Visions of success

Amerequip seizes on unseen opportunities and engineers a turnaround

Posted on Jul 1, 2016 :: Cover Story
Posted by , Insight on Business Staff Writer

Mike VanderZanden often looks up to Walt Disney when needing a little inspiration.

It’s not hard for him to do. Framed Disney prints hang on his office wall at Amerequip Corp.’s corporate offices and main production facility in Kiel. What inspires him is the Magic Kingdom-maker’s vision of opportunity and success in a Florida swamp where others could only see mosquitos, soggy marshes and insurmountable obstacles.

There was a time in the not-too-distant past when VanderZanden needed to tap that vision for Amerequip, which designs, engineers and manufactures accessories and attachments for the construction, utility and lawn- and turf-care equipment industries.

“My first six months on the job I really thought I had made a terrible mistake,” VanderZanden says, recalling how the Great Recession ravaged the company when he started his tenure as the company’s CEO. “But it was also an opportunity — our chance to reengineer the company.”

Those were dark times for Amerequip.

As the recession tightened its grip on the regional economy, revenues at Amerequip plummeted from roughly $38 million in 2008 to about $20 million by 2010. The declining revenues resulted in Amerequip cutting its workforce by more than half, from 205 to 100.

But where some would have seen a business dying, VanderZanden and his team saw opportunity.

Sure, times were tough for everyone, but his 22 years with the company had also taught him something else — there was great opportunity if internal changes could be made to help it blossom. This was the perfect chance to break the “we’ve always done it this way” mold and engineer a different kind of company that would be nimble enough to negotiate the road ahead.

“We knew we needed to get the pieces for a new plan for the company in place right away so we would be prepared to take advantage of the opportunities when things turned around,” VanderZanden says. 

Nothing was off limits for VanderZanden and his leadership team. They looked at all facets of the company, from its ESOP ownership to the candidates it attracted to its workforce to the types of clients they worked with. They implemented a plan to upgrade the company’s manufacturing processes to meet new ISO standards and set aggressive goals to exceed $100 million in revenue and 400 employees by 2020.

That vision is coming to fruition.

This year, Amerequip expects to hit the $70 million mark for revenue, with projections showing a jump to $97 million in 2017. The company received multiple awards from groups such as the Fox Cities Chamber of Commerce and Wisconsin Manufacturers & Commerce for its workforce culture and onboarding process. It is now a destination employer with a workforce of 270 and growing.

“We’ve really instilled a whole new culture here,” VanderZanden says.

That growth fueled three building expansions in the past three years. The latest, expected to begin in August, adds 90,000 square feet of space and consolidates work done at a nearby facility to the main plant in Kiel. The expanded facilities should be online by summer 2017.

“Amerequip’s first interaction with the Regional Partnership was during the company’s Phase I expansion of its Kiel plant,” says Manny Vasquez, vice president of economic development with the Fox Cities Regional Partnership. “We’re excited to see the company’s continuous growth.”

Building it better

Amerequip traces its roots directly back to 1920 and Farm Specialty Manufacturing Company, founded by Bruno Arps in New Holstein. Creating customized solutions for backhoes and farm equipment were part of its original mission, and the company would eventually expand its footprint as an OEM designer and manufacturer for a variety of Original Equipment Manufacturers.

Innovation was an early hallmark of the firm. In

1926, the company introduced the Snow Bird, an

over-the-wheel track and ski system for Ford Model A vehicles. Admiral Richard Byrd used the system during one of his Antarctic expeditions.

As the company grew, it continued to expand its product lines and capabilities, including its engineering and design function. It also added contract manufacturing to its business model. In 1988, the ESOP plan acquired 100 percent of the company’s stock.

By this time, the company had facilities in New Holstein and Kiel, and was providing design, build and contract production service to an array of clients.

“In those days we were pretty reactive about how we did things,” says Gary Brochtrup, Amerequip’s current CFO and a 26-year company veteran. “People gave us their orders and we made and delivered the product.”

Then the shockwaves of the Great Recession hit.

