Fresh roll

Paper Converting Machine Co. sets its sights on diversification

Posted on Sep 27, 2019 :: Cover Story
Jessica Thiel
Posted by , Insight on Business Staff Writer

Looking at the Paper Converting Machine Co. of today, the picture that emerges is one of success. Since 2005, the 100-year-old Green Bay company has been part of the storied Barry-Wehmiller Network, a move that has helped it embrace lean principles and emerge as an employer of choice.

It’s easy to forget that amidst more recent victories, lies a history of a company that struggled for years to ride the waves of an industry that’s marked with peaks and valleys. In fact, between 2001 and 2005, the paper converting company lost more than $57 million and instituted more than 730 layoffs across all its operations.

Nearly 15 years after Barry-Wehmiller Companies acquired PCMC, the company is going strong. It recently merged with fellow Green Bay company Hudson-Sharp Machine Co., acquired two printing companies, and plans to diversify its business, boost its customer service and embrace Industry 4.0 solutions.

Few people could be better poised to lead the company into its future than Stan Blakney, a seasoned leader with decades of experience in the capital equipment industry. Throughout his career, he’s helped companies diversify and increase profits. In February, Blakney became the first-ever outsider named president of PCMC.

As the company grows, Blakney recognizes the importance of PCMC’s continued role as a leader in the tissue converting equipment industry. At the same time, he sees the need to stretch into new markets, ones he says could help stabilize the company’s long-term outlook.

“Either (customers are) putting in a bunch of new lines or they’re not,” Blakney says. “We want to keep concentrating an emphasis on tissue, and we want to service that market really well, but we also want to expand, so that we’re not impacted so much on the ups and downs of that market.”

Battling back

In 1919, PCMC began as the vision of a father-son team operating out of a garage under the name Bay City Machine Co. In 1923, its name changed, and the company continued to grow over the decades, building its headquarters in Green Bay and establishing itself as a leading manufacturing company.

Over its century of history, however, PCMC has ridden out its own peaks and valleys. In the early 2000s, the company’s fortunes took a particularly rough turn.

Craig Sabota, a continuous improvement team lead with PCMC, has worked for the company since 1997 and lived through the five years of financial losses and layoffs. The company was stuck in a cycle of getting huge orders and hiring a bunch of people, only to lay them off a year or two later.

The uncertainty led to a culture Sabota describes as “very nervous.” Workers would see a security guard at the door every Friday and worry they would be next to lose their job, Sabota says. Furthering the problem, the company didn’t share financials with employees, so he says he knew times weren’t good, but he didn’t fully understand the magnitude of the challenges until later.

PCMC’s fate changed in 2005 when Barry-Wehmiller, a St. Louis-based $3 billion global supplier of manufacturing technology and solutions, acquired it. Today, Barry-Wehmilller includes nine companies serving the packaging, paper converting, sheeting, corrugating, engineering and IT consulting industries.

For the company’s employees, the change was momentous. “This is definitely not the same organization, in a very good way, since the acquisition by Barry-Wehmiller,” Sabota says.

Three years after the acquisition, another cruel twist of fate — the Great Recession — lay in store. The way the company handled it, however, could not have been more different than the response to previous downturns.

In his celebrated 2015 book “Everybody Matters: The Extraordinary Power of Caring for Your People Like Family,” Barry-Wehmiller Chairman and CEO Bob Chapman and co-author Raj Sisodia recounted how Barry-Wehmiller weathered the recession, keeping people’s jobs intact and emerging as a stronger organization. Chapman is a sought-after speaker for his message and has made three presentations in the region during the past year, including just last month at St. Norbert College.

When the recession hit, Chapman had already developed the company’s Guiding Principles of Leadership, which lay out its commitment to employees’ personal growth, and founded Barry-Wehmiller University, which offers classes focused on inspirational leadership, culture and sustainable business strategies. Staying true to the principles he’d laid out would prove the ultimate challenge.

As Chapman watched the economic downturn, he agonized, ultimately asking himself the question, “What would a caring family do when faced with a crisis?” The answer: shared sacrifice.

At PCMC and other Barry-Wehmiller companies, no one got laid off, but workers took mandatory furloughs, with everyone taking four weeks of unpaid time off. Sabota says the solution was a relief to employees, one that garnered national media attention amid a slew of companies taking the “slash and burn” approach to weathering the downturn.

“It was one of the nicest summers I’ve had in my working career because I could actually spend time with my family, and I think a lot of people viewed it that way. It sure was a lot nicer to do it that way than losing your job,” says Sabota, who also teaches a class for Barry-Wehmiller University.

The move not only spared people’s livelihood, it helped strengthen Barry-Wehmiller. Business bounced back, far outpacing the recovery of the economy at large, and the company posted record earnings in 2010.

Legacy Flexo, a Green Bay flexographic printing company, has worked with PCMC since the early 2000s. Mark Carrick, president and co-owner, says he had some reservations when he learned Barry-Wehmiller had acquired the company.

“Sometimes it’s a negative when a larger corporation takes over a business,” he says. “They’ve done a very good job with PCMC, improving service and offerings.”

Truly Human Leadership

Each Barry-Wehmiller company embraces and lives by Chapman’s Truly Human Leadership philosophy that advocates for creating a culture that brings out the best in employees “through communication, trust, celebration, respect, continuous improvement and responsible freedom.”

Chapman began championing Truly Human Leadership in the early 2000s, and considering the war for talent nearly every company is facing, the concepts he developed seem prescient.

Blakney became familiar with Barry-Wehmiller when he read Chapman’s book and later encountered the company firsthand when he was working as chief operating officer at Goss International, a New Hampshire-based printing machinery company. PCMC was among the bidders when the company was for sale.

