Just last year, France’s largest privately owned design firm opened a U.S. headquarters in Charlotte. Team Créatif USA, located uptown in the Carillon Building at 227 W. Trade Street, brings with it a powerhouse of branding and package design from working with some of the world’s leading brands.
Growing Into Charlotte
Everything is Possible
The Charlotte Team
Last December marked the first anniversary of the merger of American Airlines and US Airways, which created holding company American Airlines Group, Inc. (NASDAQ: AAL), and made American Airlines the largest airline in the world.
When the merger was first announced in 2013, many in Charlotte saw it as a benefit to the area, but others had concerns about the future of Charlotte Douglas International Airport and its role in the post-merger American network.
Charlotte Douglas, which serves more than 39 million passengers annually, is widely considered a strategic asset in attracting and maintaining businesses for the area and figures prominently in local leaders’ vision for making Charlotte a future global hub of trade.
Prior to the merger, US Airways operated 90 percent of daily flights in and out of Charlotte Douglas, with Charlotte Douglas as its largest hub.
As the integration of the two airlines progresses, the US Airways brand is eventually absorbed and rolled into American, operating 90 percent of the airport’s daily flights, with Charlotte Douglas as its second largest hub behind Dallas/Fort Worth.
So a year into it, how is the merger going?
According to Chuck Allen, American’s managing director of government affairs, “It’s been a busy year. A lot has been accomplished, but this is a multi-year undertaking and we have a busy year coming up too.”
An early accomplishment of the past year was linking the two airlines’ route networks. In January 2014 the airlines began code sharing, placing their designator codes and selling tickets on each others’ flights.
“We’ve created the largest code share in the industry,” comments Allen. “This gives customers access to the combined network.”
The combining of the two airlines’ mostly complementary rather than competitive routes has created a substantial network. With the inclusion of the wholly-owned and third-party regional carriers operating as American Eagle and US Airways Express, the new network consists of nearly 6,700 flights per day to 339 destinations in 56 countries from its hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix and Washington, D.C.
And while the airlines’ frequent flyer programs have not yet combined, customers can currently earn and redeem miles on flights operated by either airline and have reciprocal access to clubs and upgrades.
Another past year milestone is the consolidation of duplicative operations. “We’ve combined operations in 82 different cities,” says Allen. “That allows us to be more efficient in the cities in which we’re co-located.”
When asked how that affects the airlines’ Charlotte labor force, Allen responds, “We’ve co-located ticket counters and absorbed those employees so there haven’t been any employment reductions.
“Right now, American employs over 10,000 in Charlotte. That will remain fairly consistent. Obviously, we look for additional flight opportunities out of Charlotte and that might drive future employee hirings.
“Companywide, we’ve been hiring people—more than 650 new pilots and over 2,000 flight attendants this year.”
Going for Great
In addition to new employees, American is also acquiring new aircraft. They took delivery of nearly 100 new aircraft in 2014, giving the airline an average aircraft age of 12.3 years and the distinction of having the youngest fleet of any U.S.-based network carrier. Orders of new aircraft continue with 112 expected in 2015 and 84 in 2016.
“We’re taking delivery of a new airplane and retiring an older one about every four days,” says Allen. “These new aircraft are passenger-friendly and more fuel efficient than the aircraft they’re replacing.”
The company reports orders of the Airbus A320 family, A350-900s, Boeing 737 MAX, 777-300ERs and will receive its first Boeing 787 Dreamliner this month.
In addition to new aircraft, American intends upgrades for much of its existing fleet. Refurbished interiors and new seats are planned for many aircraft including lie-flat seats in Business Class on both the 767-300s and 757s. The 93 A319s of the legacy US Airways’ fleet will also receive new seats and 24 main cabin seats offering extra space.
Improvements to in-flight entertainment and connectivity are also planned. By the end of 2016, all of the airline’s 777-200s will be retrofitted with in-seat entertainment systems and a walk-up bar.
Customers will also have an easier time powering devices in-flight. New 737s, nearly all new A321s as well as retrofitted A319s will have power ports in every row. And all new wide body deliveries, including 777-300ERs and 787s will have power ports at each seat.
Satellite-based internet access on all 787s, 777s, A330s and retrofitted 767-300s and 757s will allow connectivity on international flights.
The aircraft upgrades are just part of $2 billion in customer improvements American recently announced. The airlines’ nine hubs, including Charlotte, will also receive capital improvements.
Updated lobby designs and additional newer, faster and more reliable kiosks will streamline the check-in process. New worktables with 12 power outlets each and seating for eight will allow travelers to charge up devices near the gates in hub and gateway airports.
The company’s Admirals Clubs will also get a facelift with refurbished restrooms and shower facilities, improved technology, and expanded and healthier food options.
“Now that we have the network to complete globally, we’re going to deliver a product that’s better than our competitors,” explains American’s Chairman and CEO Doug Parker. “Refreshed cabins and clubs, modernized ticket counters, improved technology and new aircraft are further examples of how American is ‘going for great’—providing our outstanding team members the tools they need to deliver a great experience for our customers.”
The announcement of the $2 billion airline improvements comes in the wake of a banner financial year for American. Third quarter 2014 net profits, excluding net special charges, was a record $1.2 billion, an increase of 59 percent over 2013 third quarter results. Third quarter 2014 GAAP net profit was $942 million, the largest in any quarter in the history of the airline.
