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On The Move
Hibbing Fabricators is back after dot-com bust
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3/12/2008 by Paul Lundgren |
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(Photo: Frederick Prom, president and controller of Hibbing Fabricators, with the company’s $950,000 laser metal cutter, purchased in 2006.)
Hibbing is a city familiar with booms and busts — its economy always measured by the mining industry.
Following a downturn in the early 1980s, a group of 12 local investors launched a metal fabricating company with the specific intention of being free from reliance on mining business.
By 1999, Hibbing Fabricators, Inc. reached $5 million in annual sales and employed 65 people. It was indeed insulated from the mining industry, but with much of its business dependent on electronics companies, it was caught in the dot-com bust. Within two years, sales fell to about $3.4 million and the payroll dropped to 28.
After fighting through those lean years, Hibbing Fabricators has hit the $5 million mark again, and Frederick Prom, the company’s president and controller, sees continued growth in 2008.
Ironically, the company’s resurgence has followed the same strategy of mining companies — relying more and more on technology and higher-skilled labor.
“We do the same amount of work we did in the peak years, but we do it faster and with less people,” Prom said. “We have 33 company employees now, with four or five temporary workers.”
The company recently received a $42,617 grant from the Minnesota Job Skills Partnership program to team with Hibbing Community College to train its entire workforce in welding, lean manufacturing principles and new computer software.
“We’re always trying to come up with more efficient ways to do jobs and hold down our customer’s costs,” Prom said.
The chief industries Hibbing Fabricators has targeted are aerospace, medical, telecommunications and non-fossil fuel energy companies such as wind energy generation. Clients are scattered throughout the United States — some with production facilities overseas.
The company cuts and bends sheets of lightweight metals — such as stainless steel, aluminum, brass, copper or titanium — to create parts for these manufacturers in a wide array of products.
“None of the things we make are proprietary products,” Prom said. “We make a lot of small pieces that people don’t see.”
Those pieces can be anything from the chassis the company made for IBM electronic typewriters in the 1980s to the metal dashboard backings produced today for Duluth airplane manufacturer Cirrus Design Corp.
In addition to bending and cutting, other custom work is sometimes performed, such as affixing hardware like screws and washers or applying custom finishes and silk-screening custom labels.
Walking through Hibbing Fabricator’s 37,000 square-foot plant, Prom isn’t always sure what items are in production.
“In a month, we do 400 to 500 different parts,” he said. “This guy’s making one thing, that guy’s making another thing, this guy’s making something else.”
Prom said the company’s most recent major equipment addition was Northeastern Minnesota’s first laser cutting instrument, which went into production at the end of 2006. The $950,000 purchase was made possible with the help of a $300,000 bank participation loan provided by Iron Range Resources.
Prom said the company also uses a turret punch press that cuts holes better, while the laser cuts curves better. He said the company is exploring the purchase of turret/laser combination machine.
“The biggest push that we’re seeing now is robotics,” Prom said, referring to the demand for cutting machines programmed to work when the human labor goes home at night.
“Quite a few of our competitors are doing that in order to compete with foreign labor costs,” he said. “We’ll need high-skilled people to program it. We intend to train the people we’ve already invested in.”
Hibbing Fabricators began with just three employees in 1985. Prom was hired as controller in 1999, and became the company’s fourth president when Steve Saggau left in 2002.
“We still have the same core owners,” Prom said. Of the original 12, nine are still invested.
“Imagine starting out with no products, no equipment and putting a company together,” Prom said. “It was a struggle, but it worked. The investors stuck with it.”
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