Buy out, bail out, turnaround

Two employees step in to save vacuum forming division caught in corporate restructuring

After a few years of turmoil and ownership changes, the vacuum forming business that began as Plastics 80 twenty two years ago is solidly on its feet again. Recast as Custom Vacform Components Inc. (Milton, ON), the growing enterprise is in the capable hands of owners who know the vacuum forming business inside and out, and who care deeply about this particular operation.

The new owners -- Roy Ford, Mark Oribine and two private investors -- orchestrated a buy out of the business in November 2000. At that time, the vacuum forming operation was a subsidiary of ACS Manufacturing, a diverse corporation with a core business of manufacturing and assembly of exhaust systems. ACS also had interests in injection molding and extrusion. Following an aggressive acquisition phase, ACS was divesting its non-core assets.

So Oribine, who handles sales, and Ford, plant manager turned president, found two investors and bought the assets of the vacuum forming division, took over the lease on the 40,000 sq. ft. building, and took over the headaches.

"Even though the same management, customers and employees were in place, the banks still wouldn't get involved with us," says Oribine.

"We could have walked away and started a new business, but there are people in this plant who've been here since the beginning with Plastics 80, and that wouldn't have been fair to them or our customers," he adds.

In Custom Vacform's first year of independence, "four or five major accounts moved their operations back to the U.S. or cut back product lines, so we lost about 50 percent of the business of our major accounts," recalls Ford. "The steady Eddies that you can usually lean on weren't there last year, but we made it up with new business."

The company's main markets are heavy equipment, mass transit and health care/mobility products for physically challenged people.

Long hours and dirty hands

Oribine and Ford take hands-on management literally, pitching in on the shop floor whenever necessary. Last year they purchased a used Shuman vacuum former for large sheet (6 ft. x 11 ft.). As is their usual practice, it was stripped and rebuilt for their purposes. Oribine sanded and painted the machine himself, and both owners, along with some of the key employees, spent many hours working on it as the project progressed.

"We wanted a Shuman because of the frame. It's very solid and strong. Everything else we've changed, " says Oribine. The used machine purchased for US$8000 now has $140,000 worth of new components.

"We put in ceramic ovens, and completely rewired the machine for greater control of each function in conjunction with the computer." The machine was strengthened to handle tooling that descends from the top, instead of the more traditional tooling-on-the-bottom approach. A MAAC clamping system was added, as it is to all Custom Vacform's machines.

All the machines in the plant also use a custom operating system. It has a combination of touch-screen controls and manual over-ride buttons. The controls allow operators to customize each function during the automatic cycle. For example, an operator can program the cooling fans and fresh air system to shut down when the sheet exits the oven to prevent cooling the sheet and disturbing the drape until the part is formed. The other advantage to having the same control for all machines is that it makes it easier to cross-train operators, and reprogramming is easy.

Cross-training operators on different machines is not typical in a vacuum forming plant, says Oribine, "but we generally march to the beat of a different drummer." According to him, a typical vacuum forming company invests in high-end equipment, especially for trimming, rather than investing in people. Often, parts will be stacked at the forming press, and then moved to a trimmer for batch processing.

At Custom Vacform, the plant is arranged in what could be described as manufacturing cells, with one operator per machine. That operator loads and unloads the machine, and usually does quality checks and trimming by hand at press-side during the cycle.

"In the past vacuum forming operations worked to large tolerances with limited information and documentation. To meet customers' demands for higher quality our company is ISO 9002 registered," says Oribine.

Custom Vacform has also invested heavily in CAD/CAM software to be compatible with its customers and tool makers. "Engineers and program managers involve us early in the part design process, because they know it is crucial to producing good parts. Tooling design is a combined effort between Custom Vacform and the tool maker. Years of experience, the type of material and shrink allowances dictate the final tool layout," explains Oribine.

"We have to rely on our experience," adds Ford. "There's still no one we can call for technical advice."

Copyright © 2002 Business Information Group.