Contrary to popular belief, manufacturing in the United States isn’t dead.
In Colorado, manufacturing saw modest growth in 2017 and is expected to keep growing this year, says the Colorado Business Economic Outlook 2018, produced by the University of Colorado at Boulder’s Leeds School of Business. That growth, the report says, is "against the backdrop of a surging national sector."
"I think the national narrative is that manufacturing is not growing, and that’s based on one metric – employment," said Bart Taylor, founder and publisher of CompanyWeek (companyweek.com), which strives to be "the media voice of modern manufacturing" and highlights companies in Colorado, California and Utah. "The main paradox today is that the United States has never been more productive from an industrial standpoint, but there have never been fewer employees in the manufacturing sector historically."
That’s the result of automation and robotics. But even with technology reshaping the landscape, manufacturing has seen an employment comeback in recent years, Taylor said.
"Consumers today want more locally made products, they want more locally inspired brands, and at least today, growth in those industries is offsetting losses in manufacturing that are from automation and technology," he said.
Colorado Springs, he said, "is well- positioned to participate in this manufacturing comeback." Taylor points to "a rich and underpublicized sector" of industrial manufacturing in the area. And the Springs’ assets line up well, he said, with growth markets such as food and beverage – "with a cadre of craft brewing and distilling entrepreneurs" – and the outdoor industry.
The third annual Colorado Manufacturing Awards, hosted by CompanyWeek, are this week, and a Colorado Springs company is guaranteed to be the winner in one category: industrial/equipment manufacturing. That’s because all three finalists – ConcealFab, Diversified Machine Systems and IP Automation – are based in the Springs. In addition, the Pikes Peak region is home to two other finalists in the nine other categories – Divide-based Paradox Beer Co. is up for outstanding brewer and Blue Moon Goodness, in Woodland Park, is a finalist for small food brand of the year.
A look at those local finalists:
ConcealFab is on a steep growth path: It doubled revenues in 2016 and 2017 and expects to do the same in 2018. Late last year, it moved from a 23,000-square-foot facility on the west side of Colorado Springs to a new, 96,000-square-foot facility on the north end of town.
"ConcealFab is growing in the wireless space, and we’re creating a world-class manufacturing facility to support that growth," said Douglas Hinkley, chief operating officer.
Mike Slattery founded ConcealFab in 1997, manufacturing PVC enclosures for communications and satellite equipment that were transparent to radio and radar waves. Today, ConcealFab specializes in small cell concealment, such as streetlights that serve as mini-cell towers. The "Hide in Plain Sight" products not only conceal, they boost cellular bandwidth.
"We actually have product being installed in Colorado Springs for Sprint," Hinkley said.
Product development is key to growth, he said. "Ninety percent of what we make is newly custom-designed products."
ConcealFab has more than 80 employees. In addition to growing its workforce, it’s also growing its supply base in Colorado Springs, which includes fellow finalist IP Automation.
"We’ve created a lot of jobs in Colorado Springs, not just at our facility but in our supply base," Hinkley said.
Diversified Machine Systems
DMS makes large, computer-controlled, precision shaping and cutting machines – machines that other manufacturers then put to use. In addition, said CEO Doug Rhoda, the company now makes large-scale, industrial 3-D printers.
"The exciting thing is we can provide these combination machines, additive and subtractive," Rhoda said. (Industrial 3-D printing is known as additive manufacturing.)
Patrick Bollar, now chief technology officer, started DMS in 2003 after another business he and his father had, MotionMaster, ended. He moved the business to Texas for three years before returning to the Springs.
Last year was a record one for the company, which has about 100 employees, Rhoda said. DMS’ chief market is aerospace and space manufacturers, he said. While that sector is fueling growth, "we also have product lines that serve smaller customers, with woodworking and plastics. So smaller mom-and-pop-type shops will buy our $50,000 machines for their own processing, and that market is growing too."
Rhoda, who has been CEO for just over a year, grew up in Cincinnati. He went to engineering school in the early 1980s, when the city was "kind of the machine tool manufacturer of the world" but was under assault by foreign manufacturers.
