SEMA News—October 2011

Made in the U.S.A.

Why Many Specialty-Equipment Manufacturers Still Call America Their Land of Opportunity

By Michael Imlay

    Because the United States has lost an estimated 8 million manufacturing jobs over the past three decades, there’s a popular notion that the nation’s manufacturing sector is in deep decline.
Vic Edelbrock Jr. has not only kept his manufacturing in the United States, but has gone a step further and proudly built his own high-tech metalcasting foundry as well. The ISO-certified facility is capable of both green-sand and permanent-mold aluminum casting. 
     
Made in the U.S.A.” has long been a powerful marketing proposition, especially for the automotive specialty-equipment market. Resurgent patriotism and concern over American job losses, along with outsourcing and foreign knockoffs, are currently inspiring consumers to “buy American.” Of course, there are plenty of manufacturers in this industry who, for numerous reasons, never left the good ol’ U.S.A. Has their decision to remain stateside helped or hindered them?

The Raw Data

First, some background: Because the United States has lost an estimated 8 million manufacturing jobs over the past three decades, there’s a popular notion that the nation’s manufacturing sector is in deep decline. Yet, media outlets such as The Wall Street Journal reported surprising United Nations stats in February 2011 revealing the opposite: America is still the world’s manufacturing leader, out-producing nearest competitor China by a whopping 46% in 2009, $2.15 trillion to $1.8 trillion.

In fact, American factory productivity has actually exploded since the ’80s, with technology and other efficiencies allowing U.S. companies to manufacture far more goods with far less manpower (hence, many of the job losses). Typically, onshore production now focuses on big-ticket items, such as automobiles and high-tech electronics, leaving cheaper, lower-tech consumer items, such as clothing and toys, to overseas factories.

As American Enterprise Institute economic scholar Mark Perry recently told the The Boston Globe: “The decline, demise and death of America’s manufacturing sector has been greatly exaggerated. America still makes a ton of stuff, and we make more of it than ever before in history.” More than China and more than Germany, Italy, Japan and the United Kingdom combined.

Moreover, after flirting with global outsourcing, numerous American manufacturers are now “reshoring.” With growing middle classes demanding higher wages and unstable oil prices driving up shipping costs, China and other far-flung manufacturing locales are becoming less attractive. In addition, more and more U.S. companies are citing frustration over quality assurance, intellectual property issues and lengthy delivery cycles as further reasons to reduce manufacturing overseas.

All-American Casting

    Edelbrock does more than machine-manufacture equipment in America. The company casts parts at its own state-of-the-art aluminum foundry situated on a nearly seven-acre desert parcel in San Jacinto, California
Separating cylinder head castings from their molds in preparation for finishing at the Edelbrock foundry.
     
    Unlike Detroit foundries that concentrate on moldings involving expensive tooling, Edelbrock’s computer-driven facility focuses on lower-volume castings requiring less complicated setup.
The Edelbrock foundry specializes in lower-volume casting requiring less costly tooling and setup in ranges of 20,000–30,000 units.
None of this surprises Vic Edelbrock Jr., owner of Torrance, California-based Edelbrock LLC, legendary for its aluminum racing heads, carburetors, manifolds and other performance engine products.

“People have gone overseas and found it’s not a bed of roses,” he said. “Sure, it’s cheap, but there’s no control, so they’ve brought their manufacturing back. We feel it’s always better to be in control of what you’re doing. If you’re making stuff overseas, I’m sorry, you have no control. There are a lot of horror stories.... If that’s the way they do things over there, I don’t want to be part of that. I want to know when something comes out here, it’s going to be right.”

Of course, Edelbrock does more than machine-manufacture equipment in America. The company casts parts at its own state-of-the-art aluminum foundry situated on a nearly seven-acre desert parcel in San Jacinto, California. Opened in 1990, the ISO-certified green-sand foundry is the last of its kind to be built in the United States. In recent years, Edelbrock added an advanced, robotized permanent casting facility alongside the original green-sand operation. All in all, the foundry employs more than 130 workers.

