Known for promoting from within, Milacron Inc. has gone outside for a new global plastics boss as the company tries to bounce back to profitability after six straight money-losing years-but Bob Simpson says he is not an agent of radical change.
``If you take a look at the steps that Milacron has taken all along, again, everything's focused on long term. And we'll continue to do that,'' he said.
Milacron named Simpson, 47, president of global plastics machinery on Nov. 17. Since then, he has been busy meeting with employees and fellow executives, suppliers and customers. He brings an outsider's perspective, but not too far outside, given his experience in automotive plastics.
``My background is more in operations, so [this means] taking more of an operational approach and helping the company on the cost side, rationalizing products and putting in a robust supply-chain organization. I think I can help more immediately than maybe selling machines,'' he said.
Some of the changes in products and the component sourcing were going on before Simpson arrived. He said the moves will improve the company's competitiveness, and he wants to foster a sense of urgency. ``Here's the plan, but why can't we get it done early? What can we do right now, to get the low-hanging fruit?'' he said during a mid-January interview in his office at in Batavia, home of Milacron's main U.S. assembly plant.
But he also stressed a long-range outlook will continue to drive the maker of injection and blow molding machines, extruders, structural foam equipment and mold components.
``It's a great workforce. Absolutely the best. And I think we can capitalize on that,'' he said. ``We might have to shift some little things. But it's not an overhaul, it's a tweaking, because I think that there are components here in the strategic plan that are right on and again, focused on the long term. There's some things that we can do maybe a little bit better in the short term, and we'll get that done. We'll concentrate on urgency.''
Simpson replaced Karlheinz Bourdon in the top machinery spot. Bourdon, a 14-year Milacron veteran, remains with the company to head up global injection molding machinery. Simpson has a bachelor's degree in manufacturing engineering from Ohio's Miami University and an MBA from Western International University in Phoenix.
Simpson brings first-hand understanding of automotive suppliers-a key market for Milacron, especially its large-tonnage injection presses. Most recently, since early 2005, he was president of Siegel-Robert Automotive, an injection molder based in Farmington Hills, Mich., that is a division of Siegel-Robert Inc. of St. Louis.
Before Siegel-Robert, he spent nine years at Textron Automotive Co. Inc., as senior vice president of operations at the plastic trim division and president of Kautex Textron North America, a supplier of blow molded gas tanks.
U.S. sales of large injection presses could get hurt this year, after production cuts by the Big Three of General Motors Corp., Ford Motor Co. and DaimlerChrysler Corp., industry observers say. Also, a series of factory auctions have dumped some late-model presses on the market.
Asian transplant automakers are winning more business, and attracting Tier-1 and Tier-2 molding work. Simpson said Milacron recently got an order for a large press, with 3,500 tons of clamping force, for a U.S. supplier to a Japanese transplant. Milacron executives have reported some other transplant-related sales, but have declined to identify the customers or the car company.
Simpson has personal contacts at automotive molders, such as Collins & Aikman Corp., which bought Textron's trim operations in 2001, Magna Donnelly Corp. and Plastech Engineered Products Inc. Milacron has competitive machines with a good name in automotive, he said.
``When you take a look at all injection molding [machinery companies], I would say that we might be in better shape than the majority of them. Certainly, we're in the top tier,'' he said.
One thing automotive customers need is fast spare parts and technical support. Simpson said Milacron needs to keep beefing up its ServTek aftermarket business and machinery rebuilding. ``We want to be on the proactive side and make sure we're out there checking up on the equipment and helping our loyal customer base, make sure that machine stays up and running as long as it possibly can,'' he said.
Milacron has become more international, with factories in India and China. The company also has a longtime injection press plant in Malterdingen, Germany, its Ferromatik Milacron business.
Milacron's extrusion business has gotten more aggressive overseas, after its noncompete agreement ended with SMS AG in January 2005. Milacron had been blocked from selling outside of North America since 1999, when it sold an extruder business in Vienna, Austria, to the German conglomerate.
Simpson has visited the Ferromatik plant. He just got back from another trip to Europe. Next it's on to China, to visit Milacron's plant there, and to Japan to shore up the company's long relationship to distribute the all-electric Roboshot press from Fanuc Ltd.
Simpson plans to visit Milacron's plant in India soon. Milacron plans to expand capacity in India, he said. The company in December booked an order for 15 injection presses from a South Korean automotive supplier that is putting a factory in India - an example of the interconnectedness of global manufacturing. Also, the plant is serving more regional customers, outside of India.
Even as Milacron expands around the world, its home base of North American continues to generate about half of its machinery sales. The slowdown in North American equipment sales has hurt.
As one of a few publicly traded plastics machinery companies, Milacron's financial warts are available for all to see.
The Cincinnati-based company has lost more than $500 million from 2001 through 2005. Through the first nine months of 2006, it lost $31 million.
When Simpson's hiring was announced, Ronald Brown, Milacron's chairman, president and chief executive officer, said Simpson would play a major role in moving Milacron forward.
``His in-depth knowledge as an end-user of plastics machinery and technology, along with his proven ability to lead and get results, will be instrumental in achieving our sales growth and product cost-reduction objectives,'' Brown said.
Simpson said Milacron has a solid future. He points to a new five-year revolving credit line from General Electric Capital Corp., announced Dec. 20. The GE credit, which increased the machinery maker's borrowing capacity by about $17 million, replaces Milacron's credit line from JP Morgan Chase.
In 2004, Milacron jumped over a roadblock by successfully refinancing major bond debt and bringing in large new investors.
``I think Ron and the rest of the group that has been here, again, continue to focus on the long term. The immediate issue of liquidity and cash, that's a big hurdle and we've gotten beyond it. And more important-and you cannot overlook this-now you've got GE and the other people wanting to invest in us,'' Simpson said.
Simpson is in for the long haul. He's not a quick-fix guy. ``No. I want to retire from here. That's my sole purpose. I have a vested stake. My blood's in the game here.''