Take a glance at the end markets served by HellermannTyton Corp. and the outlook for 2019 is pretty positive.
The heavy truck market has a significant backlog, as does the commercial aerospace industry. Solar energy continues to grow, as does the heavy equipment market, particularly in construction. The light vehicle market could be flat to slightly up, but with more than 17 million vehicles to be produced in North America, the industry will still be a major driver for HellermannTyton.
“As we get into 2019, indications so far are that really all of those markets should still be growing,” said Terry Tuttle, president of HellermannTyton North America, based in Milwaukee.
Longer-term trends in the industry, like electric vehicles and autonomous driving, also bode well for the cable management manufacturer.
HellermannTyton does not make the actual cables and wires that go in cars. The company specializes in plastic injection and extrusion molding to make the products used to bundle and secure wires and cables across a number of industries. More wires to make cars more connected means more demand for the products that keep the wires in place.
But behind the optimistic outlook for HellermannTyton’s end markets is some uncertainty created by rising commodity costs and increased volatility.
“We always conduct our business with eyes wide open, but now I would say they are extra wide open, because it is a volatile macroeconomic world that we are living in,” said Tuttle, one of four speakers at the 18th annual BizTimes Economic Trends event scheduled for Jan. 25 at the Italian Conference Center in Milwaukee’s Historic Third Ward.
Tuttle said most companies in the markets HellermannTyton serves are dealing with the challenges of rising commodity costs. In some cases, like steel, those increasing costs are brought on by tariffs implemented by the Trump administration. The plastics industry, while not directly hit by the tariffs, has also seen increasing nylon prices and scarcity.
“Every industry needs to manage their cost structure and their price to market in order to continue in a healthy way,” Tuttle said.
She said the level of volatility is higher than almost any time she can remember in the business. Part of the challenge is dealing with the uncertainty while also preparing to take advantage of opportunities.
Managing through the current environment requires a focus on the company’s long-term strategy, even when ups and downs in markets might make it tempting to change course.
“We’re not here to shift our strategy every year,” Tuttle said. “We are here to build upon it and grow it.”
In a low unemployment rate environment, Tuttle is confident in HellermannTyton’s investments to make its business a place people want to work. Those include offices renovated to promote collaboration and a strategy focused on customers and innovation. On the manufacturing side, the company has developed strong training programs and implemented gain sharing to allow production employees to benefit from what they can control.
The challenge, however, is making sure new employees understand the full value of the benefits HellermannTyton offers, Tuttle said.
“We don’t want to see entry level people that are good leaving for 50 cents more per hour or a dollar more per hour when their overall value is less,” she added.
Part of the company’s culture also focuses on finding a balance between defining processes to improve efficiency while also allowing for creative and innovative approaches.
“We want that creative spirit to reign,” Tuttle said. “We want enough process so it’s sufficient but enough runway so innovation can emerge.”
Technology like automation and integrated systems throughout the business also help with efficiency and quality. With developments in artificial intelligence or augmented reality getting plenty of attention globally, Tuttle said it’s important for technology investments to be made with a practical approach.
“We are not here to bring in technology just because it’s cool; we bring it in because it helps our business,” she said.