SOUTH BEND, Ind. - Metal expands when heated. So it seems logical that Deluxe Sheet Metal, in a red hot market, is expanding also.
Founder Earl Smith, at 65, is in the process of passing the business along to son Kevin, 45, who has taken on much of the day-to-day handling of the operations over the past six years. "Dad still estimates and is a great asset," according to Kevin.
Earl says he retired three years ago "but nobody told me." He hopes this year will be his last, marking 49 years in the sheet metal business. Like many, he started the business out of his home, in a two stall garage back in '71. He nailed down enough work to allow him to move out before winter set in, moving into a 3,500-sq.-ft. rented space, and has been expanding, more or less, ever since.
The name Deluxe came from kicking around ideas with a buddy, according to Earl, "and where people would find us in the phone book." You want to be up front, not in the back! "I didn't want a name like Smith and Company either." According to the dictionary, deluxe means first class, with all the trimmings - not a bad choice, looking back.
Talking to Kevin quickly reveals that his background is in more than just sheet metal, and his plans to expand Deluxe go far beyond its four walls. He came up, for example, with a completely integrated accounting system for the company, one that tracks all jobs down to production rates per pound of metal. "We bar code everything," he said.
This attention to detail and reliance on new methods extends into the field. Kevin now is working on a container system which would be mountable on truck beds and trucked out and left at individual jobsites, direct from the shop. Smith sees this as a real advantage to smooth work flow and quality control. The containers are 8 X 11 X 7, and can easily be bolted together when 22 foot sections are called for. When emptied, the returnable containers can be used to store anything no longer needed, such as ladders. A truck driver could be reserved for the task of delivering and picking up these containers. "This could take care of a lot of long term storage and shipping problems," he said.
Multi-faceted businessDeluxe is both manufacturer and installer, and Kevin says he doesn't want to concentrate on one over the other. Doing both allows the company to better control the entire flow, from initial job estimating through delivery and installation. Also, it keeps dollar volumes up so that it can justify expensive new capital investments, something he says the smaller 15 or 20 man shops are sometimes hard-pressed to do.
Kevin isn't a stranger to technology. The "old" building they are currently in has been expanded, not only in square footage, but in a fiberoptic communications system to attract high-tech tenants. He has done so successfully, and those tenants should take over the building completely when Deluxe is ready to move on to its new quarters.
Deluxe does some custom fabrication as well, not large volume parts that a manufacturer would punch out more quickly, but unique items that Deluxe can specialize in - like the custom signboards for Notre Dame University's (the famed Fighting Irish) newly expanded football stadium.
This is one busy customer to have: Facility enhancements at Notre Dame in the athletics department alone costing approximately $100 million have been made since 1995. A list of recently completed projects fills three pages, including the expanded Notre Dame Stadium for football, the Warren Golf Course, and the new Rolfs Sports Recreation Center.
Historic Notre Dame Stadium has been the home of Fighting Irish football since 1930. An expansion and renovation added 20,000 seats to the stadium bringing capacity to 80,012 rabid football fans.
Kevin is intent on launching a CAD division which would take them even farther afield - in fact, nationally. Kevin would like to lend Deluxe expertise to the many architects who are working in metal yet have little in the way of their own staff expertise to do so. He wants to staff Deluxe with its own engineer, which will position the company to pursue more design-build work. In that same vein, his company has and will continue to act as a general contractor on some projects, coordinating all the mechanical and hvac systems.
A demanding customerTheir largest customer is also their most demanding: Notre Dame University. To work for the university, you have to be good, fast and on time. "When you're working on a job for Notre Dame, you can't just sneak it by," Smith said. "You can make a mistake with them just once, because they won't allow it again. But that's ok with us, because it allows us to compete on a quality basis, and I can live with that." Ductwork and specialized exhaust systems for laboratories and fume hoods - "bright metal" are specialties of Deluxe. Also, some blow pipes.
Another recent job of note was a three-story combination library/office complex for Indiana State University. An architect from New York was selected, but local input into the plans was instrumental to achieving an on-time, in-budget project.
Hospitals are another good customer, as well as any time-sensitive or hard-to-do job that Deluxe can flex its abilities at.
Deluxe itself is one of its own most critical customers. Kevin sees great plans ahead for a new shop facility, one with a standing seam metal roof, with arched trusses, and the body of the building built into a hillside to take advantage of geothermal insulation properties. He envisions 3608 of windows, with good daylight for his workers inside. There is a wetlands, and he wants to create some sort of an outdoor walking path for the occasional inspirational break away from the shop. For the CAD portion of the operations, he knows he'll have to go nationwide to attract workers, and he wants to make Deluxe as attractive a workplace as possible in order to do so.
One thing Earl and Kevin agree on, and that's moving the company forward, technology-wise, to stay ahead of the competition.
When Earl Smith started in this industry in 1952, like many, his roots were family-oriented; his father-in-law was in the business. His wife never worked alongside him though. "I always wanted to keep business and that part of my family life separate," he said, "although I would sometimes have to kick Kevin out of bed at midnight to come out to the garage to help me to finish a job." A daughter, Christine Torok, is a grade school principal whose early interest in the family business, Earl said, was limited to "learning to drive the pickup truck."
They have manufactured dust collectors for a company in Texas, which has taken them out of the 90-mile or so regional range common to most types of sheet metal delivery. Generally speaking, they keep their work within Indiana and nine or so adjacent or nearby states. But these recent and anticipated other moves, such as expansion of the CAD department, also helps insulate Deluxe from the ups and downs of the local market. Not that it hasn't been good, but a cooling off is not impossible.
Deluxe employs workers out of Local 20 SMWIA, and occasionally will draw on other areas of the Local, such as Indianapolis, when the company had a job at Grissom Air Force Base. There tends to be a lot of overtime work available, although in September Earl said there was just a bit of a letup when some of the hurry-up school jobs were completed before fall semester began.
The company has a new 5 foot Engel coil line with "all the bells and whistles" including insulation and TDF; two Lockformer plasma cutters; a 10-gauge shear; Roto-Die, Pittsburgh seam closer; 10 or so welders; and other stand-alone equipment, largely purchased through Central West Machine, also out of South Bend.
Much of their software was purchased from QuickPen, although Kevin has also written a lot of it on his own. He is a Notre Dame graduate, in psychophysiology. That may seem a stretch to the metal fabricating shop, but Kevin said he uses much of what he went to school for on the computer side of the business. He also utilizes QuickPen software, and at one point in the 1980s worked closely with QuickPen president Curtis Broughton to develop software with Cybermation and similar types of equipment.
The relationship with QuickPen continues, he said. Occasionally, QuickPen will send a customer to Deluxe's shop to show how its software can be best utilized in a "live, working environment." Kevin, says Earl, also has a knack for building and architecture, which rounds out the range of skills required for this successful sheet metal shop.
The company is planning a new building of its own, but that will have to wait as its customers come first. This has pushed Deluxe's expansion plans back a bit. Originally planned for this year, it's now pushed into the first quarter of '01. A hot local economy also has meant a lengthy wait for construction equipment and workers. Deluxe wants a showplace in its new building, not just four walls and a cement floor: it wants to show customers what can be done, and who can best do it. Deluxe will construct its own stainless steel fluted panels for this building - and they'll be eye-catchers, Kevin promises.
Deluxe is a family business, with Earl and Kevin and Kevin's wife Sue as the company controller. It didn't start out that way. Sue was working at AlliedSignal but wasn't happy with her job there. At the same time, Kevin desperately needed some office help at Deluxe. "One day we were thinking about this and looked at each other, and bang! There was the solution."