2021 FAB 40: Metal fabricators keeping pace during a booming recovery

If you’ve worked in metal fabrication for a while, you’d likely be hard pressed to recall a busier time. You also would be hard pressed to find a time when leaders of some of the country’s largest custom and contract metal fabricators have been so positive. Still, it’s been quite a ride.

Consider Cupples J&J Co.’s experience. The Jackson, Tenn.-based fabricator, known for being on the bleeding edge of laser cutting, began 2020 in growth mode. Then came the pandemic. Cupples’ plants didn’t shut down, but its customers’ plants did. Still, Cupples didn’t just hunker down to ride out the storm. The fabricator took action.

Jeff Cupples, vice president of engineering and estimating, recalled the story: “We took some gambles and bought extra equipment, including a 15-kW laser, a 20-kW laser, and two 12-kW lasers. We did all that over a four-month period starting in June.”

Once the fabricator received its first 20-kW laser, James Cupples, owner, saw what it could do and ordered another 20-kW system. In total, the company now has 23 lasers, and nine of them are greater than 10 kW. And since revenue bottomed last May, the company has hired 90 people, bringing the total head count to about 355.

Cupples’ story has unique qualities—considering the company’s raw laser cutting power—but it has one element that many FAB 40 companies share: The fabricator took action when times were tough and is now reaping the benefits.

The picture isn’t all rosy. Everyone is feeling the pinch of high material prices, and some are experiencing outright shortages. In fact, many fabricators are saying that they could actually sell more if they could find more people and material.

The material supply and price roller coaster might be around for a while—many are predicting demand pressures to continue supporting high prices until later this year or perhaps into early next year—though eventually the ride will end. But what about the people shortages? Alas, that ride isn’t likely to end anytime soon.

Sure, automation reduces the need for some kinds of direct labor, but it doesn’t apply everywhere. The most advanced cutting and bending system can automate dozens of manual manufacturing steps. But unlike a cross-trained employee, an automated machine can’t drop what it’s doing and help free a constraint elsewhere in the plant. Automation has helped metal fabricators achieve truly eye-opening throughput, but they still need good people to manage it all.

Regardless, the industry has so many opportunities to offer the right person, as the stories that follow show. Metal fabrication may well be at an inflection point. Customer demand is pushing capex to new levels, as many are making extraordinarily large investments—not just a single machine here or there but entire factories full of new equipment. Vintage lasers and decades-old press brakes are starting to become a rare find at industry-leading operations.

Some of the industry’s largest contract fabricators might be on the cusp of truly scaling up. Although many consider material prices to be a bubble destined to pop, they don’t see customer demand in the same way. Sure, some spending might be temporary, but such bubbles aren’t pervasive. Many feel the industry might be about to experience a new era of customer demand. If that’s so, the revenue numbers reported in the 2021 FAB 40 could look extraordinarily different within just a few years.

Anchor Fabrication

Greg Frye has worked in manufacturing operations his entire career, and he embraces automation fully. As COO of Southlake, Texas-based Anchor Partners and CEO of the Anchor Fabrication division, he oversees a company with numerous welding robots, automated panel benders, and more.

“We automate where we can automate,” Frye said. “But there’s a misconception that if you just get automation right, then everything you do can be automated. That really isn’t the case.”

Frye emphasized the importance of what he called the “continuity of supply” and the importance of redundant capability and capacity. Should a panel bender not be available, are press brake operators available to form a product and send it downstream? “You need a backup,” he said.

Continuity of supply has certainly been a major goal, and often a challenge, for fabricators across the industry during the rebound. And as Frye explained, Anchor Fabrication, No. 3 on this year’s FAB 40, has its entire business organized to provide it.

Like many larger fabricators, Anchor has grown significantly through acquisition. Between 2015 and 2019 the organization acquired Louisiana-based BOH Environmental, which provides field pack-up systems used in logistics in the military and other sectors; Abby Manufacturing, a Memphis-area (Walnut, Miss.) company that focuses on medium- to small-scale fabrication; and Quality Industries, a large contract fabricator outside Nashville with a heavy focus on commercial transportation. The BOH acquisition—with the division’s focus on defense work—helped carry Anchor through 2020 without a drop in revenue.

