The name may not be recognizable, but there’s a good chance that an iron casting made by Waupaca Foundry is on your vehicle or on the John Deere tractor you saw in a nearby field.
As the world’s largest iron foundry company, an estimated three quarters of all brake rotors for cars are made at Waupaca Foundry. A single John Deere tractor has more than 75 Waupaca Foundry-made castings.
“The castings we make here are in thousands of products,” says Gary Gigante, the company’s CEO and president.
Waupaca Foundry – which has three plants in Waupaca, one in Marinette and two out-of-state and employs more than 3,600 – is well known in the communities where it operates because of its large employment base and economic impact. It may not have the name recognition of another (smaller) regional foundry that stamps its name on manhole covers, but what it lacks in name recognition among consumers, it more than makes up in output.
The foundry traces its history to the 1870s and boasts annual sales upwards of $1 billion, producing more iron castings than entire countries. If Waupaca Foundry was a country, it would rank among the top 10 casting producer nations in the world.
“To put our size in perspective, China is the top casting producer in the world, but their largest facility is half the size of ours,” says James Newsome, Waupaca Foundry’s director of marketing.
Like many industries, foundries were hit hard by the recession, but the company has climbed back and surpassed pre-recession output levels. There’s also plenty of optimism about the future. “We’re excited about the future. We recovered pretty fast from the recession and the demand is high for our products,” says Gigante, who has been with the company for more than 20 years, including the last six as CEO and president.
Much of the optimism from the company’s leadership team stems from the foundry’s new owner, KPS Capital. The private equity fund bought the company in July 2012 from ThyssenKrupp for an undisclosed amount.
“The change (in ownership) has been transparent for employees, but for managers it’s been a big difference. They are allowing us to run the business – they are very hands-off,” Gigante says. “They know manufacturing and know what healthy companies look like.”
But to understand where Waupaca Foundry is going, Gigante says it’s important to understand the foundry industry and the company’s past.
Waupaca Foundry traces its roots to 1871 when John Rosche started the Pioneer Foundry along the banks of the Waupaca River. His son later partnered with H.H. Suhs to create Suhs-Rosche, which specialized in making equipment used at the City of Waupaca’s stone crushing plant. The company was sold a couple of times in the intervening years and in 1955, Clifford Schwenn bought it and renamed it Waupaca Foundry. In 1968, The Buddy Company of Michigan purchased the foundry and 10 years later ThyssenKrupp of Germany purchased The Buddy Company, becoming the foundry’s owner until last year.
In 1969, Waupaca Foundry built Plant 2 and Plant 3 in Waupaca. It added the Marinette facility in 1973. During the 1990s, the company expanded into Indiana and added the Tennessee facility in 2000.
All of the foundries take scrap metal and melt it down, creating new iron. That iron then runs through a mold where it turns out a casting. The casting is then “cooled” by sand before it rolls off the machine.
“We can melt 80 to 120 tons per hour. I don’t think anyone can do more,” Newsome says.
From the 1950s to the 1990s, Waupaca Foundry had a steady growth rate. Once the Indiana plant came online, output spiked – making it the world’s largest foundry. In addition, lean manufacturing initiatives, along with the company’s decision to build its own mold-making machines, set it apart from the competition.
The company never relied on one industry or company for the majority of its sales, Newsome says. That variety allows it to weather economic storms, although the company was hit hard when the automotive sector declined in the late 2000s.
“We only have three customers that are more than 10 percent of total business. That diversity in customers helps us ride out the storms,” he says.
Despite that diversity, the recession – especially that steep and sudden decline in business from the automotive sector – led Waupaca Foundry to idle its Tennessee plant in January 2010. While the plant was idle, a maintenance crew kept it operationally ready so once demand increased, the plant could easily come back online, which it did in October 2011.
“It was very important for us to get that plant back in business,” Gigante says. “It was a difficult choice to idle it, but we hired back everyone who wanted to come back and hadn’t found other jobs.”
Waupaca Foundry continues to grow. From fiscal 2009 to fiscal 2013, the company’s revenue grew 113 percent.
