Pouring On Value ... With or Without the Pour

Kim Phelan

The metalcasting business is straightforward enough: Customer needs a casting, so the foundry quotes a price, wins the job, collaborates on design where needed, then manufactures and ships the part. End of story. Except there’s another side to the story, and that’s where Sean Smith steps into the narrative. In a way, he and his family rewrote the rulebook on how to supply castings to customers—which he does effectively today whether he’s the one pouring metal or not. 

His story actually begins 124 years ago, when one ancestor’s course marked a map that would influence Smith’s career destiny.
Like many North American foundries, Smith’s family business, AFS Corporate Member Pittsburgh Foundry, is steeped in rich history and lore. The story goes that his great-grandfather, William Alexander Smith, son of Scottish immigrants, apprenticed with the original foundry’s owner at the age of 18, and by the time he was 20 he had bought the business. The time was 1901 and Pittsburgh was a booming hub for the steel industry. Work was abundant and growing was easy—two years later the business built a second location in Salem, Ohio. Four of Smith’s 11 children eventually joined him full time in operating the foundries. 
Sean Smith, fourth generation owner of the legacy his ancestor built, has 100-year-old photographs and even board meeting notes written in his great-grandfather’s own hand—so it’s hard not to feel a bond with his family’s past. It’s also apparent that metalcasting is not just in Smith’s blood but in his heart. His passion for serving customers and solving their problems couldn’t be extinguished even when the fire ultimately went out at the foundry. 

The Fire Died, But Not the Business

Business was cooling by the 1950s and William Smith and his children started leasing the Pittsburgh building to another metalcaster—they retained offices and the machine shop in that facility and continued pouring castings in Ohio. In the ’70s, pollution regulations put added duress on the cupola-melt iron foundry, which invested heavily in air pollution equipment but struggled to make it work. 

“Hindsight being 20/20, the dollars they put into that equipment on the cupola probably should have been put into an electric furnace instead,” Smith said. “That might have changed the prospects of how we went forward from a business standpoint.”
In addition to regulatory pressures, the foundry’s plight was exacerbated as the steel industry consolidated drastically from the 1960s through the early ’80s, Smith explained, and the number of customers was shrinking. “We were in the business of making fairly large iron castings for the steel industry in particular—that was what we had concentrated on,” he said. “That consolidation hurt, and our business struggled to make the transition. Ultimately, we didn’t.”

In 1986, the Smith family shut down the furnace at their Salem, Ohio, plant, and by the late ’90s eventually sold that property to another foundry. But it wasn’t the last chapter for Pittsburgh Foundry—Smith’s uncles, Chris and Pete, along with William and great-uncles Tom and Dave, got creative and willed themselves to stay in the fight. 

“The way they looked at it, the family had spent some 80-plus years building a business and building a group of customers that we had strong relationships with, and we had value to offer to those around the plant in the summertime, such as digging an eight-foot hole for a new water meter, lots of roofing, and whatever else needed doing, he recalls.  

After graduating, Smith and his father agreed it would be best for Sean to make his own way in the world rather than join the business at that time. “I went to work for a plumbing wholesaler in sales, and it was like graduate business school,” he said. “It was a big company, but they let the individual stores operate like small businesses. So, I got experience with the P&L, with operations, and all different aspects of the business. My customers were all small-business people, so I could relate to them based on my family business, which I had experienced by then. It was all part of the path that was leading me back toward the foundry.”

Smith finally joined his dad and uncles 10 years later doing business development, and while the notion of returning to manufacturing was far from the owners’ minds, he began to sense a customer climate change through his daily interactions in the field. He had a knack for knitting tight relationships that usually produced many referrals that in turn became solid customers. “But what I did find from talking with a lot of them was that because we weren’t making castings ourselves, many were starting to tell me they had other relationships and only needed me if they were having trouble finding solutions. 

“It was getting harder to compete, and then with some customers, you couldn’t even get your foot in the door because they said we didn’t have any skin in the game. They just basically said, ‘Hey, I know how to buy a casting.’

“That’s what led me down the path of deciding we needed to try to do this. I said, ‘Making castings will open more doors for us. There’s business that we can earn that we won’t otherwise earn. Plus it’s our heritage.’ It was something I really wanted to try to do.”