In recent years the company went to market under previous company names: Anchor Fabrication was known for its large weldments and subassembly expertise, Abby was known for medium-gauge work for construction and ground support, and Quality Industries was known for its thin-gauge fabrication and transportation products (think sleeper cabs in commercial trucking).

“Of course, when we talked to our customer base,” Frye said, “almost unanimously they told us, ‘We don’t have time to figure that out; you decide where it fits best.’”

This year the organization is undergoing a rebranding. As of May 2021 the company will go to market with two distinct divisions under the Anchor Partners name. BOH will go to market as a division of Anchor, while the three fabrication locations in Texas, Mississippi, and Nashville will all be branded under the Anchor Fabrication Division as Anchor Fab FW, Anchor Fab MS, and Anchor Fab TN.

Each division will have its own sales team and P&L, though the sales organization companywide operates under the 80/20 rule: About 80% of its job remains maintaining and growing the order book for the local plant, while the remaining 20% involves working as a companywide sales and marketing team that coordinates with the vice president of business development. The goal is to uncover opportunities that could tap into Anchor’s entire process portfolio.

The idea is that individual parts of the organization have different yet complementary areas of expertise, but everything follows the same processes and best practices. All of Anchor’s metal fabrication locations have similar automation and other equipment, as well as complementary levels of expertise. If one area or plant lacks capacity or, especially in 2021, the availability of certain material, work can be shifted elsewhere.

And as Frye described, Anchor builds redundancy at the machine level too. If a process is automated, Anchor works to have the workforce available to perform the job manually if needed, should something happen to that automated machine.

Frye said he hopes the rebranding, the expanded sales strategy, and the company’s focus on the continuity of supply will carry Anchor through a busy 2021. “We’re seeing a strong return in demand across all of our customers,” he said. “Class 8 trucking returned strong. Rail is back. Material handling equipment is back, and construction is back. Defense, meanwhile, is a little down, but everything else is up. Our diversification has put us in a very good place.”

Momentum Manufacturing Group

The product mix at Georgetown, Mass.-based Momentum Manufacturing Group, one of the largest metal manufacturers in the Northeast—and No. 8 on this year’s FAB 40—exemplifies why metal fabrication overall fared relatively well over a tumultuous two years.

Sure, the fabricator’s plants in Vermont and New Hampshire, which have heavy concentrations in restaurant and exercise equipment, saw significant declines in March and April 2020. Lines devoted to stainless steel restaurant equipment were hit particularly hard.

“Meanwhile, our facilities in southern New England remained strong [in 2020] and had month after month of record sales,” said Steven Gore, COO.

Why? It again comes down to product mix. Momentum’s southern New England facilities did see some volume declines in fabricated components for airport security products, but other core lines—including components for medical equipment and warehouse automation—kept going strong. Throughout the pandemic, robotic warehouse systems kept products flowing to consumers, and metal components for such automation came from companies like Momentum Manufacturing.

“For us, everything started coming back strong in September,” Gore said, “and by the end of the fourth quarter, it turned out that revenue-wise, 2020 turned out to be a decent year.”

Leading Momentum’s growth in 2021 are again those robotic warehouse systems, along with fitness equipment. Such demand has spurred capex too. Besides sheet metal fabrication, Momentum offers extrusion, and capital expenditures have focused on both. A new, multimillion-dollar extrusion press will be installed this year, as will an automated tube laser.

Momentum is facing similar material pricing and supply chain challenges as everyone else, of course, and the labor shortage continues unabated. That said, 2020 did give Momentum a breather of sorts, especially in its Vermont and New Hampshire plants, which gave the fabricator the opportunity to re-examine part flow. “We’ve aligned the whole work flow and updated our workcells,” Gore said. “Now, we’re getting about 30% more done with fewer people.”

IMS Companies LLC

Des Plaines, Ill.-based IMS Companies’ diverse customer base prevented its revenue from sinking too deeply in 2020. While automotive took a dive thanks to plant shutdowns, IMS gained in businesses like semiconductor, medical, and aerospace. And like nearly every other fabricator, IMS’s business in 2021 is on a tear, on track to match if not surpass 2019 revenue. No. 5 on this year’s FAB 40, the company also will spend more money on capex in a single year than it ever has before. This includes big investments in robotic welding, as well as spending on automated punching and panel bending.

