Regarded not only as the finest modern architect but also a master builder, Frank Lloyd Wright was known to design everything that would be used in a building down to the lighting fixtures and the plates on the dinner table.
While the professionals at Clark Nexsen tend to leave the tableware decisions to the building owners, they are committed to the master builder philosophy through holistic, integrated design. This is reflected in the firm’s diverse staff which includes architects, engineers, interior designers and planners.
“This is my greatest sense of accomplishment; that we work with the whole building, the whole project. I see us as master builders,” says Peter Aranyi, managing principal of the Charlotte office.
Founded in 1920 in Lynchburg, Va., Clark Nexsen has become a full-service, integrated design firm headquartered in Norfolk, Va., with offices in Richmond and Roanoke, Va.; Raleigh and Charlotte, N.C.; Washington, DC; Atlanta, Macon and Brunswick, Ga.
Clark Nexsen has worked on projects in 46 states and 42 countries. It is recognized as one of the top 50 architectural firms in the nation.
One Big Family
While each of Clark Nexsen’s offices has its own culture, none is a separate profit center; the company runs as a whole.
“We’ve grown up together as one big family,” says Aranyi. “One reason this works so well is that the company is employee-owned. There are close to 100 stockholders in the company, which is run by a board of directors.” Aranyi sits on the board.
“We needed to have a broad base of stockholders to sustain the business over time,” he explains. The firm attributes its success to personalized service and diversity.
Charlotte is one of the largest offices and was started in 1994 with a merger between Clark Nexsen and Charlotte-based Gunn-Hardaway. Aranyi, who previously worked in the Norfolk office, came to Charlotte to head up the office 12 years ago. He also oversees the Roanoke office.
The overall firm specializes in higher education, commercial, offices, government, recreational, manufacturing, health care, and land planning projects. The Charlotte office’s primary focus is higher education projects, especially student life buildings such as housing, dining, academic buildings and student success centers.
Clark Nexsen operates out of 15,000 square feet of space in uptown Charlotte; its third location since opening here. “We previously had offices on Church Street and Morehead Street, and finally now on Elizabeth Avenue. We designed and upfitted our office space to promote staff collaboration,” says Aranyi. “Our Elizabeth office has become home.”
Company-wide, Clark Nexsen has over 500 employees; 54 of them are in Charlotte which includes 21 architects and 25 engineers.
Clark Nexsen’s clients and projects in Charlotte are equally diverse. Higher education projects are active at UNC Charlotte, UNC Chapel Hill, Winston-Salem State University, Duke University, Clemson, University of Virginia and Penn State.
“UNC at Charlotte has been a wonderful client,” says Aranyi. In Chapel Hill, the firm is designing a major student housing project that will replace Odom Village, built during WWII for returning soldiers. The firm has just recently developed a 10-year master plan for the redesign of 26 residence halls at Penn State University.
Since 2002, the firm has designed space for 20,000 beds for higher education housing; an average of 2,000 per year. Over the years, Clark Nexsen has designed many schools for Charlotte-Mecklenburg Schools as well.
The firm also enjoys significant military work, a consequence attributed to the company’s founders—two military men—one a captain, the other an admiral. Both NATO and the U.S. Navy have been clients, along with dozens of other Department of Defense agencies such as the U.S. Army, Air Force and Coast Guard.
The Charlotte office designed two dining facilities for the U.S. Marine Corps at Camp Pendleton in California which are just wrapping up construction. These facilities are designed to achieve LEED Gold and have received a design award from the local Charlotte AIA chapter. The firm is also under contract with the U.S. Navy on a worldwide energy contract, looking at ways to conserve energy across the country.
Private business clients include Family Dollar Stores and Duke Energy. “One of our interesting niches is indoor firing ranges,” says Aranyi. “We are working on new firing ranges for the Buncombe County Sheriff’s Department up in Asheville and are also doing a master plan for Union County.”
Sustaining the Community
Clark Nexsen’s success has driven it to give back, especially in mentoring students in the field. The Charlotte office is currently working with students at UNC Charlotte on the Solar Decathlon competition. Sponsored by the Department of Energy, this national program invites college campuses to compete in the design, build and operation of a solar-powered, smart home.
Its goal is to train the next generation of leaders in sustainable architecture, engineering and business by having them deliver innovative technologies using environmentally conscious, energy-efficient and marketable methods.
“We provide support to the students, giving them advice so they can do a better job,” says Aranyi. “We do it to contribute to the field,” he says, adding, “Students become great employees.”
Work began on the design of the home in October 2011 and construction started in February of this year. The competition will take place in California in October. The Norfolk office is similarly engaged this year with students at Old Dominion University, and previously worked with students at Virginia Tech when they won 5th place in the national completion.
As with any business, there are challenges. “Mine is time,” says Aranyi. “We travel extensively. Our work is diverse and spread out geographically. It’s hard to be in all the places I need to be but I try to get home in the evening to spend time with the family.”
“We’re constantly challenged—in a good way—to keep up with fast-moving technology and advances in the industry,” says Aranyi. “I tell my junior staff that what I see now is the stuff of comic books from the 1960s; we’re there, working in three dimensions and seeing projects as we never could before.”
The firm’s animation programs now use video game engines to model how a building functions with people in it and demonstrate to owners the experience of their projects before they are complete.
The firm is actively engaged in research to stay abreast of developments. “Buildings we design will typically be in place for 50 to 100 years. We are working on flexible design solutions for technologies that are not even in place yet. For instance, in the future, landline phones will be obsolete. Engineering will be required around new systems of communication. We’re making educated guesses about what will be needed for technologies that are not even discovered yet,” says Aranyi.
Committed to Growth
At Clark Nexsen, the junior staff helps the senior staff understand and employ new technology. The senior staff teaches the junior staff the business of integrated design and the communication skills and social graces involved with face-to-face meetings and picking up the phone and talking with a client, according to Aranyi. “Everyone brings value to the table,” says Aranyi.
Aranyi says Clark Nexsen weathered the recession better than most, a fact that he attributes to the foresight in 1994 to diversify.
“When I first came to Clark Nexsen, all of our work was military-related, but the Cold War ended and we saw the writing on the wall. That’s when we got into the higher education market,” explains Aranyi. While a few jobs were lost company-wide, the firm actually added offices during the recent recession years. With an 80 percent repeat business rate, the firm has continued to provide full design services.
Now, uncertainty over military spending is again affecting the firm and is one of Aranyi’s frustrations. He explains that the federal government has not yet disclosed their 2013/2014 projects. Normally, these are communicated a year in advance. “That our elected government cannot work together to keep the country running is demoralizing to companies like ours,” laments Aranyi.
Aranyi is a second generation architect; his father completed his architectural studies at NC State University and opened a business in Virginia Beach, becoming a key player in the solar field and named Energy Man of the Year in 1984 by the Department of Energy. The junior Aranyi worked in his father’s office as a teenager and initially, rejected architecture as a career choice.
“It was a kind of rebellion; I threatened to join the Air Force,” remembers Aranyi. But he found that he was intrigued and went on to study architecture at Hampton University in Virginia. He became a registered architect in record time because he worked during school and earned credit towards the three-year internship requirement. Aranyi lives in Charlotte with his wife, who is an artist, and twin sons. His daughter is enrolled at NC State University in graphic design.
Committed to professional learning and personal growth, Aranyi applied to and was accepted in the 20th class of the Leadership North Carolina program.
“I’m learning a great deal about North Carolina. I had been so focused on my career and the industry, I failed to realize the impact of social issues in our state—economic, health care and education issues,” says Aranyi. “Now my interests are much broader and I understand that as a leader in North Carolina, I have to be involved in these things. There’s a lot at stake right now.”
Active in the community, Clark Nexsen is involved with several charitable and educational organizations including Hands On Charlotte, Habitat for Humanity, the Dove’s Nest and Classroom Central.
They are once again participating in the American Institute of Architect’s program “Canstruction” in which participants build sculpture structures out of food cans, then donate the food to the Second Harvest Food Bank. The firm has also been active in the ACE Mentor program, working with area students who have interest in the architecture and engineering fields, and has just kicked off an Explorer program for architecture.
The firm will continue expanding its business, according to Aranyi. “We’re not comfortable sitting back and saying ‘We did it, we’re done.’ We will probably open an office on the west coast and continue looking west of the Mississippi.”
A remarkable trait of the firm is its workplace culture. It’s a friendly environment, a pleasant atmosphere where even the most junior staffers are encouraged to share their ideas.
“I value everyone’s opinion,” says Aranyi. “Any success that I have is because of all the people who work here.” The firm encourages the exchange of ideas “around the coffee maker.”
The firm also encourages staff and their families to get together at monthly events such as hockey or baseball games, outdoor cookouts or poker nights. “We have a Fun Committee to make sure we have some down time,” asserts Aranyi.
Aranyi holds several titles within the firm—senior vice president, operations director, managing principal, and board member. His current business card simply reads “Principal.”
“I’m waiting for the box to be empty,” he says with a smile. “I didn’t want to spend money for a title. When people ask what I do, I say, ‘I’m an architect.’”
When Electrolux relocated its North American headquarters to Charlotte in July 2010, it was the largest corporate relocation to the city in the last 25 years. With more than 40 million products sold in markets in more than 150 countries each year, Electrolux is a global leader in the design and manufacture of appliances for both consumer and professional use. Electrolux develops, designs and manufactures both major and small appliances including refrigerators, dishwashers, washing machines, dryers, stoves, air conditioners and vacuums.
The company’s North American business accounts for more than one third of Electrolux’s total global sales. The relocation of its North American headquarters brought Charlotte not only the prestige of being the regional home of a global company with household name recognition but also a commitment from Electrolux of new jobs for the area.
Jack Truong, president and CEO of Electrolux Major Appliances North America, who has a doctorate in chemical engineering and holds 11 U.S. patents and several international patents for innovation in his field, joined Electrolux in 2011.
“The community here in Charlotte has welcomed us with open arms,” Truong says. “We love being here and we look forward to working with everyone here to make this a growing part of the company for our global group.”
In our backyard
Since its relocation, Electrolux has proven to be a strong contributor to the Charlotte community. The company’s original commitment of adding 738 jobs to the area within five years was met and surpassed in two years, and the company currently has 80 openings at its headquarters on David Taylor Drive including positions in engineering, IT, sales, marketing and supply chain functions.
They also expect to add 80 more jobs in engineering, product testing and design when the research and development facility they opened just north of uptown, expands to include R&D for their washer and dryer business. The facility already houses R&D functions for vacuum products globally, electronic systems of all major appliances built in North America, and product design for all major and small appliances built in North America.
“All of our appliances that are built in North America are designed right here in Charlotte,” explains Eloise Hale of Electrolux North America’s corporate communications and media relations. “This addition not only signals our commitment to product innovation in our washer and dryer business but also builds on the design and testing capabilities that we have here in the city.”
Last August the company opened a 43,000-square-foot research and development lab at its refrigerator products manufacturing plant in Anderson, S.C. This Cold Technology Center and their other numerous R&D efforts demonstrate the importance of innovation to the company; an importance that dates back to its beginnings as the Frigidaire Company.
“Who invented the first refrigerator?” Truong asks. “Frigidaire.”
“Your mom or your grandmother probably said, ‘Please go get milk from the fridge,’” Truong continues. “That reference came from the Frigidaire brand. Frigidaire invented the first refrigerator in 1918. Who invented the first home freezer?”
Truong lists off other appliances: the first home air conditioner, the first refrigerator ice maker, the first washer and dryer combination unit for apartments, and the first stainless steel appliances for home use.
“The answer to each is ‘Frigidaire.’ All of these are the legendary innovations our company has brought to American consumers since 1918,” Truong says.
Frigidaire’s product innovation continues now through Electrolux, a Swedish appliance company, which bought Frigidaire in 1986.
