ALBION — Over the last decade and a half, Team 1 Plastics Inc. avoided expanding its facility until absolutely necessary, choosing instead to maximize every square inch of its shop floor.
However, after the Albion-based automotive supplier won additional contracts with new customers, President Craig Carrel knew it was time to invest in the company’s facility.
“A lot of times, people will expand and they weren’t really utilizing the space that they had,” Carrel said. “We’ve been delaying this and making sure we’re optimized, but you get to a certain point where you start to lose efficiencies because you’re just too crowded.”
The company recently completed the $350,000 expansion project, which added 3,500 square feet to house its maintenance team and freed up valuable manufacturing space on the plant floor. The manufacturer of small plastic control switches for vehicle interiors and air induction components already added three injection molding machines and plans to add another three machines in the next month.
The expansion increased the company’s footprint to 50,000 square feet, Carrel said.
Clark Lake-based Collins Design-Build Inc. served as the general contractor and architect on the expansion project.
While modest, the expansion underscores Team 1 Plastics’ philosophy for keeping its operation as lean as possible — a lesson the company took to heart during the economic downturn, Carrel said.
“We learned a valuable lesson going into the last recession,” Carrel said. “It was the companies that didn’t have a lot of debt and that had their financial house in order that survived it. We continue to make sure that we’re not overextending ourselves and putting ourselves at risk. I think that’s the best strategy you can have.”
The company generated approximately $15 million in annual sales in 2015 and Carrel aims to grow the company to $20 million in the next five years.
As long as Team 1 Plastics continues on a track of profitability, Carrel plans to embark on another expansion in a couple of years, he said.
It’s likely the supplier could continue on its present arc, particularly as analysts and industry insiders predict another two years of steady growth in production for the automotive industry. Southfield-based research firm IHS Automotive predicts North American light vehicle production to reach 18.2 million units this year and grow to 18.5 million units in 2018 and to 18.7 million units in 2023.
At the same time, the global plastic injection market is expected to grow nearly 5 percent annually from $127.5 billion in 2015 to $162 billion by 2020, according to a report by Portland, Ore.-based Allied Market Research.
Despite the growth projections for the automotive industry, Team 1’s Carrel remains cautious given that the present economic recovery seems long in the tooth.
“Being in automotive, you always have to be careful of when the next downturn is going to happen,” Carrel said. “We’re on seven years of continually growing sales. Most people think the industry isn’t going to dramatically drop but (that) it’s going to flatten out, which will create its own set of challenges.”
Beyond uncertainty surrounding the next downturn in the business cycle, Team 1 Plastics also is navigating its business through shifting trends in the interior design of automobiles. As customers become more accustomed to touchscreen infotainment systems in their cars, automakers are decreasing the number of physical switches in the vehicle cockpit.
For example, while the company used to supply 15 physical switches on the Toyota Tacoma, it now supplies fewer than five switches as the vehicle integrated a touchscreen display, Carrel said.
While Carrel doesn’t see a time in the immediate future when physical switches will be removed from vehicles, he’s committed to keeping Team 1 Plastics abreast of emerging technology. The company needs to be flexible enough to enter new product markets if necessary, he said.
“What you really have to do is focus on the customer base and make sure you’re working with the companies that are leaders in today’s technologies but also working on those future systems,” Carrel said. “If your customers are using less of your product, then you have to find where the next customer is that can use your product in the same or a different system.”
Sidebar: Albion-based Team 1 Plastics Inc. recently completed its first expansion project in 15 years after maximizing space on its shop floor, said President Craig Carrel. The automotive supplier of plastic injection molded interior switches plans to continue its lean operational philosophy as it prepares today to weather the next downturn in the business cycle. Team 1 Plastics generated approximately $15 million in annual sales in 2015 and expects to grow to $20 million in revenue within five years.