Like other large fabricators, IMS is looking to grow organically and through acquisition, considering opportunities with complementary product lines (such as server racking and enclosures) as well as companies that play in spaces complementary to its sheet metal fabrication, stamping, and gear-making capabilities.

That said, when asked about the skilled labor shortage, Steve Tokarz, president of IMS Companies, got right to the heart of the matter. “I hate to say it, but we’re all stealing from each other.”

Like nearly every fabricator in the FAB 40, IMS is searching constantly for talent, even as overall unemployment remains high. “You can have old equipment and great people and make great products,” Tokarz said. “And you can have new equipment and bad people, and not be able to make your orders. With the market so hot right now, and most in our industry not able to find people, we all need to work to keep the people we have. We do this by, one, paying a competitive wage and, two, having the right environment.”

To that end, the company continues its push toward cross-training. “If, say, someone is a star player in assembly and they want to grow, we can help,” Tokarz said. “We have a dedicated safety and training coordinator who finds people who can move up to different opportunities. When they feel like they’re a part of something, their job becomes meaningful. That can mean the world to them.”

Major Tool & Machine

Any metal manufacturing manager would have looked at Major Tool & Machine’s customer mix in 2020 with at least a hint of envy. About half of the Indianapolis-based metal fabricating and machining operation’s revenue comes from defense; 15% comes from the semiconductor business; 10% from aerospace; 10% from power generation; 10% from the nuclear industry, including the national labs; and 5% from oil and gas. Considering this, it’s no surprise that 2020, despite all its challenges, was for Major Tool a record year.

“Our market mix continues to evolve,” said David Weyreter, vice president of sales and marketing. “We saw an uptick in defense-related spending, and a lot of our customers received contracts that allowed them to place new orders in 2020.”

Likewise, the work continues to ramp up in 2021. Recent new work includes fabrications for the Navy’s new Columbia-class submarine and precision machining of rocket engine nozzles associated with NASA’s Artemis program, which aims to return U.S. astronauts to the moon and Mars. Major Tool’s shop load is a combination of custom manufacturing and repeat production. The production work has allowed the company to invest extensively in machine and welding automation technology. However, the company’s primary business is in custom manufacturing; employees often work with large, complex fabrications and assemblies. That environment, Weyreter explained, requires talented and experienced people who understand metal fabrication techniques, including code-level welding. Major Tool employs more than 50 welders, most of whom are certified to perform code-level work.

Without such talent, Major Tool wouldn’t be the company it is today, sitting at No. 7 on this year’s FAB 40. It’s why for nearly 20 years it has developed its own machinist and welder training programs. The programs, conducted on the company’s Indianapolis campus, use dedicated training labs, classrooms, and shop floor shadowing. Weyreter himself participated in the initial training program in 2005.

“We start with the basics of welding and fabricating which includes cutting, grinding and gouging, and the basics of print reading,” he said, adding that from there the three-month weld training program moves into process-specific information, incorporating AWS and ASME welder qualifications. At the end of the program students are paired with seasoned welders as part of Major Tool’s mentor/mentee program to continue learning and perfecting their skills.

The continuation of such training and development programs is a critical part of Major Tool’s value proposition, and the programs continue to support the company as it heads into 2022.

“We’re seeing [late 2021 and early 2022] as being more of the same,” Weyreter said. ”We continue to see a tremendous amount of opportunity for growth within the contract manufacturing environment.”

Steel Craft Corp. of Hartford

Hartford, Wis.-based Steel Craft Corp. of Hartford’s business dropped some 17% (year over year) in Q2 2020. Then came what turned out to be an unprecedented rebound.

“Since the second half [of 2020] we started to see the rebound, and it hasn’t’ slowed down even now. I can’t hire enough people to keep up with demand,” said Tom Verbos, president/CEO. “It’s unlike anything I’ve seen in my 33 years in the industry.”

Like others, the company has turned to automation, including automated welding cells. But Steel Craft—No. 9 on this year’s FAB 40—also has turned to lean manufacturing. In fact, the investment firm that owns Steel Craft has several executives who previously worked at Toyota and are well-versed in the Toyota Production System. Steel Craft holds regular kaizen events and continues to push lean thinking throughout the organization.