“The combination of Electrolux, which is really about design and European aesthetics,” explains Truong, “with Frigidaire’s functionalities and cutting-edge technology, merges form and function to produce beautiful, innovative products for the consumer’s home.”
The Frigidaire name remains a popular mass brand of the company which has four different levels of residential products, three under the Frigidaire brand as well as one under their premium Electrolux line. The company also offers a line of kitchen and laundry products for commercial use.
Innovation for the home
“What we are doing in Charlotte and North America,” says Truong, “is understanding changing consumer behavior and designing and developing products for every type of family through the various stages of their social and economic cycles.
“Starting out in your career in your 20s, you begin with the Frigidaire mass products,” Truong explains. “As families grow, they move on to Frigidaire Gallery, a step up. This is typically what many Americans would have in their kitchens. The step up from that within the Frigidaire brand is called Frigidaire Professional. And when the family gets to the point where they can afford great products with the luxury of beautiful design to complement their kitchen, they choose the high-end Electrolux kitchen.
“The purpose of our company is about designing and developing cutting edge products, but it’s also about families. It’s about friends and families coming together in the kitchen. It’s about cooking healthy food for your family. We’ve found that, particularly in the U.S., more than 70 percent of households prefer to have great meals cooked at home. The kitchen has become the center of the house.
“The design of homes has changed too, so as we develop new appliances we make sure they change to take that into account. The kitchen of today is often open to a family room, so the dishwasher must be extremely quiet. Our latest innovation in the Frigidaire Gallery line is a dishwasher with what we call ‘orbital cleaning.’ A proprietary hydraulic system allows four times more water coverage to provide the best cleaning and the best drying but yet it’s still extremely quiet. You can’t hear it as you entertain friends and family.
“Right now, time is everything to the consumer. Rather than using gas or radiant energy, our new induction cooktop uses electromagnetic induction technology to boil water in only 90 seconds. We’ve put computer logic into our ovens. If you want to cook a turkey, the ovens have a special probe. You put it in the turkey, press the ‘perfect turkey” button and that’s all you have to do. A few hours later, when the turkey is ready, the oven rings, you open it up and it’s ready to serve.
“We’ve also developed new technology for our washers and dryers that allows you to wash a load in 15 minutes and then to dry it in 14 minutes. Everything’s done in 29 minutes.
“All of these innovations allow consumers to perform household tasks with high quality and in a shorter period of time so they have time to spend with their friends and family,” Truong sums up.
Electrolux’s continuing emphasis on innovation has yielded big results. Currently, Electrolux is a $17 billion global company—the second largest appliance company in the world with the largest global reach of any appliance company.
“We’re outperforming the industry,” cites Hale. “The industry as a whole is seeing declines, yet we’re seeing growth.”
The company has also been recognized by third parties for its achievements. The Frigidaire Gallery double oven range won the prestigious 2012 Good Housekeeping Very Innovative Products Top Ten Award. Each full size oven in the range is large enough to cook a 28-pound turkey but separate controls allow independent baking, broiling and roasting.
“A family can cook a ham in the top oven and bake cookies in the bottom oven simultaneously and both can be perfectly ready at mealtime,” says Truong.
Sustainability for the planet
Electrolux has also recently received recognition from three leading ratings organizations for its sustainability efforts. In December of last year, the non-profit organization Climate Counts named Electrolux as one of the world’s leading consumer goods companies in terms of addressing climate change.
For the second year running, the company was named Sector Leader in the RobecoSAM 2013 global sustainability rating and in January, Electrolux was included in the Global 100 ranking of the world’s most sustainable companies.
“We place great emphasis on sustainability,” explains Hale. “Appliances are a major user of energy. The appliance industry as a whole has been aggressive in driving down energy usage. All of our products are energy efficient and many are ‘Energy Star’ rated.” (Products earn “Energy Star” labeling by meeting energy efficiency requirements established by the U.S. Environmental Protection Agency.)
The company’s emphasis on eco-efficiency moves out of the manufacturing plant and into the classroom with its participation with UNC Charlotte in their “Urban Eden Initiative.” UNC Charlotte is one of 20 schools chosen to compete in the U.S. Department of Energy’s Solar Decathlon 2013. The worldwide competition, to be held in California in October, challenges academic teams to design and build highly energy-efficient solar-powered homes. Electrolux is an active sponsor of UNC Charlotte’s entry, the “Urban Eden” house.
“We’re donating both money and products,” explains Hale. “We’re also working directly with the students on the design of the kitchen and how best to bring energy efficiency to it.”
Electrolux is collaborating with UNC Charlotte in other ways as well. “We are working on several efforts with UNCC,” Hale says. “We are hiring graduates, offering internships and working with several of their departments on STEM (Science, Technology, Engineering and Mathematics) education.
Truong also speaks to the partnership: “I and our team work closely with the UNCC administration to identify our company’s needs and to help write the curriculum so that their graduates can be readily employed within Electrolux. We believe building standards in engineering and technology excellence is a key value we can bring to the Charlotte community.”
Electrolux’s community involvement extends beyond education. In the two years since their relocation they have been active in local non-profits with cash, sponsorships and in-kind donations to organizations such as the United Way of the Central Carolinas, the Charlotte Chamber of Commerce, the Arts and Science Council, and Johnson C. Smith University.
Last July Electrolux provided 940 air conditioners worth $140,000 to Mecklenburg residents in need through a donation to the Crisis Assistance Ministry.
“Community welfare, the arts and STEM education are important focus areas for us,” says Hale. “We are committed to growing here and being a good corporate partner.”
At home in the South
Electrolux’s growth has been especially beneficial to the Southeast. North Carolina and its neighboring states account for a generous percentage of Electrolux’s 14,000 employees in North America.
In addition to the more than 800 employees in Charlotte, their dishwasher production plant in Kinston, N.C., employs 600 and the Asheville national parts distribution center employs another 300.
Electrolux boasts the world’s largest top mount refrigerator production plant in Anderson, S.C., and the company produces one of out of every three stoves sold in United States from its Springfield, Tenn., factory.
To further underscore Electrolux’s commitment to the U.S. and the Southeast, Electrolux will soon move production of its high end ovens from Canada to Memphis,Tenn. The 750,000-square-foot state-of-the-art factory will open in June 2013, and at full capacity will create 1,200 new jobs in Memphis.
Truong points out that the economic impact should be even more beneficial. “For every manufacturing job we create, we typically create three additional jobs that our suppliers need to add to increase their production.”
In July 2012, Electrolux North America celebrated two years in Charlotte with a local campaign of billboards, advertising and sponsorships to thank the city for being such a great place to work and live.
As Electrolux North America headquarters settles into its third year in the Queen City, the company’s innovation, growth and expansion of local jobs as well as its interest, work and involvement in the community continue to be a cause for celebration.
When North Carolina lost most of its furniture and textiles production to Mexico and Asia, it looked as though all our manufacturing was dying. Like a tsunami, factory closures sent tidal waves across a vast supply chain of producers. As the disaster deepened, many envisioned a future without manufacturing. They predicted that cleaner, greener and safer service sector jobs would emerge to dominate the North Carolina economy.
During the 1980s and ’90s, North Carolina lost not only its factories, but also its confidence in manufacturing.
“Manufacturing became a dirty word,” remarks Dr. John Ziegert, heading up the UNC Charlotte initiative for advanced manufacturing. “It was dumb, dark, dirty and disappearing.”
It took a while before the state put the loss of its furniture industry in perspective. Wooden case goods were the economic equivalent of silk-screened tee shirts. This was an industry ripe for export and vulnerable to duplication by low-wage, low-technology operations across the pond.
Despite a generalized loss of faith in manufacturing, North Carolina remains the most productive manufacturing state in the Southeast and third in the nation. Over 400,000 North Carolinians work in the state’s 9,300 manufacturing companies, with Mecklenburg County the state’s manufacturing leader. Even with the Great Recession, North Carolina’s manufacturing output has grown over the last decade.
Looking at the larger picture, the United States today produces 21 percent of the world’s manufactured goods and manufacturing employs one in six American workers. That leaves plenty of room for improvement. During the 1970s, approximately 25 percent of American workers were employed in manufacturing.
Globalization experts are coming to the understanding that manufacturing plays a vital and essential role in our economy. “We can’t have a vibrant economy without a world-class manufacturing sector,” says Ziegert. “Without it, money only leaves the country.”
Due in large part to the vision of then-Chancellor Jim Woodward, UNC Charlotte has never lost its emphasis on manufacturing.
“During the past two decades when most universities were running away from manufacturing, UNC Charlotte identified advanced manufacturing as something we’d be good at,” asserts Ziegert, a professor of mechanical engineering and engineering science at UNC Charlotte. “The school continued to build its strength in manufacturing when others like Purdue and the University of Illinois were downsizing and letting professors working in manufacturing retire without replacement.”
Ziegert’s area of expertise is not just mechanical engineering, but advanced manufacturing. This is the type of manufacturing that business leaders do not want to export. It holds the key to manufacturing’s long awaited American Renaissance, a revival that could even extend to the now-crippled furniture industry. With all the problems of high transportation costs, poor quality and long lead times associated with furniture produced overseas, it may be time to think about “advanced” manufacturing of furniture in North Carolina.
What is “Advanced Manufacturing”?
”Advanced manufacturing” has been defined in numerous ways. In fact, there have been entire government studies devoted to developing the concept, part of which involves defining the concept.
In the November 2012 issue of Industry Week, Editor-in-Chief Patricia Panchak tackled advanced manufacturing’s untidy definition:
- Is advanced manufacturing just “newer” manufacturing, like aerospace compared to auto production?
- Are its products designed with CAD, CAE, CAM, modeled by high performance computing, simulation and analysis, and produced by advanced robotics, additive manufacturing and other intelligent systems?
- Should leadership systems like lean management, lean production, Six Sigma, supply chain integration, and advanced planning and scheduling be part of the definition?
- Does advanced manufacturing have to be born in university science and engineering departments and then transferred into manufactured products?
These are not just academic concerns, argues Panchak. “How we define advanced manufacturing determines the metrics we’ll use to evaluate success and shapes public policy and business strategy,” she stresses.
Panchak found an acceptable definition in the June 2011 Ensuring American Leadership in Advanced Manufacturing report by the President’s Council of Advisors on Science and Technology (PCAST): “Advanced manufacturing…involves both new ways to manufacture existing products and the manufacture of new products emerging from new advanced technologies.”
To some extent, the definition is a moving target. Ziegert has his own take on the subject: “Advanced manufacturing is that segment of manufacturing where you gain a competitive advantage by the application of specialized knowledge and technology as opposed to low labor rates.”
Universal in any definition is a dynamic element. “What is considered advanced manufacturing today may be commonplace in 20 years,” says Ziegert. The smartphone is an all-too-obvious example. While it is undeniably high-tech, assembling it is not.”
Examples of advanced manufacturing range from the microscopic to the majestic. Ziegert points out one that is large and dramatic: aircraft manufacturing. Thirty years ago airplanes were made of sheet metal and metal component parts were folded and riveted together.
In work pioneered by Dr. Scott Smith of UNC Charlotte, that has all changed. Smith and others learned how to take a solid piece of aluminum and machine it into complex shapes with sheet metal thickness. That research, combined with high speed milling techniques that Smith also helped to develop, led to what is referred to today as monolithic construction.
“As a result,” Ziegert says, “the structural components of virtually all United States military aircraft are no longer built by folding sheet metal.” The technique has revolutionized aircraft construction and Boeing has estimated that implementing it has saved as much as $500 million on the F-18 program alone.
As a result of PCAST report in 2011, President Obama appointed Mike Molnar, a manufacturing executive from Cummins, chief manufacturing officer of the National Institute of Standards and Technology and director of the interagency National Program Office for Advanced Manufacturing whose mission it is to foster industry-led partnerships and to form a “whole of government” approach to strengthen competitiveness and innovation in U.S. manufacturing.