As revenues fell, customers pulled back and layoffs grew, VanderZanden and his team realized they needed to change the company structure if they were going to implement their plan to improve the culture and turn things around. The first step was to gain control of its ownership. In 2011, in a move to keep ownership local, Amerequip’s management made its bid to purchase the company’s stock from the ESOP.

“Our plan was for a nine-month transition. I think we accomplished the goal in about three weeks,” VanderZanden says.

With local ownership and control secured, the management team began to examine the company’s assets and review the alignment of the company’s capabilities. Sales and engineering were integrated under the leadership of Tim Dorn, vice president of sales and engineering, to ensure customer projects matched the company’s capabilities.

“We really preach getting in at the ground floor so we can integrate our expertise into the process and deliver on what we promise,” Dorn says.

The company also shifted its client focus. Instead of casting a wide net — a strategy that had burned Amerequip with costly unsold inventory — a more targeted approach was adopted.

“We were burned pretty bad,” Brochtrup says of the inventory buildup left in the wake of a client failing. “It was an expensive lesson to learn.”

Rather than remain a passive supplier, Amerequip opted to solidify its relationships with partners that included some of the largest and long-standing companies in the industry and embarked on a more aggressive approach to help them meet their global goals.

“That’s why we really want to stick with seven to 10 key clients,” Dorn says. “They know us and we can grow together.”

The customer list may be smaller, but the results are not.

“I don’t need to have hundreds of clients,” VanderZanden says. “What I need is the seven to eight largest players in the sandbox. That’s who I want to be working with.”

As the company refined its offerings, it also began to sell its ability to handle all phases of a project under one roof, from design and engineering to fabrication and finish. It’s an advantage many of the company’s competitors can’t offer and a significant selling point to major clients.

“It’s part of the value we can add — that we can design it, test it, build it, finish it and deliver it,” VanderZanden says.

Employer of choice

Perhaps the greatest change Amerequip has made is the shift in its relationship with the community and its workforce.

Prior to and during the recession, Amerequip did not have an active relationship with the surrounding community, nor was it necessarily a destination employer, VanderZanden says. Without improvements, the other changes would not be able to gain the traction necessary for the new plan to work.

The layoffs gave the leadership team a chance to make significant improvements to employee attraction and retention efforts, creating a new employee onboarding process that was recognized earlier this year by the Wisconsin Manufacturers & Commerce.

Some of the changes were simple in nature, from offering one-on-one time with supervisors and company leadership to providing a special gift to trailing spouses. Others required additional investments, such as paid training, a wellness program and even investing in holiday parties and other employee celebrations.

Since taking the new approach, the company’s employee retention rate is above 95 percent.

“I don’t want people to hate their jobs,” VanderZanden says. “I want them to leave here at the end of the day in a better mood than when they got here.”

As part of a greater community outreach, Amerequip is actively involved with area high schools’ career education programs and as many as 300 high school students will tour the plant each year. The company supports several apprenticeships and VanderZanden is active on the board of the Career Pathways Academy in Little Chute.

“It’s no surprise that the company has been successful in finding the talent it needs — they don’t wait for it to come to them, they go and find it or develop it,” Vasquez says.

“As the skilled labor market continues to get tighter across the state and nation, companies should follow Amerequip’s example and put all workforce development options on

the table.”

Sign of the times

Just outside one of the primary entrances to the production area hangs a sign with a slogan that sums up how the company will be successful going forward: “That’s the

way we’ve always done it” circled and crossed out in red. 

Aside from the successes in growing both revenue and the workforce, the results of Amerequip’s new approach can be seen on the shop floor, where employees work in a clean and well-lit environment that is choreographed by the automated material handlers moving parts from one work station to the next as they emerge from fabrication on the way to finishing and final assembly.

The conference rooms buzz with activity, from sales and engineering teams huddling over projects for

clients to production employees taking part in the continuous training

programs offered.

Just beyond the robotic welding cells, VanderZanden opens a door to show the space the new addition will occupy. As he outlines the plan for this latest expansion, he can also envision what’s coming next and notes the company

still has room to add another 50,000 square feet of space.

“We are getting everything in line,” he says. “We’ve changed the culture.”