Precision Plastics Finds Success, Growth in Employee-Owned Structure
Columbia City, Ind. — Ron and Ryan Richey have ambitious plans for Precision Plastics Inc. They also have the orders to back up their aspirations.
Ryan Richey, executive vice president, says his goal for Precision — an injection molder with 35 machines and 200 employees — is to be the premier molder within 180 miles of their plant, situated in the northeast corner of rural Indiana, 22 miles west of Fort Wayne.
So, how's business? "We're experiencing the best growth we've ever had," said Ron Richey, president and CEO, who has been with Precision for 40 years.
To put some numbers to that growth, Richey says the $27 million-per-year business will see "small growth in '17, but 20 percent in 2018 and 10 percent in 2019."
The automotive market makes up 65 percent of Precision's business with specific concentration for this Tier 2 supplier on safety critical pieces such as the plastic parts in housings for driver, passenger and side curtain air bags.
The second big slice of Precision's sales comes from the defense market, where 18 percent of the business is devoted to what would be classified as packaging, Ryan Richey, 39, said. Consumer and industrial markets, along with miscellaneous sectors, make up the balance of Precision's sales.
Precision is physically growing, too. Next month, the 75,000-square-foot facility will be joined by a 10,000-square-foot warehouse on the backside of the Columbia City campus. A new 720-ton injection molding press is coming soon, too, with others to follow.
The Richeys — father and son — point to the company's employee stock ownership plan as one key to the company's success. The ESOP began in 1997 when Ron helped lead a buyout of the company for the employees. Today, when employees work 1,000 hours with the company, they begin to be vested in the program, which operates much like a profit-sharing or pension plan. Shares are allocated each year to participants.
"It works partly because we have an open-door policy," Ron Richey, 63, said. "The employees can see the value of their stock growth, and they correlate that with customer satisfaction. They have a vested interest in satisfying the customer because they understand the way their retirement funds/ESOP fund is going to grow through the company."
Ron Richey speaks glowingly of Ryan's 14 years at Precision, crediting his son with the company's culture, the move toward automation and the new hires on the management team.
"We're building a race horse," said Ron Richey, referring to the growth of the company. "We've never had this kind of talent here."
Ryan, in turn, deflects and credits initiatives like the company's slick website launched last year to the vice president of sales. The website serves to attract prospective customers, current customers and prospective employees, he said.
There is a succession plan in place at Precision. Ron plans to completely hand the reins over in three to four years. But it will be gradual rather than circling a date on a calendar with Ryan stepping up on that particular day.
For his part, Ryan said he took nothing for granted when coming to Precision. "There was no guarantee I would be Ron's successor," he said.
The duo share a genuine affection for each other, although they are quick to point out that they are "Ron" and "Ryan" in meetings with customers and employees rather than "Dad" and "Son."
That said, they share a similar concern about finding and training employees, pulling folks from all over, including southern Michigan, some 60 miles to the north.
"Human capital is the biggest issue outside of material," said Ron Richey. "We have to have managers who can hold their own in front of OEMs."
Ryan agrees, echoing what other processors have discovered, getting involved with local high schools and colleges in their search for skilled trades people.
"We have to grow it from here," he said. Ron agrees, saying: "We have our best success training people in-house for technical jobs."
Another aspect that keeps Ron Richey up at night is the squeeze Precision feels from OEMs setting fixed terms and resin suppliers seeking price increases.
"Long term, I am concerned about how the industry has gotten positioned over the last 20 years. As I said earlier, we're a small guy between large customers and large vendors. I'm really worried about margin erosion for the injection molding community. It has been trending down. ... If I'm going to feel proud of my company, it has to have a livable wage for our employees."
As seen in Plastics News.