Molnar is a self-described “manufacturing guy from industry” and is seen by Fred Wetzel, executive vice president for the National Council for Advanced Manufacturing (NACFAM), as an effective “inside guy.”
In July 2012, Molnar’s National Network for Manufacturing Innovation (NNMI) announced a $1 billion proposal to create 15 public/private manufacturing innovation institutes around the country. The Charlotte Research Institute at UNC Charlotte is bidding to become one of the centers.
Innovation Institute at UNC Charlotte
The job of shepherding UNC Charlotte’s application for an Innovation Institute was a star attraction in John Ziegert’s move to the University two years ago. Currently in the University’s William States Lee College of Engineering and a researcher in the Center for Precision Metrology, his background is steeped in smart manufacturing.
Before Charlotte, the University of Rhode Island Ph.D. was at Clemson University as Timken Chair in Automotive Design for the International Center for Automotive Research. Prior to Clemson, Ziegert spent 17 years at the University of Florida, progressing from assistant professor to the Newton C. Ebaugh Chair and director of the Machine Tool Research Center.
The Carolinas Manufacturing Innovation Institute (CM2I) that Ziegert envisions will concentrate on large-scale, high-precision manufacturing.
“The United States exports far more than we import in aircraft, industrial engines, excavators and railway and mining equipment,” he says. And with the experts Ziegert intends to bring to CM2I, he is determined to keep that trade imbalance tilted in favor of the U.S.A.
“A key to success in high-precision manufacturing is integrative precision manufacturing,” Ziegert says. “One result of this type of production is a rapid and automated correction of production errors before they spread through the system. That’s a vast improvement over what’s been cynically called ‘inspecting quality into manufactured goods.’”
Ziegert was attracted to UNC Charlotte for a rather straightforward reason. “This department has the largest, strongest, most respected and best equipped advanced manufacturing group in academia in the United States,” he says unequivocally.
That assessment is not hyperbole. The International Academy for Production Engineering (CIRP, French) is the world’s leading professional organization in production engineering research. It is at the forefront of design, optimization, control and management of industrial processes, machines and systems.
Researchers are invited to join CIRP and each industrialized country is limited to 20 Fellow members. In the delegation from the United States, five of the Fellows are from UNC Charlotte.
“M.I.T. has two members. No other U.S. university has more than one member. That was an easy sell to get me here,” says Ziegert, nodding.
The five CIRP Fellows from UNC Charlotte are Scott Smith, Robert Hocken, Chris Evans, Gert Goch, and Matt Davies. All are Ph.D. professors in the department of mechanical engineering and engineering sciences.
Dave Barton, co-founder of BlueSwarf, agrees wholeheartedly with Ziegert’s assessment, and, he’s willing to take bets on UNC Charlotte’s chances of success with funding for CM2I. Barton’s company, a developer of software for the machining industry, is now located at Penn State University’s Innovation Park, but would move to UNC Charlotte in that event.
“Chances are good that UNC Charlotte will get one of the 15 spots,” says Barton. “UNC Charlotte is one of the primary machining facilities in the world. In manufacturing research and machining, Georgia Tech and MIT pale in comparison to UNC Charlotte.”
What It Will Take…
NACFAM’s Wentzel is skeptical about funding the new Institutes: “Nothing will happen until the money is available.” Acknowledging that that depends on the administration and Congress getting together on spending, he says in light of recent history, “I wouldn’t hold my breath.”
Ziegert is more optimistic. Based on conversations with people in the government’s National Program Office for Advanced Manufacturing, he feels confident that there will be calls for proposals in the spring with awards for the first institutes by the end of fiscal year 2014.
If successful, CM2I will be an independent, not-for-profit research and training institute run by a board of directors composed largely of representatives of its member companies. The new institute would rely on NNMI dollars only for its start-up phase. Once it matures and attracts industrial partners, it will survive on dues, fee-for-service activities, competitive federal research contracts and license fees.
One part of CM2I involves a partnership with area community colleges such as Central Piedmont. Ziegert says their cooperation is necessary in the vital area of work force development. He is looking to train entry level shop-floor machine operators, technicians and mid-career engineers for positions in digital manufacturing and manufacturing analytics.
To get there, he has fashioned a training laundry list that includes apprenticeships, short courses, flexible degree programs, internships and certificate programs.
There is another reason Ziegert purposefully chose to come to Charlotte: He is also point man for the partnership between the University and Siemens Energy centered on creating the Siemens Large Manufacturing Solutions Laboratory, a place where Siemens engineers and UNC Charlotte grad students can engage in short-range applied research to make Siemens more profitable and competitive.
Ziegert is still looking for a permanent home for the lab, but that hasn’t stopped Siemens engineer Michael Jones and his student researchers from tackling some practical manufacturing-related problems.
Jones is generator manufacturing development manager for Siemens Energy in Charlotte. He winnowed dozens of suggestions from other Siemens engineers into five practical student-centered problems. “What better way to educate students than to investigate real life projects?” says Jones. “It is a perfect setup. What an opportunity for UNC Charlotte students!”
Since May 2012, the students, working with UNC Charlotte faculty and Siemens engineers, have tested high-strength alloys for gas turbine parts, developed new methods to accurately measure a round spinning shaft, compared the effectiveness of side-entry milling and broaching, automated the measurement of large, high volume valves, and tried to solve vibration problems associated with deep hole drilling. All are practical problems that Siemens would like solved.
“This is neither fundamental research nor is it research that will revolutionize the way gas turbines or electrical generators are manufactured,” says Ziegert. “But the challenge is to see beyond the immediate practical problem to what is fundamental beneath it; to invent something new that will not only solve this problem, but will also solve related problems or help prevent them altogether.”
Ziegert’s hopes for the success of the Siemens lab and Innovation Institute are intimately related to his hopes for reinvigorating the manufacturing sector of the American economy. His field of advanced manufacturing is one of the reasons companies are “reshoring”—returning manufacturing operations from Asia to the United States.
Economic factors such as transportation expenses across the Pacific, custom duties, communications difficulties, product quality, labor unrest and rising wages are also energizing the trend. A 2012 M.I.T. survey of 108 American firms with Asian production found that 14 percent have already brought some manufacturing home and another 33 percent are actively considering it.
“The experiment of going to China didn’t work out for many companies,” confirms Ziegert. Perhaps experiments in the labs at UNC Charlotte coupled with an American work force more willing to work for lower wages will help reshore—and restore—the American economy.
MBAJ Architecture’s favorite projects are the ones their clients love. Judging by the stellar reputation of the firm and the repeat business it enjoys, that means that pretty much all of them.
From its inception in 1981 as a sole proprietorship in Shelby, N.C., the architectural firm has experienced impressive growth, opening the Charlotte office in 1988 and the Raleigh office in 1996.
MBAJ Architecture has six principals practicing out of four offices in North and South Carolina. The ownership of the firm is shared by 17 employee shareholders including the principals. In what Rob Johnson calls “a really good culture,” the firm focuses on leadership, serving projects which support their client’s mission and cultivating new opportunities.
“What we don’t emphasize are hierarchy and seniority,” says Johnson. “Over the last decade, we have strategically aligned ourselves,” and Johnson lists the principals with their complementary emphasis: Stan Anthony, finance and business; Rick Brown, firm development and technology; John Thomas, project management and quality assurance; and Angie Crawford Easterday in Raleigh and James Golightly in Charlotte, the principals in charge day-to-day.
Johnson, himself, has an emphasis on marketing, external relations and new business development. Each principal is a registered architect, actively engaged in projects, focused on client satisfaction and active in their community.
The MBAJ Blueprint
MBAJ Architecture provides a broad range of services from pre-funding studies and assessments, programming, and master planning to architectural design, bidding and procurement, construction administration, and digital imaging. Throughout the implementation of these services, the firm is committed to cost control, schedule management, quality assurance and sustainable design.
“Critical thinking, problem solving and collaboration form the foundation of our work,” says Johnson. “We’re really helping people who have needs associated with educational, civic and governmental, religious and commercial facilities to understand and prioritize their needs and desires, so we can then creatively offer alternative ways to accommodate their needs, incorporate their desires and determine the best-fit solution to implement.”
Frequently, MBAJ is called in before clients have obtained their funding for a project and, in today’s economy, clients are trying to decide between refurbishing, new construction or phasing over time.
Typically, MBAJ Architecture is hired by the owners of the building project and often handles the bidding process for contractors. “Once contractors are awarded the commission, we look after it and make sure it’s being built according to the drawings and specifications,” says Johnson. Architects are selected on the basis of qualifications.
“We primarily do public work,” says Johnson. “Consequently, we work mostly with boards of education, county commissioners, community colleges, local governments and state agencies.” The firm also does commercial/private work and has completed a variety of banking, office and church projects.
Examples of the firm’s work include First Ward Elementary School, Myers Park High School, Selwyn Elementary School, Bailey Middle School, South Pointe High School (Rock Hill), Highland School of Technology (Gastonia), Mitchell Community College Advanced Technology Center, Surry County Judicial Center, Iredell County Department of Social Services, Yadkin Valley Bank, Holy Angels Group Home (Belmont), Episcopal Church of the Redeemer, and Stuart W. Cramer High School (Cramerton).
“We’ve been fortunate to work on a wide variety of new buildings and also many challenging additions and renovations,” says Johnson. The firm is also responsible for the architectural work at Central Piedmont Community College’s first satellite campus—the North Campus.
The firm’s design teams are carefully compiled, according to Johnson; contracting and consulting with multidiscipline engineers and specialized consultants. MBAJ also assembles a project team that identifies key client participants.
Johnson’s inspiration to become an architect arrived at the age of 10. Living in his hometown of Wilmington in the mid-’60s, he experienced his parents building a new house. They sketched the plans and hired a local architect who refined the plans, drew sections and elevations, and on numerous occasions came to their home.
“They let me sit in on the meetings with the architect and later the contractor and by my doing so, along with watching our house being built, I knew from that time that this was what I wanted to do. I’ve never wavered,” says Johnson.
The second piece of direction came from his high school guidance counselor who told him about UNC Charlotte developing a new school of architecture. There he met fellow student, Stan Anthony III, who agrees, “We both feel that we received a fabulous education.”
Johnson went on to earn his master’s in Architecture from the University of Illinois and Anthony did the same from Georgia Tech. He joined MBAJ in 1988. The other principals are similarly educated. Golightly and Thomas are also graduates of the University of North Carolina at Charlotte as is Brown, who additionally is a Virginia Tech grad; and Crawford Easterday graduated from Texas A&M and North Carolina State University. Anthony also serves as the mayor of Shelby, his home town.
Johnson touts the academic rigors demanded of architectural students: “We receive a well-rounded education. As an architect, you are a generalist; you have to know a little about a lot of stuff.”
Johnson likes to point out that the 1980s musical group Talking Heads was made up of architecture students, as was the late songwriter, Dan Fogleberg. “It speaks well of our profession,” he chuckles. “We’re flexible and can blend into a lot of different professions.”
More seriously, Johnson speaks of the need to migrate on your feet: “The difference between building airplanes and cars is that they are built inside. Buildings are built in the weather; coming out of the ground. There are a lot of decisions that happen in the field; it makes for an exciting way to earn a living.”
A New Era
Advances in technology have made huge inroads in architectural design and analysis, providing many opportunities for creativity and problem solving. First, there were two-dimension drawings, then some three-dimension tools. Now, all the components are ‘smart’ and work together.
AutoCAD came along in the 1990s allowing drawings to be done by computer. Next came Building Information Modeling (BIM), which allows architectural, engineering and construction components to be observed and manipulated in relation to each other.
“It’s incredible the power of the computer,” says Johnson. “What we’re seeing now will seem like child’s play in the future, but right now we’re greatly benefited by being able to create and visualize designs. It is a great communication tool for our clients and us. BIM can also run conflict resolution between the components to determine if that light and that beam and duct work are all in the same three-dimensional space.”
