Many American corporations are compiling record profits and generating record returns for their investors.
Yet, those healthy returns are, in most cases, not translating into business expansions or new jobs. Many companies are hoarding their cash, saying they are leery about the uncertain future and the threat of a double-dip recession.
By contrast, some companies are zagging while everyone else seems to be zigging. They are boldly going forth, daring to expand at a time when their peers are sitting on their hands.
Instead of battening down the hatches and waiting out the economic storm, Bradley Corp.’s leaders have decided to forge ahead.
Construction is underway on the company’s new 190,000-square-foot facility in Germantown, with enough space to add another 300,000 square feet in the future, said Bradley Corp. president Bryan Mullett.
Bradley Corp., a Menomonee Falls-based manufacturer of commercial plumbing fixtures and washroom accessories, is investing about $8 million in the expansion.
“As a company, one of our foundations is we don’t look to make changes on a quarterly basis, we look more towards a long-term vision,” Mullett said. “There’s no better time than now, than today, to build a new building.”
In an example of Bradley’s forward-looking investment plan, the company purchased the 32-acre property for its new lean manufacturing plant in 1997, knowing it would allow for flexible use in future expansions.
The facility will replace 119,000 square feet of leased space at 7020 W. Parkland Court in Milwaukee.
“We’ve been leasing the current building, and we’ve paid for that building twice,” Mullett said.
Bradley has about 600 employees nationwide. The company has two manufacturing facilities in Ohio and two other sales offices in the United States.
The company started by specializing in commercial wash fountains, which provided a communal hand-washing station in industrial settings. Its products now include washroom partitions, accessories, emergency fixtures and plastic lockers, which are distributed to the commercial, industrial, health care, recreation, education and corrections markets.
While it may seem counterintuitive to expand in uncertain times, Bradley’s strong financial picture has helped Mullett feel comfortable with the investment.
“I think with our solid financial foundation, we can take advantage of these opportunities,” he said. “We can’t dictate what other companies do, but we took advantage of expanding in a down economy.”
Mullett wanted to take advantage of the low construction costs to build the new Germantown plant to customized specifications, he said.
The building will be laid out in a lean operation format, with efficiencies realized through a custom floor plan.
“We’ll have opportunities to grow and expand and diversify our product offering,” Mullett said.
While he’s not sure yet if new employees will be hired for the Germantown facility, Mullett hopes about 100 workers can shift operations there starting in early 2012.
Looking ahead, Bradley is moving into new foreign markets and distribution channels in an effort to follow growth patterns in developing countries, he said. In addition, the company is releasing more green products in its new 40-product Diplomat line, that can be used in sustainable buildings.
The key to Bradley’s success, Mullett said, is a family focus on planning far ahead for growth. There are always five-year, three-year and current year plans in place.
“I’m the fifth generation here in the business, so I think that’s been distilled into our family,” he said. “It allows us to plan and be more effective in our business.”
Several other southeastern Wisconsin companies are joining Bradley Corp. by boldly expanding in a murky economy.
KLH Industries
KLH Industries is expanding its square footage, and it’s doing so out of necessity, said company president and CEO Ken Heins.
The 31-employee precision machine shop, located at N117 W18607 Fulton Drive in Germantown, has been out of space and looking to expand since 2008, he said.
In fact, Heins put in an offer on a new building in 2008, right before the economic downturn started, and it was rejected. The rejection was a blessing in disguise, he said.
“Within 48 hours after my offer was declined, the markets crashed,” Heins said. “Immediately we saw the economy (declining), and our customers cancelling orders, so we’ve just been moving sideways for the last three years.”
Now, Heins has purchased a 15,000-square-foot building 120 yards from its existing 18,000-square-foot facility on Fulton Drive, for about $1.5 million.
CNC jobs and half of the company’s dimensional inspection work will shift to the new building soon.
Now seemed as good a time as ever to go forward with expansion plans, since it appears the real estate market had bottomed out, and the company didn’t want to get stuck in “survival mode,” Heins said.
