September 5, 2005
Turnaround story | Industry veterans set up a deal to buy Pride Manufacturing's Guilford wood turning plant
By Jess Kilby
When Burnham-based Pride Manufacturing Co. announced in June it would sell its Guilford wood turning facility to focus on its primary business of making golf tees and other golf accessories, reaction in the region was swift. Within days of the announcement Gov. John Baldacci visited the mill, pledging financial assistance for the 60 workers there, as well as help in finding a buyer who would keep the facility up and running.
"We were worried about [the mill] being sold piecemeal," says Mark Scarano, executive director of the Piscataquis County Economic Development Council, "because most of that machinery is custom. We were sure that some of Pride's competitors would have picked up that machinery and moved it out of the area, thereby decreasing the chances that there would be continued manufacturing in the region."
It looks like Scarano's worst-case scenario will not come to pass, however. In early August, Guilford residents voted unanimously to apply for a $400,000 community development block grant to help brothers Doug and Jody Fletcher finance their purchase of the Pride facility. And at the end of the month the state approved Guilford's application, says Office of Community Development Director Orman Whitcomb.
The Fletchers see the deal as an opportunity to increase efficiency and improve technology at Maine Wood Turning Inc., the New Vineyard firm of which they are part owners. Others, however, see it as something much more significant: an opportunity to prove that manufacturing is still viable in Maine.
Of course, there is much uncertainty ahead. Maine Wood Turning President Doug Fletcher cautions that "people should not assume, just because we [got] the grant, that the deal is clinched." He and his brother won't be signing a purchase and sale agreement, he says, until they finish examining the financial stability of the Guilford plant. He adds, however, that "we're fairly well assured we're going to be successful at this."
Bob MacGregor, executive director of the Maine Wood Products Association, notes that the American wood turnings industry ˆ which produces all manner of products, including architectural moldings, furniture parts, craft items and novelties ˆ is losing business to foreign competition, not to lack of demand for product. In such a climate, he says, efficiency and diversification are crucial to success.
And, according to MacGregor, the Pride deal is good news for several reasons. "It's keeping the jobs here in Maine," he says, "but also it's encouraging to see some companies that are still optimistic about the turnings industry and willing to make a go of it. It's nice to see them hanging in there."
A complementary deal
Guilford officials now enter the project development phase of the grant process, which the OCD's Whitcomb cautions could take up to six months. In addition to a planning board meeting, the deal must go through another public hearing, he says, and a rigorous environmental site review. (Pride Manufacturing Vice President Bob Burr declined through an assistant to comment on the deal, saying it would be "premature" to do so.)
If the final stages of the grant process go smoothly ˆ and the Fletchers like what they see when they're done crunching numbers ˆ the Guilford facility will become a new company called American Pride LLC. American Pride will retain all of the 60 workers currently employed at the Guilford plant who "have a desire to stay," Doug Fletcher says; he estimates that number to be about 55.
While American Pride won't have any official ties to Maine Wood Turning (whose other two owners Fletcher says weren't interested in the Pride purchase), he says the companies will have a mutually beneficial relationship and fairly integrated operations.
There's currently about a 20% overlap in the products made at the Guilford and New Vineyard facilities, with Pride specializing in the manufacture of turned wood products between a quarter inch and an inch and a quarter in diameter, and Maine Wood Turning specializing in larger products ˆ one to three inches in diameter. "When we try to go below one inch, we become very inefficient," says Fletcher. "When [Pride] goes bigger, they become inefficient as well. So there's a need for some swapping of equipment and turnings to make sure the right facility is doing the right work."
Fletcher cites the two companies' molding lines as another target for increased efficiency. "They do a lot more on their molding line, but neither one of us keep our molding departments very busy," he says. "So there needs to be some consolidation in that regard."
Fletcher says the Guilford acquisition would launch Maine Wood Turning "light years ahead of where we are right now in terms of technology," specifically regarding software, lathes and finishing capabilities. "We do not intend to duplicate these processes and the equipment and put some at both the Guilford and New Vineyard facilities," he says. "Where the two businesses are separate entities but affiliated because of the ownership, it will allow us to share information with Maine Wood Turning."
Founded in 1971, Maine Wood Turning currently employs 50 people at its New Vineyard plant, which includes a 20,000-square-foot production facility, a 33,000-square-foot sawmill, and kilns with drying capacities of 150,000 board feet per charge. Fletcher says the company makes "literally tens of thousands of products," from bowling pins to napkin rings. Handles of various types are the company's number one product, he says, comprising about 25% of total sales.
The company doesn't disclose its annual revenues, but Fletcher says the American wood turnings industry as a whole has been shrinking since about 2000. MacGregor of the Maine Wood Products Association agrees with this assessment. "There used to be several big players in Maine," he says, "but they've consolidated over the past few years."
The PCEDC's Scarano, for one, believes the Fletcher brothers have a firm grasp on this reality. "These people, through business smarts, good decision-making and good salesmanship, have been able to stay ahead of the curve," he says. "They continue to invest in making the company more productive and efficient."