As with any discipline or firm, there are challenges. “The main one is the reduced level of funding going into building facilities since the downturn,” says Johnson. “We also have a reduced number of architectural graduates continuing on to registration, preferring instead—and having the ability—to use their skills within other industries and concerns such as energy or real estate.”
As the recession unfolded, 2010 and 2011 were wrought with challenges for the firm. “K-12 school projects stopped in their tracks,” says Johnson. “We were accustomed to a handful of large projects at any given time; however, the shift in the marketplace caused us to seek several handfuls of smaller projects.
One of the main things that kept the firm going in the downturn were existing clients who used the downturn to assess their needs, conduct feasibility studies and complete very economical small additions and renovations. “Also, in that it can take a year to design larger projects and a couple of years to build, the cash flow income from these larger projects were a big factor in sustaining the tough times.”
Johnson describes breaking even as the recession eases as ‘the new normal.’ “Although we’re still in the curve coming out, it is incrementally upward and our peace of mind is much better than a few years ago,” says Johnson.
Johnson actually cites positive impact from the financial difficulty: “We’ve used the downturn in the economy as an opportunity to turn things around to fully utilizing BIM.” Plus, he sees a different, more responsible climate.
“Now building is being done a lot more thoughtfully. People appreciate energy more. Before, the goal was to build it fast and inexpensively without much regard to sustainability,” Johnson says.
He also detects a new attitude towards architects: “The downturn has actually helped in terms of people realizing what an architect can do for them. As a field, we are more appreciated. As we work to design buildings with much fewer resources, we’re back to being problem solvers. This means being involved from the beginning of a project and helping to determine the best use of space.
“There’s a lot more pre-design—analysis and feasibility studies. It used to be people figured out what they wanted and then called in an architect to draw up blueprints—just slide them under the door. Now, they call in an architect to figure out what they need and desire. The profession is a lot more challenging but fun because expectations have gone up. It’s a new day and forever different; it’s exciting.”
A Families Affair
“The firm is made up of not just principals and employees, but 25 families,” says Johnson. “We know one another. We work hard and we play hard.” The firm values opportunities where employees and their families can spend time together away from the office: “We’ve had deaths and been faced with cancer—we rally around each other.”
“Our culture is an outgrowth of our shared kindred spirit,” says Johnson. “We all believe that our personal lives are just as important as our professional lives. It’s all about the people you meet along your path. In the end, you probably won’t worry about your sketches or technical aspects but you will be comforted by the fond memories of the many people you have met thorough our firm and the profession.”
For the last eight years, the principals of MBAJ Architecture have been involved with UNC Charlotte’s architectural professional practice classes. “They ask us to come in and talk about all aspects of being a mid-size firm and our marketing, human resources, technology—things that make a firm work.”
They also sit on the Central Piedmont Community College Architectural Technology Program Professional Advisory Board. Johnson attests, “Mentors were important to me and I want to mentor in turn.”
“We seek to make a positive difference in the communities we serve,” says Johnson.
“It’s good to be proud of the things you’ve been a part of but better, still, is the ongoing lineage,” he continues. “For an architectural firm to sustain multiple generations is a real accomplishment.
“We want clients to describe us as genuinely good people—trustworthy people who greatly support and advance their mission—a firm they would like to work with again.”
Every time the New York Mets hit a home run at Citi Field, a 16-foot tall apple adorned with LED lights and weighing over two tons rises out of a housing in center field. While the apple itself is a well-known icon at the new stadium, most people don’t know that underneath the exterior façade is a little piece of Charlotte.
Charlotte’s own P.T. International Corp., a leading manufacturer of industrial power transmission products, supplied many of the bearings and other components that make the mechanism in the apple rise after each big homer.
Bearings, Gears, and Rails
While Citi Field’s big apple may be their most visible project, P.T. International’s core business is supplying components for things like conveyor systems, textile machinery, and a wide variety of industrial manufacturing applications. Their industrial power transmission products can be found in the mechanisms of Carowinds rides, in commercial rooftop air conditioning systems, and in airport baggage conveyor systems—just about anywhere power needs to be transferred from a motor to a mechanism.
“Many of our products are tucked underneath working mechanisms within machines and are not very visible,” says company co-founder and President Tom Haffner. “We help transfer the power from the machine’s motor using products like bearings, gears, couplings, drive components, rails, and linear systems.”
Located off Westinghouse Boulevard in south Charlotte, P.T. International is somewhat unique because, unlike most other American companies in this industry, they focus on industrial power transmission products that conform to European standard metric dimensions rather than American inch-based standards.
While the company doesn’t actually manufacture these products in their Charlotte facility, they are ISO certified as a manufacturer and do their own design and quality control work. Most products bear the P.T. International name, but the actual fabrication and manufacturing is contracted out to shops in places like Europe, Brazil or Taiwan because metric manufacturing is still a very small slice of the U.S. market.
“The shops we use can produce metric at a much lower cost than we can do it here in the United States because we just don’t have the volume here yet,” explains Haffner. “Those shops have the right kinds of cutting tools and grinding fixtures to manufacture metric parts cost effectively in volume because that’s all they use over there.”
The contract shops machine the parts to P.T. International specifications and then ship the completed components to Charlotte where they are warehoused in the Westinghouse Boulevard facility. The company sells to leading industrial and power transmission distributors and also direct to certain large OEMs which use the supplied components in the manufacture and integration of various types of machinery.
They do not sell to the end users who employ the mechanisms on their assembly lines or in other facilities. The distributor network and the OEMs handle those relationships.
Many of P.T. International’s products find their way into very high technology robotic assembly equipment used on automated manufacturing lines. While the bearings and housings themselves haven’t changed much over time, the ways they are used are constantly changing as automated technology continues to find its way into more and more of the manufacturing process.
Making the Move to Metric
With an undergraduate engineering degree from Purdue and a master’s degree in Engineering from Notre Dame, Tom Haffner began his career in the power transmission products business with Dodge-Reliance Electric, a company that now operates as part of the huge ABB Group of Switzerland.
Like most other American companies in the industry, Dodge had concentrated their product lines on American standard products based around inch-based specifications. But Haffner began to see that to compete on the world market, American manufacturing would have to begin to embrace metrics.
“If you want to ship something to a country outside of the U.S., you know they are going to want metric,” explains Haffner. “That has been a problem for U.S. manufacturing. Not many countries will want what the U.S. makes until it becomes metric. They don’t want a one-inch bearing in Germany or Brazil. More and more, U.S.-owned manufacturing companies are recognizing that they better look global to grow manufacturing and industrial exports. To do that, they must go metric.”
So in 1994, after 18 years with Dodge-Reliance, Haffner ventured out on his own. He and partner Hartmut Kossack started P.T. International and decided to focus the new company on European standard metric product lines instead of the American standards most others in the industry are focused on. They saw this as an opportunity to capitalize on the long-term trend toward metrics in American manufacturing.
Today, P.T. International has grown to 30 employees. Kossack remains involved as a director. Recently, Tonka Bay Equity Partners of Minnetonka, Minn., completed a major capital investment in the company to help facilitate future growth.
“I think we have a good focus on the market and what is going on,” says Haffner. “Metric is still not the largest market here in the U.S., but we sell both nationally and internationally, to all the main national distributors, and to some large, well-recognized OEMs. If you ask most of our customers, they would truly recognize us for our broad metric offerings.”
Metrics still make up less than 10 percent of all U.S. manufacturing by Haffner’s estimate, but he says things are slowly starting to change. American manufacturing companies are gradually beginning to see that the equipment they design will have to begin to move beyond the legacy American standards, particularly if they want to expand globally. But for now, many American equipment manufacturers are forced to incur the added expense of maintaining dual product lines—inch-based for the U.S. market and metric for export.
One of the first American industries to make a complete move to metric is the automotive business. Over the past 20 years, all American automotive manufacturing has gone fully metric. In addition to the cars themselves, all of the automotive assembly machinery that often comes from Europe, Taiwan, China, India or Brazil is metric.
Some of the companies that make these machines are located in or around Detroit, but many of them are Swiss, Italian or -wned. The designs come out of Europe, and one set of drawings is used both here and in Europe to build the same machines. A piece of equipment could easily be moved out of Detroit and put in Sao Paulo, Brazil, or Mexico City, Mex., if a car production line gets moved or reconfigured.
“If we’re going to compete as a country, we must have designs that are in metric so they will be acceptable and appreciated worldwide,” stresses Haffner. “We make good products here, but the world doesn’t want them because they’re not metric. We’re slowly recognizing this and companies are realizing that we have to switch over.”
“One local customer builds machines that are exported to many corners of the globe,” he continues. “In Germany they have another division, as well as India, Brazil and China. Each of these five manufacturing sites builds machine types for the entire globe, minimizing duplicate production lines. That’s the globalization that we are finally seeing, and that’s why metric will win out in the long run.”
Educating Future Engineers
One of the most critical needs of any technology-oriented business is new engineering talent and a highly skilled work force. That’s also critically important to the Charlotte region as a whole. With major companies in the power generation business operating here—firms like ABB, Areva, Duke Energy, Fluor, Mitsubishi, Shaw Power Group and Siemens—Charlotte is establishing itself as one of the major centers of expertise in the energy business.
With engineering in his blood, Haffner is doing his part to help create this next generation of engineers. In addition to his role as CEO of P.T. International, he serves on advisory boards for UNC Charlotte’s School of Engineering and Engineering Sciences, as well as the Charlotte-Mecklenburg Schools’ Academies of Engineering program.
“UNC Charlotte is in the right place at the right time,” says Haffner. “Because of energy, Charlotte is ready to become a huge engineering center. The engineering school at UNC Charlotte has really wrapped their arms around the energy mantra and there is a technically diverse skilled work force need growing here.”
The relationship with UNC Charlotte is a perfect example of how business can partner with academia for each other’s mutual benefit. The University has state-of-the-art testing labs and facilities, so Haffner has hired the University for several projects such as stress analyses modeling on bearing housings and metallurgy analysis of components.
“I don’t have enough daily need for that testing equipment, so it’s easier to source that out to the University when we need it,” explains Haffner. “It also helps the University professors and students by connecting them to industry and real world applications.”
Taking it one step further, Haffner has also been instrumental in helping to build an engineering foundation in CMS with the Academy of Engineering program. These schools within a school feature a four-year specialized high school curriculum focused on mid-tier and at-risk high schools to help students understand future careers and increase graduation rates.
The programs are sponsored by the National Academy Foundation out of New York, which receives funding from such organizations as Motorola, Verizon, and the Bill and Melinda Gates Foundation.
By the fall of 2013, CMS will have seven engineering academies located at Hopewell, Vance, Mallard Creek, Philip O. Berry, Olympic, East Mecklenburg, and South Mecklenburg high schools. Haffner says this gives Charlotte the largest concentration of engineering academies in the nation.
Haffner serves on the advisory board at Hopewell, which will graduate their first class from the academy program this year. He also serves on an advisory board for the National Academy Foundation as well as a regional board for the program.
The engineering academy program offers a healthy dose of math and science, but also features specialized introductory engineering courses that expose the students to the major disciplines within engineering—such as mechanical, electrical, civil, chemical, and more. During the summer between their junior and senior year, the students are placed in a company internship so they can start to get an idea of what an engineer really does.
“To me it all fits,” concludes Haffner. “The good jobs of the future will be technology driven, so education is one of the most important focus points that we can do for the next generation as industry mentors for students. It’s all about what we can leave behind and share with our kids and our neighbors’ kids.
“Industry involvement and support for these focused Academy programs in education have exceptional success and graduation statistics. Each Academy has an industry-chaired Advisory Board to support and mentor students and teachers.
“Industry is stepping forward as they recognize that planning is important for an earlier grasp of a skilled work force. We still have one of the best education systems (including technology) in the world and industry support is making a difference.”
Manufacturing is important to North Carolina, the country, and even the world because manufacturing makes the things that we depend upon in our daily life. From our computers to our automobiles, everything we use and rely on is manufactured somewhere. However, the products being made in North Carolina have changed dramatically in recent years.