Waupaca Foundry has a large economic footprint in the communities where it operates. A 2013 economic impact study by the University of Wisconsin Extension reported that Waupaca Foundry generated $82.5 million in direct labor income in Waupaca County. The foundry also purchased more than a quarter million dollars’ worth in goods and services from other Waupaca County businesses.
David Thiel, executive director of the Waupaca County Economic Development Corporation, isn’t surprised at the survey’s results. He knows just how big a role the company plays locally. “They are huge in Waupaca County and not just as an employer. They also work with many businesses locally,” he says, adding that employees don’t just come from Waupaca County. “They also play a role in the community by supporting numerous projects. Once you take into account the employment base, their work with local businesses and their giving, it all adds up to make Waupaca Foundry a substantial player in the county’s economy.”
Combining the direct and indirect employee wages and non-wage expenditures, Waupaca Foundry creates an impact of $161.5 million, or 10.4 percent of the total income (and $347.6 million, or 9.9 percent of the total sales), of Waupaca County, says Joey Leonard, the company’s vice president of human resources.
“Our economic footprint is considerable in the communities where we operate,” Leonard says.
Waupaca Foundry is known as a good employer, offering competitive wages and benefits while also putting a strong focus on promoting from within. (Case in point: Current CEO Gigante started as a metallurgist at the Marinette plant 32 years ago.)
Employee longevity is a trademark with annual turnover at 5 percent while the national industry average is 15 percent, Leonard says.
“Each spring, we have a party for people who have been here for more than 10 years. This year, we had more than 1,000 people eligible to attend – I think that says something,” he says. “We also employ several generations of the same family – grandfather, father and son. We’re proud of that tradition.”
Earlier this year, residents of Waupaca County voted the foundry as the “Best Place to Work” in a poll taken by the local publications owned by Multi-Media Channels. In addition, the Waupaca Chamber of Commerce named Waupaca Foundry as its Large Business of the Year for 2013.
“We have a very self-fulfilling culture,” Gigante says. “You can always find a mentor. People are constantly learning and growing, which is why I think we have such low turnover.”
Gigante also praised the workforce. “We have very talented employees who are dedicated to what they do,” he says. “We couldn’t be who we are without them.”
Many plant employees start out in entry-level jobs that don’t require a lot of training and from there, they receive additional training and can move into new positions, Leonard says. The foundry was a key supporter when Fox Valley Technical College opened a new facility in Waupaca several years ago. Leonard says it uses the building heavily for training.
“We offer tuition reimbursement and internal training leadership programs to grow tomorrow’s leaders,” he says. “The in-house promotions and training we offer help us weather any skills gaps out there.”
Like many manufacturers, continuous improvement is an integral part of the culture at Waupaca Foundry. “We got into lean early – back in the 1990s,” Leonard says. “We are constantly looking at how to make what we do better.”
A good example is mold making, Gigante says. “No one makes molds like we do. We designed and built our own high-speed molding machines. They also are vertical, which sets us apart from the competition,” he says.
Foundries and sustainability don’t naturally go hand-in-hand, but as Bryant Esch, the foundry’s environmental coordinator, points out: “Foundries are the original recyclers; 94 percent of feedstock is someone else’s junk,” he says.
Having access to raw materials is integral to the company’s success. Every day at the Waupaca Plants 2 and 3, trucks carrying metal to be melted down arrive every 30 minutes or so. Workers use a giant furnace to turn that scrap metal into liquid metal, which is then poured into multiple machines, turning out a variety of products.
Waupaca Foundry is a recognized leader in sustainability practices and received a commendation from the U.S. Department of Energy’s Better Buildings, Better Plant Programs for its efforts to reduce the energy used in its manufacturing operations by 25 percent over 10 years. In 2011, the foundry reduced its energy intensity by 6.3 percent, and it’s down 16.5 percent since 2009.
With the intense heat coming from the furnaces, the foundries have heat recovery systems in place to take the heat during the winter and circulate it throughout the entire facility. That not only helps conserve energy, but helps the foundry with its heating costs.
“Long before sustainability was a buzzword with businesses, we were doing it,” Gigante says.
