[caption id="attachment_604480" align="alignleft" width="327"]
Rush LaSelle[/caption]
As
Rush LaSelle eases into his
new role as chief executive officer of Hartland-based
Fathom Digital Manufacturing, he says there’s a lot to be optimistic about.
After several years of
lower-than-expected customer demand and macroeconomic uncertainty, LaSelle has been hearing from customers who say they anticipate having more research and development funding in 2025.
Fathom, which has approximately 500 employees and 400,000 square feet of manufacturing space across all of its facilities, will go back to its roots and spend the next year giving its customers the quick turnaround manufacturing solutions they desire, LaSelle said.
He recently spoke to BizTimes reporter Ashley Smart to discuss exactly why he’s feeling so bullish about Fathom. Below are excerpts from the conversation.
How did you learn about the opportunity at Fathom?
“I've known about Fathom since
Rich Stump started the business, which is not necessarily what we are here now in Hartland, but I've been very aware of this business, because he had started it in the Bay Area around the same time I was at Jabil, a large contract manufacturer. We had a very similar objective at both companies, which was to give manufacturing capability to folks who didn't have it within their own four walls. Fast forward, that was 10 or 15 years ago, I found out about the opportunity at Fathom because I was working for another portfolio within CORE (Industrial Partners). So, a little over two years ago, I was managing an additive technology portfolio for them by the name of 3DX Technology over in Grand Rapids, Michigan. When
Carey (Chen) decided that he wanted to do something new and exciting, our chairman gave me a call and said,' Hey, what do we think about Fathom?'"
Are you relocating for the position?
"I live just outside of Denver, where we have one of our largest manufacturing facilities for sheet metal. I am a virtual person who spends just a lot of time here."
What did taking the business private allow Fathom to accomplish?
“I think there are a couple things. First,
Ryan Martin and CORE and the whole Fathom team were obviously on a path to take advantage of being a public company, which, of course, has certain capital advantages. Unfortunately, the timing couldn't have been worse, because that was during the crash of the SPAC vehicle. Carey came in and had a difficult job taking the company private. It's tough, because when you're going public, but it's exciting. Everybody's going to ring a bell on Wall Street. When you go private, it's really tough. It's a grind because you're taking some of that excitement away. What it does is it changes the capitalization of the business. It's expensive to be public and it's exceptionally visible. If you're a public company, there are very few financial metrics that matter, and some of them, the market has just not been yielding manufacturing. It has been tough in North America over the last couple years. Strategically, going private gave the company an opportunity to reset, both financially and then really what our initiatives and strategies are going forward.”
What do you think about your predecessor’s approach to leaning into “pandemic proof” markets, like electric vehicles?
“Pandemic proof, in many cases, is thinking about what you can or can't outsource. Think about government, right? Some of the things that our military has manufactured, they don't want made in certain places. There are other things that just logistically we found... masks and a whole lot of other stuff. We're going to stay on that path, because there is a great opportunity as R&D spending returns to many of our Fortune 500 and domestic companies. They need somebody that can help them in early stage, product introduction, and a lot of it has to be done here in the U.S. from a regulatory perspective.”
What are you keeping an eye on as far as President Trump’s potential impact on manufacturing?
"If we just look over the last 20, 30, maybe 40 years, we've taken a bit of an easy route here in the U.S. as far as becoming a service-based economy. The pandemic shined a light on that, because we found that we couldn't restock certain things for the military. We couldn't restock certain things for our medical community. The new administration, I think, if you read all the papers, is going to continue, if not increase, the expenditures into domestic manufacturing. Thinking about Trump, whether it's through tariffs, I think he's a reasonably savvy businessman. Even if he doesn't implement huge tariffs on China and other places, which we're watching closely, he'll negotiate deals that will be favorable to us manufacturers.”
How big does additive manufacturing continue to be for Fathom?
“It's a very important tool in our tool kit, because it satisfies one of the things that makes us special, which is the immediacy and the rapid response we can provide to people who want to do prototyping or early-stage design and low-volume manufacturing. It's very fast. The reality is, structurally, it's not as good as injection molding, CNC and sheet metal. It is a very important tool in our tool kit, but I would say our umbrella of 25-plus different capabilities, that's what makes us a bit unique."
What have you heard about spending for 2025 from your customers?
"They weren't sure what the EV market would look like for us in 2025. They didn't know what the interest would be from the consumers. They didn't know what the subsidies would look like. So, what changes is, we get clarity on what the new administration thinks. And so now, if you're a major automotive manufacturer, you know whether you're going to put your chips down on EV or maybe a more efficient hybrid gas-powered vehicle. We already see coming down the pipe and budgets are going to start to free up."
What’s the status of Fathom’s optimization plan? Could the company start expanding again?
“Our office in California was very concentrated on additive manufacturing and, as you know, Silicon Valley is exceptionally expensive. That office was there for a very specific purpose. It was near some big innovative companies, like Google, that we still do a lot of business with. Having that proximity, having people there who were ambassadors for new technology, was highly appropriate. Now, when you look at the cost structure, you ask those same customers if they are okay with us bringing all of that into Hartland, where we have more infrastructure. They said 'yes,' they were okay with it because it is more cost effective. In that case, that's that answer. Closing the Florida office was a very sector specific decision where a particular, very large, concentrated customer for that site went a different direction. It wasn't a sweeping decision. It wasn't that broad of an edict. It was a case-by-case basis. Will we continue to optimize in that way? Absolutely, because it's good for our customers. Manufacturing wants commitment on delivery. It wants quality. Typically cost comes in a third. When we start to think about that, we want to be a cost-competitive supplier that led to some consolidation. So that's the history. Looking forward, I am bullish."
Any other big challenges for the company in the coming months?
"I think the challenge, and this is not relegated solely to us, is that manufacturing as a profession has been de-emphasized. If you think about the talent pool, that's where we're most vulnerable. We don't have a lot of people coming out of colleges, ready and interested in doing some of the things we do. A priority for me is making sure that we keep the talent that we have, but more importantly, that we can scale and grow with our customers. How do we get the right level of passion and capability and motivation into our workforce? That's a manufacturing problem, and it's certainly one that we're paying close attention to."