Traditional industries such as furniture production and textiles are being replaced by industries which produce the things we need in the construction industry, in the telecommunication industry, and in the pharmaceutical industry. In addition, labor-intensive practices are being replaced with innovative technological processes and a highly skilled work force.
Southeastern Metal Products LLC, a major metal fabrication company based in Charlotte, is in one of the industries shaping this new manufacturing world.
Southeastern specializes in high quality sheet metal stamping and fabrication for commercial and industrial needs. It operates more than 20 punch presses with a broad range of tonnage and supplies a wide range of machined and fabricated parts for a variety of industries. Southeastern Metal Products bends, stamps, laser cuts and welds various type of metal into parts used by the heavy truck and construction industries, health and safety companies, and the data communication industries.
“We pride ourselves in the ability to use our manufacturing and engineering expertise to manage any type of project, ranging from ‘build to print’ to assisting our customers in product design for manufacturability,” says company President Richard Wright. “In addition, we are constantly working to develop new products, exploring new markets, and learning to make our operations more efficient and sustainable.”
Southeastern Metal Products has been serving customers since 1952 and has established a reputation for high quality workmanship, dependable delivery and first-rate customer service. With 100,000 square feet of manufacturing space and a skilled workforce, it is prepared to handle any metal project, big or small, from start-to-finish or anywhere in between.
Fabricating a Business
Southeastern Metal Products grew out of a friendship between two tool and die makers during the 1940s. Don Cumberworth and Hayes Risk first met at Super Metal Products in Auburn Heights, Mich., and continued their relationship while working as tool and die makers at Chrysler and other plants in the Detroit area.
In 1952, with funding of $8,000, they incorporated Southeastern Tool & Die Co., Inc., and started operations at 226 Cedar Street in Charlotte, hiring grinders and craftsman and making high quality tools for other manufacturing companies.
By 1960, when the company had grown to 15 employees, it moved to a new 10,000-square-foot facility at 1420 Metals Drives. As the business continued to grow, so did the space it occupied. In the ’60s and ’70s, additions brought the building size to 67,000 square feet.
In 1966, the partners decided on a change in the nature of the business itself. They entered the metal fabrication business. “That was the true birth of Southeastern Metal Products,” says Wright, “although the name change didn’t come until 1979.”
Don Cumberworth died in 1979 and that is when the company’s name was changed from Southeastern Tool & Die Co. to Southeastern Metal Products LLC.
Then, in 2006 the company was acquired by Juno Investments LLC, a New York-based private equity firm specializing in the acquisition and consolidation of both privately and publicly held middle and lower middle market companies.
Today, Southeastern Metal Products occupies over 100,000 square feet of manufacturing and warehouse space and employs a skilled workforce of over 100 that include engineers, designers, quality technicians and factory workers.
Wright, who took the position of president at Southeastern Metal Products in 2010, is responsible for overseeing the daily operations of the company, as well as business development, strategic planning and customer relationships.
Although only 41, he has a rich and varied resume, which makes him an excellent choice to lead the company. During a career, which spans 17 years, he has been successful in supervising all stages of an organization’s life cycle, from business start-up to turning around under-performing companies, as well as improving upon already profitable entities.
Wright holds a bachelor’s degree in business from West Virginia University. He began his career in the rail and automotive industries, where he developed a talent for building collaborative business relationships with his clients.
“I was a plant manager at 25,” Wright explains. “I wasn’t ready for it, but I learned a lot and rolled with it. Being thrown in the fire so early, it tempered me.”
Welded to Charlotte
Wright’s experience has equipped him with exceptional leadership and organizational developmental skills, as well as an affinity for controlling profit and loss. He has overseen complex operations for top-tier companies in support of revenue, cost, productivity, delivery, safety and quality goals. He sees his skills and Southeastern’s needs as “a perfect fit.”
“This is the place for me,” he asserts. “Southeastern is a good company that is growth-oriented, but we also believe in taking care of existing customers. The ownership group is committed to long time viability and to growth.”
Juno Investments LLC, which acquired Southeastern Metal Products in 2006, focuses on acquiring and enhancing U.S. based manufacturing companies. It employs strategies that enable portfolio companies to grow to their fullest potential. Wright sees the company as a long-term patient owner. Wright, who has worked with a lot of equity groups over his career, believes Juno is a good partner for Southeastern.
“Juno is a buy and build company,” he says. “They are a sound firm with an interest in growing Southeastern. They have no exit strategy, which is very important to us.”
In 2009, Juno purchased $2 million in assets from a High Point, N.C., structural metal fabrication company that closed its doors due to the downturn in the economy.
“In a down market, Juno afforded us an opportunity to grow by investing $2 million for the future,” explains Wright. “And it worked. Southeastern has experienced a 10 percent growth directly related to the acquisition of those assets.”
One of the reasons Wright is working at Southeastern Metal Products is its location in Charlotte. He and his family wanted to relocate from the north and he had worked in Charlotte for five years in the early 2000s. He believes it is a good place to raise a family and provides a business community in which a manufacturing company can thrive.
“In one sense, Charlotte is a small, close-knit community,” says Wright, “but it has the desire to be something bigger. It is starting to be looked at as more than a banking town.”
Although he admits that Charlotte hasn’t been a beacon for the manufacturing industry in the past, he feels that the diversity of the population is a big plus. As is the fact that it is a transportation hub with decent-sized airports and ports within reasonable distances.
Wright also believes that changing global economic conditions, rising wages in developing nations and increased transportation costs will continue to make the manufacturing of metal products in the Charlotte area more attractive.
“Our customer base is primarily regional,” he reports. “Ninety percent of our customers are within a four-hour drive, but we do supply products as far away as Texas and Mexico. Metal parts can be big and bulky and that makes transporting them potentially expensive—especially from overseas. In addition, rising wages and security risks abroad are causing a lot of companies to rethink their strategies.”
In addition, growing automation is reducing the cost of producing products in the U.S. If local companies can provide products at close to the same overall cost, Wright believes many companies will opt for local, rather than foreign, production.
While traditional manufacturing relied on labor-intensive production, modern manufacturing builds on technology. New machines, increased automation and smarter logistics define the future for companies like Southeastern Metal Products.
“We see technology as an opportunity,” asserts Wright. “We are looking to grow through automation. Always though, we have to consider cost versus benefit.”
Automation can reduce mistakes that cost money and upset customers—mistakes Wright refers to as “scrap and rejects.” Automation can also reduce the time involved in producing a product. And automation can make a positive impact on factory safety.
“We have to have a plan and understand our objectives and how to achieve them,” Wright explains. “Our goal is to deliver a good quality product on time. We have to work out all the nuances of automation before we decide to proceed that way.”
Still, robots are not about to replace a human work force any time soon. As technological change accelerates, so must the skill of the work force that engages with it. Instead of seeing the new opportunities in manufacturing, many potential workers continue to tie manufacturing to an outdated image of the industry, one which requires few skills and offers low wages.
“As we grow, we need more skilled, trained employees,” says Wright. “They can be hard to find. There are few trade schools producing press brake operators, welders, or punch press operators. The ideal is to hire someone who has been there, done that, but with the experienced work force getting harder to find, we need to create our own apprenticeships.”
In fact, Southeastern Metal Products is in the beginning stage of creating an on-site job training program of its own, although Wright reports the program is still probably six months from institution. Meanwhile, the company is relying on other methods to acquire the good quality people it needs. It uses both classified ads and word-of-mouth to attract new workers.
Additionally, the company has a program in place in which current employees can earn up to $500 for bringing in a good quality hire. It also works with CPCC and other local organizations, like Charlotte Works, to find skilled workers. Charlotte Works is a public/private partnership that attempts to link employers and job seekers.
In addition to establishing a job training program to attract good quality people, Southeastern also works hard at retaining its valued employees. Looking for employees who will be on time and dependable and work safely, the company strives to create an environment that such people will enjoy working in. It also rewards success with celebratory lunches and provides excellent earning opportunities.
The future of Southeastern Metal Products is focused on growth. Wright wants the company to grow as quickly as possible, as smartly as possible, while still serving the company’s existing customers. He believes that direct, honest communication is one of the best platforms on which to build a customer base.
“We’re focused on building relationships with a high level of trust,” Wright asserts. “At the end of the day, we need to communicate as much as possible, as accurately as possible, with customers, employees and owners. This is still a people business—robots are not taking orders or talking about issues, people are. People get it done.”
The Charlotte Knights’ baseball season at the new BB&T Ballpark uptown will begin next year. Construction of the state-of-the-art stadium can be viewed in real time via webcam at the team’s official website and soon will show the erection of the steel columns, beams and metal decking for the 10,000-seat facility.
The 1,035 tons of steel needed to build the $54 million stadium will be provided by SteelFab, Inc. But the ballpark is hardly the first high profile project for SteelFab. Within sight of the ballpark, the peaks of several other SteelFab projects carve out the Charlotte skyline.
Duke Energy Tower, the NASCAR Hall of Fame Convention Center, and 1 Bank of America Center were all built with steel fabricated by SteelFab.
Other SteelFab projects nationwide include the Georgia Aquarium, Temple University Fox Business School, UNC Dental Science Building, TRADOC Headquarters, 12 Crate & Barrel stores, as well as paint shops for car manufacturers Kia, Volkswagen, Honda and Nissan. The company has worked on projects in industries as diverse as commercial health care, energy, food processing, heavy industrial and defense.
For the last three years the company’s jobsites have included two naval shipyards where they’ve fabricated the staging and temporary shoring needed for work on nuclear submarines.
Headquartered in Charlotte and with seven divisions spanning the Mid-Atlantic, Southeast and Texas, SteelFab has become a national leader in the fabrication of structural steel. The company’s success is a source of pride for Chairman and CEO Ronald G. Sherrill, but Sherrill views the success from a broader perspective.
A Steel Core
At its core, SteelFab is a family business, founded in 1955 by Sherrill’s father J. Glenn Sherrill, who grew up on a farm and dropped out of high school after the ninth grade to work in a cotton mill before starting work building handrails for a local steel fabricator. After a tour of duty in the Navy in WWII, Glenn Sherrill returned to Charlotte to work for the same company before starting his own business in a barn off West Boulevard fashioning ornamental handrails for a local house builder.
“I was about seven,” Ron Sherrill recalls, “when I would ride with my dad on the weekends. We’d measure for the handrails and then in the next week, he’d fabricate them and put them up the following Friday or Saturday. I have two brothers and a sister and my brothers and I would work for him during summer breaks and holidays growing up. When I graduated from college in 1970, I knew I wanted to work for my dad.”
At the time Sherrill joined his father in the business, the company had 15 to 20 employees and had branched out into jobs involving smaller structures like one-story office buildings and shopping centers.
Brothers Don and Phillip soon followed Ron into the business, but the brothers quickly realized that something needed to change if the family business were to continue to succeed.
“So,” says Sherrill, “in the late ’70s, we started buying more equipment. We began investing so we could do bigger work. Some contractors and developers we worked for started expanding, and because we did a good job for them, we started growing as well.”
In the early 1980s, the company became involved in more office buildings, manufacturing facilities and several high-rise buildings in Myrtle Beach. Although the brothers continued fabricating handrails, stairs and other miscellaneous type jobs, in 1985 they decided, for efficiency’s sake, to move that work to a different location.
So, in 1985, they opened a new division, CM Steel Inc., continuing the early legacy of SteelFab with those fabrications as well as structural steel in a 70,000-square-foot plant in York, S.C.
The next decade was a time of expansion for the Charlotte-based company. In 1988, SteelFab opened a new structural fabricating facility in Florence, S.C. Named SteelFab of South Carolina; the new facility was followed by SteelFab of Virginia in Emporia in 1990, SteelFab of Alabama in Roanoke in 1996, and SteelFab of Georgia in Dublin in 2000.
