TigerStop poised to pounce
Vancouver company hangs onto key workers, seeks new markets
Sunday, July 17, 2011
If you’re a manufacturer, and you managed to survive the Great Recession — and even reposition yourself to grow again — you may still be waiting on a few important things to happen that stand agonizingly out of your control.
Like the housing market coming back and, with it, consumers who are willing to buy your products again. Or the Obama administration successfully browbeating China into halting its manipulation of currency so American exports may flow.
Vancouver-based TigerStop knows how you feel.
The 17-year-old maker of computerized machines that make precise cuts of wood, metal or plastic (think of a high-tech tape measure) believes it’s made the right moves to rise from the economic crash, move forward and to grow.
If only the national and global economies — and the people who purport to hold sway over them — would get their respective acts together.
That’s how Spencer Dick, the straight-shooting president and chief executive officer of TigerStop, sees it.
Until the U.S. “lobs some grenades over the bows of our trading partners,” he said, and until the housing mess is resolved and banks are prodded to lend again, “I don’t see things getting significantly better for us or a lot of people.”
A time to change
That’s not to say TigerStop isn’t doing what it can to gear up for a stronger recovery. In a way, the company’s experience is a lesson for others: Hold onto key employees, no matter what. Be smart enough to change and introduce new products, even in a feeble economy. And don’t ignore foreign markets.
Sounds easy. It isn’t, as TigerStop’s experience illustrates.
The company won’t divulge specific financial information, but it was, in good times, generating revenues of $15 million to $25 million annually and employing more than 40 people.
Then the economy cratered. TigerStop’s products, including its mainstay TigerStop Standard, were heavily used by the housing and woodworking industries to cut lumber into the relevant shapes and sizes.
The company’s products are aimed at making certain jobs — including everything from cutting lumber to bending metal — more accurate and speedier. Because TigerStop’s tools are computerized they also enable builders and manufacturers to process higher volumes of lumber, and metal and plastic pipes.
You punch a length into a keypad and make your cut. The linear measuring device can be mounted on different saws and bending machines, and on punching and forming equipment.
But when the market for building houses tanked, so did the appetite for TigerStop’s tools.
The company’s revenues dropped by roughly 50 percent and it was forced to lay off workers; it now employs about 25 people.
New products, different mix
The company got creative, though, as it went into survival mode.
It reached out to the Washington Employment Security Department’s Shared-Work program. The program allows employers to reduce the work hours of their full-time employees, allowing workers to collect partial unemployment benefits to replace a portion of their lost wages.
That enabled TigerStop, which at its core is an engineering and marketing firm, to hold onto key, highly skilled employees rather than laying them off.
“For us to be able to retain these people — engineers and (research and development) people, that’s our value,” Dick said. “Otherwise, we would have suffered far more from losing that brain trust.”
Survival mode also meant rebalancing TigerStop’s mixture of products and customers — de-emphasizing the housing and woodworking markets and re-emphasizing the market for fabricated steel and aluminum parts, such as aircraft parts and metal railings.
The Obama stimulus helped, Dick said. It created work for Caterpillar Inc., the global maker of construction and mining equipment, which is a customer of TigerStop’s and possesses a “significant group of machines” from TigerStop, Dick said.
Pursuing overseas sales
The company also got busy designing and introducing new tools, including the TigerRack, designed and built specifically for sawing heavy metals and pipe. TigerStop’s products range in price from several thousand dollars to tens of thousands of dollars. They’re designed to fit the needs of everyone from small contractors to major corporations, such as aerospace giant Boeing, which TigerStop counts among its customers.
With a sluggish domestic economy, TigerStop also looked to increase sales overseas. It already has an office in Holland to serve the European market.
The company is making inroads in China and Brazil, Dick said. “Clearly, opportunities are opening up in China.”
He may be right. As the weekly online newsletter Supply Chain Digest recently reported, an analysis by the Boston Consulting Group suggests “that the U.S. is likely to see a ‘manufacturing renaissance’ as the wage gap with China shrinks and certain U.S. states become some of the cheapest locations for manufacturing in the developed world.”
Competitors ready, too
TigerStop’s work to reposition itself for growth isn’t done, of course. Plenty of challenges loom, including from a chief competitor: Technical Services Inc. of Ames, Iowa, which manufactures the RazorGage line of computerized devices used for the same types of work as TigerStop’s machines.
Dave Krevanko, a sales manager for RazorGage based in Portland, said TigerStop, where he once worked, “does a good job marketing” its products. However, he said he believes RazorGage has the upper hand in technology.
RazorGage has seen an upturn in business, Krevanko said, and plans to compete hard against TigerStop. “We’re pretty fierce,” he said.
But TigerStop believes it has recaptured its roar. Company officials said revenues are increasing, as a result of TigerStop’s investment in new products, solid reputation and its strong marketing efforts.
An example: As part of its “Built Metal Tough” marketing campaign, TigerStop touts its relationship with Cotterman Co., the Chicago-based maker of industrial ladders.
A video testimonial shows Cotterman extolling the benefits of adding TigerStop products to its workflow.
Positioned for growth
Dick said TigerStop is in a good position now, maintaining solid relationships with its customers, selling new products and gaining new footholds overseas.
What would help, he said, is if policymakers worked harder to correct the trade imbalances the U.S. carries with other countries. “I don’t feel the U.S. will generate significant jobs until we get some of these structural problems taken care of,” Dick said.
In any case, TigerStop believes it’s ready to pounce when the slow economic recovery shifts into higher gear.
“We’re essentially debt-free with the exception of a small real estate loan,” Dick said. “Banks are very anxious to loan to us.” TigerStop is prepared to thrive, Dick said, and “that’s a tremendous thing to be able to say … especially after the crash.”