Engineering a corporate turnaround

However, Frantz quickly realized it was the wrong time to start a second company, because his lock manufacturing competition was outsourcing production to nations with cheaper labor costs, enabling them to sell their products for $5 less than his American-made product.

Then came the 2001 recession.

“It was impossible for us to continue with where we were and be successful at it,” recalled Cathy Kraatz, Frantz’s daughter and marketing manager for DuraSafe.

Frantz decided to partner with a manufacturer in China to save his company, and at the same time he attempted to design and develop different types of locks that his larger competitors were not producing.

“When we found that there was so much competition with the locks we were manufacturing at the time, we went to the drawing board and came up with some new innovative products that nobody had,” Kraatz said.

The launch of three new products within the last year has not only enabled DuraSafe to be noticed in the market, but it enabled the company to win a national award for innovation. Most importantly, the new locks have helped the company increase its sales by 200 percent.

Frantz’s strategy of selective outsourcing, marketing and new product innovation is paying off with a remarkable corporate turnaround for Durasafe.

“These three new products have completely carried the company to the next level, and with the attention we are getting from all over the world with our patented products, the company has completely turned around,” Kraatz said.

DuraSafe first bought the distribution rights and launched a product developed in Australia called the Couple-Mate last fall. The Couple-Mate is a winged guide that enables boaters to align their trailer hitch with their hitch ball in half the time.

“People have a hard time seeing where they are going when backing up their trailer, so this helps them guide the coupler directly over the ball. It has been a really good seller for us,” Kraatz said.

The Couple-Mate, although not DuraSafe’s own invention, fits well within the line of problem-solving products DuraSafe wants to be known for, Kraatz said.

In March and June, DuraSafe introduced its two new patented products, a line of Marine Electronics Locks to secure fish-finders, depth-finders and global positioning systems (GPS) on the deck of a boat, and the T-Rex Transom Saver with Prop Lock, a combination transom saver and propeller lock.

Frantz and Kraatz have even changed their mindset about locks, from planning ways to beat the competition at their own game to planning their next consumer-friendly invention.

“We create products that we know customers have a need for,” Kraatz said. “For instance, their GPS or fish-finders are getting stolen, or their propellers are getting stolen. We like to come up with problem-solvers, and people are taking notice. When they invest in an expensive propeller, they want to ensure that it is not stolen from them.”

The T-Rex, a combination transom saver and propeller lock, was actually suggested to DuraSafe by a dealer. According to Kraatz, the dealer mentioned that propellers can cost up to $800 and are stolen frequently.

Instead of adding an extra lock to a trailer or boat, DuraSafe came up with a two-in-one solution that is easy to use and costs between $59 and $69.

Kraatz said most consumers who tow their boats already have a transom saver to protect the outboard motor and to stabilize the transom while the trailer is towed. By adding a propeller lock to the typical transom saver, DuraSafe is providing consumers with insurance against theft of both the propeller and the transom.

DuraSafe’s most popular product is the Marine Electronics Lock. The company has sold 15,000 electronics locks since March. They retail at $14.99 to $16.99 per lock.

“The Marine Electronics Lock is a worldwide patent pending product that replaces one factory knob on either side of an electronics unit such as fish-finders, GPS units or very high frequency (VHF) radios,” Kraatz said. “You screw it in like you would the factory knob, turn the key, and it spins freely in the locked position.”

“Every time the fish-finder customers go to a marina, they have to take all of their equipment off of the boat deck, tuck it down in the galley, lock it up.  Sooner or later, the plug is going to wear out from constantly taking it in and out,” Frantz said. “That is why the electronics lock is so popular, because it is what consumers are looking for.”

DuraSafe is in the final stages of development for electronics locks for VHF radios, which Frantz suspects will become a top seller because of radio requirements for boaters.

With all of DuraSafe’s recent success, Frantz and Kraatz are now able to plan for the future growth of the company and are finally making a profit.

“Business is a lot different for us now than in the past because everyone wants our products,” Kraatz said. “In the past, we were competing with existing products, trying to get the business while offering nothing new. The distributors already had similar products, so why should they change? Now, these new products are getting our foot in the door.”

