Jason Inc., a Milwaukee-based group of manufacturing companies, deals with a wide range of customers, and that diversification could shelter the parent company against an economic slowdown in 2008.
One of its companies makes seating for motorcycles, lawn and garden equipment, construction machinery and the marine markets – areas that, while volatile, could have unique opportunities in 2008.
Another Jason business unit sells exclusively for the automotive industry. And while that industry is in store for a tumultuous 2008, there are plenty of chances for growth this year, said David Westgate, president and chief executive officer of Jason Inc.
Jason Inc.’s other industrial units serve other manufacturers, which present their own opportunities this year.
“We’re a diversified company, and that gives us a lot of protection against downturns,” Westgate said.
Milsco, Jason Inc.’s largest portfolio company, makes seating for motorcycles, lawn and garden equipment, construction machinery and marine products. Milsco’s largest manufacturing facility is in Milwaukee. It also has plants in Redgranite, Wis., two Michigan plants and additional facilities in Georgia, Mexico and the United Kingdom.
In total, Milsco has about 1,100 employees. Jason Inc. has about 4,100 workers and 42 manufacturing facilities throughout the Midwest and around the globe.
Harley-Davidson Inc. is one of Milsco’s largest customers. Many of Harley’s motorcycles use Milsco’s seats. Milsco also produces saddlebags and other leather products used on some of Harley’s cycles.
Milsco and other suppliers that serve Harley-Davidson will be in good shape for 2008 and beyond because of moves that the publicly traded company’s leadership is making now, Westgate said.
Westgate is prohibited from talking about Harley’s new designs, plans and products under development. However, he said the company will grow in the future, despite some speculation that it might have short-term troubles selling to an aging target demographic.
“Harley is an iconic brand, they’re a phenomenal brand to build off of,” he said. “They’re doing a lot of the right things to secure long-term growth. They’re working on new products. We believe we’re positioned well with Harley.”
The lawn and garden market has slowed over the last several years, but Westgate believes there could be growth there in 2008.
“Weather is one of the drivers in that market, and it’s unprecedented to have three years of bad weather (in a row),” he said. “Heavy rainfall can give it a shot in the arm. I’d say we’re more optimistic (about the market) than others.”
Similar to the automotive market, Jason Inc. may use the down market to make acquisitions to help Milsco gain market share in the lawn and garden sector, Westgate said.
The marine industry has also been down in the last couple of years, Westgate said, and Milsco may pursue acquisitions there as well.
International demand for construction equipment made in the United States is growing, Westgate said, which will help balance lower domestic demand for construction equipment in 2008. That lower demand is tied to slowing residential and commercial property development.
“With construction equipment, there is an opportunity for geographic expansion,” he said. “We’re looking to expand to Europe and Asia. We want to grow with our customers.”
Automotive adjustment
Many analysts predict a tough year for the American auto industry – both the Big Three and new domestic manufacturers – but some who supply that industry see opportunity in 2008.
One of Jason Inc.’s portfolio companies, Janesville Acoustics, is the largest supplier of non-woven insulation for the auto industry.
About 65 percent of Janesville Acoustics’ business is with the Big Three. The remaining 35 percent is with new domestics, and Westgate is looking to grow that percentage.
“I think the U.S. auto industry is starting to straighten out,” he said. “I think there are a lot of opportunities that lay ahead with automotive. Any time there is turmoil, there is opportunity.”
Jason Inc.’s headquarters and administration remain in Milwaukee. Janesville Acoustics is headquartered in Detroit, and its largest manufacturing facility is in Ohio.
During 2008, Westgate expects to see further consolidation within the automotive suppliers. Jason Inc. will look for acquisition opportunities, and Westgate expects other auto suppliers will do the same, especially among those who are heavily involved with the Big Three.
“Companies that are diversified with the new domestics will continue to diversify,” Westgate said. “Any time there is a downturn, that’s when we go after market share. For anyone with a strong balance sheet, it’s a good time to go after acquisitions.”
Janesville Acoustics will try to increase its amount of work with the new domestics during 2008, Westgate said. Those manufacturers, including Toyota and Honda, are not only desirable because of their growing market shares, but also because of their relationships with suppliers, he said.
Japanese automakers use a system called keiretsu, in which large companies partner with their suppliers and partner on product and system development to ensure the success of all parties.
“It’s their methods of doing business and appreciation for lean transformation,” Westgate said. “They’re being successful in the marketplace, and they want you to be successful with them to gain market share and manufacturing market share.”
To target new domestics, Janesville Acoustics is improving its products, technology and materials used.
“What we have done and continue to do is offer technology that others don’t have – material blends, lighter weight systems, better proximity of operations,” Westgate said. “It’s a long process (with the new domestics).”
Global growth
Jason Inc.’s industrial group has operations in U.S., Canada, Mexico, China, Taiwan, Brazil, Germany, Romania, Sweden, Denmark, Spain, Portugal and the United Kingdom, and make up Jason Inc.’s most global business unit, Westgate said. The bulk of the group’s revenue came from global sales overseas in 2007.
Jason Inc.’s industrial group of companies falls into two categories, its brush group and its components group.
The brush group makes industrial brushes, buffing wheels and buffing compounds. The companies included in the group are Osborn International, Sealeze, Atlanta Brush and JacksonLea.
Jason’s components group is comprised of Metalex, Advanced Wire, Assembled Products and Jason Precision Components. Metalex, Advanced Wire and Assembled Products, have operations in Illinois, and Jason Precision Components is based in Shanghai, China.
The components group does some work in the automotive, lawn and garden and outdoor power equipment areas, Westgate said. It also serves the air and liquid filtration and utility meter markets, areas that the group could make improvements this year.
“For utility meters, through innovation I see significant growth for us,” Westgate said. “There are unique opportunities for growth through technology and our manufacturing capabilities.”
Jason Inc.
President and CEO: David Westgate
Divisions: Milsco Manufacturing Co., Janesville Acoustics, JacksonLea, Assembled Products, Advance Wire Products, Metalex, Osborn International, Sealeze, Atlanta Brush
Headquarters: Milwaukee
Industries: Manufacturers of seating, acoustic insulation, industrial brushes, finishing products and components for OEMs.
Number of employees: About 4,500
Revenue growth: About 13 percent in 2007
Web site: www.jasoninc.com
