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Michigan Wheel’s fortunes spin positive
Long-time propeller maker is on the way back with contracts for Coast Guard, Navy.
At its height in the 1960s and 1970s, Michigan Wheel Corp. saw annual sales of more than $100 million. Based in Grand Rapids, the company was one of the biggest names in the marine world, especially when it came to propeller manufacturing.
Then, in 2009, like many companies, Michigan Wheel hit rock bottom, with only $15 million in sales.
The Great Recession was tough on a lot of industries, especially manufacturing, but the North American marine industry saw most of its companies shutter their doors or shrink drastically.
Now the bad days are in the past for Michigan Wheel, which has had three straight years of rising sales, said Bruce Dieterle, president and CEO.
“We’re like a Twinkie or a cockroach — we don’t go away,” Dieterle said. “Now, as we settle into a new normal, there’s very few people in North America who can do what we do.”
The company’s resurgence has been led by orders from the U.S. Coast Guard for its new Sentinel Class Cutters, an extremely fast, 154-foot vessel.
The past three years, the company has had $18 million, $21 million and $24 million in sales. This year, Dieterle said he expects sales between $25 million and $27 million. Michigan Wheel now has more than 110 employees, up from its low of 50.
Michigan Wheel has made propellers for more than 100 years on the south side of Grand Rapids at 1501 Buchanan Ave. SW. It’s gone through a variety of ownership changes, including time in its heyday by Dana Holding Corp. to now being held by the Florida-based private equity firm Anderson Group. Currently, the company has a partnership with Japan’s Nakashima Propeller Co., which allows it to compete for larger propeller contracts.
Even without the larger propeller capabilities, Michigan Wheel has begun to re-establish relationships it has had during its century in business with the U.S. Coast Guard, U.S. Navy and U.S. Army Corps of Engineers.
Prior to the Great Recession, Michigan Wheel had made propellers for landing craft for the U.S. Navy Seals, until the work went away. Then recently, the company won back the contract, making 32 propellers for the landing craft. It also fulfilled an order for 50 small aluminum propellers for underwater autonomous units for the Seals.
The return of these long-term, relatively high-volume contracts is incredibly important to the company, Dieterle said.
“We aren’t like Ford or Keebler — nothing here is volume,” he said. “Everything is one-off. We might sell a pair of wheels for a 110-foot yacht for $50,000, but you go through all the design, engineering patterns for that and maybe a set of spares. Absolutely zero repeat volume.”
So when the chance to win the contract for 50 Coast Guard vessels came along, it was important for Michigan Wheel to win the business. In the case of its flagship propeller for the Sentinel cutter, Michigan Wheel was in competition with a German firm.
“Everything made in Germany — just ask them — is the grandest in the world,” Dieterle said. “But the boat couldn’t hit speed, so we did a custom design and put a propeller on it, and not only did we hit their target, we exceeded it.”
Dieterle said one thing the company is working on with the Sentinel Class Cutters is wake-adapted rudders, which can result in one, if not all, of three benefits: speed increase, noise or vibration decrease, and fuel efficiency. A good propeller design also helps ships save money on fuel consumption by using smaller engines.
The future should continue to be bright with showings like the Sentinel, Dieterle said. More long-term, multimillion-dollar contracts will allow the company to get its foundry and machining technologies up-to-date and more efficient so the one-off propellers can be worthwhile.
With a more modern and efficient facility, the product Michigan Wheel puts out can be more efficient, too. Dieterle said some parts of its foundry are still rudimentary. Only in the past 20 years did Michigan Wheel move to full CNC capabilities. Now it’s working to introduce more modern technology, including using a 3-D printer for making models rather than wooden patterns cut by hand based on CAD designs.
One of the most demanding parts of making propellers, which can screw up a propeller with one wrong move, is the polishing stations. Dieterle said Michigan Wheel is looking at robotic polishing stations to help ease the stress on the manpower in that role.
“It takes a lot of intestinal fortitude to take a 50-pound prop on their belly and start grinding that on a wheel spinning a couple hundred miles per hour,” he said.
He’s hoping the newer processes at Michigan Wheel will become standard. Documenting processes is becoming much more important as the knowledge base is disappearing, Dieterle said.
The issues Michigan Wheel is struggling to overcome are compounded as competition for machinists is tough in Grand Rapids.
“There isn’t a next generation like there was in the ’30s, ’40s, ’50s and ’60s,” he said, mentioning a three-generation family that has worked at Michigan Wheel for 75 years. “We have to grow our own (and) train our own.”
Michigan Wheel is also working with Western Michigan University, which has an engineering program with a focus on the casting industry. Dieterle said working with more area colleges will soon be a priority to help attract talent.
Business is coming back for Michigan Wheel, and while Dieterle is hesitant to say it will ever hit the height of its heyday, he’s excited for what the future holds.
“We wish it would come quicker, of course,” Dieterle said. “But it’s coming, and those dark, dark days are, hopefully, a long, long way behind us.”