Sherrill credits the expansion to the regional growth of their business. Not only is it more cost efficient to fabricate the steel nearer to building sites, but “it’s nice to be closer to your customers,” explains Sherrill. “This really is a relationship business. From the very beginning our philosophy has been to take care of our customers. We realize we’re only as good as our last job.”
With a small marketing staff and no outside advertising, SteelFab is a word-of-mouth, repeat business success. Sherrill says many of their customers are long-term, and notes that they’ve been doing business with several local contractors and developers for more than 35 years.
Clients aren’t the only long-term aspect of the company; when Sherrill’s sons, Stuart and R. Glenn Sherrill Jr. joined the company in the 1990s, it became a third generation family business.
Sherrill admits that being family didn’t make joining the family business any easier. “There’s no training program,” he says. “You get a desk and a computer and you’re expected to learn on the job and set a good example for others.”
When SteelFab of Georgia was having a rocky time, Sherrill’s son Glenn volunteered to save the ailing facility. Within a couple of years, he turned it around, and in 2007 when SteelFab of Georgia merged into SteelFab of Charlotte, Glenn became and today remains president and chief operating officer.
Business milestones were reached in 1999, when SteelFab fabricated and erected the 42-story Hearst Tower, and in 2008, when SteelFab provided 23,500 tons of fabricated steel for the 2.1 million-square-foot NCE project in Fort Belvoir,Va. The year 2008 also was a record production year for the company when, for the first time, they fabricated over 100,000 tons of steel in one year.
But SteelFab isn’t just about big projects. “The first job I ever sold was for $3,000,” remembers Sherrill. “We grew up on very small projects and we’re still very involved in that market. A large percentage of our projects are under $500,000. We also handle $200 jobs.”
Commitment to Quality
Whatever the size of the project, SteelFab has become known for its commitment to quality. “It’s an excellent company,” says Eric Reichard of Rodgers Builders, “very professional and good to work with.”
In his position as COO, Reichard has personally worked with SteelFab for over 20 years on projects ranging from Lowe’s corporate headquarters to the Levine Center for Wellness and Recreation at Queens University. Currently they are teaming up to build the BB&T Ballpark.
“We had a project in the limited space of the city where two cranes were needed simultaneously to pick up one steel beam,” Reichard adds. “They did a great job. Another time, they had to haul large trusses to a jobsite in the middle of the night because that was the only time allowed by the permit. SteelFab sets the bar very high for any other subcontractor.”
And the bar has changed dramatically since Sherrill started with the company. “All the shop drawings used to be done by hand,” says Sherrill. “And the actual fabrication was very labor intensive. Labor’s still a big part of it. Our employees are highly skilled craftsmen. But we’ve also invested in computerized processes and state-of-the-art equipment to help them achieve even greater accuracy and efficiency.”
The role of technology continues to grow in importance. The company began using BIM (building information modeling) technology in 1997. Its initial role of transferring basic information to equipment has expanded to the point where it now enhances the functions of purchasing, production, estimating and 3D modeling. SteelFab provides three-dimensional modeling on all its projects to minimize errors and provide better information to the design team.
SteelFab also uses bar coding technology to track material through production, to assist in shipping, and to provide important information to workers both in the shops and in the field.
Investments in equipment have also helped SteelFab remain competitive and able to handle even the most demanding projects. Each of SteelFab’s fabricating facilities contain several pieces of CNC (computer numerical control) equipment that allows them to saw, drill, punch, shear and burn every type of structural steel. The automated equipment enables them to fabricate up to 2,000 tons of material each week companywide. One of the machines performs in 20 seconds what used to take 30 minutes by hand.
The company has also invested in heavy cranes and forklifts in order to handle large and complex assemblies that can weigh upwards of 120,000 pounds. They have a dedicated shop for these heavier fabrications and specialized truss and frame fabrication areas which allow finished assemblies to be fabricated together to ensure that pieces fit perfectly when erected in the field.
Commitment to People
Given the materials involved and equipment used, Sherrill admits that safety is a big concern but also a source of pride for SteelFab. SteelFab has full-time corporate safety personnel that strive to meet or exceed all local, state and federal guidelines, standards and rules.
Sherrill states that their philosophy behind safety is driven by the company’s belief that “We must be each other’s keeper” and that working safely is a condition of employment.
“Our safety record is one of the things that make me most proud,” Sherrill says, “The Charlotte facility’s last lost time accident occurred more than three years ago and all the SteelFab facilities together total more than 4,000 days without a lost time accident.”
Sherrill is also proud that SteelFab employs 800 people companywide; 250 of them at their 285,000-square-foot facility on Old Dowd Road in Charlotte. Many employees, such as engineers, project managers and estimators, have engineering backgrounds. Production positions include skilled welders, machine operators, material handlers, fitters and quality control personnel.
“We want our people to work here because it’s a good place to work,” Sherrill says. “We want to treat each other, our customers and our vendors by the golden rule. It’s a pretty simple thing to do—treat people the way we want to be treated. We’re proud of our culture here.”
Part of the corporate culture is community involvement. SteelFab donates hundreds of thousands of dollars annually to the Muscular Dystrophy Association, United Way, Teach for America and over a hundred local and national non-profits.
“It’s our way of giving back to our communities and to our customers,” Sherrill says.
SteelFab continues to grow. It opened a Washington, D.C. Mid-Atlantic sales office in 2010, and in 2012 it purchased Alpha Industries, Inc. in Texas. The newly named Alpha SteelFab Inc. expands their project footprint as far west as Colorado. In 2012, SteelFab companies did work in 14 different states.
Sherrill smiles. “It really is amazing,” he says. “When I first started working here I never dreamed we could be where we are today.
“This company was never built on dreams. We came to work each day, we worked hard, we took care of our customers and our people, and our growth was a byproduct of that. It’s a family business and a group success.
“I can’t take the credit. We’ve got 800 people who can take the credit.” Sherrill winks. “I just happen to be the oldest,” he says.
What’s the harm in buying a Gucci, Prada, Fendi, or Dior designer bag knock-off? Who does it hurt? You might save hundreds of dollars and, well, it may look almost the same as the real one. “Plenty” and “Lots of people!” answers Ross Bulla, president of The Treadstone Group, Inc. “Intellectual property infringement, including counterfeit manufacturing, is perceived to be a victimless crime—but it definitely is not,” maintains Bulla. “Companies suffer hundreds of millions of dollars in lost revenue which, in turn, results in job losses which, in turn, affect the entire economy.” Bulla also cites brand damage for companies whose names are tarnished when counterfeit products fall apart or fail to fulfill their purpose.
Even more serious, some counterfeit products can affect health and safety and even result in death, according to Bulla. “Plus, we do know that counterfeit products have been used to sponsor and fund terrorist activities,” says Bulla. The protection of trademarks and design patents is just one of the areas of security expertise of The Treadstone Group, a 10-year-old company located in Denver, N.C.
The Treadstone Group is a global security risk mitigation and investigations firm which specializes in investigation and enforcement and acquisition of intellectual property rights; physical security risk assessments; and security consulting and litigation support. Intellectual property is defined as intangible assets that are proprietary to a particular owner; the most common properties are trademarks, patents, copyrights, trade secrets or domain names.
The nature of the work is extremely confidential and so, too, is Treadstone’s customer list which represents many of the largest brand owners in the world—Fortune 500, 100 and 50 companies in a wide range of industries including soft drink manufacturers, retail, automobile, consumer services and pharmaceuticals. “We’re working with every industry I can think of and certainly have customers that are among the top 10 most well known brands.” says Bulla. “We also have smaller companies and start-ups, but many of them are multinationals.” Sixty percent of Treadstone clients are businesses in the United States; 40 percent are abroad. Clients include corporate security departments, law enforcement agencies, event planners, transportation companies, high-profile delegates and speakers, local, state and national candidates and elected officials, contract security vendors and hotel and venue owners and managers.
While most of the firm’s investigation clients come from the private sector, some of its security consulting work is government-related. The company also offers training for law enforcement agencies. “We’ve just instructed a course in dignitary protection for law enforcement through a local community college in preparation for the Democratic National Convention and are providing services to public and private sector clients involved in the DNC,” says Bulla. The Treadstone Group operates with just five full-time investigators but employs a large group of sub-contractors around the world.
“Today, we may have an investigation in Russia; tomorrow, Istanbul; next day, Latin America,” says Bulla. “That’s probably the most challenging thing; coordinating all the subcontractors. On any given day, we will have five to 20 subcontractors at work in 20 different places, somewhere in the world.” Name is Everything Protection of intellectual property rights has become a huge industry with values measured in the hundreds of millions of dollars. Treadstone investigates how trademarks are used—in what types of services, where they are marketed and the critical question of how long they’ve been used in commerce. “Trademarks exist to prevent customer confusion,” explains Bulla. “If you like a trademark that is used to sell shoes, you might be able to use it to sell tires, but you couldn’t use it to sell socks—too similar a purpose,” explains Bulla. “If both companies are doing the same thing, then it comes down to who was using the trademark first.”
Similar considerations go into a company’s trade dress, or design concept. For instance, most people (where Time magazine is marketed) could identify Time magazine without actually seeing the name on the front of the magazine, so no one else can copy that. The same is true for the TGIF Restaurant chain’s red and white striped awnings and uniforms and the overall image of McDonald’s, according to Bulla. The company also anonymously purchases trademark rights, domain names and patents on behalf of its clients. “We buy domain names for $100,000 from owners that may have paid in the single digits for them,” says Bulla.
“Domain name owners are either the first to buy them or they paid a lot of money for them.” Negotiations aren’t always easy. “When telephone negotiations fail, I literally fly into a town and knock on someone’s door to offer them instant retirement if they will sell their domain name to my client.” Domain names have been sold for as much as $8 million, according to Bulla. Every investigation involves privacy issues. “We always have to be cognizant of whether it is legal to obtain certain types of information,” says Bulla. “We don’t knowingly break any privacy laws.” Treadstone investigators, including Bulla, are private investigators, licensed by the State Department of Justice. Bulla is board-certified in security management and physical security. Continuing education is required to keep abreast of laws.
A Darker Side
Criminals infringing on design patents and engaging in counterfeit manufacturing and diversion activities bring about especially dangerous challenges. Very often, income from these activities is used to fund or supply terrorists. Bulla cites the large anti-terrorist busts in response to an illicit operation to divert counterfeit cigarettes here in North Carolina. An ongoing problem exists with the purchase of large numbers of mobile phone handsets for the purpose of facilitating terrorism. All but the handsets are discarded. The handsets are then used by terrorist cells to make one phone call before being thrown away. Or the handsets are re-flashed or re-programmed to operate on a local carrier. Worse yet, the phones can be used to detonate IED’s in Afghanistan and Iraq, according to Bulla, who confirms that some of their investigations have resulted in terrorism charges being brought.
Even when money is the chief motivator for counterfeit manufacturing, the results can be deadly. “Five percent of our medications in the United States are counterfeit,” says Bulla, who says they can be found in major retail stores. “Another problem is the redistribution of drugs that were manufactured according to the lower standards of other countries, back into the United States.” Examples abound. According to Bulla, the American helicopter crash during the Iran hostage crisis was due to counterfeit products on the aircraft. “The counterfeit parts couldn’t withstand the conditions of the desert.” Bulla recounts other cases involving poisonous baby formula, exploding batteries, and teabags filled with sweepings off the factory floor including sawdust and rat droppings.
In certain countries, the problems are exacerbated by governments turning a blind eye. “In China there is a fake Apple store right across the street from the real one. The government makes money from it; there is no way to shut it down,” says Bulla in disgust. Even in America, consumer education is the most difficult challenge. “There are documentary specials and news reports but consumers have short attention spans,” says Bulla, adding that it is also necessary to educate legislators to the loss revenue, job impact, damage to brands and dangers to consumers. As of now, most cases are handled in civil courts.