The company also declared its first dividend since 1980, returning $185 million to shareholders through payment of $72 million in quarterly dividends and the repurchase of $113 million of common stock.
“Our chairman has said the fourth quarter will also be a record fourth quarter so we’re going to have a record year of profitability for the company,” adds Allen.
While the challenges of the first year of the merger appear to be successfully met, the airline admits 2015 is a year of “heavy lifts.”
Behind the scenes, the company is working on getting a single operating certificate from the Federal Aviation Administration (FAA). “We have to combine the American and US Airways operations into one single book of operating procedures and the FAA must bless that,” explains Allen. “It’s extensive and very detailed but it should be completed by the summer of 2015.”
By the second quarter, American plans on merging the two carriers’ frequent flier programs. Mileage totals will combine for those having active balances in both AAdvantage and Dividend miles programs. And for the time being, American will continue to award points based on miles flown rather than on ticket cost, a change recently made to frequent flyer programs at Delta and United.
One of the “heavier lifts” of the upcoming year is the combination of the two carriers’ reservation systems. “This integration is behind the scenes but can be very visible to the public if we don’t do it right,” says Allen.
American has cause for concern. The integration of US Airways’ and America West’s reservation system a year and a half after their 2005 merger caused serious disruption at several airports. Combining the reservation systems of United and Continental was similarly problematic in 2012.
But the heaviest lift of all might be the Herculean effort of unifying 100,000 employees into a single workforce.
After a narrow loss last November and subsequent binding arbitration, American and the Association of Professional Flight Attendants reached an agreement worth $112 million in late December that would cover the 24,000 flight attendants of American and US Airways.
Efforts continue with pilots, passenger service agents, mechanics and ground workers. Not surprisingly, in a past year of record profits for American, profit-sharing has become a source of contention. While several other airlines have employee profit-sharing, American’s management prefers fixed pay increases. Negotiations continue.
“We are laser-focused on all the 2015 issues,” Allen states, “so if there are any surprises we can deal with them immediately. Obviously, our goal is to make sure there are no surprises.”
So a year in, what has the merger meant for service out of Charlotte?
“Charlotte has exceeded our expectations for a long time,” Allen states. “It’s a great operation and now it’s the second largest hub in the world’s largest airline. We continue to look at opportunities, but Charlotte will continue as a terrific East Coast domestic hub for us.
“We’ve got a lot of service out of Charlotte to the Caribbean year round. We’re now doing daily doubles to London and we’ll continue to fly to Frankfurt. We’ll also continue to do top destinations in Europe in the summertime.
“Since the merger, we’ve added a number of new destinations in the Midwest like Tulsa and Oklahoma City.”
When asked about the Charlotte Regional Intermodal Facility, which is located at the airport and enhances global trade for the area by facilitating cargo transfers among airlines, trucks and railroads, Allen responds positively. “It’s a great addition to Charlotte,” says Allen. “It provides opportunities that most airports in the country don’t have. We’re very pleased it’s here.
“The new, larger network provides more opportunity on the cargo side in Charlotte, but cargo operations in this country are predominantly on wide body aircraft. As primarily a domestic hub, we fly very few wide bodies into Charlotte currently. Of course, the more wide bodies we have in the future, the greater our opportunities are.”
While opportunities certainly exist, several current issues have the potential to impact the future of American at Charlotte Douglas.
The airline’s 30-year master lease with the airport, negotiated under legacy US Airways, expires in 2016. “I think we’re going to be partners for a long time,” Allen says on the topic. “We have a substantial investment here. The Charlotte operation is one of the best in the country. The airport is the most efficient in the world.”
In fact, Charlotte Douglas’ historically low operating cost is a major part of its attraction for American or any airline and one of the reasons why there is so much at stake in the ongoing battle over who controls the airport.
A judge’s ruling last October allows the city to maintain control of the airport and blocks an independent commission favored by state legislators from taking over. So far, the FAA has declined to weigh in on the decision.
Expressing confidence in the current management at Charlotte Douglas, American Airlines remains neutral about who should control Charlotte Douglas. “Our position hasn’t changed,” says Allen. “We remain agnostic as to who runs the airport.
“We just want to make sure that it’s run in the most efficient and cost-effective manner like it has for years. Management that keeps the airport as a low cost, efficient operation is what we want to see in Charlotte.”
That low cost could soon be threatened, in part, not by airport management but by the North Carolina General Assembly.
In 2006, North Carolina lawmakers approved a cap that refunded airlines any fuel taxes paid in the state in excess of $2.5 million. The cap, with an estimated value of $10 million of revenue to the state, is set to expire January 1, 2016. American is the largest beneficiary of the cap.
“Taxes are an important factor in the cost of an operation,” says Allen. “Certainly, you want to put your assets where they have the greatest return for you. Virginia has a very low tax rate on fuel, as does South Carolina, and Texas has no tax on fuel.
“The tax cap is certainly beneficial to American and if it were to sunset, as it’s scheduled to do at the end of the year, without being continued or mitigated in some form, then that will change the cost dynamics in North Carolina and Charlotte. The fuel tax is the number one legislative issue we’ll be focused on in North Carolina for 2015.”
According to a recent Tax Foundation blog, Illinois has the highest total tax rates for commercial jet fuel, followed by California and Connecticut. North Carolina is 20th on the list. Neighbors Virginia and South Carolina ranked 38th and 42nd, respectively.
