Six years ago, in a New Jersey snowstorm, an Asbury Park Press story captured the moment when a wind gust slammed Christopher Filos to the ground as he prepared to tow a car for his family-owned Taylor's Towing and Heavy Hauling.
``I fell on my ass. I think they put that in there, too,'' he recalled, chuckling. ``It was a big Northeastern storm and they did an article about us.''
These days, Filos has no intention of falling down in his new mission: Rejuvenate HPM-brand injection molding machines, sheet extrusion lines and die-casting machines, with a line of metal- forming presses added to the mix.
Filos, just 34, is a newcomer to the ranks of plastics machinery executives. But he's a quick study, said several veteran HPM employees.
``The new owners are younger, and they have a lot of good ideas. They ask a lot of questions and learn the machines very quickly,'' said John Rexford, director of product development. Rexford started at HPM as a cooperative student in 1963 - before Chris Filos was born.
Filos comes across as a Michael J. Fox type: young and sincere and hard-working, with a sense of humor that suggests he does not see himself as the center of the universe. He will need all those skills to repair the damage done when HPM shut down in the summer of 2001, after months of financial trouble.
Ken Eichhorn, director of engineering, has worked at HPM for 24 years. ``Chris has been very refreshing. Your initial response is how could somebody that young know anything about machinery? But he's a sharp character, and he knew about the industry from Taylor's Towing,'' he said.
Filos, indeed, is not a total greenhorn when it comes to plastics machinery. In fact, he has hands-on experience behind the wheel of the 19-axle, 72-tire truck used by Tinton Falls, N.J.-based Taylor's Towing that hauled two HPM Next Wave presses, with 5,000 tons of clamping force, to Saturn Corp. He negotiated the Tennessee mountains to deliver several loads to Spring Hill in 1998.
``We still move them for my competitors, for Milacron and Van Dorn,'' Filos said in his wood-paneled office at HPM headquarters in Mount Gilead.
Filos is president and chief executive officer of the manufacturing side of his family's business, a sister company called Taylor's Industrial Services LLC, and its HPM Division.
In a wide-ranging interview, Filos explained why Taylor's got into plastics machinery and outlined his vision for the future. He said the new HPM has almost no debt, giving it an advantage over competitors suffering through today's depressed machinery market.
``We're starting from scratch,'' Filos said. ``I think we reduced the previous debt by 90 percent. HPM was $32 million in debt two years ago. We're down to 10 percent of that. None of my competitors can say that.''
Filos also is patching up relations with suppliers and customers bruised when the old HPM ran into financial trouble.
The buying history:
Price was right, really
On July 30, 2001, Taylor's Industrial Services announced its deal to buy the assets of HPM for $10.5 million.
Almost immediately after that, on Aug. 1, HPM Corp. filed for Chapter 7 liquidation in U.S. Bankruptcy Court in Columbus, Ohio.
Taylor's bought the assets from Fleet Capital Corp., HPM's largest creditor. Fleet had taken over the company since 1996 from HPM's owner, Stadco Inc., a company that precision-machines aerospace components owned by Los Angeles businessman Parviz Nazarian and other investors.
HPM was one of the early U.S. makers of injection molding machines, starting with basic hand-cranked models in the early 1930s. Filos estimates there are roughly 7,000 HPM injection presses running around the world today, and 22,000 total machines if you include injection molding, extruders, die casting and metal fabrication.
With that many machines, HPM's annual spare parts business is worth about $10 million, industry sources say. That means Taylor's could recoup its purchase price in one year of spare parts sales.
Importantly, Taylor's did not buy any of HPM's liabilities, listed by court documents as more than $10 million owed to unsecured suppliers and other creditors.
That meant the new owners could start fresh. But one roadblock to Taylor's ownership came a few months after the deal. Sara Daneman, the court-appointed trustee for HPM, filed a lawsuit asking the bankruptcy judge to void the sale.
Taylor's bought the assets from Fleet, which had repossessed HPM. What bothered Daneman was the fact that the $10.5 million price tag closely matched the amount - $10 million - that HPM Corp. owed to Fleet. That left nothing for other creditors.
The lawsuit hung over the heads of the new owner like a rain cloud, even as Filos built up employment to 150 people. Daneman claimed the HPM assets were worth more than $10.5 million, and she suggested there were other potential buyers - charges vehemently denied by both Filos and Fleet Capital.
Finally, in May 2002, Daneman gave up the fight, filing a motion to allow the sale. ``Upon further investigation ... it is the trustee's belief that the sales agreement between Fleet and Taylor is a valid and binding agreement,'' the motion said. The judge approved the sale.