Building the Case
The Treadstone Group’s security consulting and litigation support division conducts investigations primarily for attorneys who represent clients or are in-house attorneys for corporate clients. To determine facts in civil claims, it interviews and vets witnesses—including field experts—and investigates backgrounds and reconstructs accidents to see if there is anything different from police reports. “We’re looking for anything that would challenge credibility in a legal proceeding,” asserts Bulla.
On the physical side of security, The Treadstone Group provides security risk assessments for facilities around the world to identify vulnerabilities and make recommendations. The company’s team examines a facility’s physical access controls with regard to persons and vehicles and how they screen them. It also looks at how the facility is protected physically and technologically with barriers, barricades, alarms, lighting, intrusion detection devices, guard forces and credentialing systems. “Most of our work comes out of concern for terrorism, but we don’t focus solely on anti-terrorism. We also focus on preventing illicit entry, workplace violence and demonstrators,” says Bulla.
Law Enforcement Dream
“From the time I was four or five years old, I wanted to be a police officer or federal agent,” remembers Bulla, who grew up in Graham, N.C. After high school, he attended UNC Charlotte. His double major in criminal justice and psychology was purposely planned to prepare him to become a behavioral scientist with the Federal Bureau of Investigation, but inability to meet the vision requirements kept him out of the federal agency. Bulla first went to work as operations manager with the Blockbuster Pavilion, now known as the Verizon Wireless Amphitheater, and continued to do security risk assessment and security management work within the private sector.
He was then hired by the Atlanta Olympics and became one of its lead instructors, developing all of the security training programs for the 1996 Olympics. “I fell into intellectual property by accident,” says Bulla. “I was working as a branch manager for a security guard company in Charlotte and a former secret service agent hired me for a company who did intellectual property investigations. I managed the anti-counterfeiting for a major auto parts manufacturer. That was my start.” The company closed in 2001 but Bulla was armed with knowledge, experience and contacts. In 2002, he opened The Treadstone Group.
Fans of author Robert Ludlum’s Bourne Identity book series and the subsequent film versions will instantly recognize Treadstone as the name of the fictitious, CIA-backed, secret organization which programmed former agents into morally vacuous assassins. “By the time the movie came out, everybody wanted to name their company Treadstone, but I had already registered the trademark rights,” smiles Bulla.
Despite a busy work schedule, Bulla is also committed to the local community. He says he’s aiming at a higher level of service with a run for the North Carolina Senate. Bulla insists that he is not jaded by the job. “I see as many good guys as bad buys,” he says, adding that a lot of infringement is unintentional. “I look forward to coming to work every day; I always have.” “I’m fascinated every day by the reality that a little unassuming building in a small town in Lincoln County and a handful of employees are involved in acquiring trademarks for major companies and investigating the world’s largest brands,” muses Bulla. “I go home and see our work on national television, in magazines and newspapers—every day. The result of our work is visible everywhere.”
In his book, The Coming Jobs War, Gallup CEO Jim Clifton describes the global jobs war and what he thinks every leader must know about the future of job creation. Clifton maintains that local tribal leaders, super mentors and universities, need to come together, creating “supercolliders” for job creation.
With regard to the first component, he says, “A city with highly talented local tribal leaders is essential for creating the jobs that will re-ignite America’s GDP and save its economy.”
With regard to the second, he says that whether the U.S. stays a world leader or even solvent will be determined by three kinds of people: entrepreneurs, inventors, and super mentors described as university leaders, chancellors, presidents and deans in addition to bankers, venture capitalists, private equity executives, and government leaders.
With regard to the third component, he continues, “A prime foundry or petri dish for the energy and brilliance of these people is the university system. Universities are a critical part of new-company formation everywhere in the world, but America has a decided advantage. Why? Because America’s top…universities are its most differentiating global strength in this war for jobs.
“Great universities are the origin of most highly successful startups. Universities have, by design, the best ecosystem for entrepreneurship and innovation. More super mentors of all kinds are highly involved and swirling around the top…universities in a wider variety of activities than anywhere else.”
This combination of active tribal leaders, entrepreneurial mentorship, and universities—he says, “This is America’s supercollider for sudden job growth.”
Clifton seems to be describing the Charlotte region, its local leadership, its business community and UNC Charlotte—the Charlotte Research Institute, in particular.
Charlotte Research Institute
UNC Charlotte has experienced several names changes since it was first created in 1946. First known as Charlotte Center and then Charlotte College, it was re-created by the state of North Carolina in 1965 as The University of North Carolina at Charlotte, more commonly UNC Charlotte. Its focus has always been service to the Charlotte region and its businesses.
When Jim Woodward assumed the mantle of chancellor at UNC Charlotte in 1989, the University was 43 years old and still did not have a single doctoral program. The problem, he diagnosed, was speed or the lack of it. He likened the school to a Galapagos tortoise while other universities raced forward like English hares.
“The Ph.D. is critical to continued growth in both research and service,” maintains Woodward, a Georgia Tech Ph.D. in engineering mechanics. Under his watch, UNC Charlotte ramped up its evolution.
In 1993, four years into his chancellorship, UNC Charlotte inaugurated doctorate programs in electrical engineering, mechanical engineering and applied (not theoretical) mathematics. Today, the University boasts 19 doctorate programs turning out 100 new Ph.D.s a year.
But Woodward thought more was needed. “We asked, ‘What could we do to be more aggressive in service?’” he says. “How could we make the University more available to the greater community?” The University’s answer was, “Research.”
In 2000, UNC Charlotte broke ground on a 102-acre free-standing research campus adjacent to what is today the new football stadium. The Charlotte Research Institute (CRI) nicely blended the last two steps in university evolution—research and service. By 2014, there will be 12 buildings at CRI with 1.6 million square feet of academic, research, and partnership space.
These evolutionary giant steps were capped by the Millennial Campus Financing Act of 2000. With that important legislation, the North Carolina General Assembly not only stimulated the development of research campuses throughout the state, they also lifted restrictions on who could work there.
“We could bring companies to campus, charge them rent and collect the money,” says Woodward. “A research campus was another step in enabling UNC Charlotte to engage the community at the right level.”
The Charlotte Research Institute is often confused with the act that created it. It is UNC Charlotte’s version of the “millennial campus” referred to in the act.
“North Carolina State University calls its research campus Centennial Campus,” says UNC Charlotte Chancellor Philip Dubois “We have never formally taken the name Millennial Campus. We have always called it Charlotte Research Institute.”
CRI connects businesses, researchers, governmental agencies, and academia with exceptional facilities and equipment to enhance intellectual capital, accelerate technology commercialization, cultivate the development of entrepreneurial and start-up ventures, create global educational and industry partnerships, and spur economic growth regionally and nationally.
CRI supports interdisciplinary research centers that tackle complex problems in bioinformatics and genomics, biomedical engineering and science, optoelectronics and optical communications, precision metrology, cyber defense and network assurability, energy production and infrastructure, environment and sustainability, life sciences, nanoscale sciences, motorsports engineering, visualization, and biology and translational research.
Most CRI buildings are concentrated just off of North Tryon Street, along Snyder Road, north of the new football stadium, but the campus also includes Woodward Hall, Cameron Applied Research Center and other academic buildings on the main campus.
“CRI looks like a congressional district,” says Dubois. “Despite its amorphous shape, CRI’s message is crystal clear,” he continues. “The University is open to business.”
Open to Business
Teaching, the first step in a university’s evolution, was not overlooked in the development of CRI. Companies that either come to CRI or spin out from faculty research often need graduate and undergraduate students. For students, that means combining the practical and the theoretical during the school year and part-time employment during the summer.
Dr. Robert Wilhelm has directed the evolution of CRI since 2005 when he was named CRI’s executive director. Prior to that, he was a UNC Charlotte mechanical engineering professor. Wilhelm was appointed to his present position, vice chancellor for research and economic development, in 2011.
The traditional yardstick for measuring a research director’s impact is how much he or she spends. CRI’s “spend” is currently $30 million with 80-82 percent from federal grants and 15 to 20 percent company-based grants.
The Department of Defense accounts for most of CRI’s government dollars. Older and larger research campuses like North Carolina State University or Clemson University have a $150 to $180 million spend. Wilhelm’s goal for 2020 is to boost his “spend” to $50 million.
“Bob Wilhelm is the perfect person for this job,” says Woodward. “He is a full professor, a status that was earned because of his outstanding teaching and research, and he started his own business. His role is to encourage and coordinate, to be engaged in the business community, learn what they need and bring that back to UNC Charlotte to get it done.”
Wilhelm has had a place at the table for all decisions regarding CRI since 2005, Dubois’ first year as University chancellor. Decisions to significantly expand CRI to include a more than $4 million motor sports facility as well as to lobby city government for two light rail stops were initiated since that pivotal year.
“UNC Charlotte has never been better prepared to engage the Charlotte regional business community than we are today,” says Bob Wilhelm. “We are ready, willing and able to help businesses advance their products and services.”
Currently there are 16 small, rent-paying companies residing at the research campus. “These companies work with faculty members to produce prototypes or small quantities,” says Wilhelm. “We are not really in the quantity business here.”
For techno-centric start-ups or spin-outs, CRI is a dream location. It combines high powered Ph.D.-level talent, top-end lab and office facilities, new equipment, a university library, campus eateries, information technology experts, Internet, maintenance and local phone service. Annual rent ranges from $19 to $21 a square foot.
Cutting-edge insights, advice and assistance provided by faculty members may result in inventions with great commercial potential. That benefit belongs to CRI’s rent-paying business partners, not CRI or the University. CRI is a landlord with oodles of assets for its partners, but it doesn’t own their patents, trademarks, copyrights or ideas. If it did, few would come knocking on their door.
That sweet deal takes a different track for the University’s faculty and staff. Professors must disclose their inventions to CRI’s technology transfer office, which reviews the invention and tries to determine the best strategy for commercializing it. That could involve filing for a patent or patent protection, but neither option shuts out an entrepreneurial professor. Faculty inventors may obtain a license to produce or commercialize a patented invention from the University.
“We are a little different from other universities,” says Associate Director Brad Fach of the Office of Technology Transfer. “Our policy is to encourage faculty and staff to be entrepreneurs. We help them do that.”
Partnership, Outreach and Research
In early 2014, Charlotte Research Institute is expecting a giant uptick in its real estate. That’s when the 96,000-square-foot PORTAL building opens its doors. A portal is an entry way and the new building is another way for business to enter into the life of the University. PORTAL is Wilhelm’s acronym for partnership, outreach and research to accelerate learning, and he played a large role in its design.
Ten thousand square feet of PORTAL’s first floor will be devoted to a sensitive compartmented information facility (SCIF). The acronym is pronounced “skiff” and in defense and security parlance may be referred to as a Red Room. The “information” in SCIF is derived from federally-funded and classified CRI research. Access to the SCIF is limited and all activity, even casual conversation, is restricted from the public.
There are 13 other SCIFs at UNC Charlotte. Foreign students are excluded from working in these sensitive areas. Like Greta Garbo, SCIF may want to be alone, but there will be other commercial enterprises and research facilities near its first floor sanctuary.
PORTAL’s second and third floors will house Ventureprise, Inc., formerly the non-profit Ben Craig Center. Since 1986, the University-sponsored, CRI-affiliated Ben Craig Center has provided coaching, mentoring and business incubator services to startups, early-stage businesses and client tenants. Currently it has 22 client tenants; all are expected to make the move to PORTAL.
President Paul Wetenhall explained the difference between CRI’s business partners and his client tenants. “For companies to succeed commercially they must produce a superior product and compete in the marketplace. That is not something a university research facility can figure out. Business incubators provide day-to-day help with strategies, plans and models. They build commercial capability.”
Wetenhall encourages small businesses to move to PORTAL incubators where rent is even more reasonable than CRI’s research locations. A small commercial office runs $400 a month; larger space rents for $16.50 to $17 a square foot with all coaching, mentoring and normal office accessories included.