Texas, where American is headquartered and where it has its largest hub, doesn’t tax jet fuel. Neither do Delaware and Ohio.
Airlines serving North Carolina are lobbying state lawmakers to extend the cap or even exempt the jet fuel sales tax completely. They estimate that if neither step is taken, North Carolina will be the fifth costliest state for the purchase of jet fuel.
Despite upcoming challenges, Allen says American “will remain fully engaged in the Charlotte business community at multiple levels and in multiple organizations.”
We’re very interested in the growth of Charlotte,” Allen continues. “That’s why we are members of the Charlotte Chamber of Commerce and Charlotte Regional Partnership. We think the Charlotte area has a lot of opportunity and we’re committed to making Charlotte grow.”
Engineering and marketing may not seem the logical combination, but when it comes to mixing things up Michael Cooney does just that.
His company, EngNet, with North American headquarters in Charlotte, is a small powerhouse that provides a range of digital marketing services to the engineering and industrial sectors across North America and the globe through focused strategies that take advantage of minimal costs.
“I received my training as an electrical engineer in South Africa,” explains EngNet CEO Cooney, who graduated in 1994 from the University of the Witwatersrand (Wits University), a world-class research university in Johannesburg, studying in the fields of Electrical Engineering and Heavy Current Electrical.
“Very quickly in starting my career, I realized, ‘Hey, this isn’t really what I want to do. I prefer the marketing side of engineering,’” he remembers.
By that time, he had built up a number of contacts in the industrial and engineering communities. At the same time, the Internet was becoming mainstream. He describes it as a seminal moment.
“‘Wow!’ I thought, ‘This is going to make my job easier. I can just go online and find all the information for these suppliers.’ However, it was still early days for the Web. I knew I could build into this space, but Yahoo! was still just a simple directory.
“So, I created EngNet as a categorized engineering directory to help customers find companies based on the equipment that our clients sold and manufactured.”
Creating an Engineering Network
Cooney decided to pursue EngNet, a portmanteau of ‘engineering’ and ‘network,’ full-time in 1998. But he had to overcome some resistance. The Internet was not as developed in non-Western countries at the time, and many industrial clients were reluctant to get involved. As a result, Cooney decided to take his operation outside of Johannesburg and aim for larger markets in the United Kingdom.
“I was in the U.K. for about six years, and I was getting U.K. clients, but at the same time, I was getting more and more companies from the United States that wanted to reach our audience,” he describes. “They liked our positioning with Google, and we recognized the opportunity provided by North American companies and decided to expand operations to the U.S.
“We chose Charlotte because we already had many companies as clients in the Charlotte region, including automation companies. And you simply can’t beat the weather here. In addition, the educational institutions are amazing.”
Unfortunately, while Cooney was starting up and running the U.K. division of EngNet, the South African office began to see declines. The company as a whole had good revenue with virtually zero costs, but it had hit a plateau in terms of bringing in new clients or continuing growth based on its directory subscription services.
Cooney’s solution: “About 2004, my brother joined me. He is a mechanical engineer, and he came on as a partner. Now my brother and I are equal partners in the South African office. He’s taken the reins and grown the revenue 20 times since coming on.”
While the business directory is still one of its strongest selling points across all three offices, Cooney found that competition within the North American market was stronger than any he had faced before. As a result, he decided that a “pivot” in strategy was required.
“The goal of the company remained the same: matching clients with customers in the engineering and industrial markets,” Cooney explains, “but as Google was becoming the 800-pound gorilla in the room, change was needed.
“Google traffic eventually rose to the top of referrals, so we had to contend with that. We work with hundreds of companies, and it’s always Google at number one when it comes to incoming referrals. So, if you do any type of directory advertising, you’ll see Google is number one, if you do AdWords, that’s number two, then Yahoo! and Bing. Then, down around number seven or eight, you’ll start to see directories come in,” he laments.
As a result of this trend, Cooney and EngNet began to put more emphasis on offering customers other solutions outside of the directory, eventually breaking the company into two additional parts: EngNet Design Group and Industry Tap.
“So, to pivot, we had to be SEO AdWords specialists. We were doing that already for our sites, but our clients were seeking Google traction. We began getting more and more requests asking if we could do that for them or do their web design.”
Adding Digital Marketing and Industry News
Today, in addition to maintaining an extensive directory for engineering professionals, EngNet offers a digital marketing division as well as an industry news site that incorporates social media. The company created Industry Tap out of a need for social media engagement, and the effort has brought in tens of thousands of “likes” and over a hundred thousand new followers.
However, EngNet was not as successful in gaining a social media following. Cooney explains, “What we tried is working with our large email database though our EngNet network, about 150,000 email addresses.
“By mistake, we included an article that took a different approach. Instead of talking about a product, we talked about how the product solved a problem. We wrote on that and we got three times the engagement compared to any other posts. So, we began to realize, if we write engaging stuff in a story format, we’re going to get much better results.”
After focusing on more premium content through the company’s newsletters, with an even split on advertising and content, EngNet saw engagement grow three to five times higher. As a result, Cooney decided to create and implement Industry Tap in order to tackle the social media world.
Today, Industry Tap is an EngNet property that concentrates on providing useful, entertaining and educational news to the engineering and industrial industries, currently boasting over 100,000 followers on social media.
