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March 13, 2006 01:00 AM

USF works to add value, cut costs: Part 1 of 2

Bill Bregar
Senior Staff Reporter
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    One of U.S. Farathane Corp.'s star products - the ``leaf screen'' that fits between the windshield and hood - grabbed attention at TechWorld, General Motors Corp.'s closed-door trade show for more than 1,800 GM engineers, plus top executives.

    A lot of sexy technology is on display at TechWorld - things like hydrogen fuel cells, a heater that instantly warms cars and an electronic device that lets a car start only after scanning its owner's fingerprint. In another setting, with a different audience, USF's plastic cowl panel might not stand out.

    But the automotive industry defines ``sexy'' differently than Mr. and Mrs. Car Buyer. USF's cowl could save GM millions of dollars in parts and assembly costs by using the two-shot injection molding process. Molding in the flexible lip for sealing, rather than assembling it in a second step, also gives a quieter ride, since nothing can come loose.

    GM is studying more than 30 parts from USF, many of which were displayed at TechWorld. GM also named USF to its roster of top 300 global suppliers, and in January, USF won a supplier excellence award from the automaker at Detroit's North American International Auto Show.

    Saving money while improving the final part. That formula is winning notice for USF in the rough-and-tumble industry, said Andrew Greenlee, president and chief executive officer of the midsize plastics processor with about $80 million in 2005 sales - and Plastics News' Processor of the Year.

    ``If you're not growing successfully with new products with strong value with the customer, you're not making it,'' Greenlee said. ``If you keep the same book of business, and try to cover givebacks and resin and wage increases and all that, there's no way you can survive.''

    Greenlee is a rising star in automotive supplier circles. Just 38 years old, he's already a 10-year company veteran. He joined U.S. Farathane as director of sales and marketing in 1996, then was promoted to executive vice president. He became the top executive in 2001.

    The Sterling Heights-based company runs four injection molding factories and two extrusion plants, all in Michigan. Greenlee said employment will grow from the current 575 to more than 650 when USF begins operating its new southern plant in Jackson, Tenn., this year.

    The Tennessee plant, and new molding work overall, will help boost 2006 sales to around $100 million, Greenlee said.

    USF's two-shot parts include side shields for seats, steering column seals, headlight and taillight housings, and cluster bezels and other interior trim parts. A dual-durometer air conditioning seal uses two-shot molding to replace foam with elastomers. The company also makes two-piece, hot-plate-welded brake reservoirs.

    A dedicated 13-press factory in Madison Heights, Mich., makes guides for headrests - more than 30 million of them a year. A nylon stem and a polypropylene cap are molded for each guide, the part that metal headrest bars slide down into. Automated assembly machines marry the components together and test each guide.

    Around Detroit, Greenlee and his management team have earned a reputation for picking the right technologies to invest in, such as two-shot molding and coextrusion. In the past five years, USF has found a way to evolve from a largely shoot-and-ship molder into a maker of value-added parts.

    In addition to the GM honors, USF has won top supplier awards from big-name customers, including Lear Corp., Johnson Controls Inc., Delphi Corp. and Visteon Corp. Plastics News presented USF with its Processor of the Year Award on March 7 at its Executive Forum in Tampa, Fla.

    USF was a PN finalist last year, but the award went to another automotive supplier, Miniature Precision Components Inc. of Walworth, Wis.

    USF Strong points

    Because automakers demand annual price cuts, suppliers are under constant pressure to win new jobs. ``But finding ways to reduce the cost of current products is just as important as churning the new work,'' Greenlee said.

    The judges - who are Plastics News reporters and editors - gave USF strong grades for financial performance, customer relations and quality, employee relations, technological innovation and environmental performance.

    Creativity, tempered with a battle-hardened automotive mentality, is what keeps USF moving as fast as traffic on the Lodge Freeway. Two-shot molding has steadily increased each year, from around 15 percent of total sales in 2000 to more than 40 percent now.

    USF has been consistently profitable. For several years, sales bounced around the mid-$60 million dollar range as management got rid of shoot-and-ship molding. Then sales jumped more than 10 percent in 2004 and 2005. The payoff came from winning new, higher-margin work.

    USF now is one of the largest U.S. multicomponent molders, but the company is more than a two-shot wonder. Officials never stop looking at new technologies.

    At GM TechWorld, USF handed out drink coasters showing off a new way to make decorative aluminum trim, found on interiors of high-end vehicles, by back molding. The current method is to mechanically crimp the aluminum onto the plastic base. Stephen Leonard, director of new business development, said the company developed a tie-layer technology that etches into the aluminum and affixes the injection molded plastic to the outer trim. ``There's no possibility of air, no possibility of separation, and no denting,'' he said.

    The trim innovation could win USF new markets, such as appliances, Greenlee said. ``It's much less expensive, and it performs at a much higher level,'' he said. ``We wanted a differentiation.''

    The commitment to moving ahead also filters down to employee relations. Farathane boasts a low absentee rate, a good safety record and open-door communications through weekly meetings with general managers. But even more important, workers who were interviewed were excited that their company invests in new technology, searching for ways to improve. That's a powerful motivator.

    Clearly, a young and enthusiastic Greenlee, and the other managers, have energized employees. A recently hired salaried employee said: ``This is a well-rounded group of people that really want to succeed.''

    ``I'm just very proud of the people in this company,'' Greenlee said. ``You try to build stability throughout the company. It's certainly not just me - the key thing is building the team, getting people in the right place and getting the most out of them.''

    Greenlee also has meant stability in what had been a revolving door of top executives, as five CEOs had passed through in less than 10 years.

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