Filos still lives in New Jersey, but he spends about four days a week in Mount Gilead. His brother Joe Filos Jr., is HPM's vice president of marketing. Another brother, Doug, works in the trucking business with their father, Joe Sr.
Joe Sr. and Chris Filos bought the towing and hauling business in 1990. The family had owned a New Jersey trucking company, when Joe Sr. bought a used tow truck from a company called Taylor's Towing. Deregulation was hurting the trucking industry. Ready for a change, Joe Sr. mortgaged his house and made a proposal to his son Chris, who had just graduated from the University of Arizona with a bachelor's in biology and chemistry.
Chris Filos said he had long-term plans to become a doctor. Instead, he ends up in a blizzard pulling cars out of ditches.
By purchasing HPM, the Filos family inherited a piece of Americana, a company founded in 1877 to make apple presses. But they also took on a major challenge: How to regain the trust of customers, suppliers and small-town Mount Gilead.
HPM's 175-year history was rudely interrupted July 2, 2001, when HPM shut its doors after months of financial turmoil and layoffs to close out the five-year ownership by Stadco.
Rumors about HPM being sold were nothing new in this village of 3,300, two counties north of Columbus. For decades HPM had been through its ups and downs. But things actually started to deteriorate a year earlier, when a sister plant in Germany, which made Hemscheidt injection presses, went bankrupt and shut down.
The German machines also caused quality problems for HPM, because of faulty hydraulics. Customers complained about the Hemscheidt machines, sold in the United States as the two-platen Next Wave line, until the company finally corrected the problem by bringing all production to Mount Gilead.
After investing several million dollars into the aging factory, Stadco stopped putting money into the operation. HPM President William Flickinger tried to put together investors and buy the company. Fleet took charge and controlled every dollar of spending. Payments to suppliers got stretched out, then stopped. Employment slipped from more than 500 two years ago down to a skeleton crew when it closed.
Mount Gilead held its collective breath.
Making a fresh start
Taylor's knew HPM from hauling its machines. Filos said that Taylor's, at first, wanted to buy only the HPM die-casting machines. The plan was to move it to a small metal fabricating job shop that Taylor's was leasing in Hobart, Ind. Filos said Taylor's had purchased the equipment at an auction of a heavy-equipment maker, another hauling client, and gone into business in early 2000.
But after doing more research ``we ended up buying the whole company, which was very attractive.'' Instead of moving to Indiana, the Indiana operation moved to Mount Gilead.
Today Taylor's HPM Division employs 150 people making the complete line of injection molding, extrusion, die-casting and metal-forming machines.
``The trucking is still an integral part, because I'll tell you right now there is no other large manufacturer that builds something over 100,000 pounds that can deliver it themselves. Sell it. Design it. Manufacture it 100 percent, deliver it and install it all under one name, without outsourcing it,'' Filos said.
Folks in Mount Gilead are warming up to the new owners. To celebrate the 175th anniversary of HPM, and the first year of ownership by Taylor's, the Filos family held a party in August on the lawn in front of the factory. Hundreds of people enjoyed food, beer and a band. Chris Filos invited the mayor, county commissioners, sheriff and other local dignitaries.
Filos respects the history. Rummaging through his new office, he found a complete record of the company. ``I still have all the ledgers and they're in those thick leather binders, all the way from 1877,'' he marvels.
For local government officials, it's a big change from the Stadco regime, when Mount Gilead's largest employer did not return phone calls.
``This was the first time we've been invited to anything of that nature there,'' said Olen Jackson, a Morrow County commissioner. ``He's working extremely hard to make this thing work. It was a step in the right direction.''
Claiming stake in PH; taking on Welltec USA
Rebuilding HPM won't be easy. The plastics machinery market declined 40 percent last year, and business continues to stagnate. Most people would say this is a bad time to get into equipment, Filos is asked. ``Really?'' he says, laughing and opening his eyes wide in mock surprise.
Even so, Filos is optimistic. He got in at the bottom. ``I bought the company at the best time someone could have. Because there weren't too many orders that were missed, as we were scaling up and putting our infrastructure in place.''
The sheet extrusion business made some sales right after the acquisition, including a $3 million line to Baxter Healthcare Corp. for blood bags. HPM just completed a second line for Baxter.
Injection press sales have been slow, mirroring the overall industry.
Filos is realistic. A year ago, when he bought HPM, his original projection was to get the parts and service business going, then start to see new-machine sales rebound back in the third quarter of 2002. Quoting activity has started to increase.
``We can also tell by the type of parts people are buying that they're starting up the machines that have been idle. They're starting up old machines,'' he said.
HPM should have 2002 sales of around $50 million, about half the $100 million annual sales HPM had when it was healthy, Filos said. He blames the slow economy.