Since assuming his new role, people have often asked Blakney if Barry-Wehmiller delivers on the promises it makes to employees.

“It’s one thing to write it in a book. Do they really live it? I can tell you after being here for going on seven months … they do. They really care about people and try to get them into the right areas,” he says.

This doesn’t mean PCMC is a utopia, he says. Rather, it’s about dealing with people respectfully and giving them the opportunity to take on new and different challenges. It’s a workplace where employees know they matter.

“It really is a culture of caring here. It’s amazing to me how people really reach out and support one another with whatever crisis they’re dealing with,” says Kate Eastman, marketing and communications leader at PCMC.

It’s also a culture of openness. Unlike in the past, Barry-Wehmiller shares financials with staff at all levels. Sabota says knowing what’s going on with the health of the organization gives employees confidence.

Recognition and celebration are integral at PCMC and all Barry-Wehmiller companies. Peers and co-workers recommend employees to be recognized at its Guiding Principles of Leadership celebrations. Honorees get to drive a special vehicle from the Barry-Wehmiller fleet for a week, receive Green Bay Packers tickets and get to spend a weekend at one of the company’s cabins in Hobart or Phillips.

PCMC faces an onslaught of retirements among machinists and struggles to fill service technician roles because of the travel and highly technical knowledge required for the job. Overall, though, Blakney says the company fares well when it comes to talent and has a low employee churn rate compared to industry averages.

To help meet future needs, PCMC has a strong internship program in which students work on meaningful projects and tackle real problems. On the skilled trades side, it’s looking to reinvigorate its co-op/apprenticeship program in the hopes of training people for machinist and assembly roles.

“We’ve been pretty lucky. I think people recognize us as a really good place to work, and that helps us in recruiting,” Blakney says.

A larger footprint

Choosing an outsider to lead the company was a new direction for PCMC. Blakney says the company thrived under his predecessor, Steve Kemp, who retired from PCMC after working there 38 years. At the same time, it wanted to pursue a new strategy that would help broaden its focus.

Blakney, a Marine Corps veteran, has held multiple roles in the manufacturing industry in the Midwest and on the East Coast, as well as living in Germany for three years while he served as COO for the Valve and Gate Group.

The capital equipment industry veteran has overseen renovations and expansions and helped lead companies from losses to profits. When American Industrial Partners acquired Goss International and Blakney joined Goss as COO, the company was losing $26 million. Blakney and his team turned that around. His first year there, Goss made $4 million; it made $14 million his second year.

When Blakney joined PCMC, it was heavily focused on the tissue side of its business. While the company will continue to nurture and grow its tissue converting business, it also plans to expand the print and bag converting side. Its merger with Hudson-Sharp, a bag converting equipment manufacturer and fellow Barry-Wehmiller company, helps facilitate that goal.

Blakney says the two companies and their equipment complement each other well. He anticipates the move will facilitate innovation and efficiencies and put the company in a stronger place to meet customer needs moving forward. In addition, several customers have PCMC presses and Hudson-Sharp bag-making equipment, so that puts PCMC in a good position to sell them both pieces of equipment.

In August, PCMC acquired two printing companies: RDP Marathon Inc. of Montreal and IPT Digital of Sarasota, Fla. In addition, the company would like to expand out of doing flexographic printing alone and move into digital as well. It plans to incorporate a hybrid press that allows for customization and doing both kinds of printing.

PCMC’s dedication to printing innovation includes manufacturing presses designed to reduce energy costs and which include waste-saving, quick-changeover features. Its Meridian laser anilox cleaner provides a one-pass cleaning solution, and its SteadyPrint anti-bounce feature delivers enhanced graphics and improved imagery to customers. Its SteadyPrint won the Flexographic Technical Association’s 2019 Technical Innovation Award in May.

Blakney wants to expand and pursue acquisitions on the tissue side as well to improve PCMC’s product portfolio. On the innovation side and in pursuit of sustainability initiatives, it manufactures a machine that allows companies to produce rolls of coreless bath tissue.

Blakney says a reinforced dedication to service and incorporating more modern technology is necessary to meet customers’ needs. “I come from a lot of capital equipment businesses. Service and support are key,” he said.

PCMC is also embracing internet of things and Industry 4.0 solutions. Smart Touch HMI (Human-Machine Interface) will be added to its new equipment. Field Link is a tablet that allows the company’s technicians to assess and diagnose customers’ problems, and Smart Touch offers an intuitive machine interface. In October, Hudson-Sharp also will launch a machine with Industry 4.0 features specific to the bag converting market.

The company works with partners such as Legacy Flexo to run trials on equipment and test and devise smart manufacturing solutions. For example, the two are working on a project that documents printers’ run abilities and collects data.

“We work hand in hand with one another. That’s from the sales end to the engineers to the service end of things,” says Alex Schaefer, maintenance and safety manager for Legacy Flexo.

As PCMC moves forward, it plans to grow its core businesses through providing superior service and increasing product offerings while also maintaining its focus on the aftermarket. Selling new equipment is the smallest part of the business, Blakney says. Sustaining and maintaining it is key. It also will continue to pursue acquisitions where they make sense.

“We set a good goal for this group that we’re going to grow. In the past, we had kind of just tried to maintain, and we’re changing that philosophy now,” Blakney says.

 

Paper Converting Machine Co.

Headquarters: Green Bay

Year founded: 1919

What it does: Tissue converting, packaging, flexographic printing, bag converting and nonwovens technology

Employs: Approximately 980 across locations in Green Bay, England, Belgium and Italy

pcmc.com