Clow Stamping expands to meet high manufacturing need
To truly appreciate the remarkable growth at Clow Stamping in Merrifield during the last two years, it’s important to look back at the numbers.
During the economic downturn in 2008, the metal stamping and fabricating company was forced to lay off 70 workers, decreasing its staff to about 260 employees. The company froze wages and its 401K company contributions. Salaried staff members took a 10 percent pay cut. Clow also went to a higher deductible health savings account model to reduce healthcare costs.
“It was terrible,” Reggie Clow, president/chief executive officer and co-owner, recalled. “Our revenue went down about 27 percent and our monthly costs didn’t support it.”
Manufacturing is generally a strong industry but it was not immune to the recession. When business rebounded, it bounced back with a vengeance that wasn’t anticipated.
Clow said the company is now in its third year of steady growth. They were forecasting a conservative 10-12 percent growth rate but began experiencing 38 percent increases in revenues in 2011-12. During the last 18 months, Clow Stamping had a 65 percent increase in sales.
Suddenly, the 42-year-old company had a new problem. It couldn’t keep up with demand.
Reggie Clow said the company added a fourth eight-hour shift so the production line operated 24 hours, seven days a week. Saturdays were mandatory for everyone, and a Sunday shift was voluntary.
Clow said the company began paying employees $100 a week not to take their scheduled vacation.
“I needed them,” Clow explained.
After one to two years, the wage and benefit freezes were lifted. Clow hired about 60 temporary workers to try to keep up. Many of those temporary workers were hired on as full-time employees. The company now has 355 employees and 19 full-time temporary workers. Its payroll, a direct impact on the local economy, is about $16-$18 million per year.
Last year Clow Stamping expanded its warehouse facility by 20,000 square feet, about a $1 million project. But it was still difficult to keep up with the business boom without adding more production space.
Earlier this year the board of directors authorized the construction of a 72,000-square-foot facility to add more production space, a $4 million investment, increasing the company’s footprint on its 80-acre land by 30 percent. It will be the largest expansion project to date. Construction is expected to be completed in September.
Clow Stamping has completed 12 expansion projects since it moved from St. Louis Park to Merrifield in 1973.
Last year Clow purchased about
$3 million in new equipment as part of its expansion plan.
The company was about six or seven weeks behind on its production because of the rapid growth. On time deliveries fell from about 98 percent on time to the low 90s. On June 1, Clow was about 6,000 hours behind schedule. By the end of July, the company had narrowed that gap and was behind about 1,300 hours.
“It’s been a roller coaster ride,” said Clow. “Demand for our product has made us busy.”
Clow said most of the company’s sales increases are from existing customers. Its largest growth area includes agriculture and recreational vehicles. Agriculture products, like tractors, combines, seeders and sprayers, make up about 35 percent of its product sales while recreational vehicles make up about 22 percent of sales.
Clow Stamping has a customer base of about 500 businesses; its largest accounts include Kubota, Polaris, Arctic Cat, Life Fitness and Kawasaki. They fabricate and manufacture mostly steel parts that are used on everything from exercise equipment, gas pumps and snowmobiles. The company is involved in about 25 different markets. The newer markets they’ve entered within the last five years include manufacturing parts for lighting and refrigeration.
Clow said his clients were willing to wait out the lag in production because they knew the company had an immediate expansion plan in place.
“That’ll put me in a position for future growth,” Clow explained, about the company’s expansion. “That’s what I tell my customers. I’m committed. I want them to give me more work. I can handle it.”
Clow Stamping was started by Clow’s parents, Everett Clow and Gladyce McLeod, in St. Louis Park in 1970. In those early days, the company made parts for Scorpion snowmobiles being built in Crosby. They also made parts for Xerox and Control Data.
It was through the business relationship with Scorpion that the Clows learned about land available in Merrifield and decided to relocate to the Brainerd lakes area in 1973. Back then Clow Stamping had about 15 employees. The company also opened a plant in Monticello, which operated until about 2006 when it was decided to close the facility.
Clow Stamping continues to be a family affair. Reggie’s sister, Tara Moghadam, is a co-owner, and their parents continue to serve on the board of directors. The Monticello plant had been managed by the late Ricky Clow, Reggie’s brother, who died last October at the age of 63.
Clow said he feels confident about the future but it’s difficult to predict what lies ahead. He said he’s been through about four or five recessions.
Clow Stamping is a survivor.
“It’s a gamble because I can’t control the economy,” Clow said, of his company expansion. “But I can control how this company performs.”
Clow also has found innovative ways to save money. About five years ago the company began building its own metal, reusable pallets and containers when business is slow, though that hasn’t been the case for awhile. This has saved Clow about $100,000 a year in cardboard costs.
Clow Stamping ships about $200,000 to $230,000 a day in products or about $4.5 million in products each month. The company has 45 employees who work around the clock in the shipping department.
Clow said the greatest demand is for workers trained in the machine trades who have graduated from two-year technical programs, like Central Lakes College. He said his company, like many others in the industry, are in short supply of tool and die makers, machinists and welders. They are the hardest positions to fill.
Reggie Clow said he is fortunate to have a great staff.
“A lot of people who report to me have been here for 25 to 35 years,” Clow said. “We try to take good care of them.”