- February 26, 2013
by Mary Scianna
Shop Metalworking Technology’s 2nd annual Job Shops Roundtable sheds light on the highs and lows of operating a manufacturing business in Canada
- Ron Tucker, co-owner, E. Tucker & Sons Ltd., Paradise, NL
- Ron & Rhonda Marks, owners, Techtronic Machine Works, Musquodoboit Harbour, NS
- Craig Beal, president, Number One Machining, Dieppe, NB
- Patrick Bolduc, co-owner, Usitech 2000 Inc., St. Anselme, QC
- Spyros Chaidemenos, owner, Speedox Custom Machining Shop, London, ON
- Flemming Jensen, president, JenFab Metal Fabrication Inc., Concord, ON
- Mike Whatling, plant manager, Niagara Precision Ltd., St. Catherines, ON
- Levica Feys, vice president, Metric Machine (1998) Ltd., Winnipeg, MB
- Frank Herbert, general manager, Devcan Machine & Mfg Co. Ltd., Leduc, AB
- Dennis Barbour, president, D&D Machine Works, Lethbridge, AB
- Traci Bennett, owner, Redline CNC, Surrey, BC
Frustration. Anger. Drive. Optimism. These four words sum up the sentiments of job shops across Canada that shared their experiences of operating a custom manufacturing business in Canada with Shop Metalworking Technology Magazine.
Job shops are frustrated because the work is starting to flow in but they can’t find the skilled workers to run their machines. They’re angry because they don’t think the government is doing enough to improve the technical training programs in schools, nor improve the apprenticeship programs in the country.
Yet, despite the obstacles they face--and the skilled worker shortage is just one of many--they remain in the business because of their drive to succeed. And while they continue to face some uncertainty about business in 2013, they are optimistic about growth.
On the East Coast, the oil industry is driving business for many shops, particularly in Newfoundland. Ron Tucker, part owner of E. Tucker & Sons Ltd., Paradise, NL, who runs the business his father Ed Tucker founded in 1964 with brothers Andrew and Ed Jr., says business is good, but also very competitive. The company is looking to replace an old lathe with a large new machine. The nature of the
work the shop does—large, heavy parts, typically one-offs—don’t require CNC machining.
“There are five to six major machine shops the same size as ours [4000 sq ft, 10 employees] and everyone is fighting for the same piece of the pie. We’ve been fortunate because we are well-established, have customers that have been with us for more than 40 years and because of our reputation for good work, word of mouth helps us to get more customers.”
On the other side of the country, Redline CNC in Surrey, BC, also faces fierce competition, but unlike E. Tucker, Redline is focused only on CNC work, in part, because of the nature of its jobs, which require complex machining and high tolerance, high quality finishes. The company, already ISO certified, is set to acquire its AS9100 certification for aerospace, says owner Traci Bennett who runs the company with partners Lyle Hystad and Paul Mowat.
Redline CNC invested in lights out manufacturing in 2006 to better compete with offshore suppliers. The system is comprised of four horizontal milling machines with 56 pallets. Each pallet has from four to 12 faces, depending on the size of the component and the quantity of parts. The system gives the company the capability of producing 200 to 300 different parts nightly, which hold tolerances of 10 to 25 microns (.0005 to .001 in.).
Lights out manufacturing gives job shops a competitive edge because you produce parts faster with fewer people. The bigger problem is finding the right skill set in people to run such a system.
“It is impossible to find talent and it’s a shame. You need someone who understands how to troubleshoot the technology; not just the hardware, but the software too. A lights out manufacturing environment is different than a standard shop environment,” says Redline CNC’s Traci Bennett.
Lights out typically isn’t viable in small and medium sized job shops with small volume/multiple part production environments. Job shops with this type of manufacturing environment instead invest in other machining technologies, such as multi-tasking machines.
JenFab Metal Fabricators Ltd., Concord, ON, for instance, purchases machinery every year.
“I would say we spend $200,000 to $500,000 a year to replace old machinery and help improve our productivity. We work best when everyone is at work at the same time so we can solve problems together, and problems come up all the time. When they do, we need to be able to access our customers’ engineers and designers,” says Flemming Jensen, JenFab’s owner.
For Usitech 2000, St. Anselme, QC, investing in machining technologies is part of the company’s philosophy of continuous improvement. Co-owner Patrick Bolduc says it’s the only way to compete. In 2011, the company embarked on an 18-month machinery investment journey that culminated in the purchase of the shop’s first full five axis turn/mill machine.
One of the challenges job shops face is resisting the temptation to be all things to all customers, says Spyros Chaidemenos, owner of Speedox Custom Machining, London, ON.
