Bearing Down

The maker of hydrodynamic bearings had grown steadily since it was founded in 1968, from 42 employees to 170 in 1998. The company primarily served industrial and manufacturing customers around the country, and its bearings were regularly incorporated into compressors, pumps, motors and generators.

As its existing markets became more competitive, resulting in slower growth, the company looked to the power generation and oil and gas markets for future opportunities.

“If I look at power generation and the growth of developing countries – that growth is quite rapid at the moment,” said Robert Nowakowski, the company’s president.

The shift has paid off in spades for Orion.

“It’s grown exceedingly fast over the last several years,” Nowakowski said. “We’re struggling to meet that demand. That’s why we’ve expanded and added so much equipment.”

The company has grown today to have more than 260 employees in two facilities. The firm regularly ships its products to customers across the globe in industries as diverse as power generation, the oil and gas industry, large manufacturing operations and even naval vessels.

Orion has averaged 15- to 20-percent revenue growth per year for the past five years, and the company projects that trend to continue through 2012.

Bearing builder

Orion designs and builds hydrodynamic bearings. Unlike traditional ball bearings, where metal components are in constant contact with one another, hydrodynamic bearings utilize a layer of liquid – usually an oil or another type of lubricant – allowing high-speed, high-load components to spin with virtually no resistance.

“Our bearings, theoretically, last forever,” said Nowakowski. “The parts are separated by a film of lubrication (while they’re moving). The only time there is metal-on-metal contact is when the machine is starting or stopped.”

Hydrodynamic bearings are able to adjust to varying loads and speeds, which allows them to be used in applications that change speeds and pressure, such as large propellers on ocean-going ships, power generation equipment and oil and gas exploration and production.

“Hydrodynamic bearings can take challenging conditions – they can operate fast or slow, with a high or light load,” Nowakowski said.

Many of the company’s bearings are in use in coal and natural gas power plants throughout United States and around the world. And soon they will be found in nuclear power plants as well, Nowakowski said. The company was recently certified to produce hydrodynamic bearings for nuclear power plants and has received several orders from nuclear power customers around the globe.

“One of the large orders we got recently is domestic, for a retrofit and expansion of a power system,” he said. “We are not the original manufacturer, but we do have the replacement and redesign order.”

Orion also entered the hydroelectric power generation field early this year.

The company’s work in the oil and gas industries is even more diverse, ranging from exploration to pipelines to refinement.

“We serve all of it,” Nowakowski said. “Anything that has turbines, pumps, gear drives, compressors or electric motors can have hydrodynamic bearings.”

Although Orion has seen significant growth in the power generation and oil and gas fields, it also has a diverse base of customers in the industrial fields, requiring the company to make a wide range of bearing styles and sizes. Orion’s bearings also are found in many applications that use high-speed rotating machinery, such as compressors, gear drives and electric motors.

“We can make bearings from five-eighths of an inch up to 60-inch plus,” Nowakowski said. “We can make one that could fit in your hand or one that we could all jump inside of.”

The company also has produced custom bearings and systems used by the U.S. Navy on aircraft carriers and submarines, and by the U.S. Coast Guard on cutter ships.

New market payoff

In 2007, Orion expanded its Grafton headquarters by 15,000 square feet, taking it to about 90,000 square feet total. Since then, the company has added 12 new CNC machines, lathes and precision inspection machines.

“Right now, we’re looking at and discussing some investment in two additional pieces (of equipment) and doing two more in the future,” Nowakowski said. “We’re looking at our requirements and product mix and addressing additional equipment on an ongoing business.”

Orion has enough space for another 10 CNC or milling machines at its Grafton facility, Nowakowski said. It also has significant expansion room at its 50,000-square-foot facility in Columbus, Neb.

“Nebraska has lots of room, but it’s hard to find people,” said Ridge Braunschweig, the company’s executive vice president and chief financial officer.

Orion has 260 employees total now, with 170 in Grafton and 90 in Nebraska. The company recently hired six new machinists and hopes to add another 15 before the end of the year at the Grafton facility, Nowakoski said.

The company’s reputation for growth and high quality has helped it attract experienced machinists. Economic difficulties affecting other manufacturing companies also have helped, but Orion, like most manufacturers, struggles at times to find qualified workers.

“Right now, we’ve been successful,” Nowakowski said. “But we’ve got a long way to go. We have employees from as far away as Sheboygan, West Bend and Waukesha.”

Keeping pace

Even with its new machinery and growing employment, Orion expects to have difficulty meeting the demand for its products in 2009.

“We are now working on our forecast (for next year), and we can’t possibly add enough people and equipment to meet it,” Nowakowski said.

Orion may seek an acquisition to help meet the continuing demand for its products, but it is not pursuing one now, he said.

While some industries are cyclical, demand for Orion’s hydrodynamic bearings has continued to grow over the last 10 years.

“We’re somewhat recession-proof,” Nowakowski said. “When our customers are not building new generators, motors, turbines or power generating equipment, they’re repairing their current ones.”

As Orion has focused more on the power generation and oil and gas markets over the last 10 years, its business has become more global.

“If I look back (10 years ago), about 85 percent of what was made here was used in the U.S. and the rest was going overseas,” he said. “Today, it’s the opposite of that.”

Roughly 30 percent of the company’s orders are shipped directly overseas today. However, an even larger portion is eventually shipped overseas after the components have been sent to original equipment manufacturers (OEMs) that use Orion’s bearings in their machines, systems or components.

“Our customers don’t really tell us where it’s going,” Nowakowski said. “Some of it we sell directly to India or China, but we also have customers that sell to them too.”

Despite its increasingly global list of clients, Orion credits much of its success to its long-standing relationships with employees, customers and suppliers.

“We have some long-term relationship with customers that are 40 years,” Nowakowski said. “Loyalty and value no longer exist in business today, but that really is us. We’ve been identified by players in the industry for establishing long-term relationships with our engineering and sales function.”

One way that Orion has cultivated long-term relationships with customers is by only employing degreed engineers in its sales department. The company’s technical sales people, with their engineering backgrounds, are able to talk not just with customers’ purchasing departments, but also their engineering, design and manufacturing areas.

Nowakowski was the company’s first engineer to work in the sales department, and he said requiring salespeople to be engineers created a new industry standard.

“In the last 10 to 15 years, we’ve had our competitors recognize it because we’ve been so successful,” he said. “They just had salespeople talking to customers, but we had technical salespeople.”