Auto supplier turns trouble to triumph by venturing into turbines
"We knew the downturn was coming. ... we knew we were going to run out of work by the end of the first quarter of 2009." John Holcomb, general manager of MasTech's Manistee facility, who had an idea to save the supplier. (ROMAIN BLANQUART/DFP)
BY KATHLEEN GRAY
FREE PRESS STAFF WRITER
John Holcomb felt the cold winds blowing through the auto industry as early as 2006. But it took him three years and a dream to come up with a survival plan in which wind would play a big part.
As general manager of the Manistee factory of Sterling Heights-based MasTech, Holcomb had made a good living for three years supervising the production of machines and assembly lines for auto manufacturers. But he saw trouble coming in September 2006, when Ford announced plans to close 16 plants, cut 44,000 jobs and revamp its product lines with an eye on becoming profitable again by 2009.
Why, Holcomb wondered, weren't the other struggling auto companies embarking on similar plans?
"I saw Ford go out and secure funding for new, more economical models, and the rest of them weren't doing that," Holcomb said. "Changes weren't being made that would make them competitive on a broad enough scale. That was my first inkling that something was going to happen to the automotive industry."
His plans began to take shape a year later -- during a dream-induced conversation with his father and grandfather, both long dead, as Holcomb lay hospitalized in critical condition with a ruptured colon.
"I asked my dad and grandpa if I could go fishing with them and they said, 'No, it's not your time,' " he recalled. "At that point, I decided I had to do something to make a difference in a positive way."
So Holcomb hit upon alternative energy as a way to make a contribution to cleaning up the environment and keep a thriving business going in Manistee.
He went to Manistee's newly formed Alliance for Economic Success and pitched his idea: It was time for the group to aggressively recruit alternative energy businesses to the Lake Michigan shoreline community as a way to stave off the devastation that would come from an implosion of the auto industry.
"We knew the downturn was coming because all of the quote requests dried up, and then all the purchase orders dried up," Holcomb said. "We knew we were going to run out of work by the end of the first quarter of 2009."
As the alliance was hunting for alternative energy companies that also needed the machining expertise available in Manistee, Mariah Power of Reno, Nev., was looking for a place to build Windspires, residential wind turbines that were smaller and more compact than traditional windmills.
In October 2008, as auto sales were plunging and the Detroit Three were shutting plants and shedding thousands of employees, MasTech's Manistee operation began transforming from an auto industry supplier into a wind turbine factory.
Last January, the plant sent out its last automotive job -- an assembly line for a BMW plant in Spartanburg, S.C.
"I've been doing automotive all my life, and there's a certain sadness in getting out of that business," Holcomb said. "But it's also been refreshing to step away from the unwritten rules and regulations of the auto industry. So often, they didn't reward innovation."
The joint venture between Mariah and MasTech shipped its first Windspire on April 20 and has since built hundreds. Optimistic initial estimates called for production of 75 to 100 units a week, but the overall economic downturn has forced Holcomb to scale back to 100 a month.
"We're trying to continue to get the American people to spend some money. And we've had a hard time getting traction for sales because of zoning issues," Holcomb said. "Right now, I'm talking to as many zoning boards as salespeople."
From a high of 43 employees, MasTech is down to 35, many of whom worked in the auto industry. That's a steady level of employment from about 40 as an auto supplier.
"I worked in the automotive industry for 15 years, and now I'm doing the complete turnaround," said Sean Jacobs, 39, a machinist from Manistee.
Adam Morris, 37, of Ludington had been working in an auto die stamping plant in Grand Rapids but jumped at the chance to move to MasTech.
"I wanted to be in a business that was more secure," he said.
The company has plans for expansion.
This fall, it began producing a Windspire that is large enough to store wind-created energy in a battery for future residential or vehicle use. MasTech expects to begin construction on another production facility in mid-2010 to meet expected demand from overseas.
"We have some really huge orders pending overseas. We thought we'd sell more domestically right off the bat," Holcomb said. "But it turns out there's more interest right now in Europe, Asia and north Africa than in Iowa."
And, thanks in part to a dream, MasTech's Manistee plant will deliver.
Contact KATHLEEN GRAY: 313-223-4407 or kgray99@freepress.com
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