Two plastic molders, Moll Industries Inc. and Trim Systems LLC, have bought outside companies to boost their in-house design and engineering operations.
Both acquisitions are part of a growing trend, greeted by design and engineering experts, for molders to form free-standing design houses that they own and control.
``Most of us have been hoping for this to happen for the last 10 years,'' said James Karlin, a design consultant and president of a recruitment firm called the Search Team in Fairport, N.Y. ``Our biggest wish is for molders to get involved as early as possible to produce better designs.''
Other large molders, including Mack Group Inc. in Arlington, Vt., and Nypro Inc. of Clinton, Mass., recently have formed their own product-development houses.
In the case of Moll, the firm has taken advantage of another company's distress. Compression Inc. of Louisville, Ky., filed for Chapter 11 bankruptcy protection March 8. The firm recorded about $30 million in sales last year at its six locations.
The company, one of North America's largest prototyping service bureaus, had difficulty fighting ever-thinning profit margins and declining costs of entry, sources said.
Compression decided to sell off its operations instead of liquidating them, said Chief Executive Officer Robert Leasure. By moving into bankruptcy court, new buyers will not have to assume company debt, he said.
``We thought that was the best path to take,'' Leasure said in an April 29 telephone interview. ``Associating with molding companies makes us a much stronger organization. The good news for us will be that our operations will continue and our employees will still be working.''
Compression, with 210 employees, has sold three facilities to Moll Industries, a Knoxville, Tenn.-based injection molder. About 80 people will move from Compression to Moll as part of the acquisition. The sales price was not disclosed.
Two of the facilities, in Atlanta and Toronto, do conceptual work and other upfront product-development functions, said Mike Red, Moll marketing vice president.
The other facility, in Irvine, Calif., also conducts full-blown product-development functions. That includes modeling, prototyping, prototype tooling and some limited-run molding.
The acquisition helps Moll deepen its design and engineering capabilities, said Moll Chairman George Votis. As part of the acquisition, the company picked up 24 new design engineers at three locations.
Moll plans to run the design studios as a separately functioning group under a new name, Votis said.
By bringing enhanced product-development work in-house, the company will respond to several customer requests, Votis said. Those customers, from a variety of industries, are clamoring for shorter product-development time, faster work, and innovative, highly creative parts.
But not many molders have made the same business leap that Moll is undertaking, Red said. The company expects more processors to catch on eventually.
``To be effective on the creative side of the business requires a completely different mind-set,'' Red added. ``Creative, fun and sexy are not words necessarily applied to injection molding.''
The need for upfront design work is especially critical in the medical, telecommunications and consumer-product industries, Votis said. ``It's a totally integrated solution from front-end design through production,'' he said.
The firm will use the design capabilities as it continues to grow. Moll expects to record more than $450 million in sales this year and is considering opening a new plant in South America, Votis said.
Meanwhile, Compression expects to announce the sale of its three remaining facilities in early May, Leasure said. After that, the company will sell its name and close its doors.
Another molder, Trim Systems of Columbus, Ohio, is following a similar path toward product development. The company, molding parts for heavy trucks and off-road vehicles, was formed in the fall of 1997.
Since then, Trim Systems has decided to take an aggressive approach to help its customers with product development, said President Don Cuzzocrea.
The company has purchased design firm R-Squared Inc. of Rochester Hills, Mich., to give the company a product-development presence in the Midwest.
R-Squared, which is changing its name to Trim Systems Rochester Hills, performs both computer-aided-design and engineering work at a 28,000-square-foot facility. The company has 16 employees, some of them former designers for automotive suppliers, said product development manager Rob Chastain.
Chastain, a former R-Squared principal, said joining forces with a molder was a good step for the small firm. ``A company doesn't have manufacturing if it doesn't have good design,'' he said.
Meanwhile, Trim Systems also plans to open a 10,000-square-foot design center in Vancouver, Wash., by late summer, Cuzzocrea said. The center will be located near a Trim Systems plant, providing CAD functions, a model shop, full-size prototypes and a gallery of materials and new technology.
The company expects to invest about $1.5 million in the new building and equipment, he said.
Trim Systems recorded sales last year of $165 million and has eight plants.
Besides the transportation market, the company also serves the medical and marine industries.