Cascade Sales Defy Bad Economy

April 28, 2003
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GRAND RAPIDS — While many manufacturers struggled during 2002, Cascade Engineering had its best revenue year ever.

The plastics components maker, which just celebrated its 30th year in business, had record sales last year, while making improvements in quality, productivity and safety. Sales revenue at Cascade reached $230 million for FY02, a jump of 11.2 percent from the previous fiscal year.

So how did Cascade Engineering accomplish that, while others stumbled through one of the worst economic years in the last few decades?

According to President and COO Mike Valz, the answer lies in two factors: being diversified and staying focused.

Valz told the Business Journal that having a diversified product line turned out to be a blessing last year. Cascade supplies parts to a handful of different industries, and two of those did very well financially last year.

“Our automotive acoustics market stayed firm because we were tied to the SUV and truck markets with our OEM customers. That remained strong for us,” said Valz.

“Secondly, our container business was basically at plan. And at the same time internally, we resolved some operational issues with one of our automotive groups,” he added.

Cascade also acquired two companies last year and one began producing quickly. CK Technologies, an affiliate of Cascade, bought the assets of a Clarion Technologies plant in Montpelier, Ohio, in April.

The plastics injection molding company makes components for truck manufacturers, such as Volvo, Freightliner and International, and looks to be a good fit for Cascade.

“It’s a new market for Cascade,” said Valz. “Even though the truck market was severely soft, we knew that going in, and are planning for the day that it rebounds.”

The other acquisition, Invisible Waste Services LLC of Orlando, might seem a bit of a departure for Cascade. But the company is betting that the valet trash pick-up service will succeed and, in turn, help boost sales for its line of solid-waste container products.

“We are in the very early stages of launching that business model,” said Valz.

“We’re using our product platform to sell related services,” said Michael Goldman, vice president of business services.

But Valz pointed out that while diversification can be a blessing, as it was last year, it can also be a curse at times. Managing a diversified company like Cascade, he said, isn’t always an easy thing to do. And that’s why keeping a firm focus on the company’s goals played such a huge role in Cascade’s financial success last year.

“This is not smoke and mirrors,” said Valz. “Frankly, we had people focused on achieving our business plan. While we didn’t make the targets that we set for ourselves, we did far surpass the prior year’s results.”

Despite the hits Cascade produced last year, Valz candidly admitted that the firm also had a few misses. And those misses just may ultimately play as big a part in the company’s future as the hits will. Those misses helped Cascade to restructure, a reorganization effort the firm recently started after reviewing evaluations of the way it does business from the Boston Consulting Group and Watson Wyatt Worldwide.

The feedback that Valz received said the company’s efforts in sales and marketing — and to an extent, product development — were insufficient, a word that no executive likes to hear but one that Valz saw as being honest and one that he took seriously.

So acting on the advice from its consultants, Cascade is shifting some of its focus from the manufacturing of goods to the selling of current products and creation of new offerings.

“Our thought was to reorganize from a position of strength while we were organized and running well. We will shift more of these resources to an external focus to begin to plow and sow new initiatives for our customers in our marketplace,” said Valz.

“Internally, we weren’t transferring best practices around the company to the best of our ability. So we saw an opportunity to improve that.”

Goldman said the restructuring will add an enhanced marketing and concept team, while it will also reduce the number of Solution Groups from four to three.

Cascade will accomplish that by rolling its automotive acoustic and trim groups into one, merging the container, office and home groups into another, and starting a group that will deal with new products.

“When we create a new product and bring it to market — and if it’s not within one of our other established Solution Groups — it will come under the Emerging Solution Groups,” said Goldman.

Two weeks ago, Cascade marked its 30th anniversary.

Founder and CEO Fred Keller started the company with six employees on April 16, 1973, as a department of Paragon Die and Engineering to make mold tryouts for the plastics industry.

Today, Cascade has 1,200 employees, a global reach and a goal of reaching $1 billion in revenues.

“Our recent corporate realignment has taken us closer to the customer and focused Cascade on being the best total-cost provider of innovative solutions,” said Keller. “President and COO Mike Valz and his team are doing a great job of positioning Cascade Engineering for the future.”

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