Foundries use a large amount of sand and water, and Waupaca Foundry has programs in place for both. The company’s closed-loop cooling water systems reduced plant water cooling demands by more than 80 percent while daily water use was reduced by 225,000 gallons.
As for sand, Esch says each grain is used about 50 times. “We are looking at some sand reclamation processes so we can even get more use out of our sand,” he says.
All that sand also creates dust, but the foundry uses a dust collection system that keeps the air clean, Esch says.
“Waupaca Foundry sets the bar high when it comes to sustainability,” he says. “A lot of agencies look to us and what we’re doing. We also recycle about 70 percent of waste products created in the parts making process and use it for things such as the base they use in highway projects.”
Those waste products from the plants in Waupaca are also being put to use in creating a new 42-foot-high sledding hill in Waupaca. The foundry donated 200,000 cubic yards of foundry byproducts to help in the construction of the Swan Recreation Facility, which will also include an ice-skating rink in winter, added hiking trails, basketball courts and an amphitheater. The company is working with the city and local construction companies on the project, which is expected to be complete by May 2014.
“Customers are very interested in our sustainability initiatives,” Esch says. “Consumers are becoming more aware and that gets back to the manufacturers and then down to us, the suppliers.”
With adequate capital on hand and new owners in place, Gigante says Waupaca Foundry is now able to move ahead and see continued growth. “The demand right now exceeds capacity for foundries,” he says. “That means there is room for us to grow.”
Newsome says some foundries were unable to weather the recession and closed, leaving those who survived with more opportunities now that manufacturing is picking up and in need of castings.
The key to continued growth is making sure there is always enough supply on hand of both scrap metal and sand, says John Wiesbrock, vice president of Waupaca Foundry’s supply chain management. “We are very just-in-time for the supply of metal. We don’t have room here to store a bunch. Trucks come in regularly with what we need,” he says. “The supply chain is set up daily.”
As for sand – another key ingredient the foundry needs – a good supply is available in the region.
“Our access to natural resources, along with the great work ethic make Wisconsin a great place to do business,” Gigante says.
Safety is an integral part of life at Waupaca Foundry – even for visitors. Everyone who comes to the various plants, including reporters there to interview the company president, watch a short safety video. With ample amounts of moving and loud machinery, plus extremely hot temperatures in the foundry, it’s important for the company to protect its employees and all visitors.
Despite that focus, a contractor working at the Waupaca Foundry facility in Tell City, Ind., died in a July accident. Kim Voss, director of safety and health for Waupaca Foundry, says training and education are ongoing, encompassing classroom instruction, educational toolbox talks, on-the-job instruction, new hire training and mentoring, specialized equipment training and specific safety programs for contractors.
The company has a behavior-based safety program that includes peer to peer on-the-job safety observations and feedback. Although each plant has a dedicated safety manager and team to provide guidance, individual employees are personally engaged in established safety and health initiatives.
“Each employee is accountable for working safely each day,” Voss says.
Individuals are encouraged to correct unsafe conditions and behaviors immediately when they occur, or seek assistance from management as needed. All employees are encouraged to report near-miss incidents and safety suggestions on a daily basis, and these leading indicators are measured with set goals.
Did you know?
Waupaca Foundry Inc. melts 9,000 tons of metal daily – which is equal to the amount of metal in the Eiffel Tower.
Waupaca Foundry locations
Waupaca Foundry Inc. has six plants and employs a total of 3,670 workers. Here’s a breakdown of the company’s locations:
» Corporate staff in Waupaca: 200
» Plant 1 (Waupaca): 550 employees
» Plants 2 and 3 (Waupaca): 850 employees
» Plant 4 (Marinette): 750 employees
» Plant 5 (Tell City, Ind.): 930 employees
» Plant 6 (Etowah, Tenn.): 390 employees
AT A GLANCE
Waupaca Foundry Inc.
Owner: KPS Capital
President/CEO: Gary Gigante
What it does: World’s largest iron foundry company, producing both gray and ductile castings serving the automotive, commercial vehicle, agricultural, construction and industrial markets.
» Employees: 3,670 workers at six facilities in three states.
» Annual sales: Upwards of $1 billion
» On the web: www.waupacafoundry.com