With an array of incentives in hand, a Gulf Coast manufacturing firm gambles big on expansion. Part of the bet rests in turning solar power into a moneymaker.
Business. Mustang Vacuum Systems, Manatee County
Industry. Manufacturing, automotive
Key. Company plans to grow from 30 to at least 125 employees by 2012.
Manatee County manufacturing executive Richard Greenwell received a panicked call from a client one recent Friday night.
The client, an executive with an auto-parts manufacturer in Paris, France, had a chance to land a big job making thousands of car headlamps. But to get the job, the company needed Greenwell's firm, Manatee County-based Mustang Vacuum Systems, to come through in a pinch.
The question: Could Mustang retrofit and ship one of its Colt 48 systems in one week? The machine is a coating processor for dozens of metal and aluminum products, including auto mirrors, wheels and headlamps.
Greenwell, the company president, nearly balked. A standard Colt 48 sells for $750,000 and is a 12-foot cube that weighs 20,000 pounds, equal in weight to five mid-size cars. The machine alone cost $25,000 to ship on a plane from Bradenton to Paris.
Mustang nonetheless came through for the client, using a little bit of luck and a lot of weekend work. “The timing was right for us to do something extraordinary and to help out a customer,” says Greenwell.
More than a source of pride, however, that story now represents a crossroads for Mustang: The company is in the early stages of an attempt to go from well-thought-of niche player to industry force.
Indeed, Mustang is on the verge of a major growth spurt, a burst based partially on the launch of new solar-products unit. The growth includes a plan to quadruple its staff of 30 people by 2012, to at least 125 employees.
The company already has a new home. In April, it moved from a 17,000-square-foot facility a few miles north of downtown Sarasota to a 50,000-square-foot plant in a south Manatee County industrial park.
Greenwell also says the expansion could put the company, which currently generates between $10 million and $20 million a year in annual revenues, in line for $200 million in contracts. “It's a very exciting time for us,” says Greenwell.
Still, Greenwell and others familiar with the company realize a big challenge during the growth spurt will be to retain the nimble customer service approach that served the company so well with its client in Paris. “We need to keep everything moving forward,” says Greenwell, “but at the same time we have customers who call us to solve problems.”
It's a challenge noted by C.J. Evans, a site search consultant with Ryan Inc. in Tampa who assisted Mustang with its recent relocation efforts. “It's one thing to build one machine over a few months,” Evans says. “It's another thing to build a machine a week.”
Mustang's expansion bet is buttressed by local and state government agencies to varied extents. In total, the company received more than $2.2 million in incentives to expand, most of which stems from a Renewable Energy and Energy-Efficient Technologies Grant it won in February for its solar unit. That grant, worth $2 million, was awarded by the Florida Energy & Climate Commission, which Gov. Charlie Crist created in 2008. Other incentives include a $184,842 training grant from Workforce Florida and performance-based hiring grants from Manatee County.
Solar technology wasn't the primary focus of the original Mustang Vacuum when it was founded as CompuVac Systems in 1994. Greenwell and a few businesses partners from his home in Northeast Ohio bought Sarasota-based CompuVac in 2005.
Back then, Greenwell was an executive with Twinsburg, Ohio-based Mustang Dynamometer, a maker of equipment and parts used to measure the torque of an engine. He later moved to Florida to grow the business at the new Mustang Vacuum.
Mustang executives flirted with moving a portion of its new production work, including its solar division, to Ohio before it decided to expand in Manatee County last year.
There were several reasons to move. For one, the Mustang Dynamometer plant has only run at 60% capacity given the recession. Plus, Evans says local and state governments in Ohio dangled incentives to move some business there, including building roads to help the land-locked plant's location.
But in addition to the incentives Florida offered, the lure of the Sunshine State was too much to ignore. “When you think of solar,” says Evans, “you don't think of Ohio.”
And solar holds a lot of potential for Mustang, which recently created a subsidiary, Mustang Solar, to capitalize on the opportunity. Now, through its Orion line, the company markets a machine it says will drive solar to grid parity. That's the Holy Grail for alternative energy proponents, when solar power costs the same or less than it does from the traditional power grid.
The Orion systems, like the Colt 48s, are mammoth machines that take a team of engineers, software technicians and assemblers to build. And like the Colt series, the Orion machines use a technology called sputtering to coat products. The sputtering process, also called vacuum coating, removes materials through an ion bombardment. It then turns the materials into a film that can coat other products.
With Mustang Solar, the company essentially sells a machine that allows other manufacturers to build solar cells and panels, says Todd Komanetsky, director of business development for Mustang Solar and Mustang Vacuum. It's the first step of what could be a three or four part process to deliver solar power to an end-user. “We are way at the beginning of the food chain,” says Komanetsky.
There is a small list of companies in the world that need an Orion machine, maybe 25 in total, adds Komanetsky. But he says those clients represent a potential goldmine of product orders because the technology is so new and unique. Mustang executives declined to name any of its current solar clients or potential targets for solar business.
Meanwhile, the Mustang Vacuum side of the business keeps churning out the Colt 48 line of machines. Greenwell is relieved to be out of the old plant, which was so confined that some of the machines bumped against the roof.
“In the old facility we could only build one at a time,” adds Greenwell. “Our customers were asking us to build four at a time.”
Colt 48 clients include suppliers for most of the major car manufacturers, from Toyota to Porsche. The client list is evenly split between American and foreign companies, Greenwell says.
Of course, it takes lots of people doing lots of different jobs to build all these machines and that's where some of the incentive money comes into play. For example, the $185,000 training grant through Workforce Florida will utilize a program at State College of Florida in Bradenton to train new employees. Positions the company will be hiring for run the gamut, including welders, engineers, scientists and managers.
“This is some wonderful technology they have,” says Manatee County Economic Development Council Executive Director Eric Basinger, whose department coordinated Mustang's efforts to obtain the training grant. “A very knowledgeable employee is needed to fit their sophisticated needs.”
Mustang executives say the plan is to form a team of employees around a product, so one group of workers will have ownership of the process and work directly with the clients. “The most successful companies in this type of technology end up with product managers who become the driving force behind the entity,” says Komanetsky.
Greenwell says he plans to hire managers, including some MBAs, in the next few months and then allow those executives to make the next round of hires. He hopes the counterintuitive strategy of hiring during a period of high unemployment will work to the company's advantage.
Another challenge looms for Mustang past hiring dozens of people: To sell solar power-based products in an environment where companies are seeking ways to cut back, not take chances on new technology.
“This is not the best time for people to be trying new things,” says Evans, the site search consultant. “But I don't have any doubts that Mustang will be successful.”