The improvement culture starts with the first day employees are hired. New hires are shown not just what their jobs are but what their jobs could be in the future.

“Several years ago we created a career path document that employees receive right at the time of hire,” Verbos said. “We show what paths employees can take and what opportunities they can grow into.”

Career paths at Steel Craft aren’t always linear either. Assemblers can become welders. Welders can become brake or laser operators. And cross-training is continual, which helps make the operation more flexible.

“For example, many welders of ours know how to run brake presses. And our brake operators know how to assist in the laser, NC punch, and part-pull areas,” Verbos said. He added that such flexibility was critical in early 2021, when material availability issues forced workers to move to other areas of the plant to free constraints.

An automated brake or welding cell can be incredibly productive, but only if it has material. Cross-trained people, on the other hand, can move to where the constraint is and keep products on the move. Considering the record growth Steel Craft and others are experiencing, keeping work on the move has become more important than ever.

Mayville Engineering Co. (MEC)

“When you compare where we are now to where we were a year ago, the difference is amazing.”

So said Bob Kamphuis, chairman, president, and CEO of Mayville, Wis.-based Mayville Engineering Co. (MEC), a contract fabricator that ended 2019 with nearly $520 million in annual revenue. No. 1 again in this year’s FAB 40, the company reported 2020 revenue of $357 million, a figure that reflects MEC’s dramatic downturn in Q2 2020. But that figure also reflects the initial portion of MEC’s dramatic rebound late in the year. Previously furloughed employees were brought back, and robust hiring continues to this day. During a quarterly earnings call in early May, the company announced that it projects 2021 revenue could reach $470 million.

It’s been quite a ride, and MEC’s ascent likely isn’t finished. In April the company announced a strategic agreement with a significant fitness company. The customer name wasn’t disclosed, but according to company sources, the products include a fair number of stampings as well as tubular fabrication—processes MEC has experience with, considering its presence in the power sports market. To support this customer, MEC is planning to open a new 250,000-sq.-ft. plant, likely in the greater Detroit area, which will employ up to 390 people and commence production in early 2022. The plant will be highly automated—capex for the launch could be as much as $45 million—and much of that automation will be dedicated to the fitness customer’s products.

Automation technology, combined with a workforce dedicated to make the most of that technology, helped MEC navigate through unprecedented times. Going into 2019 the company invested millions in capex, which helped MEC adapt to rapidly changing customer demand. For instance, while plant closures at commercial trucking customers depressed order volumes in some areas, MEC still needed to meet rapidly increasing demand from sectors like power sports.

“The power sports area wasn’t considered essential,” Kamphuis said, “so they were shut down, and they were burning through inventory while consumers were knocking on the door for more products.” This meant OEMs needed to meet current demand and replenish available stock when they reopened.

Still, thanks to the 2019 capex investments, “when we ramped up in late 2020, we had that automation in place,” said Ryan Raber, executive vice president, strategy, sales, and marketing. “Right away, we were able to take advantage of the throughput that equipment gave us.”

Meanwhile, quotation activity remained high through the pandemic, and the latest fitness equipment contract (among other contract wins) meant MEC could pull the trigger on even more equipment investment in 2020.

And although the new capital equipment and plant itself are being created as a focused factory, it’s all being designed with flexibility and agility in mind, should market conditions change. As Kamphuis put it, “Even though these will be [customer] dedicated processes, they will be equally redeployable as needed.”

Like every other fabricator, MEC has been navigating supply chain challenges. “We’ve seen material cost increases and availability challenges,” Kamphuis said, adding that when it comes to purchased components, “we have very little that we source from overseas, so we’ve been somewhat insulated from that challenge. When it comes to flat steel and tube availability, we addressed that problem quickly, and we’ve done quite well in that area. On the pricing side, of course, everybody’s dealing with the same thing. We’re fortunate to have pass-through pricing on most of our material costs. There’s always a bit of a catch-up as [material] prices change … but in the end it washes out.”