“At different times of the year, I’m focusing on different things depending on the client,” describes Cooney. “Once we reach a certain level, we need to think about where we need to go next.
“A big thing that I’m involved with recently is tracking. We have a client that was getting 20 to 30 leads a month and they are now getting 280 to 300 leads a month as a result.”
Indeed, tracking is one of the things that has made EngNet as successful as it is in Charlotte and around the world. Cooney is so focused on providing results that he has taken to tracking not only hits on a website, but also tracking phone calls based on AdWord campaigns and beyond.
From there, he analyzes which leads really mean anything and which ones fall away. As a result, he and EngNet are able to offer meaningful statistics that display for clients exactly where return on investment is located.
Cooney grins, “These days, EngNet is focused more on lead generation, but more specifically, we’re concerned with quality lead generation, not just quantity. The company still respects Google’s ranking system, but we realize that Google is not the be-all and end-all of search engine marketing when it comes to bringing in new leads.”
He continues, “A big part of my passion is derived from the fact that I come from an engineering background. But mainly it’s connected with assisting people in finding the products and services they need. I love seeing the results, both for our clients and for their customers.
“I know that so many industrial clients have been burned, and it’s not because of the marketing agencies they use, but because those agencies don’t understand the industry. I do, and my experience and expertise allows EngNet to get the results our clients need and deserve.”
While EngNet faces larger competitors, Cooney feels that the company’s small size allows it to be more flexible with the rules and more nimble in adjusting to changing tides. The company’s directory is designed to be easy to navigate, and Cooney states that he is focused on building personal relationships with each client, whether they need EngNet’s directory, EngNet Design, or Industry Tap. Additionally, EngNet’s social media following is currently the largest when compared to larger engineering directories, and it’s growing each day.
EngNet 2.0 Content Marketing
“In the past, you’d promote yourself,” Cooney says, “but now we’re more focused on building brand loyalty through providing engaging and interesting content that matters to those in the industry. It’s all about solid content marketing, and that keeps clients interested and coming back. Our target clients are global, and while we focus on North America here in Charlotte, we offer the ability to geo-target across the globe. We try to reach everyone.”
While it’s Cooney’s view that Google will continue to dominate the search marketplace, he also believes that things are more streamlined now. In the past, it almost seemed as though the Internet was the Wild West of digital real estate; low costs and an abundant supply. Today, however, online marketers are finding that digital real estate is in short supply and costs continue to rise, all while competition is a larger issue. While this may present a problem to many online marketers, Cooney is confident.
“I think SEO remains important. Also, having real, quality content—having real, quality user engagement—is going to win the day. The times of winging it on your content are over. The guys who really put money into content, long-term, those guys are going to win,” says Cooney.
“Social media and e-commerce are growing tremendously as well, and user flow, making things totally streamlined…that’s what’s on the horizon. Every website, the easier you can make it, the more engaging it is, those are the things to focus on right now across every industry that has an online presence. There is going to be a lot of time spent analyzing in order to give a better user experience, and the companies that invest in that are the ones that are going to win.”
Adding to that, Cooney also feels that online tools will play a major role in changing the way online marketing works. Today, a large number of tools exists that offer users the ability to access very narrow parts of data, and these tools operate very effectively and efficiently.
“There are so many tools available today for checking backlinks or for putting in a simple URL and seeing who links to you and the power of those links. I find it interesting, but not all companies are using such tools, and they are only as good as how you use them,” continues Cooney.
“The cloud is also important as it is opening up communication across a wide variety of marketing channels in different industries. And this applies to small and enterprise businesses as small businesses today now have access to enterprise-level tools.”
However, the potential for problems in technology exists as Cooney mentions the plateau effect, a situation through which a client may become conditioned to seeing consistent growth through digital means.
“Clients can become accustomed to growth in positions and traffic,” he says, “but we want to be measured by leads and sales, not gimmicks. We want to be measured by amount of dollars we bring through the door.
“I see us growing, and what we do isn’t going to change: we’re connecting industrial and engineering suppliers with customers. However, what is going to change is how we do that.
“We’re using more premium content. We’re also taking a look at breaking into specialized fields,” he says. “At the end of the day, we’re going to make the process clearer so that clients can see the benefit that is being received from our services, and as time goes on, we expect to provide clients with technologies that are even more transparent, assisting in growth not only to EngNet, but also to those who rely on our team.”
Civil engineers don’t stand out at a construction site. They usually play a supporting role to the architects and general contractors designing the project. However, one Charlotte civil engineering firm is breaking that stereotype: Carlton Burton is a hands-on problem solver who assumes an active leadership role in his firm’s projects.
“Site work is the largest variable cost in a project,” says Burton, president and founder of Burton Engineering Associates located in the SouthPark area. “Construction project managers can calculate the costs of the building and land acquisition pretty accurately.
“What is unknown is the cost of preparing the site,” he continues. “Preparing the subsurface conditions and storm water drainage—all the earthwork—it varies from location to location.”
Having a Passion
Burton Engineering Associates is the “problem solver” for clients’ construction projects according to Greg Welsh, a civil engineer who joined the firm last year. He explains that when prospects are considering sites, the two largest unknowns are the site development costs and the potential tax incentives. So from that perspective, each project has at least two essential players: a civil engineer and an attorney.