In 2011, under Smith’s leadership, Pittsburgh Foundry & Machine bought H&H Foundry in Manor, Pennsylvania. “It was a very small foundry with a limited customer base, and it was a good way for me to prove that I really didn’t know what I was doing,” he laughed.

“I jumped in with both feet. I didn’t have the right capital to be doing it, and I didn’t have the knowledge to be doing it. It was a big learning experience—we ran it for two years and never made any money with it, but I was lucky we broke even. We took a big risk, and a lot of my gray hairs came from that experience.”

A few years later, along came another opportunity to return to metalcasting, and it proved to be a keeper. Smith’s family had done business with West Salisbury Foundry since the ’80s and remained in close contact with one of the owners, who stopped in to visit nearly every week while doing business in the Pittsburgh area.

“At some point along the way, I said to him, ‘I don’t know what your long-term plan for West Salisbury is, but if you guys are ever interested in selling, we would be interested in talking to you,’” Smith recounted. “He called me back two weeks later. Their goal was to put the business on strong footing to allow it to grow and prosper for the future, but they didn’t necessarily intend to own it forever. They looked at us as a generational family business that was looking to keep growing, and we both realized this could be a very good match.”

Pittsburgh Foundry & Machine structured a merger with West Salisbury Foundry, and the owners stayed on as minority owners and valuable business partners, said Smith.

His company grew again this year when he acquired Lacy Foundries, owned by AFS Individual Member Joe Lacy. Although Lacy had already closed his physical operation, Smith bought his book of business in February and will continue the legacy of Lacy’s five-generation company.

“Joe was both a customer and a supplier for us,” said Smith. “He has very good relationships with a variety of suppliers, a number of which we’ve picked up. In bringing him into our family business and having him as part of what we’re doing, we’ve got this expanded group of customers that we can continue to grow with. It has worked out really well.

“Joe and I have always had a bit of a kindred spirit with a passion for carrying on our families’ legacies in the metalcasting industry,” Smith added. “Putting our businesses together was a natural fit—Joe brings a great deal of casting expertise, experience, and knowledge.”

Threat or Ally?

Today, Pittsburgh Foundry & Machine—which never ceased as a business entity—manufactures gray and ductile iron castings, and they also pour abrasion-resistant “Ni-hard” nickel and chromium irons. But Smith continues to partner with other foundries, as well as machine and fab shops, to deliver casting jobs for his customers when the need arises, as a value-added service. Usually, the foundries he partners with are glad to perform the work he sends their way. 

An exception occurred when one of his regular casting suppliers bumped into a problem with a long-standing job they were doing for Smith. During conversations about how to solve the casting issue, the president of the other foundry discovered Smith wasn’t the end user, and it didn’t sit well with him.

“I don’t think he was taking the time to think about the value we were bringing them, but that’s a very unique example,” said Smith. “Typically, these are very mutually beneficial relationships that we’ve developed over time, and I don’t see it as an obstacle; I see it as an opportunity.

“We’re like another salesman that’s on the road for them that they don’t have to pay,” Smith added.”We’re out selling castings and bringing them business. From our standpoint, we’re bringing value for the customer and we’re bringing value for the casting manufacturer.

What’s Next

Pittsburgh Foundry & Machine has a widespread customer base. Most are within a 200-miles radius of Pittsburgh, but they serve manufacturing companies as far away as Massachusetts, Rhode Island, New Jersey, New York, and North Carolina. Employing a few dozen people who work at the West Salisbury plant—many of whom are related to each other—the company is working toward putting a 5,000-sq.-ft. addition on the foundry. Smith plans to move floor molding, which currently shares space with the core room, to its own area that will be more contiguous with the manufacturing line. 

“Right now, our floor molds have to be moved to the pouring floor,” he said. “The addition will allow us to make the molds and be in line with where the pouring floor is, which will be much more efficient. We’ll also be putting in a new used mixer and air set molding line.” He’s also planning to add sand reclamation to the foundry by next July.

Smith said he’s optimistic about how his business will perform over the next 12–18 months, barring some serious change in the world, which he’s never quick to rule out since COVID. 

“We have a good customer base that supports us, and we feel we’re doing a good job of supporting them and continuing to grow together,” he said. “We’re focusing time and resources on growing our skill level in the shop as well as investing in our equipment and our facilities so our people can work more comfortably and efficiently … and keep making better castings.”