“We have stayed focused on CNC milling and turning. It is easy to incorporate other processes in a shop but it is even harder to prevent going down an alternate path for the sake of making a few dollars. It’s hard to say ‘sorry I can’t do that,’ or ‘no I can’t help you because it’s not what we do.’”
Advice for government
Craig Beal, owner of Number One Machining, Dieppe, NB, who runs two shops and employs 19 people, has some simple advance for the government: “stay out of our business.”
“The government should not be wasting money on setting up shops. If you can’t survive on your own, don’t set up a shop. I’ve watched the government blow millions of taxpayers’ dollars on trying to get these businesses to survive and yet the people that receive the money spend it on the wrong things, like expensive vehicles, because they haven’t worked hard for the money. The government here gave one company $50 million of our taxpayers’ money and that company went bankrupt. I have $6 million worth of equipment in my shop and I have one company vehicle. If I had blown my money in good times I would been gone long ago.”
Other shops say governments should help the manufacturing sector by redirecting some of the funding they put into the sector to other, more useful programs, such as the Scientific Research and Experimental Development (SR&ED) program, a federal tax incentive program that encourages research and development among Canadian businesses.
To deal with tough competition from offshore markets, Niagara Precision, Niagara Falls, ON, spends its money on “investing in new technologies,” says Mike Whatling, plant manager. “And a lot of help has come from SR&ED; it’s been a huge benefit for us and given us the ability to try things in machining that we wouldn’t normally try, nor could afford. It costs a lot of money to develop technologies and with the help from SR&ED, we have developed new manufacturing technologies and we’ve purchased two new machines for the technology.”
Dennis Barbour, president of D&D Machine Works, Lethbridge, AB, has some simple advice for the government, “keep manufacturing on North American shores.” D&D Machine Works is doing its part to stay in Canada and compete against offshore suppliers by investing in technologies (new machines and manufacturing software) and hiring skilled workers for the shop.
Speedox’s Spyros Chaidemenos says governments should look to examples from other countries.
“Look at successful countries that invest heavily in manufacturing. We don’t have to be better, but we can follow in the same footsteps to achieve similar results. Putting manufacturing at the bottom of our national list will lead us to be more dependent on other countries and place us at the back of the pack.”
And while sentiments are mixed about the role the government should play in manufacturing, one common opinion among many shops is that Canada needs to go further back to high schools and invest in better quality education on basic reading, writing and mathematic skills.
“The skilled trades are not promoted in schools,” says Levica Feys, vice president, Metric Machine (1998) Ltd., Winnipeg, MB, who runs the shop with husband Walter. “Many seem to lack an inordinate amount of knowledge in basic skills like reading, writing and mathematics. We’re advertising every week and some of the young people that come in have no work ethic and the skills in math and English are just atrocious. We need to improve the education that young people are receiving.”
And the government must continue its efforts in post-secondary technical schools. “Industry would be better served by an education system in which you have a diploma that combines the true machinist education [e.g. Red Seal certification], CNC machining, and technology/process control at a much higher level than what we see now. Perhaps a co-op program where more time is spent in school learning theory, with a co-op term in between at machining companies,” suggests Redline CNC’s Traci Bennett.
Outlook for 2013
Despite some continued uncertainty, most shops are optimistic about 2013.
“The quote packages for aircraft in the last two months are unbelievable,” says Craig Beal of Number One Machining in Dieppe, New Brunswick. “I have two guys preparing quotes on work for the next five years. I also see work picking up in forestry here and we do a fair amont of work for this industry too.”
Niagara Precision is forecasting “modest growth” says Mike Whatling. “We have new customers and new contracts and we expect to be busy hiring people and buying more machinery.”
“I’m very positive about 2013,” says Flemming Jensen of JenFab Metal Fabricators. “I’m proud that I’ve been working with my sons, the oldest for 25 years and the younger one for 15 years. Shortly they’ll take over and I’m sure they’ll do a good job. We believe the economy is going to turn around. My biggest fear is that as the amount of people grows and we in manufacturing continue to replace people with machinery, how will we employ all these people?”
Devcan Machining & Mfg Co. Ltd., in Leduc, AB, gets much of its business from the oildfields. The last boom in the province created many new job shops “and now many of these shops are cutting their prices drastically and competition is fierce. I think it will get tougher to run a job shop here, but I expect 2013 to be better,” says owner Frank Herbert. “My son is taking over. I could shut down and rent the building, and make more money doing that, but I need to have somewhere to go every day and I want to have something for my son and my grandson and for all of us to enjoy a better life.” SMT