Moreover, Scarano says the Pride deal should be seen as a model for other Maine businesses. "I think that there is a strong case for continued manufacturing within the state of Maine if businesses continue to improve themselves, to make themselves more efficient, and develop the skills of their employees," he says. "Manufacturing can go on in Maine. We can still be competitive if we're smart."
"We were worried about [the mill] being sold piecemeal," says Mark Scarano, executive director of the Piscataquis County Economic Development Council, "because most of that machinery is custom. We were sure that some of Pride's competitors would have picked up that machinery and moved it out of the area, thereby decreasing the chances that there would be continued manufacturing in the region."
It looks like Scarano's worst-case scenario will not come to pass, however. In early August, Guilford residents voted unanimously to apply for a $400,000 community development block grant to help brothers Doug and Jody Fletcher finance their purchase of the Pride facility. And at the end of the month the state approved Guilford's application, says Office of Community Development Director Orman Whitcomb.
The Fletchers see the deal as an opportunity to increase efficiency and improve technology at Maine Wood Turning Inc., the New Vineyard firm of which they are part owners. Others, however, see it as something much more significant: an opportunity to prove that manufacturing is still viable in Maine.
Of course, there is much uncertainty ahead. Maine Wood Turning President Doug Fletcher cautions that "people should not assume, just because we [got] the grant, that the deal is clinched." He and his brother won't be signing a purchase and sale agreement, he says, until they finish examining the financial stability of the Guilford plant. He adds, however, that "we're fairly well assured we're going to be successful at this."
Bob MacGregor, executive director of the Maine Wood Products Association, notes that the American wood turnings industry ˆ which produces all manner of products, including architectural moldings, furniture parts, craft items and novelties ˆ is losing business to foreign competition, not to lack of demand for product. In such a climate, he says, efficiency and diversification are crucial to success.
And, according to MacGregor, the Pride deal is good news for several reasons. "It's keeping the jobs here in Maine," he says, "but also it's encouraging to see some companies that are still optimistic about the turnings industry and willing to make a go of it. It's nice to see them hanging in there."
A complementary deal
Guilford officials now enter the project development phase of the grant process, which the OCD's Whitcomb cautions could take up to six months. In addition to a planning board meeting, the deal must go through another public hearing, he says, and a rigorous environmental site review. (Pride Manufacturing Vice President Bob Burr declined through an assistant to comment on the deal, saying it would be "premature" to do so.)
If the final stages of the grant process go smoothly ˆ and the Fletchers like what they see when they're done crunching numbers ˆ the Guilford facility will become a new company called American Pride LLC. American Pride will retain all of the 60 workers currently employed at the Guilford plant who "have a desire to stay," Doug Fletcher says; he estimates that number to be about 55.
While American Pride won't have any official ties to Maine Wood Turning (whose other two owners Fletcher says weren't interested in the Pride purchase), he says the companies will have a mutually beneficial relationship and fairly integrated operations.
There's currently about a 20% overlap in the products made at the Guilford and New Vineyard facilities, with Pride specializing in the manufacture of turned wood products between a quarter inch and an inch and a quarter in diameter, and Maine Wood Turning specializing in larger products ˆ one to three inches in diameter. "When we try to go below one inch, we become very inefficient," says Fletcher. "When [Pride] goes bigger, they become inefficient as well. So there's a need for some swapping of equipment and turnings to make sure the right facility is doing the right work."
Fletcher cites the two companies' molding lines as another target for increased efficiency. "They do a lot more on their molding line, but neither one of us keep our molding departments very busy," he says. "So there needs to be some consolidation in that regard."
Fletcher says the Guilford acquisition would launch Maine Wood Turning "light years ahead of where we are right now in terms of technology," specifically regarding software, lathes and finishing capabilities. "We do not intend to duplicate these processes and the equipment and put some at both the Guilford and New Vineyard facilities," he says. "Where the two businesses are separate entities but affiliated because of the ownership, it will allow us to share information with Maine Wood Turning."
Founded in 1971, Maine Wood Turning currently employs 50 people at its New Vineyard plant, which includes a 20,000-square-foot production facility, a 33,000-square-foot sawmill, and kilns with drying capacities of 150,000 board feet per charge. Fletcher says the company makes "literally tens of thousands of products," from bowling pins to napkin rings. Handles of various types are the company's number one product, he says, comprising about 25% of total sales.
The company doesn't disclose its annual revenues, but Fletcher says the American wood turnings industry as a whole has been shrinking since about 2000. MacGregor of the Maine Wood Products Association agrees with this assessment. "There used to be several big players in Maine," he says, "but they've consolidated over the past few years."
The PCEDC's Scarano, for one, believes the Fletcher brothers have a firm grasp on this reality. "These people, through business smarts, good decision-making and good salesmanship, have been able to stay ahead of the curve," he says. "They continue to invest in making the company more productive and efficient."
Moreover, Scarano says the Pride deal should be seen as a model for other Maine businesses. "I think that there is a strong case for continued manufacturing within the state of Maine if businesses continue to improve themselves, to make themselves more efficient, and develop the skills of their employees," he says. "Manufacturing can go on in Maine. We can still be competitive if we're smart."
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