“We’ve chosen to keep things here because we want to control our destiny,” Edelbrock said. “You take our supercharger: Everything is under our roofs except the Eaton rotors that we buy and put in there, the powdercoat, and maybe a few small [pieces] we get from the outside. Everything else we do—99% of it—is controlled by us. We have a quality control (QC) system here and, of course, we have one over in Torrance. We QC every one of our supercharger manifolds from A–Z, which normally you don’t do. Usually, you do first-off, any changes in the middle, if you change a tool or whatever, and you do a last-off.”

Edelbrock’s quality-control system includes a $30,000 microscope to analyze vacuum-hardened pucks from the foundry’s furnaces several times a day. The pucks are halved with a diamond cutter and carefully examined for proper porosity and structure. The plant also creates its own nitrogen, which is circulated in the aluminum baths to maintain consistency.

“Aluminum is the gassiest metal there is to pour,” Edelbrock explained, adding that a finished cast can look great on the outside but hide numerous pores and imperfections inside. Every production phase must be carefully monitored, from raw material selection to cooling and finishing.

Considering the costs and challenges involved, why would any manufacturer want to operate its own foundry here in the United States?

“Having our foundry is key,” Edelbrock said. “There just aren’t any foundries like this sprouting up [in the United States] because they’ve all either gone south or overseas, or the ones in Detroit have gone for more elaborate stuff.”

Unlike Detroit foundries that concentrate on moldings involving expensive tooling, Edelbrock’s computer-driven facility focuses on lower-volume castings requiring less complicated setup.

“We can handle quantities of 20,000–30,000 and keep the price down,” he said.

Proud of his all-American foundry, Edelbrock is eager to attract other manufacturers in search of onshore aluminum casting solutions.

“When we built the green-sand foundry we built in a factor of 10%–15% outside work, and we’re out looking for that work now more vigorously than we have been in a long time,” he said, adding that the company’s current customer list includes New York Air Brake, Mercury Marine, GM (parts for crate engines), Ford and Chrysler Mopar. (Look for the Edelbrock foundry booth next to the company’s main booth #22643 at this year’s SEMA Show.)

The Pride of Staying Put

    Based in Santa Ana, California, Danchuk Manufacturing was established by brothers Dan and Art Danchuk in 1976
Sparks fly at Danchuk’s Santa Ana, California, manufacturing facility. Despite economic pressures and globalization, many specialty-equipment companies still consider domestic manufacturing a decided advantage in the marketplace.
     
Remember “baseball, hot dogs, apple pie and Chevrolet?” Given that all-American commercial jingle, it seems only fitting that a company specializing in ’55–’57 Chevy restoration parts should confine its production to the United States. Based in Santa Ana, California, Danchuk Manufacturing was established by brothers Dan and Art Danchuk in 1976 when they acquired their father’s tool and die company and rededicated it to their passion for restoring the vintage classics.

“That’s all we do and all we focus on,” said Danchuk General Manager Steve Brown. “We have a tooling department and more than 20 guys in our manufacturing facility who do nothing all day but manufacture and assemble everything you can possibly imagine in parts for these cars, and we do it right here in Santa Ana, California.”

Brown added that Danchuk’s decision to remain onshore over the years has been based on more than marketing. Thanks to their father’s legacy as an American tool and die maker, Dan and Art aren’t big overseas guys.

“They prefer to keep it right here in the United States,” Brown said. “They feel very strongly that it supports our economy and that you can control the quality much better.... You’re giving back to the country you were born and raised in, not to mention that these ’55, ’56 and ’57 cars were made in the United States.”

Apparently, Danchuk’s customers wouldn’t have it any other way. The company’s core demographic is males in their 50s and 60s who are now restoring Chevrolets for nostalgia’s sake. Either they or their fathers had similar cars in their teen years. When it comes to authenticity, they tend to be a much pickier crowd, Brown said.

