Given all the bad news since January — the U.S. plastics industry has been force-fed a diet of layoffs, bankruptcies and plant shutdowns — the latest news from Mount Gilead, Ohio, looks like a happy ending.
HPM Corp., the second-largest U.S.-owned manufacturer of plastics machinery, is about to get a new owner: an investor group led by President and Chief Executive Officer William Flickinger.
The deal isn't an ending, though; it's a beginning. Employees, customers and competitors will be watching as the tale unfolds to see what sort of business formula the new owners have in mind. The top question: Will they stick with their plan to keep all three businesses — injection presses, extruders and die-casting machines?
Rumors about HPM seeking a buyer go back at least several years. But the rumbling, fueled by the economic slowdown, became more urgent in recent months. HPM workers, suppliers and sales representatives quietly have watched for a signal that the company had a survival plan.
Considering that HPM was founded in 1877, this isn't the first time the company has faced difficulties. The most recent change in ownership came just five years ago, when the deep-pocketed folks from Stadco Inc. in Los Angeles bought HPM, bragging that they would triple sales within a few years.
HPM has held its own since then, but the new investors found out it wasn't easy to expand the company's market share. The machinery market, and HPM itself, didn't grow fast enough to suit their taste.
Now that the Stadco investors are leaving, folks in Mount Gilead hope HPM will thrive in a new era of local control. Perhaps it will. The fact is, though, that HPM would be stronger if it were merging with another machinery firm. Discussions were held with some key competitors, but nothing came to fruition.
Flickinger's group appears to offer the status quo. HPM survives another day, the big local plant stays open, workers' jobs will be saved. HPM can ride out the trough just a little while, until the economy starts to pick up. Then the owners can cash in on the years of goodwill that they've rescued by buying the company at the bottom of the cycle.
Perhaps, at this point, survival is a worthy goal.