Taylor's Industrial Services is making a commitment. The company is negotiating with the court trustee to buy HPM's 200,000-square-foot building, which was not included in the assets it acquired.
Filos also revealed that Taylor's Industrial Services earlier this year acquired a stake in PH Group Inc., a Columbus, Ohio, maker of vertical injection molding, compression molding and metal-stamping machines.
PH Group and HPM remain two separate companies, but they will direct interested customers to the other company's machines. The deal also gives HPM access to vertical-clamp injection presses.
``They do a lot of our machining and fabricating. We share engineering resources,'' PH Group President Charles Sherman said.
HPM also has strengthened its relationship with Hong Kong-based Welltec Machinery Ltd., which makes the base machine for HPM's Universal press and the new, lower-priced GP line.
The news is that HPM is now handling spare parts and service for Welltec in the United States. Gary Edington, former vice president of Welltec's U.S. operation, now works for HPM out of Mount Gilead as sales manager for small-tonnage injection presses.
The parts arrangement should give HPM a boost. Welltec has sold about 700 injection presses to U.S. molders in the past decade, according to Filos and Edington.
HPM also has opened an office to sell die-casting machines in Beijing, China.
New HPM seeks trust
The new HPM is working to please old customers and suppliers. On the customer side, HPM is standing behind machines in the field, including the problem-child Hemscheidts. The company has set up a separate operation called Taylor's Support Services, staffed by 20 people.
``We're starting over as almost a new company, and we have to rebuild the trust of customers all over again,'' said Gerry Sposato, director of sales and marketing.
Sposato said the company is servicing machines sold decades ago. ``We had a customer that called the other day that has a problem with a feed section on an extruder that was sold in the 1980s. It'll be fixed,'' he said.
Three HPM injection press owners reached by Plastics News said good things.
``He's got a big challenge. He's got to overcome the reputation and the only way he's going to do that is he's got to try and correct the sins of the past owner,'' said Steve Pierik, facilities manager at the Collins & Aikman Corp. plant in Sterling Heights, Mich. The plant bought four of the German-built 1,750-ton Next Waves. ``They had problems with these machines that were almost insurmountable,'' he said. Under Stadco, HPM did not support the machines, he said.
Pierik said he had to convince his colleagues to give the new owners a chance to try and get the machines running smoothly. Filos means what he says. ``He's not trying to BS anybody. He stepped right up and he got me the parts we needed right away. And I mean like in four hours.''
Three 3,000-ton Next Waves pump out parts for dishwashing machines at GE Appliance Park in Louisville, Ky. Frank Varner, injection molding manufacturing engineer, said GE has had some problems with the locking mechanism and pancake cylinders.
``So far I've been able to get spare parts I needed,'' he said.
Rehrig International Inc., a leading maker of plastic shopping carts, bought two Next Waves in late 2000. They were some of the first redesigned Next Wave presses, fully U.S.-made, said Norman DeCost, vice president of product management at the company in Richmond, Va.
DeCost gave high praise. ``I worked at Rubbermaid for 22 years and I was involved in buying all the presses. I've bought thousands of presses. These two presses are the best-running presses I've ever had,'' he said.
``I'd buy again. If we need another large machine, I would not hesitate to buy another one just like the one we've got,'' DeCost said.
Saturn declined to comment, citing a policy not to talk about supplier relationships.
Suppliers got burned when HPM went bankrupt. Filos can relate; Taylor's Towing lost nearly $100,000 for hauling jobs.
Now several suppliers said they have no problems shipping to the new HPM.
``We are taking purchase orders from Taylor's HPM and we're delivering parts. They've been paying on time. They're a good customer, and I've had no problems whatsoever,'' said Ed Crist, president and owner of Component Manufacturing and Design Inc. The company makes screw-tip nonreturn valves in Brunswick, Ohio.
Gunther Hoyt said Xaloy Inc. is shipping barrels to Mount Gilead. ``We're delighted to do business with them. They've been very professional. No problems here,'' said Hoyt, vice president of sales and marketing at the firm in Pulaski, Va.
HPM is buying sheet dies from Cloeren Inc. of Orange, Texas, and Extrusion Dies Industries LLC in Chippewa Falls, Wis. Both companies report a good working relationship with the machinery maker.
``You can't let the luggage from the previous company hurt your relationship with the new entity,'' said President Peter Cloeren. ``You have to handle them like you would any new credit.''
Easing the transition is the fact that Taylor's employs many former HPM staffers. Crist of CMD said he likes dealing with the same people.
Even during the dark days and layoffs, people stayed in town. Now they're giving new life to HPM.