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Woodward Governor bracing for impact of Caterpillar layoffs

Woodward Governor (ticker: wgov) gets a sizable chunk of its engine-controls business from Caterpillar. This story in the Coloradoan (the company’s based in Fort Collins) outlines what the company’s up against:

“We saw the downturn coming,” Gendron said. “The severe reductions at Caterpillar … we didn’t predict that. It gets our attention, and we have to see what that means. Caterpillar is a very large customer.”

The story also notes something we saw in a previous post about a small Cat supplier in Michigan: people are getting more business building wind-power systems.

Can’t help wondering how long before we hear about Cat getting in on the wind-power act. (Note, it does have a wind-powered plant in Northern Ireland.)

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Tom Mangan posted at 6:48 am February 3rd, 2009 |

Caterpillar supplier in Michigan winning big wind turbine contracts in western Michigan profiles K&M Machine Fabricating, which gets most of its business from machining giant parts for Caterpillar but lately has taken an agricultural turn: wind farms. While the reporter seems to forgotten to ask the company what everybody wants to know — how it’s weathering the current downturn (this happens a lot in business reporting because companies hate to admit the truth in public) — the article does have a few interesting tidbits about what it’s like to be a small manufacturer these days.

“In our business, you can’t land an order from a customer and then go buy a machine to fill it,” Galeziewski said. “We consistently have had to buy machines and expand capacity very speculatively.”

The third-generation family owned company has made some very good guesses. It anticipated the need and had the equipment on hand as its core energy customers have required ever-larger components for new enterprises. The new equipment, for instance, enables K&M to build virtually any size hub, bedplate or gearbox in the wind industry.

The world’s largest maker of mining and construction equipment, Caterpillar Inc., is presently K&M’s largest customer. Among the parts it makes for Caterpillar are components for mining trucks so big the tires are 13 feet tall.

“One of the things that makes K&M unique is that we offer a complete vertical integration of three processes: burning, fabricating and machining,” Galeziewski said.

“We have three separate facilities: One burns metal plate into the desired shapes, secondly, those would go to the fabricating shop, where they are manually and robotically welded, third is machining. So we take responsibility for a total turnkey solution.

Alas, utterances like “total turnkey solution” have found their way to the wilds of Western Michigan. This is why your mother is so wary of the Internet’s dark powers.

All wisenheimering aside, I like to see any stories revealing that despite what you keep hearing, lots of manufacturing is still happening in the United States.

K&M’s Web site is here. Check out the company’s way-cool sculpture here.

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Tom Mangan posted at 7:55 am January 23rd, 2009 |