Frantz and Kraatz saw the marine industry’s reaction to their products firsthand when they attended their first trade show. The Marine Aftermarket Accessories Trade Show (MAATS), an annual event presented by the National Marine Manufacturers Association (NMMA), was held in Las Vegas in July.

Frantz said he did not walk out of any meeting at the show without a buyer purchasing something. Many took at least three products made by DuraSafe, he said.

The NMMA awarded DuraSafe with the 2004 Product Innovation Award for the Couple-Mate self-aligning trailer hitch guide. The Marine Electronics Locks line has been featured in seven trade magazines.

“We learned a lot from the MAATS show and have had such great feedback from that show that we will definitely be there next year,” Kraatz said. “We will not concentrate on the marine industry, but it has consumed so much of our time that it is the direction we are currently going. There is so much potential outside the U.S. that we have no idea how much the business can grow.”

Frantz said the fact that to compete in the lock industry means that he must outsource his production still bothers him, but it is a necessary evil to enable him to stay in business.

Although they would rather sell American-made products, Frantz and Kraatz said because the competition is outsourcing to save money on production, the price difference would deter consumers from choosing DuraSafe over a competitor’s brands.

“There was somewhat of a price difference for products being made in the U.S. vs. outsourcing and importing them,” Kraatz said. “Basically, when we got to market, we found that if we couldn’t meet or beat the price, there was really no interest, regardless if it was made in the U.S.”

If the outsourcing trend is reversed in the future by tax breaks and other incentives for companies to keep their manufacturing operations in the United States, Frantz said he would consider starting up the machines at Frantz Machine again.

Until that equation changes, American manufacturers will continue outsourcing their production to China to reduce their costs for production, employee wages, health care insurance and environmental compliance, Frantz said.

For now, Frantz instead is focused on next year’s MAATS event, where DuraSafe has already signed up and doubled its booth space.

“We already have four new ideas. Three are patent-able,” Frantz said. “It is hard to say if we can continue to keep up with innovative ideas and produce an innovative product, but that is our goal. We want to keep inventing or coming up with something that is not out there, or something that is out there, only we are going to make it better or lockable.”

Frantz and Kraatz currently have three other employees at DuraSafe who help with product development, testing and design.

DuraSafe operates within the Frantz Machine building at 1785 N. Johnson Road in New Berlin, but Frantz said he is in negotiation for 2,500 square feet of additional warehouse space nearby.

He wants DuraSafe to have its own location, which may be sooner than either Frantz or Kraatz could have expected a couple of years ago.

“Every day, there is great news,” Kraatz said. “When we started in 2000 as a lock business, we hit a wall when we realized we couldn’t make our products in the U.S. or at Frantz Machine. Now, with our new products, we have had interest from France, Italy, New Zealand, England. We have already shipped to Australia and just received a call from distributors in Canada and South Africa.”

Frantz said he decided to make locks because the receiver locks for trailers were something his machine shop could easily produce on the side and would allow DuraSafe to be a separate company.

Since innovation became the answer to DuraSafe’s shortcomings, convenience and peace-of-mind for his customers are now Frantz’s top priorities.

“If you can stop products from being stolen from consumers, especially when they are on vacation, that is a problem-solver in itself, and it is helping the person,” Frantz said. “If you get your fish-finder stolen, it ruins your fishing trip, or even worse your boat or trailer, or your propeller.”

The success of the new products also is increasing sales for the receiver locks that DuraSafe originally tried to sell to distributors. Kraatz said the rust-resistant stainless steel receiver locks that DuraSafe produces are becoming more popular because of their ability to cross over from the boating industry to the automobile and towing industry.

When the company maximizes its potential in the marine industry, Frantz hopes to create locks for other applications. DuraSafe already has a motorcycle lock line with locks for helmets, jackets and wheel discs.

“We are basically targeting the marine, hunting, fishing and automotive industries,” Frantz said. “But we can branch out. I mean, we can make a lock that locks anything. We have the research and development capabilities at Frantz Machine. Show us what you want locked, and we will lock it.”

DuraSafe Locks Inc.

Location: 1785 S. Johnson Rd., New Berlin
founded: 2000
OWNERS: Don Frantz, president
web site: www.durasafelocks.com
AWARD: 2004 National Marine Manufacturers Association (NMMA) Product Innovation Award for DuraSafe’s Couple-Mate Self-Aligning Trailer Hitch Guide