“When a client is considering various sites,” describes Burton, “we can quickly and accurately prepare building and site layout scenarios, preliminary grading, and infrastructure concepts which are then used for pricing. We look at what our clients want and figure out how to create something out of nothing.”
He recalls a recent meeting with a client who asked him how he would envision a site development. He says he grabbed a marker and sheet of paper and sketched out his site plans.
“Our client was surprised that I could draw it out for him—model it and show him in real terms what it would look like,” he says, noting that a good civil engineer has to be able to show what a plan will look like and why it is relevant and economical to build.
“He was amazed that when the project was completed, it looked like my drawing and was within less than a foot of my dimensions,” Burton laughs.
“When we join the team, it becomes as much our project—and we take ownership of it. We have a passion for what we do,” he says earnestly.
“Our role is pretty integral to the project,” confirms Welsh. “We go beyond the project specifications. We want to understand our client’s business model.”
The business had a humble start in 1992. Burton, a civil engineering graduate of UNC Charlotte, had worked for a few firms and “got the itch” to start his own company and do better work. He started working out of his home. When his wife nixed the idea of getting a copier delivered to the home, he decided to sublet a 10 foot by 10 foot space, or as Burton describes, an “old break room with orange shag carpet.”
“I started with one big client in commercial development and began working my contacts in the community,” he remembers, reaching out to developers and architects. “I began building up my project lists and never looked back.”
Today, Burton Engineering Associates has a history of partnering on some of the largest projects in Charlotte. Work has expanded into the Piedmont, to South Carolina and Virginia. Burton and his team of 18 employees provide expert advice to their clients.
Welsh, who leads Burton Engineering Associates’ business development, helps direct its 30-plus ongoing projects which include retail centers and standalone; office buildings and office parks; industrial warehouse, distribution and manufacturing; health care facilities; single and multi-family residential developments; and K-12 education.
One common core component in a company’s decision to locate to the Carolinas is how long it will take to get the business up and running, says Welsh. Burton Engineering Associates partners with developers and contractors using a design-build, rather than a design-bid-build project delivery model.
Comments Burton, “Most general contractors now want to get a project constructed in six to eight months, rather than the typical 12-month time frame, and we understand scheduling to the point where we can get that done.”
Civil engineering includes the permitting process, which can be very lengthy, says Welsh; the sooner the firm can get involved with the project, the better. Burton Engineering Associate’s clients rely on the firm’s experience and established relationships with state and local officials and economic development offices to help them navigate the permitting process.
Burton cites his firm’s knowledge of “site readiness” as an additional benefit for clients.
“We’ve been working around this area long enough that we know most of the available sites,” Burton acknowledges, adding he has a library of data on different sites. “We can advise clients about site features like wetlands and clay deposits, and help them locate sites that can be cleared and graded quickly.”
“When we start the civil engineering on a prospective site, we like to get a jump on the project,” he continues. “We can do a preliminary site evaluation, pull grading permits early, and find a way to work around the time constraints and meet the schedule.”
Additionally, Burton believes in continuing to participate throughout the project.
“We understand the cost implications of different design decisions and constructability that is often overlooked,” he remarks. “We like to work as a team with our contractors. We might suggest a second look at plans to see if the design could be altered to help in the flow of construction.”
Another way Burton Engineering Associates works faster on jobs is by using its own in-house surveying, Foresite Surveying, something added about 10 years ago to the firm’s capabilities.
Burton Engineering Associates has been an integral partner in one of Charlotte’s well-known office parks, Whitehall Corporate Center, a 700-acre community on Arrowood Road. Burton partnered with American Asset Corporation on five of the six mid-rise office buildings, including the standout 25-foot sculpture Metalmorphosis that debuted in 2007. Burton Engineering Associates did the site design for Buildings II through VI.
Called one of the “seven wonders of Charlotte” by local media sources, Metalmorphosis is a 14-ton stainless steel motorized head created by Czech artist David Cerný. It sits in a reflecting pool and different sections of the head rotate, forming clusters of new shapes. When all the facial features line up, the sculpture spits out water.
“That piece set all the parameters for the project,” recalls Burton. “The actual artwork was top secret—not to be viewed in any form until the unveiling. All we knew was the size of the artwork and that it would be set in water.
“We had to figure out how to prepare the site to accommodate this ‘unknown’ addition, including all the preliminary work down to the design of the building.
“A steel frame was built around the project site and kept it covered,” says Burton. “When the big reveal happened as part of the opening of the office park, it was complete with an Oktoberfest party with bands, dancing girls, and lots of German beer.”
Another well-known office project is the Microsoft Corporate Center in Charlotte. Completed in 1998, it includes two four-story buildings housing Microsoft’s East Coast call center, totaling 430,000 square feet of office space, and two parking garages. Burton Engineering Associates provided the site planning and engineering.
A Can-Do Attitude
Business was booming for Burton Engineering from the 1990s to the mid-2000 years. Its 50-plus office buildings and parks included Edgewater Corporate Center, a 90-acre office park, and the HSBC Eastern U.S. headquarters, both in Lancaster, S.C.
With 60-plus industrial, warehouse and manufacturing projects, work included the Clearwater Paper Company in Shelby, the Saddlecreek Distribution Center in Harrisburg, Dixon Valve’s Phase 1 and II in the Gaston Technology Park and the Lenovo Distribution Facility in Greensboro.