    Based in Santa Ana, California, Danchuk Manufacturing was established by brothers Dan and Art Danchuk in 1976
CNC machining at Danchuk. Owners Art and Dan Danchuk have strong feelings about keeping their manufacturing on American shores—and so do their customers.
     
While other manufacturers may see savings overseas, Danchuk has found the advantages of onshore quality and volume control, not to mention an on-demand supply chain, worth the price differential. For example, plating in the United States is often more expensive than overseas.

“When [something like] that happens, sometimes we’re a little more expensive, or we literally take less profit on it and attempt to make more products that we can make more profit on,” said Brown. “Believe it or not, if you do it right, a lot of things are cheaper to do in the United States. When we commit to a project, we think it through, and we estimate costs. But once the decision is made, we just make the tooling and don’t look back—and we price the part according to what we can price it in the market, period. If it’s a little cheaper than we’d like, that’s just life—we wait a few extra years to amortize the tooling.... We’re very proud of our business, we’re very successful, and we don’t see any reason we have to change our way of doing that business.”

Supply Chain Economics

Jons Van Dooren, vice president of marketing and sales for Intro-Tech Automotive, also cites supply-chain management as a major reason his company has kept production in the States. Located in Chino, California, the company is a prime manufacturer of custom-fit floor mats, sunshades, car covers and, more recently, a Pit Stop Furniture line.

“Our main category and our backbone is our custom-fit floor mats that we started about 20 years ago,” Van Dooren said. “We manufacturer them in a variety of 15 different materials. Their uniqueness is that they are all vehicle-specific, so we have a library of more than 9,000 custom patterns. Each of those 15 different materials are cut to fit a specific car. For that reason, it would be impossible for us to have the mats made overseas because we currently turn these custom products around in four or five working days.

“Everything we ship out daily is all technically made from scratch. We can’t simply walk to the shelf and pull a salt-and-pepper shaker off and ship it out the same day. For us, everything is made to order, so as we take an order, it has to go into our production plant, where it is cut, sewn and embroidered and then packaged and shipped out the door.... We would never be able to accomplish that in a timely manner even if we [moved] to Mexico—and definitely not overseas.”

    The experiences of Edelbrock, Danchuk and Intro-Tech demonstrate how, despite popular conception, manufacturing is still very much alive and viable in the United States.
Finishing various castings at the Edelbrock foundry. Both hand-finishing and high-tech robotics are used to deliver machine-ready product.
     
Echoing Edelbrock and Brown, Van Dooren also touted the direct quality control that American manufacturers exercise over their products, noting that language and time differences, intellectual property protection and the need to staff complete overseas satellite offices to supervise operations often mitigate any potential savings. In the United States, inventory control, computerization and highly efficient manufacturing practices help Intro-Tech contain costs.

“With our machines, we have very minimal waste,” Van Dooren said. “We’re getting an optimum amount of yardage and yield out of our raw materials.”

Van Dooren also explained that American workers are often better trained in the many new high technologies that continue to revolutionize U.S. factories. In turn, despite the current economic pressures on stateside manufacturing, Intro-Tech is able to offer its nearly 40 skilled employees solid wages and benefits, including 100% health coverage.

The experiences of Edelbrock, Danchuk and Intro-Tech demonstrate how, despite popular conception, manufacturing is still very much alive and viable in the United States. It will be interesting to see how the current globalization trends impact the specialty-equipment industry over the next few years. Obviously, different manufacturers will make their decisions to produce their products onshore or offshore (or even to reshore) based on their own economic and marketing factors. But for business owners such as Edelbrock, there is no question that being “Made in the U.S.A.” remains a unique selling proposition that can carry a lot of clout in today’s highly competitive marketplace.

“Our core product is made in the U.S.A., and we’re very proud of that,” he stated emphatically. “We fly the flag every day on every one of our buildings. I do a lot of traveling around the country, [and] I’ve had a lot of people come up with tears in their eyes and thank us for being made in America.

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