By: Bill Bregar
July 23, 2013
CANTON, OHIO — Windshield washer assemblies, sunroof drain tubes and air suspension lines are still important products for DLH Industries Inc., but the Canton-based automotive supplier is moving into more complex, assembled products — such as an actuation system for turbochargers.
Turbochargers boost engine performance using exhaust gas to rotate a turbine, drawing in air and compressing it for the pistons. The actuator turns the turbocharger on and off.
DLH assembles the turbo actuator from more than 60 components. They include not only its own extruded plastic tubing and injection molded fittings and connectors, but electronics and metal parts that DLH sources from outside companies. DLH employees do the final assembly and testing.
Another example: vacuum break-assist assemblies, which prevent engine "roll" during acceleration.
"What it shows is, there's a continuing evolution within the automotive market," said John Saxon, president and CEO. "There's a continual drive to become more innovative, to push the envelope, and weight reduction. And plastics, particularly engineered plastics, are serving that need."
DLH received a General Motors Supplier of the Year award in March for the sixth year in a row.
Saxon also announced DLH is opening its first assembly plant in Mexico, to serve automakers in that country. The 30,000-square-foot plant will open in Matamoros in the fourth quarter.
Saxon said the Mexico plant will probably be a mirror image of an assembly factory DLH opened two years ago in Bristol, Tenn. DLH also runs an assembly plant in Carrolton, Ohio, near Canton.
He called the assembly operations in Tennessee and Mexico "obvious evolutionary steps." The company's Ohio operations previously had shipped assemblies to customers in Mexico.
"This will make it more convenient from a transportation standpoint," Saxon said.
The company's growth has continued after the recession of 2008 and 2009. The rebounding auto industry remains the core business, but DLH has diversified its product offerings, developing new products like the turbo actuator, a high-volume line of quick connectors and a battery coolant manifold for electric cars. DLH also has spread its customer base, from just a handful a decade ago to 114 customers today.
The Canton headquarters is the center of automated manufacturing, injection molding, extrusion, and mold and die making, plus new product development. DLH also has design engineers based at the factories of major customers, according to Dan McNary, vice president of sales, who is based in Southfield, Mich.
DLH employs 600 people and generates annual sales of about $50 million.
During the recession, DLH continued to invest in automated tube forming, all-electric Roboshot injection presses, and new products. Its own technicians develop the automation. "We knew we needed to push ourselves from a technician standpoint," Saxon said.
"We never let ourselves think that we weren't coming out of it. We knew the automotive industry was not going away," Saxon said. "We suffered a serious setback as an industry. But we were coming back, because people still need to get from point A to point B. And the rebound has been tremendous. I think we're all smarter. We all, that are still playing in this industry, have stood the test of time."
DLH makes a lot of tubing assemblies, joined together with its own molded fittings. Saxon said that as automakers trim weight to meet stringent fuel economy standards, they're giving a lot of attention to every single component, even something as basic as tubing.
A piece of rubber hose has thicker walls, Saxon said, so a tube extruded from nylon or thermoplastic elastomer is about 17 percent lighter. Thermoplastic also is recyclable.
And DLH can extrude colored tubing, to error-proof assembly at the car plant. Rubber just comes in black.
Saxon said DLH's investment in new connectors also helps out assembly.
"There are many facets to our customer. The engineering department, that's our customer. And then there is the end user, that's our customer. There is the assembly plant itself, which is our customer. And then there is the end-user, which by extension is our customer. That's a lot of customers," he said. "And if you're in automotive, you've got to be thinking along those lines for each and every automotive supplier. And you've got to service all the way to end user. That's where having an experienced automotive supplier, and an innovative-type company, helps."
DLH, founded in 1975 by brothers Doug and Vern Houck, has an experienced workforce. McNary has worked at the company for 26 years. Matt Reese, a 28-year veteran, started out at age 19 filling hoppers and now is vice president of manufacturing. Saxon has run the company for 10 years.
That experience level allows DLH to run a "very flat organization" that can make decisions and respond quickly, Saxon said. He said it gives DLH an advantage over competitors. "Some of them are huge, and they have a great deal of bureaucracy. We don't have that," he said.
But he said DLH faces the challenge of all manufacturers: finding young workers with technical skills. The company has started a co-op program at the University of Akron for engineering students. DLH also recruits on college campuses, including UA and Penn State Erie.
The strong automotive comeback means that big suppliers and the automakers have reabsorbed a lot of the engineering talent.
"As your business grows, your technical resources have to grow. And if you have a difficulty in the marketplace, you have to go where you can find those people. So we're making the investment in those young minds," Saxon said.