A major expansion project for an ER addition at Spartanburg Hospital in S.C. included the establishment of a branch office there to serve the multi-year project. Add to that another 90-plus single and multi-family residential developments and 30-plus K-12 education projects.
“It was the great boom in Charlotte and certain sectors overbuilt,” admits Burton. “They did it because they could; it happens in every economic cycle.”
But then the great recession hit. Business slowed dramatically. Burton Engineering Associates concentrated on standalone retail projects, including more than 30 Family Dollar stores in three states.
Gradually, business started to turn around.
“The current forecast for Charlotte is tremendous,” says Welsh. “In mid-2014 there was an accelerated business pick-up in Charlotte, and where’s there’s growth there’s a need for civil engineers.”
Recent Burton Engineering Associates projects include White Oak Crossing, a 710,000-square-foot retail center located at Interstate 40 and Highway 70 in Garner, N.C., that includes BJ’s Wholesale Club, Kohl’s Department Store, Pet Smart, Dick’s Sporting Goods, Pier 1 Imports, Rack Room Shoes, Target, Best Buy, TJ Maxx, Ross Dress for Less, Party City, Staples and Michael’s.
Burton Engineering Associates is also doing site design and permitting services for the FedEx Smart Post 300,000-square-foot distribution facility located in Concord, along with new public roads and improvements to International Drive that is scheduled for completion midyear.
Agility Systems, a Rowan County, 250,000-square-foot manufacturing facility accelerated project is on track for completion in the next few months.
The recently announced Movement Mortgage Headquarters in Lancaster County is currently in design as well.
“There’s so much business to be had in our area,” says Burton, who expects to continue to concentrate on projects in the Piedmont region. “It’s measured, healthy growth—there’s a sustained market for projects, including spec buildings, which we haven’t seen in several years.”
With the economic cycle set to boom, Burton Engineering Associates is continuing to expand.
“We’ve been growing with good-quality people,” says Burton. “I had to bet on the future—and I knew that during the last economic upturn (early 2000s), it was hard to find good qualified people.”
“We continue to look for new, bright engineers who can communicate well. We’re no longer the engineers that sit in the corner and design. Now we’re out with the clients, going to meetings and being constantly involved in the project design,” acknowledges Welsh.
“We have a great energy level at the firm,” he adds. “We’re the small firm with the can-do attitude.”
Expect Burton Engineering Associates to continue to play a leading role.
“I’ve managed to keep my hands in engineering throughout my career,” says Carlton. “I enjoy the conceptual piece of my work. Every job is different and I want to be involved from the start to the finish.”
Far beyond labels, companies now use the entire package of the products we use to convey advertising messages with words, images and graphics, in an array of bright designs and appealing colors.
Packaging, printing, and product branding have become multi-billion-dollar, multi-faceted industries that support each other. The North American flexible packaging industry is growing at a rate of six percent per year, largely based on population growth. According to industry analyst Smithers Pira, the global flexible packaging industry is set to reach $231 billion by 2018.
Within the mammoth printing industry is Charlotte’s own FLXON, an innovative consultative sales, marketing and distribution company that, for the past 20 years, has serviced flexographic and rotogravure printers of consumer product packaging.
Rotogravure (roto or gravure for short) is a type of printing process, which involves engraving the image onto an image carrier. In gravure printing, the image is engraved onto a cylinder because, like offset printing and flexography, it uses a rotary printing press.
Flexography (often abbreviated to flexo) is a form of printing process which utilizes a flexible relief plate. It is essentially a modern version of letterpress which can be used for printing on almost any type of substrate, including plastic, metallic films, cellophane and paper.
The rotogravure method has been in use since the 1850s. The newer flexographic method is applied to flexible substrates such as potato chip bags, frozen foods, and cartons for yogurt. Both methods are used for large runs.
Wielding the Doctor Blade
“When you go into a supermarket or retail store, almost everything you see that is printed is printed by either the flexographic or rotogravure methods,” says Paul Sharkey, president and CEO of FLXON, Inc.
“Our business philosophy is deeply rooted in a commitment to establish relationships with printers and converters based on improving their process and their bottom line,” Sharkey continues.
“FLXON’s mission is to partner with them to drive waste from their process, thereby helping them to be more precise in their quality, improve sustainability, remain price competitive, and earn greater profits. Savings on waste can go to their bottom line or in next year’s price negotiations between the printer and their clients.
“Waste in printing consists of process-related print defects such as streaks, hazing or shifts in color that their customers would reject,” explains Sharkey. “Waste can also mean loss of production time resulting from stopping a press mid-run to replace the ink metering blade, also known as the ‘doctor blade.’
“The doctor blade is at the heart of the printing unit, controlling the ink volume to be transferred. It is used to remove excess ink from the roller transferring ink to the substrate, which may be of a variety of materials from coated paper stock to film.”
This is where FLXON’s innovation and vision has helped to move the industry forward. Sharkey says he started his business by introducing a superior, high-performance, steel printing metering blade called SWEDCUT to North America, Canada and Latin America.
“The SWEDCUT blade, manufactured by Swedish Development Company in Munkfors, Sweden, is made of super refined steel that lasts longer with less negative impact on the printing press, particularly to the anilox roll or ink transfer roller, an integral part of the press,” Sharkey explains. “FLXON is the exclusive distributor of SWEDCUT blades within the North American Free Trade Agreement (NAFTA) area.
