Focus and Manufacturing

Muskegon firm does business ‘the old-fashioned way’

Forming Technologies is a growing auto industry supplier that survived the recession.

February 15, 2013
| By Pete Daly |
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Muskegon firm does business 'the old-fashioned way'
The leadership crew at Forming Technologies includes, from left, Dean Miller, Bryan Ward and Dave Hembree. Photo by Johnny Quirin
Forming Technologies in Muskegon’s Port City Industrial Park is an auto industry supplier that is “trying to do business the old-fashioned way,” according to one of its three owners.

“We don’t have much bank debt. We don’t live like kings. We drive regular cars like everybody else, and we don’t take much money out of the company,” said Dean Miller, who heads the small company’s sales efforts.

Last year the company invested more than $600,000, mostly in equipment, after receiving a 12-year personal property tax abatement as an incentive from the city of Muskegon — and then Forming Technologies’ employment jumped, from about 60 to 80 jobs, currently. The company’s primary business is custom-designing and manufacturing heavy-duty plastic containers — Miller prefers the word “packaging” — for protecting automotive parts in transit to OEM auto companies or to one of its suppliers such as Benteler in Grand Rapids.

About 80 percent of its production is for the auto industry, and while General Motors isn’t as large a share of its sales as it was when the recession hit in 2008, the new GM still provides about 18 percent of the firm’s sales revenue.

Miller said he believes the automotive industry is going to be good in 2013, 2014 and even 2015.

“I’m banking on it, actually,” added Miller.

In 2004, Miller was working for Ameriform, a Muskegon thermoforming company. Thermoforming is a process of molding large sheets of plastic, using heat and pressure, to make products ranging from small boats and portable toilets to playground equipment and pickup-bed liners.

Miller learned from the Ameriform owners that they were interested in spinning off their contracted work for other companies, so Miller, Dave Hembree and Bryan Ward formed a partnership to buy that part of the business for an undisclosed amount. Their new company, which they named Forming Technologies, began production in 2005. Hembree, who works in Brighton at a business of his own, handles finance and business affairs, and Ward is the manufacturing engineer.

Ameriform had a General Motors vendor number for its work making returnable packaging for auto parts in transit.

“We were able to transfer that (vendor number) over to Forming Technologies, the new company. That was really what we hung our hat on to get started,” said Miller.

Then came 2008 and 2009. Miller doesn’t divulge the company’s annual revenues, but he did say that sales in 2009 were one-third those of 2007. The employee roster was cut back to just 18.

Miller was 50 when he and the others launched the new company, and he had borrowed against his home. When the recession hit, he said, “My wife was having a meltdown.”

Miller said he and his partners decided the most important step was to take care of their employees and vendors first.

“It was a dramatic swing” from 2007 to 2009, he said, “and we survived that.”

One thing that helped was that GM had recognized Forming Technologies as one of its key partners in the (parts) packaging group, Miller said, “and they made sure we were taken care of before they filed.”

When the new GM arose from bankruptcy, said Miller, “We started back up with a vendor number there.”

Today, Forming Technologies is “really solid” and its borrowing is at a minimum.

Friends in business have told the partners they should borrow money now because interest rates are so low. “We’re just not like that. It just doesn’t work,” said Miller.

Forming Technologies survived the downturn because it “had a little war chest of money stashed away. That got us through the fourth quarter of ’08 and into ’09. The real problem was trying to grow back in 2010.” That’s when orders suddenly tripled.

Today, sales are four times the amount they were at that low point in 2009.

The North American auto industry today has a better foundation than when Forming Technologies started, according to Hembree.

“We were all fat, dumb and happy in the auto industry from 2000 to 2008, when it started to dwindle and then crashed,” said Hembree.

Hembree, 48, has been involved in the auto industry since age 15, and he has owned J.I.T. Packaging in Brighton for 18 years. J.I.T. makes packaging for shipping. He said that, over time, the participants in the auto industry became complacent “and really didn’t watch what they were doing.

“Today, I think the auto industry is much more aware that we are not insulated from those types of deep recessions, and so now we’re better prepared for it.”

Forming Technologies’ niche is very timely these days, since being “green” and recycling are all the rage.

“We are about as green as it gets,” said Miller. “We start with a recycled base material (plastic) and we make a returnable, reusable package that is also recyclable.” Customers like Benteler sell their parts packaging back to Forming Technologies, which cleans it, recycles it and uses the result all over again. “It’s a real nice closed-loop system,” he explained.

While it is still mainly an auto industry supplier, Forming Technologies has been diversifying into returnable packaging for other types of products, including lawn tractors made in Asia.

“I’ve got some stuff going with the peanut industry down South right now,” said Miller.

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