After years of leading the market for its signature technology, Fleetwood Electronics realized it let its position slip away.
For 20 years, the Holland-based manufacturer led its business with audience response systems (ARS) that used keypads and allowed users to communicate during presentations and meetings with instant polling or voting.
However, sales for its technology have declined in past years as smartphones encroached on the market, said Nick Hayhoe, the company’s vice president of sales and innovation.
“The truth about our business is it’s been a tough few years in our electronics division, mainly due to the decline in our ARS business, which used to be the majority of our sales,” Hayhoe said. “I think we weren’t able to keep up with the pace of innovation of other competitors. That’s where we changed our strategy on how we view our new product pipeline and business opportunities.”
Now, Fleetwood plans to take its technology and incorporate it into the growing market for connected devices, more commonly referred to as the internet of things (IoT). Fleetwood’s proprietary technology enables it to communicate over license-free Bluetooth or Wi-Fi channels with less power than standard systems, Hayhoe said.
“The biggest trend in the electronics industry is the internet of things,” Hayhoe said. “Any internet of things device realistically needs to be wireless, low-powered and networked. ... It’s very common for people to go straight to bluetooth for internet of things devices, but we have ways of developing it that are superior technologically and from a power consumption standpoint.”
The company currently is developing both commercial and consumer products.
Fleetwood’s decision to innovate with IoT technology underscores a larger move by electronics manufacturers in West Michigan to stay ahead of constantly improving technological trends.
That’s true for EBW Electronics Inc. The Holland-based manufacturer plans to capitalize on technological advancements in its niche market of automotive lighting.
Since 2012, the printed circuit board manufacturer has nearly doubled its business, largely due to the proliferation of LED lighting systems in automobiles, said Pat LeBlanc, the chairman of EBW Electronics.
Moving ahead, the company plans to tap into opportunities created by autonomous vehicles, said Dennis Hawver, EBW’s director of engineering. Specifically, Hawver believes EBW can help address how fully autonomous vehicles communicate with pedestrians.
“If you pull up to an intersection with your Toyota Camry and there’s a person crossing the street, oftentimes the pedestrian will look at you and you will make some sort of subtle gesture to cross,” he said. “There’s a human-to-human gesture there.”
For autonomous vehicles in that same situation, the communication could take the form of a red or a green light incorporated into the headlights to communicate the same information, Hawver said. That way pedestrians would know if the vehicle recognized their presence and if it was safe to cross the intersection.
EBW Electronics currently generates annual sales of approximately $50 million. LeBlanc expects the business to grow as the company begins production on a large, unnamed contract in the next two years.
A SECRET INDUSTRY
While West Michigan is most known for its expertise in office furniture and automotive components manufacturing, the region also holds a substantial cadre of electronics manufacturers.
“It’s kind of like a secret industry in West Michigan,” Hayhoe said. “No one thinks of West Michigan as an electronics manufacturing place, outside of Gentex.”
However, the industry employs approximately 5,100 people throughout the Grand Rapids metropolitan area as of 2016, according to data aggregated by The Right Place Inc. In 2011, the sector encompassed a little more than 3,000 employees, representing a roughly 70 percent increase in five years.
At the same time, electronics manufacturing jobs nationwide decreased by approximately 22,300 positions.
As a whole, the printed circuit board and electronic component manufacturing industry generates approximately $44 billion in annual revenue, according to a recent report published by IBISWorld. The sector is expected to fall slightly in the next five years, largely because of increased market volatility.
Both Hayhoe and LeBlanc attribute their companies’ growth trajectories in part to a move by manufacturers to reshore production after moving it overseas in previous years.
“Our largest customer right now is the result of reshoring,” Hayhoe said. “They had a product made overseas. They had to deal with long lead times, large minimum order quantities and very poor quality. We were able to redesign their product to make it perform better, but also to remove all of their issues with lead times and minimum order quantities.”
All told, Hayhoe said half of Fleetwood’s business is tied to work that has been reshored from foreign manufacturers.
For EBW, reshoring has resulted in increased orders from a number of local Tier 1 manufacturers that comprise the bulk of its customer base, LeBlanc said. The company is able to keep the cost of labor down through automation while offering rapid turnaround for its customers.
“The prices of LEDs are dropping, technology is changing,” LeBlanc said. “If you’re dealing with a Chinese or some offshore manufacturer, you have a pipeline that is filled with technology that is at least a month old, maybe older.”
In addition to expanding its own products in the IoT market, Fleetwood also plans to expand its contract manufacturing and design services.
The firm hopes to strike partnerships with companies that already have a strong product and sales channels, but lack electronics design and manufacturing expertise.
“Our focus is on companies that do not have electronic components yet,” Hayhoe said. “There’s lots of durable goods manufacturers in West Michigan who don’t have electronics expertise but could benefit greatly from making their product smart.”
Fleetwood also identified a market among entrepreneurs who could leverage the company’s design and engineering capabilities.
Many startups hire a separate engineering firm and contract manufacturer to complete their product, Hayhoe said. However, he maintains that path is expensive and inefficient. By keeping the design and manufacturing under one roof, dedicated electronics manufacturers can bring products to market faster and for less money.
Hayhoe added that Fleetwood is interested in co-investing in new products.
“Overall, I think there’s a lot of great opportunity for West Michigan electronics manufacturing to grow,” he said. “There’s a lot of opportunity for collaboration between software development companies, engineering service companies and electronics manufacturers, and I’m excited to be a part of that growth.”