“FLXON’s more than 500 customers are spread out over Canada, the United States, Mexico and the Caribbean. Our customers print wine and beverage labels, health and beauty packaging, food-related flexible packaging, folding cartons for cereal and ice cream and more. The list includes everything seen in a supermarket or retail store plus pharmaceuticals, tobacco, gift wrap, envelopes, wall and floor coverings and magazines.”
Printers include companies such as Bemis Flexible Packaging, Sealed Air, Sonoco, Printpack, Bryce, Rock-Tenn, Georgia Pacific, CCL Labels, Multicolor, and Mac Papers.
“There are plus or minus 6,000 flexographic and rotogravure printers in our coverage area,” remarks Sharkey. “We consider our target audience to be wide or narrow web flexible packaging printers and high quality label printers who understand the value of our proposition.
“Printing is a precise, detailed and very technical industry which operates with expensive equipment. Our customers know that the smallest detail can affect a buyer’s choice. You go into the supermarket and reach for the product you want. But, if you’re not sure, the packaging begins to assist you in your decision, and you might pick the one that has a higher quality printing and color appeal.”
Some industries, such as tobacco, have a zero tolerance for printing defects. Others, like the fast-food industry, are less concerned about absolute perfection in their packaging. “This is because with fast food, the product is already sold to the end-customer before they become engaged with the packaging,” explains Sharkey.
Engagement with potential customers begins with trained FLXON staff sitting down with printers and converters to determine if there is a problem with waste through defects, frequent press stops, press speeds, or repetitive wear to individual parts of the equipment. “We’re very selective with our time. We want to make sure we are connecting with the people we need to be working with,” says Sharkey.
Addressing the Marketplace
FLXON is fully staffed with 14 employees. “We are in growth mode and very proactive,” Sharkey says. “This past year we’ve hired a full-time marketing manager and two customer satisfaction staff members. We get high marks on service. Calling on them before they are calling you helps us both.”
“But we don’t want our sales team doing that work. Rather, we want them to focus solely on generating business.” The company divides its business into six geographic territories, each one with a business development manager to build the business. Most employees live in and travel from Charlotte; one covering the Northeast lives in Pennsylvania.
More than half of FLXON’s employees are fluent in Spanish.
“Mexico offers our greatest potential for growth,” explains Sharkey. “Many U.S. and Canadian companies have moved production there. It is extremely valuable to us to have staff that are bilingual in English and Spanish.
“The Mexican market is the big opportunity for us. Factories there are bigger and newer; there is more investment there than in the U.S. at this point. Some of the factories have eight to 10 printing presses, whereas here there are usually one or two. Many Canadian companies shut down factories in Canada and opened up more in Mexico. European companies are also investing in Mexico.”
Also vital to FLXON’s growth is the state of Wisconsin. “It is the most significant state for us,” says Sharkey. “They have so much printing and packaging because of the amount of food processed there—dairy, cheese, potatoes, and cranberries.”
FLXON maintains a warehouse and assembly plant for technical support and new product development in Appleton where customers can send used metering blades for detailed analysis and feedback about how they performed on press.
“This process helps us to develop new customized press components that perform better in a particular or unique application. These products include peristaltic pumps to transfer ink more efficiently, high capacity ink filters, and a variety of blade holders,” says Sharkey. “Kansas, Missouri, Pennsylvania, and Texas also offer good market potential; they are all big food producing states.”
Sharkey is satisfied that his company is located in the best place possible: “Many people don’t know that Charlotte is one of the major centers for flexo and rotogravure printing technology,” he says. “Many support companies, including Flint Group, Sun Chemicals, Harper Corporation of America, ARC, Ceramco, INX, Tesa Tape, and others, are making anilox rolls, ink and graphics operating here in support of the rest of the country.
“Part of the reason for this concentration,” he points out, “is that the manufacture of anilox rolls is very similar to the manufacture of rotary screens that were used in the textile industry.”
FLXON expects future growth to be around 20 percent in 2015 and anticipates doubling current levels within the next five years, according to Sharkey. “We have a clear path; we know where we’re going to go to get it. There is already enough in the pipeline to carry us far,” shares Sharkey.
Their Competitive Edge
FLXON contracts with Specialized Warehouse Service for warehousing and distribution services. Large container-sized shipments arrive by sea every other month. The company also places spot orders for materials to arrive by air. “They have three people dedicated to FLXON,” says Sharkey. “Using contract services allows our team to concentrate efforts on customer service and support.”
FLXON’s relationship with Swedish Development Company is critical to its mission. The specialty steelmaking company is a single-sourced company that manufactures precise products such as the doctor blade. It’s made of strip steel as are razor blades. None of this is manufactured in North America, according to Sharkey.
“Our competitors are buying strip steel—long and flat—but they are buying in a marketplace where they don’t always know where the steel is coming from. Lots of manufacturers are making steel without knowing what the final use will be—Venetian blinds to razor blades,” explains Sharkey.
“Our product is always coming from one source. We know the origin completely and our product is always manufactured to become a doctor blade. The microstructure of the steel has a lot to do with the performance of the product and we’re the only doctor blade provider that speaks about the steel itself.”
Sharkey started FLXON in July of 1995, having spent 19 years serving the flexographic printing industry in the U.S. and Canada. “It was a period of great technical advancements that remarkably improved the printing process,” says Sharkey.
