham said.
The drawings are still rolled up and sitting in a corner of his office.
But even if that addition were standing, it still wouldn’t be large enough to meet the demands the company faces today.
"We're relying heavily on sub-contractors,” Graham said. “And we're leasing a lot of space from Versacut."
General Broach is also considering other options in order to meet the considerable demand.
The company could continue to grow from within, but even with restructuring, reconfiguring, and retraining the growth would be slow.
"Our owners are considering potential acquisition targets, and we’re looking at the viability of strategic alliances," said Graham.
The course of action isn’t yet clear, but Graham likes the company’s current position much better than what he faced a couple of years ago.
“We've been working for three years to get out from under the industry collapse,” he said. “It’s been rough. Every person in this company has had to tighten their belt."
"Some may think we were just in the right place at the right time," said Graham. "But opportunity favors the prepared. Long hours and hard work are what got us here. There’s been no shortage of tough times and difficult decisions.”
Graham looks through a packet of news releases from the Boeing Company showing a new aircraft scheduled for production.
“Every engine on every one of these planes will have parts made with General Broach tooling,” Graham said.
“And from General Broach machines,” Stover adds.
“That’s pretty big news for a small town,” says Graham.- Jan. 4, 2007