Ventureprise has adopted a new mission to go with its new moniker: Help the Charlotte region establish a strategy for entrepreneurship. Wetenhall added flesh to that intriguing skeleton. He is working to recruit and retain inventors. Ventureprise wants to secure venture capital, provide access to public sources of money and encourage favorable public policy all on the inventor’s behalf.
PORTAL’s benefit to business begins in 2014. Its benefit to tax-payers has already taken place. “It was built with receipts from federally funded research and long-term bonds,” says Dubois. “There were no state appropriations involved.”
Strategies for Entrepreneurship
CRI has many success stories. One is Camber Ridge, a tire testing company. It graduated from CRI’s Motorsports and Automotive Research Center to CRI’s business incubator at Ventureprise. Dr. James Cuttino, a mechanical engineering professor on leave from the University, is its president and owner.
Cuttino’s invention is a testing machine that pulls a tire around a 1.25 mile paved oval track at speeds approaching 200 miles per hour. Race fans and visitors to the NASCAR Hall of Fame know that tracks at American racing venues have different surfaces. The Camber Ridge track, now in the planning stages, will have four asphalt textures. The company is anticipating five to 10 technical jobs to initially run the facility and one to two engineering staffers.
Cuttino’s potential clients are tire companies, auto and truck manufacturers, the defense industry, auto racing teams and suspension systems manufacturers. “His process is a more efficient and less costly simulation than building an entire automobile to test tires,” says Ventureprise’s Wetenhall.
Cuttino was a finalist in the 2010 Charlotte Venture Challenge, a fact that contributes to his status as an up-and-coming entrepreneur. Formerly called Five Ventures Business Innovation Competition, the Challenge is CRI’s showcase for some of the region’s most successful early-stage companies.
In 2012, 18 finalists out of 117 applicants were awarded cash prizes totaling $113,500. Each pitched their company to a panel of venture capitalists that winnowed the field to nine and then one overall winner. All applicants attend workshops that hone their verbal and oral presentation skills.
Will Camber Ridge and other fledgling businesses survive the harsh realities of the world outside the campus? “We create the conditions for success and make introductions,” says Wetenhall. “But at the end of the day, the individual entrepreneur has to have the spirit and drive to make it happen.” That may be a researchable topic for UNC Charlotte’s psychology department. The social sciences now have a small folding chair around CRI’s techno-centric table. They may need more room.
If Charlotte is prepared to engage its own “supercollider for job creation,” it appears that everything is in place to make our very own. It will ultimately depend upon civic leaders, business leaders, university officials, faculty and staff, entrepreneurs, innovators; they must participate and come forward with new ideas, challenges and insights from their own experience to boost innovative thinking in our regional economy.
Charlotte can do this and have a significant impact on wealth and job creation nation within the global marketplace.
The story of Park Sterling Bank is actually two stories. The first story is about the startup and growth of a bank from the idea and vision of a handful of people. The second story, as important as the first, is about a sense of community and an understanding of a region. Where these two stories intersect is Park Sterling Bank.
Park Sterling Bank, founded in 2006, is a Charlotte-based commercial bank that offers both consumer and commercial products and services including traditional deposit and loan services as well as wealth management, residential mortgage and commercial and industrial lending services. But its goal and beginnings are what makes its story.
From a Seed
The seed of Park Sterling began with Bryan Kennedy. Kennedy helped start Park Meridian Bank in 1991 where he served as executive vice president. Prior to Park Meridian Bank’s sale to Regions Bank in 2001, Kennedy served as North Carolina president at Regions. But in late 2005, other bankers around him started suggesting it was time to, once again, start another bank.
“You start a bank,” Kennedy explains, “because you think you can put together the right people and resources to deliver a higher level of service to the customer than they can currently find in the market. Our founders saw a need for a more comfortable, more personal banking solution.”
With that intent, Kennedy, as CEO, put together a board of directors, some from the old Park Meridian Bank, and started raising capital in March of 2006. By June, they had finished with the largest startup bank capital raise in North Carolina history—$45 million. Park Sterling Bank officially opened for business in October of 2006.
Kennedy is serious about his responsibilities to Park Sterling’s shareholders. “When you sit across from folks and say, ‘I want to start a bank. Please trust me with your money and I’ll do something good with it,’ you feel a real obligation to do just that. We never forget that we need to make a return to our shareholders.”
Kennedy had the intention of growing the bank quickly and had a definite strategy to do it. “I put an infrastructure in place that would support growth. You can either put the right people and the right technology into place from the beginning or you can try to shortcut things and have people wear different hats, none of them well, and continuously play catch up.”
Kennedy’s plan for Park Sterling’s growth got an unexpected boost in 2010 when an industry associate introduced him to Jim Cherry and David Gaines. Cherry had spent more than three decades in banking in both North Carolina and Virginia for the former Wachovia Bank working as head of trust and investment management and as chief executive officer of Mid-Atlantic banking.
He also served as president of the Virginia Banking Association and even after officially retiring from his day job in 2006, Cherry stayed on to chair the association.
“I wanted to remain involved,” Cherry says. “I continued to look for ways to get back into banking. I started meeting with people in the industry. Meanwhile, we had the economic crisis of 2008. At the same time, in the banking industry, it was clear that there was going to be a unique opportunity for consolidation. A combination of low interest rates and an increasing regulatory environment was making the small banking business model untenable.
“I began by recruiting David Gaines who is now Park Sterling’s CFO. He was the controller for legacy Wachovia and their chief risk officer for corporate and investment banking after their merger with First Union, so he had significant finance, merger integration and risk experience.
“We started talking with regulators and other bankers and realized there was a void of regional banks in the Carolinas and Virginia. This was surprising since this area used to be the home of the regional banks—NCNB, Wachovia, First Union, BB&T, Southern National, CNS, Sovereign and Signet. There was just a whole cadre of regional banks and all of them, either one way or another, merged or consolidated or grew up and for some reason, unlike other regions of this character or size nationally, no one had followed in between. There were virtually no banks in this area in the $5 billion to $20 billion in asset size.
“This was significant because those were the banks that were typically large enough to have a broad array of products and services and some geographic diversity but still small enough to serve customers in a community banking framework. We recognized we had an opportunity to fill a need.”
A Shared Vision
Cherry wanted to partner with a bank to take advantage of that opportunity and in anticipation of that, Cherry and Gaines recruited a prestigious prospective board including Walter Ayers, retired president and CEO of the Virginia Banking Association; Jeffrey Kane, retired senior vice president of the Charlotte branch of the Federal Reserve, and Bud Baker, former chairman and CEO of Wachovia.
At the time that Cherry and Gaines met with Kennedy, Park Sterling was three and a half years old with about 50 employees, $500 million in assets and offices in Charlotte and Wilmington, N.C. It was a good match with shared philosophies on risk and customer service and Cherry admits he was impressed with the “smart things Bryan had done up front with Park Sterling.”
“It was state of the art,” Cherry says, “with a technology platform ready for growth and a quality management team in place.”
When an offer to partner was extended, Kennedy says he and the Park Sterling Board had to “do some soul searching.”
“It came down to our mission,” says Kennedy. “Was this the best thing for our shareholders? Should we go with a slower growth strategy, raising capital in small chunks or change direction, partner, and go with a larger capital raise? In hindsight, the decision to partner was 100 percent the right choice.”
“Bryan and the board had an even larger purpose to consider,” adds Cherry. “Which way would better serve the customer? How could they provide more products, services and capabilities to a growing customer base without more capital and other resources? It really was a continuation of the original vision but it was an acceleration of it. When most banks were retreating, this was an opportunity to advance. We agreed we had a vision to create a regional bank in the Carolinas area.”
In August of 2010, Park Sterling Bank became Park Sterling Corporation, trading on NASDAQ, and raised $150 million in an initial public offering. “It was one of the last and largest successful bank IPO’s in the current credit cycle,” explains Cherry. “As part of that capital raise, we were hired by Park Sterling.”
Kennedy left his position as CEO, becoming president and Cherry was named the new CEO. Gaines came on as the new CFO, a position previously held by Steve Arnold who became treasurer. The board was reconstituted but much of the key management was retained.
“We immediately began a two-pronged strategy,” Cherry explains. “First to expand in Charlotte and Wilmington, and go into other high growth markets like Raleigh, Charleston and Greenville, S.C. and recruit what I call the ‘A’ talent in those markets. We’d look for the very best people who were already doing business there and well regarded in that particular market, to build the Park Sterling franchise.
“The second part of the strategy was to use our capital and industry knowledge to partner with other banks in order to gain deposits, talent and other products and capabilities for our customers.”
Partnering for Growth
Park Sterling’s first partnership with Community Capital Bank in upstate South Carolina closed in November of 2011. Not only did the 25-year-old Community Capital fit well with the investment Park Sterling was already making in the Greenville market, it also brought them a mortgage brokerage product, a wealth management and a cash management product that they could now import into other markets.
Plans for their second partnership with Gastonia-based Citizens South came in March of 2012. Citizens South, which began in 1904 as Gastonia Mutual Building and Loan Association, had, prior to the merger, $1.1 billion in assets with 21 offices located in Gaston, Iredell, Rowan, Mecklenburg and Union counties in North Carolina, York County in South Carolina, and Towns, Union, Fannin and Gilmer counties in Georgia.
The merger further enhanced products, providing more robust cash and wealth management and providing capabilities for C&I (commercial and industrial) lending in addition to the real estate lending previously available to Citizens South customers. The merger also expanded the Park Sterling footprint into a new state—Georgia.
When it closed on October 1, 2012, the acquisition of Citizens South made Park Sterling the largest community bank in the Charlotte metro area and next to Bank of America, the second largest bank headquartered in Charlotte.
With current assets of $2 billion, Park Sterling’s acquisitions have essentially caused it to twice double in asset size in the last 14 months.
But along with growth, something else is just as important to Park Sterling’s management. “Because the banks we’ve acquired are community banks, they share our commitment of service to our area,” says Cherry. “This is our home. We grew up here and spent our careers here. We love this area and we know the people here and understand their needs and want to be a solution for them.”
A Solution for the Community
“Banking is a people business,” Cherry continues, “and people like doing business with people they know that live and work here and care about their community. We want to be an alternative to the larger, more impersonal banks. Our objective, in its simplest form, is to be large enough to help our customer achieve their financial aspirations and still small enough to care that they do.”
Their message appears to resonate with customers. Bill Crawford, who is founder of Wilmar Leasing and current chairman of the board for Wilmar Inc., has been a customer of Park Sterling since its beginning.
“We’re a vehicle leasing company so we use Park Sterling’s lending services,” says Crawford. “It’s been a wonderful experience. They have a great group of people. Bill Newbold handles our account and he’s the finest commercial loan officer I’ve ever worked with. He knows our business better than anybody and represents us well to the bank. With a community bank, character matters. When we meet with Park Sterling’s credit committee they know who we are, they know our business; they know our character.”
“With Park Sterling, relationship banking is not just something printed on a business card,” says Bob Salvin, founder and CEO of Salvin Dental Specialties, Inc. “Park Sterling took time to get to know us and establish a solid relationship. Several members of their management team, including the CEO, came out to our business to get to know us. They understand business entrepreneurs and, unlike some of the big banks, they view our business as unique.”
Customer Chris Moffat says he’ll “never go back to a big bank.” He uses Park Sterling not only for commercial banking and corporate borrowing in his role as vice president of Morehead Properties but also his personal banking. “I like their people,” he says. “They know us and anticipate our needs.”
Park Sterling currently has 44 branches with 17 in the greater Charlotte area and while further expansion may be in their future, Kennedy assures that there is “no build and flip strategy here.” “We want to build something we can turn over to the next generation of leadership,” he says.
“All of our executive management have had full careers in banking,” Cherry adds, “and have achieved their career aspirations. Now we share a common motivation. We want to recreate a strong regional community bank here. We’ve all come together to create something special in this community.”