Most of today’s progressive fabricators aren’t “wait and see” operations that simply hunker down during tough times. MEC’s planning for rapid expansion began during a time of unprecedented uncertainty in the broader economy. But MEC took the long view, assessed the risk, and continued to invest. If MEC had decided to just wait and see, the company would be in a much different place. If anything, MEC’s story proves that the risk of investing—in people, buildings, and machines—is far less than the risk of doing nothing.

Ironform Corp.

What does 2021 look like for Chicago-based Ironform? “Stronger, stronger, and stronger,” said Marty Kozarec, vice president of sales.

Terry Wogan, president /CEO, chimed in: “All of our markets are exploding. 2021 will be a year of lots of launches and lots of capex.” This includes an additional half dozen welding robots and a similar number of high-powered lasers. Right off the heels of the acquisition of Hayward, Calif.-based SF Tube, Ironform continues its hunt for good acquisition opportunities.

Being a heavy player in commercial trucking and similar businesses, Ironform suffered during the 2020 shutdown like other fabricators. The company let go 50% of its workforce temporarily, but “we maintained a strong balance sheet, we maintained everyone’s health insurance throughout the layoff, and we maintained our 401(k) contributions,” Wogan said. “After 60 days passed, the country started building trucks again.”

Similar to other fabricators, Ironform’s quoting activity in 2020 skyrocketed, and since last summer the company has won a record amount of new business. “We’ve expanded into aviation, defense, and construction,” Kozarec said, “and we grew tremendously throughout the pandemic. Products for e-commerce fulfillment centers and fitness products also factored into our growth.”

“So now,” Wogan said, “we’re double-lucky. We’ve been a [commercial] trucking supplier since our inception, but during the 2021 recovery, our revenue concentration [in trucking] is still lower because of all the new business.”

Like other fabricators, Ironform has had to navigate a tumultuous materials environment, though because it works with large transportation players, it’s been able to avoid significant material shortages. Also like other fabricators, Ironform has had to navigate a challenging labor market.

According to Wogan, though, the company’s standardized processes based on lean principles, combined with aggressive capex, have helped Ironform ramp up throughput and get the most out of the labor it has. The key to the fabricator’s productivity, Wogan and Kozarec said, has been the increased throughput from new machinery.

“We are really lean operators,” Wogan said. “We’re obsessed with customer build rates.” He added that the Q1 workload was up 60% over the previous quarter, and the company took that huge demand increase in stride.

O’Neal Manufacturing Services

“Obviously, 2020 was a challenging year for us, but we came out the other side strong. We saw a decline in most sectors, but our shining star was our work in material handling and conveyors.”

So said Michael Richey, director of sales and marketing at Vestavia Hills, Ala.-based O’Neal Manufacturing Services (OMS), who described 2020 as a distinct U-shaped recovery.

No. 6 on this year’s FAB 40, OMS really began to see the rebound in January and February 2021. And now, just like a lot of fabricators, “we’re really firing on all cylinders.”

The company has increased its investment in automation, including robotic welding and bending, and it’s preparing for a year of significant growth in its major markets, including infrastructure-related sectors like construction, construction equipment, and rail.

“An increase in infrastructure spending will really benefit us,” Richey said, adding that OMS now offers special profiles designed to save significant manufacturing time. Instead of a conventional hot-rolled beam, the material comes in custom shapes designed to minimize required machining and fabrication and offer design alternatives.

The idea behind these special beams, imported from Germany, is to shorten overall fabrication and manufacturing time—top of mind for many industry leaders as customers increase demands in the face of a supply chain under stress.

Regarding steel supply, “we’re faring pretty well under the circumstances,” Richey said. “Our supply chain team is busy, and we have directed-buy programs from OEMs.”

As for the rest of 2021 and into 2022, “we’ll see our normal slowdown at the end of the year,” Richey said, “but overall we have a very positive outlook over the next 18 months.”

Robinson Inc.

During the past year Robinson Inc. installed an indexing booth-style powder coat system. It’s not a traditional automated line but instead offers the company the capability to coat extremely large workpieces, up to 30 ft. long, with doors to the system 14 ft. square. Move upstream and you’ll see press brakes with long beds and high-powered fiber lasers that accept large sheets and plates. The De Pere, Wis.-based metal fabricator, known for its highly involved project-based fabrication as well as its production capability, continues to think big.

