The employee-owned manufacturing business had sold off an aerial work platform business four years earlier, reducing its annual revenues from $135 million to $40 million. The balance sheet was suffering, and added debt from an acquisition was bleeding the company even further.

Enter Bob Kamphuis, a Giddings & Lewis veteran who grew up on a farm just 17 miles from Mayville Engineering’s headquarters. When Kamphuis came on board in September 2005 as president and CEO, the focus changed.

“There were a lot of hard decisions,” says Kamphuis, 51, who originally went to work for Ernst & Young after getting his CPA degree from the University of Wisconsin- Whitewater. “We put the right people in the right jobs and started expecting more from people. We started by focusing on the capacities we had, and taking care of our customers, our quality and our delivery performance, and getting more out of a company that customers wanted to do business with, and not one that is on the borderline.”

More than four years later, the company is on solid footing and growing at a time when many Wisconsin manufacturers are ailing. Mayville Engineering’s workforce has grown by more than 40 percent, with 2009 revenues of $123 million – a threefold increase since 2004.

It’s just the latest chapter in a company with roots dating back to 1945, the year Mayville Engineering was founded by cousins Leo and Ted Bachhuber. The original manufacturing facility was a rented garage building in a back alley off Mayville's Main Street. Total assets of the company included a few worn metal working tools, a little cash and an abundance of grand ideas.

The original letterhead bore the title “Tools, Dies and Special Machinery.” In its early years, MEC concentrated on these products, as well as offering their services to larger manufacturers in the area.

Leo moved on to other ventures, leaving Ted and his wife, Grace, to run the company. MEC eventually acquired a small warehouse adjacent to its rented garage, and later purchased a commercial building in Mayville where an office and assembly facilities were established. A new 14,000-square-foot plant was completed in 1963, employing 26 people. Ted Bachhuber sold his stake in the company in 1985, and MEC became an employee-owned company at that point.
 

Mayville Engineering Company Inc. (MEC) now is the parent company to six divisions: MEC Shotshell Reloaders, MEC Contract, MEC Prototype/Service, MEC Engineered Products, Phoenix Coaters and Fabricating Specialists. The company has operations in Mayville, Beaver Dam, Berlin and Neillsville.

The contract and prototype businesses comprise $85 million in annual revenues, with coated products adding another $30 to $35 million a year.

Mayville succeeds by helping large original equipment manufacturers reduce their costs by making the part to their specifications.

“Our best OEM will be someone who wants to do the design of the product, do the final assembly and distribute it,” Kamphuis says. “We can take the rest off their hands, and that is a tremendous cost for these OEMs. We take a lot of working capital and cost out of their product. And we keep them focused on what they do best, which is designing and focusing on their markets, and they collaborate with us to do the manufacturing.”

Because the OEMs’ own schedules can change, MEC has a dynamic production system that is flexible and designed to accommodate their needs.

Wil Cox, a senior manufacturing specialist for the Wisconsin Manufacturing Extension Partnership, worked with MEC during the economic downturn and has seen the business grow.

“It was amazing to see them supplying parts and growing their share of the business during a time when some of the other suppliers to large OEMs were going down,” Cox says. “They provide a form of one-stop shopping for OEMs. If they are making parts or assemblies, they can make it better, faster, cheaper and with higher quality.”

MEC employees spend a lot of time working with customers and understanding their needs, Cox says. Shop floor operators take steps out of the process, increase accuracy and decrease waste.

“They are listening to what their customers want and driving it through the system,” Cox says. “Internal communication is really key.”

Cox helped train MEC employees on lean manufacturing and Six Sigma in 2008-09.

“One of the things we don’t see as often as we like is highly engaged people at all levels of an organization,” he says. “At Mayville, there’s a lot of engagement by people actually involved with doing the work to reduce cost and improve quality. It’s not just posters on the wall — they actually check, measure and improve.”
 

The Phoenix Coaters division will open a new 303,000 square-foot building in Beaver Dam this year to house a state-of-the-art E-Coat and Topcoat paint system. Phoenix Coaters West will be fully operational by June, and more than doubles Phoenix Coaters’ capabilities. The new facility, which will use half of a formerly mothballed facility, will add 120 jobs, well over the 35 that the city of Beaver Dam was hoping for.

The coating done by Phoenix Coaters is of such high quality that MEC does coating work for its competitors.

“The last thing that happens before it [a fabricated part] goes to customers is a coating or painting process,” Kamphuis explains, adding that smaller ‘Mom and Pop’ paint shops tend not to be environmentally sound and have been falling by the wayside in recent years. “So we saw the opportunity to pick up that business to help companies get good quality, value and good environmental practices.”

Mayville buys as much or more steel or paint and chemicals than some of its large customers, which gives it leverage when negotiating with suppliers.

“They are looking to service us to make it more efficient for us,” Kamphuis says. “We pay attention to the nickels and dimes in this business, because they add up.”

MEC has started two businesses in the last two years, including Fabricating Specialists, in Neillsville, which makes parts and equipment from tubular steel. Two entrepreneurs were looking for angel investors when Kamphuis spotted the synergy of bringing the remains of the former Nelson Industries under the MEC umbrella.

After seeing the fallout in the power generation business, last April the company launched MEC Engineered Products. The company debuted its own brand, and works with customers such as Cummins, Caterpillar and Kohler to provide custom enclosures.

“The common theme is that it starts with metal fabrication in some way, and when it comes down to paint, we can offer a superior finish and a high-quality product,” Kamphuis says. “We own the design and the manufacturing.”

Typically, a customer comes to MEC with their design and asks for a quote to manufacture a particular part. MEC looks at the design, then forms, welds and machines the part. Then they paint it and ship it off to the customer.

MEC is poised for future growth, and is in a strong position to finance internal growth from day-to-day cash flow, Kamphuis says.

“We can offer a wide array of products and do a lot more for our customers,” he says. “We are also doing larger and larger products which are ‘China-proof.’ With the transportation time, the complexity and the costs, we are much more nimble and much more competitive.

“I think the reason for our success is that we are providing the market with something that it needs –  the opportunity to reduce costs and be more competitive. And, we are showing them that you don’t have to go overseas to do that.”