“We’ve been through a number of different downturns in the economy, and I didn’t think real estate was going to get any lower,” Heins said. “If you have any optimism at all that someday things are going to get better, this just seemed like the right time to do something.”
Founded in 1987, KLH makes custom-fabricated products for the food processing, medical, automotive, electronics, aerospace and defense industries.
The company expanded its reach to keep afloat during the Great Recession and has only recently entered the aerospace market. The firm makes flight critical components for airplane manufacturers, which means an increased focus on quality, Heins said.
He hopes to add another one or two employees with the increased space, but wants to first get established in the building.
It’s a risk to almost double the size of the company’s physical space, but it’s one Heins believes he must take to move forward.
“I don’t know what the future’s going to hold, but I’m counting on the fact that things can’t get much worse,” Heins said. “I’m willing to gamble, but I want to gamble on myself.”
Steele Solutions
Steele Solutions in Franklin also is doubling its facility and adding 30 new employees, as demand has picked up for its products.
Steele started construction this month to add 36,000 square feet to its existing building of the same size, and president Mike Thelen hopes to complete the expansion by February.
The company, which manufactures steel structures like mezzanines, equipment platforms and catwalks, saw steady growth even during the recession, Thelen said. That could be due to customers using vertical space and Steele products to make business operations more efficient and keep costs low in the economic downturn.
“In this environment, even with high unemployment, companies are looking for ways of becoming more efficient,” he said. “We’re seeing that material handling equipment sales, which is the core of our market, has been pretty good and pretty steady throughout the last year.”
Steele has two other manufacturing facilities, one in Ohio and one in Pennsylvania, and also has sales offices in Cleveland and Philadelphia.
Since it has a long lead cycle for projects and demand is picking up, Thelen hopes expanding Steele now will help convince large companies sitting on cash to do business with the company when they’re ready to spend again.
“With this addition, were going to help ourselves become more efficient and more productive with our existing facility,” he said.
Baptista’s Bakery
Baptista’s Bakery in Franklin is expanding its existing facility by 120,000 square feet to meet projected customer demand. The move will allow Baptista’s to more than double its existing 160-employee workforce, adding 200 jobs.
The company, located at 4625 W. Oakwood Park Drive in Franklin, is hiring 75 new employees as soon as possible. The remaining 125 jobs will be added once the addition is completed.
Founded by the Gardetto family in 1999 after Gardetto’s Bakery was purchased by General Mills, Baptista’s makes a variety of potato, corn and wheat snack products.
The company is expanding to make space for 4-5 new product lines, which will bring the total to 11 or 12 lines, said CEO Nan Gardetto.
“We are out of capacity in our current building and need to add additional production capacity to be able to fulfill our customers’ current and forecasted needs,” she said.
The City of Franklin approved Baptista’s expansion in late September, and the company is moving forward with a groundbreaking this month, Gardetto said. She hopes to have the addition up and running by June 2012.
J.F. Ahern Co.
Meanwhile, Fond du Lac-based J.F. Ahern Co. will join a host of other businesses moving into the Menomonee Valley Industrial Center in Milwaukee.
The company plans to break ground next spring on a new 67,000-square-foot building, which is about double the size of its leased Menomonee Falls facility. The new plant will replace the existing space and allow the company’s fire extinguisher recharge business to be based in Milwaukee.
The new building, on a five-acre parcel at West Canal and West Roundhouse Streets, and new equipment will constitute a $7.5 million investment, said Bob Fischer, executive vice president.
“Despite the bad economy, we’re kind of busting at the seams for space,” Fischer said.
Ahern, a mechanical and fire protection contractor, has 65 office employees and 125 construction and service technicians. It has five other Milwaukee locations and seven offices in other states.
J.F. Ahern has the capability to provide HVAC, plumbing, fire protection and equipment maintenance for a business, which makes it an attractive contractor to businesses looking to reduce expenses and cut back on maintenance staff, Fischer said.
“Our ability to bundle multiple services for our customers (is driving growth),” he said. “We’re seeing a tendency that owners want single stop shopping and that’s helping us to effectively sell our services.”