“At times, we were outsourcing a fair amount of cutting and forming that leads to our fabrication and assembly projects,” said Sam Thomas, general manager. “The majority of our direct labor hours are in fabrication and assembly, and we really need to be able to control that front-end of our process to meet customer expectations.”

This thinking was behind the company’s $4.5 million investment in capital equipment in 2020. For Robinson, 2020 had its challenges, but the fabricator didn’t experience dramatic fluctuations in revenue either. Projects were delayed, “but we rebounded quickly,” Thomas said. Since then, Robinson—No. 10 on this year’s FAB 40—has strategized how to handle growing customer demand.

Increasing its cutting and forming capacity has been part of that strategy. As Thomas explained, Robinson has no plans to bring all of its cutting and bending in-house. Its new in-house capacity simply gives the company more options and more control over the front end of the process.

The new machines give Robinson more lights-out cutting capabilities and greater throughput, of course, but they also give the fabricator greater design options. The large cutting and bending beds—including robotic systems that manipulate extremely large workpieces—mean the company’s products need not be made out of so many pieces. Few pieces mean shorter fabrication and assembly time, which lowers cost and increases throughput.

The company also has beefed up its engineering capabilities, taking on more work that customers previously might have outsourced to a dedicated engineering group. This, combined with recent capex, all aims to create a “single point of accountability,” Thomas said. “Our customers don’t need to cut a PO to a machine shop, send it to Robinson for fabrication, then send it somewhere else for coating. It’s just a single PO to us, and it’s a single audit to us. It’s about giving our customer a single point of accountability for a project.”

BTD Manufacturing Inc.

By Q3 2020, Detroit Lakes, Minn.-based BTD Manufacturing could see the post-pandemic boom coming. Being such a major player in the recreational market, BTD, No. 2 on this year’s FAB 40, saw volumes in that sector recover especially quickly.

“Because we had a volume uptick at a very early stage in that market, we began making capital purchases early,” said Jared Lotzer, vice president of sales, engineering, and quality.

During Q4 2020 and Q1 2021, the company upgraded its 4-kW fiber laser cutting capability to several 10-kW fiber laser machines. “With those machines, we’re able to drive so much more volume within the same footprint,” Lotzer said, adding that the upgrade has boosted throughput, depending on the material thickness and part geometries being cut, between two and three times over the lower-power fiber lasers.

The company invested in more laser tube cutting and added a number of robotic welders and robotic press brakes. On top of this, BTD has done most of its own integration work. “We’ve really expanded our automation engineering team, so we can grow and get ahead of the competition,” Lotzer said.

Automation has become especially critical as customers ramp up demand in the face of both labor shortages and material availability constraints. The company has been able to maintain its raw material supply to meet demand. “We’re not stranded without material,” Lotzer said. “We’re dealing with large OEMs who give us quarterly and 12-month forecasts. We’ve been very fortunate.”

That said, the timing of raw material delivery has altered BTD’s operational strategies. “We’re focusing on our flexibility,” Lotzer said, “and we’re getting especially good at setting up and tearing down.” Whereas before the company might have run larger lot sizes to build up finished goods inventory for a certain product, it now might run a smaller lot size and then change over. Lotzer said he expects capex investment to remain robust in the foreseeable future, combined with aggressive hiring. The aim is to boost throughput to meet unprecedented demand as OEMs replenish inventory—an aftereffect of plant shutdowns in Q2 2020.

Like many large fabricators, BTD in early 2020 experienced a softening of demand as major customers drew down their inventory. Then in March and April, many customers shut down plants entirely. OEM inventories, which were already dropping, fell dramatically in a matter of weeks. “The period between May and August [of 2020] was quite the whirlwind,” Lotzer said.

Less than a year later, demand in certain BTD markets are set to eclipse 2019 levels. “We’re seeing volume increases over 2019 in the majority of markets we serve,” Lotzer said, “the top three being recreational vehicle, lawn and garden, and [agricultural equipment].” Long term, Lotzer sees this demand continuing, adding that “there’s an inventory channel to build. As long as commodity prices don’t derail demand because of inflationary price pressures, I think we’re going to see a strong 2022.”