News that an iconic local enterprise
So when Iowa-based HNI Corp. acquired Vermont Castings almost four years ago, says Bill Corey, a 20-year employee of the local stovemaker, “We knew there was going to be a big change, but we didn’t know what to expect.”
Change did come, and quite possibly it was accompanied by some painful disruption. But as staff writer John Lippman detailed in last week’s Sunday Valley News, HNI appears to have brought stability to Vermont Castings after a period of rapid ownership changes and has invested $10 million in upgrades to the foundry in Randolph and the enameling plant in Bethel.
The result has been the transformation of the foundry into a cleaner, brighter, safer, more efficient and thoroughly modern plant. Changes at the Randolph facility include improvements to the exterior; extensive energy efficiency upgrades; installation of new computer numerical control machines and new air compressors to power machinery on the shop floor; and creation of a robotic processing center to improve worker safety while enhancing manufacturing quality.
Unlike many technology-based increases in efficiency, this one is not resulting in a loss of jobs. In fact, Vermont Castings hopes to hire 10 additional workers in the coming year to augment its 100-person workforce, which is divided between Randolph with 85 and Bethel with 15. This is a far cry from the 200 or more that Vermont Castings employed at its peak, but at least it is trending back in the right direction.
Just as important, the company’s investments and emphasis on safety have reduced workplace injuries from 42 in 2014 to just two since last June. Jeffrey Nelb, the company’s vice president and general manager, told Lippman that one goal of the safety program is to have robots or hoists lift anything in the manufacturing process that weighs more than 25 pounds.
Moreover, as the modernization increased capacity and cut costs, the company has pulled back work that was subcontracted to Belgium, China and Washington state. How great is that, America?
If indeed HNI has laid a solid foundation for the future of Vermont Castings, perhaps it is partly attributable to the fact that the parent company already knew the business and had the resources to enhance it, not merely wring short-term profits out of it. Although its primary business is office furniture, HNI’s Hearth & Home division manufactures wood, pellet and gas stoves and fireplace inserts under several well-known brand names, including Harman.
Another possible contributing factor is that synergy between acquirer and the acquired, which is often touted but frequently proves ephemeral, appears to have existed in this case. Assembly operations were moved from Bethel to sister plants in Pennsylvania and Iowa, while the Vermont Castings foundry also produces iron castings for other brands of HNI’s wood-burning stoves. And as Vermont Public Radio reported a few months after the sale, the acquisition gave HNI an asset it did not possess at the time: a foundry. Given how expensive and difficult it is to site and build foundries, this was undoubtedly valuable.
The new owners also had the wisdom to enlist Efficiency Vermont to review the company’s energy use. Staffers from the program, which was created by the Legislature to provide technical expertise and funding to businesses and others, did a comprehensive analysis of the foundry, made recommendations for improvements and put the company in touch with contractors who could do the work. The new air compressors alone are projected to save $61,000 a year in electricity costs, thus paying off the $460,000 investment in 7½ years.
Finally, although for several years prior to the sale Vermont Castings had struggled for survival, its residual reputation for distinctive quality gave it a cachet that could be built on and made it worth the investments needed to enhance the brand.
In any case, it has been a while since we heard an employee say something like what Richard Locke, a melt and mold manager who has been at Vermont Castings for 13 years, told Lippman. “It’s been a great couple of years,” he said. “Someone stepped in here and took care of us.”