Updated: January 5, 2010 at 12:00 am
Ideal Industries Inc. plans to invest “tens of millions of dollars” in new equipment to help Colorado Springs-based Western Forge regain its reputation as one of the world’s premier manufacturers of hand tools, Ideal executives said Tuesday in the wake of agreeing to buy Western.
Jim James, Ideal’s president and CEO, described a November tour of the Western Forge plant off Garden of the Gods Road as like “taking a walk back in time” because much of its manufacturing equipment dates back to the 1960s and 1970s. Despite the lack of investment in Western Forge by its previous owners, Ideal decided to buy the company because of “enthusiasm of the employees and the quality of the products, people and customers.”
When James, Ideal Chairman Dave Juday and newly named Western Forge General Manager Randy Thompson met with the company’s 400 employees Monday, James said that “100 percent of the employees believed they wouldn’t have a job (by Tuesday). Our first priority is to save the company and as many jobs as we can. We have no plans for layoffs, but we have to get the company (Western Forge) back to profitability. That will probably be through attrition.”
Western Forge has been undercapitalized for a long time, Juday said, but Ideal is “prepared to invest what is needed to be competitive and serve the customers it has today and potential new customers. I don’t know how much that will be, but it will be tens of millions of dollars.”
Much of the new equipment Western Forge needs would improve the efficiency of its manufacturing process and make the company more competitive with Asian manufacturers, said Fred Radtke, vice president of sales for Western Forge.
“We have a real opportunity with Western Forge to take what was a premier company in its heyday and bring it back to that status,” James said.
Ideal will acquire Western Forge by the end of the month from MW Universal, which bought the company in 2007 and put it up for sale in August. The deal will continue a trend of building Ideal through acquisitions, including about a dozen companies bought in the past 10 years or so, Juday said.
Ideal is still operated by the family of founder J. Walter Becker — Juday is Becker’s grandson — and includes members of the fourth and fifth generations on the board of directors and as employees. Juday said Western Forge could benefit from that kind of stability — the company has had five CEOs in the past two years.
“My grandfather wanted to provide a product whose value exceeded the price paid. That is still our philosophy,” Juday said. “We bought this company because we believe it can contribute to our growth and profitability for the long term.”
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