Reed City, Mich. — The last year has brought big changes to the ownership, operations and direction of Reed City Tool, and the next few years will bring more as the company looks to double in size and expand its injection molding division into another facility.
Founded in 1959 in Reed City, a small Michigan city about 70 miles north of Grand Rapids, the business offers mold building, hydraulic press and automation equipment, and plastic injection molding to the automotive, consumer goods and medical markets.
With total sales of about $24 million a year, each of the three business units is poised for growth under its new owners, Argosy Private Equity and Stone River Capital, President and CEO John Barnett said.
The two firms have invested about $2 million into Reed City Tool since buying it in May 2017 and bringing Barnett on board. There's also a heightened emphasis on 5S and lean manufacturing initiatives, as well as filling key positions for staff and trades.
"The shop looks, feels and functions very differently than it did eight months ago," Barnett said during an interview at the company. "It took some investment in machinery, equipment, technology and foundational business processes to get here. We have best practices in place, and our team is well-positioned to take on new challenges while remaining a high-quality and competitive partner."
About $1.5 million of new equipment was installed in the fourth quarter of 2017 to increase throughput on the mold building and automated equipment side, which got a five-axis CNC machining center and a six-axis vertical milling machine.
"That technology separates the run-of-the-mill mold builders from the high-end mold builders," said Ron Marek, Reed City Tool sales program manager.
The company's tooling services led to the startup of the injection molding unit along with growth in the auto sector.
"Being a mold builder, it's necessary to sample the tools after you build them, so we ended up buying some injection molding presses," Marek said. "At some point, an automotive customer said, 'You have th epresses. Why don't you run me a small sample of 5,000 parts?' We did that, and they said, 'Why don't you just keep running it?' We realized that was a good area to expand in, and the owners got a few more presses and a few more presses."
Martinrea International Inc., a previous owner of Reed City Tool, is the company's largest automotive injection molding customer, but Barnett said other near-term opportunities can change that mix going forward.
"Our design staff plays an integral part of the prototype and development process for our customers, and that puts us in a great position to produce the injection molded production parts," Barnett said. "In fact, it's the staff and strong workforce that make the possibilities endless at Reed City Tool. We have been a hidden gem, and I want to make sure the market knows what we can do."