Today, he said, "you hear about an American manufacturing renaissance and onshoring, and in our own small way, I think DMS is an enabler of that. We’re providing machines that are going into factories largely in the United States. These machines are making the factories safer and making products better and faster. I think that’s a really noble purpose."
IP Automation is celebrating its 30th anniversary. Bulgarian immigrant Ilia Petkov started the engineering and manufacturing firm in 1988. Its slogan: "Where ideas become reality."
Kenneth Krassy, director of business development, describes the company as a problem solver.
"A company comes to us with a problem," he said, "and we can take it from design all the way to a finished product coming out the door to solve the problem, either through automation or though production." IP Automation, for example, designed and manufactured a machine for Lawrence Livermore Laboratories to cut encased nuclear waste into small pieces for safe disposal.
"Our No. 1 area is the railroad industry," Krassy said. "We invented some machines to install the clips that hold the rails to the ties. We’ve invented all sorts of new machines for the railroad industry."
While the company produces custom products and solutions, it also performs lots of contract manufacturing work, Krassy said. For example, it supplies a major HVAC manufacturer with daily delivery of machined parts.
IP Automation is expanding its capacity for growth by adding new equipment such as a 110-ton press brake for bending materials. It expanded its workforce by 25 percent in 2017, to about 30 employees, and expects to expand it another 25 percent over the next two years, Krassy said.
Petkov, who is in his 70s, has become president emeritus, handing over day-to-day management of operations to Bogomil Banchev as managing director.
Blue Moon Goodness
When Kelly Strong started making granola in her kitchen using her mom’s recipes, she didn’t have a business in mind. "I would give it away," she said. But she got such a strong response from people who loved the granola, "I realized maybe I did have something."
Strong officially started Blue Moon Goodness in 2010, but it wasn’t until a few years later, when she began adding shelf-stable soups to her lineup, that the business really took off. The company’s name comes from the fact that she hived her first bees, needed because she sweetens her granola with honey, on a blue moon (a second full moon in a calendar month.) She acknowledges the name sometimes causes confusion, though.
"People always say, ‘I love that beer,’ and I say, well, we don’t make beer."
Strong has a sales background. With Blue Moon Goodness, "my mother said I’ve married my two strongest skills … cooking and selling." She relies on contract workers to help with cooking and packaging. Her products are in about 300 stores, including King Soopers and Albertsons/Safeway, mostly in Colorado. She regards that as just the beginning.
"We see this as a proof of concept: Oh, this works, this is a scalable idea," she said. She’s hoping to "conquer the world" and is looking at Canada – where it’s cold enough that soup is less a seasonal product – as a likely market.
Her vegan, gluten-free soups offer the most opportunity for growth, she said. The soup market is dominated by a few large players, and she’s eager to shake things up a bit.
"Our packaging is different. Our flavor profiles are unique. … There are a lot of granolas. There aren’t a lot of new, interesting, unique soups."
And the soups aren’t just a meal, they’re a meal starter.
"Everyone remembers their mom having a can of mushroom soup in the cupboard. We’d like to be in that category as well, a meal starter and enhancer."
Paradox Beer Co.
Jeff Aragon and friend and brother-in-law Brian Horton, along with Dave Hudson, started Paradox in 2012. They initially gypsy brewed on others’ systems while doing fermenting, aging, blending and bottling in Woodland Park. They were able to do everything on site once they moved to a facility in Divide a couple of years later. They also added a taproom at the 3-acre site, formerly home to an ice-making plant and a recreation center. The enterprise is 100 percent wind-powered.
Paradox specializes in American barrel-aged wilds and sours. It sold about 300 barrels the first year, Aragon said, and just under 2,000 last year. Its bottled beer is sold in 18 states.
"I think our innovative techniques that we do up here, and the passion that we have for the industry, is probably what led us to where we’re at," Aragon said, referring to Paradox’s status as a Colorado Manufacturing Awards finalist.
Paradox has nine full-time employees. Among goals for the future, Aragon said, is introducing Paradox’s unfiltered lager program in the Colorado marketplace as well as an off-site taproom.
The name Paradox comes from its style of beers, Aragon said – "kind of what old is new" – and the fact that, in the beginning, they didn’t even have a brewery.
"A brewery without a brewery, and these old-style beers, it’s a paradox."