Harken Inc.
Pewaukee
Industry: Manufacturer of sailboat hardware and accessories
Employees: 400 worldwide, including 261 in North America
Many would not expect yacht hardware manufacturing to be a growth industry in the weak post-recession economy. However, through a bold expansion and diversification plan, Pewaukee-based Harken Inc. is defying expectations.
Harken acquired one of its suppliers last year, diversified its product offering and is constructing a large new headquarters facility.
The company is building a 171,000-square-foot facility at N15 W24887 Bluemound Road in Pewaukee. The company will consolidate its existing operations in Pewaukee and Waukesha, where it has a combined 125,000 square feet of space, into the larger and more efficient new facility.
Harken is working with the University of Wisconsin Center for Quick Response Manufacturing to design a more efficient building layout for the new plant, in which raw material will come in on one end and the finished product will go out on the other, and related offices will be located near each stage of production.
Harken’s products primarily serve a discretionary spending market. That is a major reason the company saw its sales, particularly for custom-designed projects, decline during the Great Recession.
In need of new revenue sources, Harken last year acquired longtime supplier Accurate Products, a 60-employee Waukesha company. Now known as the Harken Manufacturing division, the Waukesha operation has grown to 85 employees this year to keep up with current demand and bring more processes back in-house. Harken Manufacturing is a full-service machine shop that completes CNC metalwork, including stamping.
Sales are picking up for Harken since the downturn, and the new revenue streams are helping the business recover.
“Our competitors are zigging, and we’re zagging,” said Bill Goggins, chief executive officer of Harken USA.
The company started with a ball bearing. Peter Harken, while attending the University of Wisconsin-Madison in 1966, invented a highly efficient plastic ball bearing to be used in sailing pulleys called blocks. By moving rope through the pulley by a group of ball bearings, he was able to decrease friction on the ropes and create a smoother sailing process.
The innovation would prove invaluable to the competitive sailing world.
The next year, Peter and his brother, Olaf, started Vanguard Sailboats to build boats and produce and market the hardware. They soon split the product offerings into two companies, with Harken manufacturing the blocks. Vanguard was sold away in 1986, and the company focused on its hardware products.
Eventually, the brothers were able to get their new block model featured in a 1968 Lands’ End catalog. The equipment caught on quickly after it was used to win two gold medals in the 1968 Olympics, and the company has moved full steam ahead ever since.
Today, Peter and Olaf are chairmen of the board for Harken, while Goggins has served as CEO of Harken USA since 2008.
Harken’s more than 3,000 products now include blocks, as well as winches, travelers, mansail handling, headsail handling and other complementary hardware – essentially every part of a boat that rope runs through. A division called Harken Sport sells clothing and accessories emblazoned with the now-popular hardware manufacturer’s name.
Harken has pursued a strategic acquisition pattern since 1999, Goggins said. The company now has three other U.S. sales offices, as well as offices in eight other countries. A secondary headquarters and manufacturing operation was established in Italy.
Harken has 400 employees worldwide, including 261 in North America.
As a result of the Accurate Products acquisition last year, Harken has been able to diversify its mix of products and customers by completing job shop manufacturing and assembly at the Waukesha site. It completes orders for itself, but also supplies switches and components to local companies such as Twin Disc Inc. and GE Healthcare.
“We’re actually manufacturing and selling products now that aren’t at all related to the sailing industry,” Goggins said. “It’s now given us the long-term stability to better serve the sailing market.”
Marine supply manufacturers such as Harken saw sales drop by 30 percent over the last few years, and several companies went out of business, but Goggins is determined to learn from the hardships and prepare for the future.
“The sailing industry and the marine industry were slack jawed and not prepared for this recession,” he said.
To contend with competitors who are sending manufacturing to Asia, Goggins has worked to create a shorter, more nimble supply chain for Harken’s high mix and low volume of production. He has resisted the cheaper Asian-made route in favor of keeping jobs at his existing locations.
“We’re trying to really distill our supply chain under one roof,” he said. “We’re able to compete based on innovation, design, service and price.”
In addition, aftermarket parts sales picked up during the economic downturn, and Harken has strengthened its position in that sector, Goggins said. While customers weren’t building new boats with custom hardware, they did need replacement parts for existing yachts.
Goggins also sees potential for Harken to expand its Manufacturing division into many other industries and is working to adapt its winches and other hardware for use in wind turbines in the wind power industry.
Adaptability, diversification and bold investment have helped Harken make it through the recession, and those attributes will prove useful to the company as it moves forward, Goggins said.
Goggins said he sees other company leaders panicking and continuing a holding pattern during market fluctuations, so Harken is running in the opposite direction.
“Like any smart investor, you buy low and sell high. This is the time to be doing investing,” he said. “It’s a risk, but there’s a reward on the other side of it.”
