CPP’s Upgrade in Business Class
A bankrupt business less than a decade ago, the CPP-Minneapolis aluminum casting facility has developed into its parent corporation’s flagship operation thanks to renewed investment and business discipline.
Nicholas Leider, Associate Editor
(Click here to see the story as it appears in the September issue of Modern Casting.)
For many in the American metalcasting industry, and the U.S. manufacturing sector as a whole, surviving the economic turbulence of the past decade has been a victory unto itself. The global recession, numerous regional economic crises and the impact of offshoring on the American market made many businesses content to stay afloat during a trying time.
But for Consolidated Precision Products’ (CPP) Minneapolis aluminum and magnesium casting facility, the past decade has been as much about learning to thrive as it has simple survival. Known as Hitchcock Industries since its founding in 1916, the single-site, family-owned operation had served the aerospace and defense industries for three generations. But the nobake sand casting facility experienced significant financial hardships after a number of market disruptions in the wake of the 9/11 terror attacks. Eventually, Hitchcock Industries filed for bankruptcy in 2006, and it then was purchased by CPP, a privately owned manufacturing group that now owns 19 sand casting and investment casting facilities in the U.S., Mexico and Europe.
Following the acquisition, CPP provided annual capital expenditures in the seven figures to improve outdated infrastructure and machinery. The parent company maintained a large segment of the workforce from its time as Hitchcock Industries, but management was reorganized. The corporate leadership stressed financial accountability and discipline, which had been deprioritized under previous ownership.
Now, thanks to organizational changes and consistent growth in its core markets, CPP-Minneapolis has undergone a resurgence. The facility hopes to top $90 million in sales this year, up from $50 million when it was purchased in 2006.
“In the past nine years, this place has changed drastically,” said Cori Potter, purchasing manager, CPP. “We were a family owned company in some financial trouble, but now we’ve embraced a new structure with a new dynamic. It’s undeniably better and we have a very positive outlook for the future.”
Recognizing Untapped Potential
When Hitchcock Industries declared for bankruptcy in 2006, CPP saw a unique opportunity to acquire the foundry in addition to Watkins Pattern, a pattern shop literally across the street from the casting facility that could be a natural complement. Purchasing both companies, the CPP executive team emphasized process improvements and mechanical upgrades to what had been an aging facility.
“Changes were meant to be gradual,” said Mark Krings, VP of operations. “CPP invested between $1.5 and $3 million each year in infrastructure and capital equipment, which was about as much as we could handle without a lot of interruption in production. In the meantime, we’ve seen our sales and profitability increase.”
With such a dedication to improving the Minneapolis site, CPP’s executive team expects the 200,000-sq.-ft. operation to show that such financial investments are warranted and well executed. The day-to-day metalcasting processes are managed by onsite personnel, but the parent company remains focused on looking farther down the road.
“We are held to strict budgets, with forecasting driving the financial decisions and long-term planning,” Potter said. “The corporate executive team may not always be here physically, but they have a huge presence and are always aware of what we’re doing.”
With 75% of its business directed toward commercial aerospace—the remaining 25% is military contracts—CPP-Minneapolis has experienced substantial growth in the wake of last decade’s recession. While the defense industry remains more volatile, CPP-Minneapolis has been able to offset any fluctuations in military spending by expanding into the European aerospace market over the past five years.
Because of this steady growth, company executives are confident annual sales will top $100 million in the next three to four years, which would double the facility’s sales when it was acquired by CPP.
Taking a Central Role
While CPP-Minneapolis has experienced a resurgence since its acquisition, the facility’s role within its family of companies has evolved over the past decade. CPP has 19 locations: its Cleveland-based corporate headquarters, six facilities in its permanent mold/sand casting division, 10 investment casting facilities and two processesing centers. The Minneapolis site, producing castings up to 2,500 lbs., is the largest facility with 525 employees, 460 of which are hourly. Because of size, capabilities and engineering expertise, CPP-Minneapolis has grown into the corporation’s flagship operation as a whole.
“We share knowledge, we pool purchasing power and we share resources as much as we possibly can,” said Mark Schneider, process engineer. “We provide a lot of engineering support to smaller facilities who may not have our resources. It’s not uncommon to have other CPP employees come here to shadow our employees, while we also send individuals out to other facilities.”
By purchasing nearby Watkins Pattern Co., CPP allowed the Minneapolis operation to position itself as a one-stop shop for customers by producing patterns, cores and tooling onsite. The metalcaster can reduce certain complications by having such capabilities on one site.
“It is a huge advantage,” Krings said. “When we’re building a tool, our engineers are close by. They can walk across the street to be sure it’s being built to specification. We have operations people who can make recommendations depending on the process or equipment that will be used.”
Beginning in 2015, CPP-Minneapolis has started to position itself as a central source for certain pattern and tooling projects within CPP’s sand division.
“Our goal is to make the pattern shop the go-to shop for CPP’s entire sand division, so we will be able to quote, tool and build various patterns for our sister foundries,” Krings said.
The transition, including an expansion in the amount and types of projects, has been relatively smooth, thanks in part to existing capabilities that have been reinforced through investment in technology.
“It helps having a knowledgeable patternmaking staff and all the necessary CAD tools,” Krings said. “But since [CPP’s purchase], we’ve been upgrading our mills and CNC capabilities so we have been able to accommodate that kind of work without asking for $3 million in immediate upgrades.”
Located in a developed area of Minneapolis just five miles from the airport and 10 miles from downtown, the metalcasting facility has expanded over the years to occupy as much of the available space as feasible. Onsite expansion is not a viable option, so CPP engineers have shifted focus to streamlining operations and improving throughput.
“We’re focusing on various process engineering projects in an effort to improve efficiency in specific areas,” Schneider said. “For example, we had 3M here looking at a new abrasive that would cut faster. We’re looking to save minutes that will add up—that’s how we’ll increase our capacity. We need to be technology driven.”
Capital expenditures for the second half of 2015, for example, aim to reduce a bottleneck in the heat treatment department—which runs 24/7 while most departments run two 10-hours shifts. CPP-Minneapolis hopes to increase throughput with the installation of another furnace by the end of the year.
“The rules are different,” Krings said. “In the last decade, we’ve tightened out belts, we look at things in a more meaningful matter. We are positioned to succeed because we are more informed. We’re working smarter.”