Jon Rudolph, left, and Don Armbrester, right, said Action Fabricators’ preferred relationship with 3M has helped the company secure business. It recently added some new equipment, shown here, at its 70,000-square-foot plant built in 2008. PHOTO: JOE BOOMGAARD

By Joe Boomgaard | MSS
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GRAND RAPIDS — Action Fabricators Inc. may work with adhesive-backed foam, plastics and tapes, but the company’s trajectory suggests it’s far from being stuck in one place.

In 2010, the 28-year-old company had its best year ever, up 53 percent from 2009. Even in a struggling year for the automotive industry, Action’s business with auto suppliers jumped more than 35 percent. Since January 2010, the company has added 35 percent to its workforce, with plans to add even more if the cycle continues. Action currently employs 70 full-time employees, as well as about 20 temporary workers.

Already, signs show that 2011 will be a good year as well, as evidenced by 50-percent growth in the first quarter compared to the same time period in 2010. Executives expect Action to be a $30 million business by the close of this year, if all goes as planned.

Because of this success and growth record, the Edward Lowe Foundation named Action Fabricators one of the Michigan 50 Companies to Watch.

Action President and CEO Jon Rudolph and EVP and COO Don Armbrester credit the company’s diversified product portfolio, stable finances and low-turnover workforce for its continued growth.

The company has 500 active accounts, so it’s not tied to any one customer, although Armbrester said the size of contracts has been on the rise. While a $100,000 program was a big project for Action in the past, he said that benchmark has been raised to the $1 million mark. Still, no one contract amounts to more than 15 percent of the company’s business.

“We’ve done a good job of taking on business that makes sense for us financially,” Rudolph told Main Street Strategies.

About 60 percent of Action’s business is in Michigan, Indiana and Ohio, but Rudolph said the company recently opened sales offices in Charlotte and Cleveland to tap new markets across the country.

The executives said most of the company’s traditional business has been in the automotive, furniture and electronic industries. Even within the auto industry, the company is diversified across platforms. For example, Action is a supplier for a major local automotive mirror supplier that works with a range of foreign and domestic vehicles, everything from cars to trucks. Much of Action’s auto business has come through customer referrals as well as through projects it has been able to take over from competitors.

More recently, every Chevrolet Volt on the road amounts to a rolling $50 bill for the company, which makes a series of die-cut foil parts that go into the battery pack and help dissipate heat from the batteries.

“We’re getting into some larger programs and doing some assembly work. It’s bigger dollars, but a lot is getting pushed down the food chain. We’re seeing more design and assembly work, but we’re willing to do more than we used to do,” Rudolph said.

Armbrester said customers are coming to Action earlier in the product development cycle and asking them to partner in the process to avoid headaches later on.

“The thing we hear more now, in this industry, is that they view us as the expert. They’re looking to us for solutions early on – versus correcting problems,” Armbrester told Main Street Strategies.

The company also launched a new division, Laminin Medical Products, to further develop the growing medical division of the business. The two divisions operate out of the same new facility on East Paris Avenue, but Rudolph said the company could soon move the medical manufacturing to a new facility to accommodate the growth of that division. While medical products have proven to have longer sales and development cycles, he said Laminin is on the cusp of some major projects.

“We came through this downturn really strongly, and we believe in the long term, we will continue to diversify,” Armbrester said. “Medical is a good fit for us. It’s not like we had to try to (force the) fit.”

Rudolph and Armbrester see Laminin as complementary to Action’s capabilities and expect that division to continue to pursue new products and intellectual property. Moreover, they credited the company’s skilled, flexible workforce for helping it take on these new projects. The company has a low employee turnover as a result of its mission to treat employees like family and to share in the profits.

“We’re just thankful. We feel like the company has really been blessed. How we do business is as important as what we do, and we’re proud of that – but I hope we’re not arrogant,” Rudolph said. “We have long memories. It’s hard not think past two years ago, but we have a very conservative approach. With relatively little debt we need to service, it doesn’t prevent us from making capital improvements.” MSS