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Sunday, 07 December 2014 22:00

Lacks Enterprises grows by influencing trends, not following them

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MADE IN MICHIGAN: Grand Rapids-based Lacks Enterprises Inc. manufactures composite wheel systems, trim and coatings for the automotive industry. The fourth-generation family-owned company has grown from its modest roots in Grand Rapids to include 20 facilities in West Michigan and one in South Carolina, employing 2,850 people in total. With annual sales of around $550 million, Lacks is one of the largest automotive suppliers in West Michigan. The company supplies manufacturers in North America. MADE IN MICHIGAN: Grand Rapids-based Lacks Enterprises Inc. manufactures composite wheel systems, trim and coatings for the automotive industry. The fourth-generation family-owned company has grown from its modest roots in Grand Rapids to include 20 facilities in West Michigan and one in South Carolina, employing 2,850 people in total. With annual sales of around $550 million, Lacks is one of the largest automotive suppliers in West Michigan. The company supplies manufacturers in North America. COURTESY PHOTO

A commitment to technology and staying ahead of the curve has driven one family-owned West Michigan manufacturer to become one of the largest automotive suppliers in the region.

A manufacturer of composite wheel systems, trim and coatings for the automotive industry, the fourth-generation family-owned Lacks Enterprises Inc. has grown from its modest roots in Grand Rapids to include 20 facilities in West Michigan and one in South Carolina, employing 2,850 people in total.

The secret to that growth: A focus on research and design, particularly when it comes to identifying and influencing future industry trends, said Nick Hrnyak, vice president of the company’s Plastic-Plate Inc. division.

“We spend an inordinate amount of our energy setting the trend,” Hrnyak said. “We are working with the OEMs on model year ’19 and ’20, showing them the new finishes and designs they can have. We are part of the trend setters, not reacting to decisions.”

[RELATED: Hrnyak to lead Lacks Enterprises]

One of the most prevalent trends influencing the company is the industry’s focus on lightweighting, said Larry O’Toole, vice president of Lacks Wheel Trim Systems LLC. With manufacturers scrambling to meet the 2025 Corporate Average Fuel Economy (CAFE) standards that will require an average of 54.5 mpg for all passenger cars and light-duty trucks, suppliers such as Lacks have been required to redesigned traditionally aesthetically-focused products for improved functionality.

That’s the case for the company’s eVOLVE wheel product, for which Lacks was recently awarded six different wheel systems contracts for three global OEMs. The new systems will be released in the second half of next year, helping the OEMs boost mileage and improve the aerodynamic performance of the vehicles, according to executives at the company.

“With weight savings, we think our wheel functionality will become very important over time,” O’Toole said. “When we initially sold it, it was just for finish. Now it serves a function.”

The company’s product helped Audi reduce the weight of each wheel by nine pounds for its A8 sedan, O’Toole said.

Lightweighting for the sake of improving fuel efficiency isn’t the only reason OEMs are pushing for weight savings from components such as wheels, said James Arden, director of business development for Lacks’s wheel division. Major manufacturers use the extra wiggle room to fill vehicles with more safety equipment, electronics and other optional components that bump up the cost of each vehicle and are highly profitable for the OEMs.

“There are these offsets all over the place,” Arden said. “Each of those things add weight — and it’s not a small amount of weight, either. It all adds up.”

Although the company produces components for domestic production, many of its products are shipped globally. Because aesthetic preferences vary so much from region to region, the company has focused on developing a wide selection of products across its divisions to cater to different markets.

For example, unlike North American car buyers, consumers in Japan and Europe tend to avoid having chrome on their vehicles in favor of more muted colors such as iridium and satin, O’Toole said.

“The reality of it is that every region is going to have its own taste and we are never going to be able to offer a common finish on a common vehicle that meets the regional standards and tastes of consumers,” Hrnyak said. “Those companies that do find they put out a very average vehicle that appeals to no one.”

The company’s growth strategy appears to have paid off. Lacks has grown sales 150 percent since 2009 to approximately $550 million, said James Green, executive director of human resources at Lacks.

Part of the company’s growth can be attributed to OEMs increasing the rate at which they refresh vehicle designs, said Jim Gillette, an independent automotive analyst in Grand Rapids. Prior to the late 1990s, it was common for vehicle programs to last eight years.

While programs have shortened to a four-year model cycle, competition has prompted OEMs to refresh their lines with more frequency, often by changing key design characteristics to give the vehicles the appearance of a new model, Gillette said.

“That affects Lacks because they do things that dramatically alter the appearance,” he said. “They’re going to be under the developmental pressure to refresh the vehicles.”

Since its founding in 1961, the company has made it a practice to adapt to the changing automotive industry. Lacks originally began working in die castings and coatings for the auto industry, but by the late 1970s, the manufacturer’s leadership saw the auto industry shifting, Green said.

The company decided to move away from metals and begin the transition toward plastic and composite components, completing the shift by 1983.

“We were a successful die casting company and would have kept the Lacks family in a very good lifestyle for two or three decades, but they were looking forward,” Green said.

At a time when automotive suppliers are expanding globally to support OEMs as they’re globalizing their vehicle platforms, Lacks plans to remain focused on domestic production rather than run the risk of spreading its operations too thin, Hrnyak said.

“The strength in our organization and why we have success is because we have a center of mass in one region,” Hrnyak said. “We have all of our resources in one area to work on any project or issue that we have immediately.”  

Read 4313 times Last modified on Friday, 12 December 2014 09:59

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