GRAND RAPIDS — Driven by customers’ needs to lightweight large components, Paragon Die and Engineering Co. is adding new equipment and expanding its facility in West Michigan.
The company, which specializes in building injection molding, compression molding and hydroform tooling for the plastics industry, has invested roughly $3.5 million into new machinery that increases its metal-cutting capacity. To accommodate that growth, Paragon also added on to its 33rd Street SE facility by 25,000 square feet.
With product demand projected to increase by 5 percent to 10 percent over the next several years, Paragon — which operates plants in Grand Rapids and Brownsville, Texas — will now be able to complete large orders such as cutting a 90-ton block of steel. The investments made sense as the company experienced size constraints in recent years, according to President Dave Muir.
“Everything is getting bigger for us,” Muir said, adding it’s imperative that Paragon is able to lightweight large components as well as deliver on time to customers. “We do things that not only are big, but they need to be extremely accurate.”
Paragon first considered the addition of new milling machines two years ago after experiencing problems with capacity. Fast forward to 2018 and the company has enough business to run the two milling machines at its Grand Rapids plant around the clock using three employees during the day and one to two people at night, Muir said.
Paragon fits a national trend of mold builders investing in capital equipment. According to a study from Mold Making Technology, mold builders expect to spend more on equipment this year than they did in 2017, and they have “significantly more interest” in buying metalworking equipment.
Of note, the study projects plants the size of Paragon — around 250 employees — will increase spending by 32 percent in 2018.
According to Muir, the company’s investments in machines pay dividends by expanding its product offerings.
“This is a standard machine that we use to remove metal in everything we do,” Muir said. “Most of this is about gaining efficiencies. With these machines, not only their size is huge, but there’s a lot of capabilities to run these lights out and have a higher range of personnel (for a) team manufacturing approach.”
HIRING FOR TOMORROW
Over the next few years, Muir expects the company will hire 20 to 40 employees to counter an “attrition of retirements” at Paragon.
With its growth potential and a focus on internal training for employees, Paragon remains in good shape and prepared for the future, Muir said. The company has a robust apprenticeship program that pairs new employees with skilled operators to help them learn the ropes at Paragon, which also has developed its own curriculum.
“They’ll be able to train right alongside the guys who operate this every day. It’s not as disconnected,” Muir said of outside training initiatives. “It makes it a lot stronger and gives us the teaming approach on those machines.”
About 30 to 40 people have completed the apprenticeship program since the company launched it in 2011, he said. Depending on the program — anything from machining and assembly to engineering and maintenance — the apprenticeships can last between one and four years.
WAITING ON AUTOMOTIVE OEMS
With 220 employees between the company’s facilities in Texas and Michigan, Paragon generates $50 million in annual sales and services the aerospace, automotive and defense industries.
Currently, Muir said 30 percent to 40 percent of the company’s sales come from the automotive sector, with 20 percent to 30 percent of sales in the aerospace sector.
Among Paragon’s clients are OEMs Ford, Tesla, Toyota and General Motors.
While Muir remains bullish on the company and the prospects for strong business with customers in the automotive industry despite a plateau in vehicle sales, Paragon has felt the sector soften in the first quarter.
“There’s definitely a little bit of a slowdown right now, and we’re feeling it especially in the injection (molding) industry,” he said. “There’s always fits and starts in that. That’s always going to happen. They always think they’re going to get it done ahead of time, and then they focus on something else or some news comes up, so they switch their piece.”
As a result, Paragon is having to deal with delays from customers in the automotive industry, especially as OEMs put off tooling for certain vehicle projects.
According to a survey from Southfield-based Harbour Results Inc., mold makers reported about $2.3 million in work on hold in the first quarter, but the long-term trend has the average work on hold continuing to decrease to 7 percent to 11 percent of contracts for the year.
Because Paragon “serves so many industries and product groups,” the company is able to stay “reasonably level” when projects go on hold, Muir added.
“Anybody who’s been in automotive, you’ve got to make money when the sun shines and hunker down when you have to,” he said. “That’s the standard automotive cycle.”
Going forward, Muir said he’s confident about his company’s prospects in the metalworking industry.
“Our team has got some really good technologies in all different areas,” he said. “I feel like those technologies start to breed into other areas. I’m confident that with our position, that if one (industry) starts to get soft, then we can build it up.”