“As the vice president of sales and marketing for an anilox roll manufacturer here in Charlotte, I had the opportunity to work with major printing and packaging companies to help them upgrade their process.”
Sharkey traveled extensively, increasing his exposure in the industry. It was during this time that he discovered the steel ink metering blade being manufactured in Sweden and used by printers in Europe but not yet in North America.
Sharkey is originally from Long Island, N.Y., and met his wife, Carol, who is from Charlotte, while attending college. He first worked in the D.C. area in sales, marketing and advertising for the General Electric Corporation. Then, he moved with his wife to Charlotte to work with Ron Harper & Associates. Following that he worked with Consolidated Graving and then Anilox Rolls Company.
“I realized that I had done all that I could as an employee and that I really did want to start a business,” he says frankly.
Running a successful, growth-oriented business comes with a few challenges. Among them is constantly monitoring and adapting to the foreign exchange rate. FLXON buys bulk container-load quantities and pays in Swedish Krona (SEK). “After a long period of the dollar being down against the SEK, it’s starting to rebound,” acknowledges Sharkey.
The most significant challenge the company has faced is getting through the 2008-2009 recession. “In 2008, six of our top 10 customers closed their doors. In all, we lost 30 percent of our business as a result of closures and reductions in our customers’ business. We didn’t have any layoffs but were not able to fill vacancies.”
The industry went through a major consolidation over the following few years. Says Sharkey, “While it should have been an ideal time for us to gain new business based on our ability to help reduce waste and costs, it was not because customers were faced with layoffs, overworked employees and overall uncertainty.”
“It took us until 2012 to regain the same revenue levels we had achieved in 2008. However, in the process we have increased our customer base, largely by gaining business with higher quality printers who were focused on improved productivity. Making it through has made us a more focused company.”
Sharkey does not see the need for additional locations in the foreseeable future: “We can distribute out of Charlotte to anywhere. We can ship faster out of Charlotte to Guadalajara than if we had a facility in New Mexico.”
Although Sharkey is nearing retirement age, he has no plans to retire anytime soon. But he admits to putting in too many hours and wanting to have a transition plan for his son, Ryan, to take over the business. Ryan currently serves as the company’s area business manager.
Sharkey’s stellar career puts him in a good position to give advice: “People often fail in the first year of business because they are not prepared to start a business.”
He urges entrepreneurs and others who want to go into business for themselves to save up the necessary start-up money and practice due diligence with research, “beyond what you want to do or sell, there is a business side of things.”
Taking out the trash may seem like a chore, but for Wastequip, it’s big business. The company manufactures many of the common trash cans consumers use every single day, but it also manufactures a large variety of steel containers, compactors, and vacuum truck systems that are used across a variety of industries.
“The company was founded in 1989,” explains Wastequip CEO Marty Bryant. “At that time, the focus was on the steel container side of things. But around 2007, Wastequip started to grow larger, integrate, and buy new brands.
“Today, Wastequip is the leading manufacturer of waste handling and recycling equipment in North America. We specialize in products, systems and solutions to collect, store, transport, and manage a wide range of waste and recyclables. We’re one of the few companies that manufacture a complete line of both steel and plastic waste handling equipment.”
Wastequip’s extensive product selection includes dumpsters, compactors, balers, carts and more. The company’s brands include Wastequip, Toter, Galbreath, Pioneer, Accurate, Cusco, Mountain Tarp and Go To Parts.
“In June 2012, New York-based private equity firm Centerbridge Partners purchased the company,” continues Bryant, “and I came to Charlotte along with that transition.”
The Charlotte headquarters started out with 28 employees, but that number has grown significantly to nearly 80 professionals, with more than 1,600 nationwide. Bryant attributes much of this growth to the company’s team-based strategy developed in 2012.
“I joke all the time that the CEO is the least value-added position in the company,” laughs Bryant. “Prior to June of 2012, the company was run as one large entity, so we had all the corporate-type functions in a matrix-style formation. So the leader was here and responsible for all the sales people, the company, and so on. Upon Centerbridge’s purchase of Wastequip, one of the first things we did was break that up into independent divisions in order to shrink the size of corporate.”
In fact, in November of 2014, the company’s headquarters underwent a massive renovation to assist in furthering the breakup of a ‘corporate mentality’ by removing dividers and offices so that all employees, including the CEO, are now all accessible in one large floor space. In addition, the few offices that the company now has are almost all glass-enclosed in order to promote openness and transparency.
Part of the reason for this is that Bryant himself started from the bottom and worked his way to the top, so he understands the feelings and needs of his staff. After serving in the military during Operation Desert Storm, Bryant returned to the United States and took a job as a janitor, later working on a Johnson Controls assembly line while attending college.
He explains, “For me, it’s a privilege that I don’t ever take for granted to be the CEO. Also, I’m biased, of course, but our private equity firm is one of the best to work for in terms of a management team. So, I handpicked Wastequip to campaign to become the CEO of, and part of the reason for that was that Wastequip was and is a good, solid blue-collar company.
“The waste industry itself is fascinating in that if you really could imagine for a little while if no one picked up garbage or efficiently processed waste…Wow!” He continues, “Additionally, the waste industry has an amazing history in the United States, including Martin Luther King Jr. and the 1968 garbage workers strike. We’ve made huge strides in American manufacturing.”
As a result of Wastequip’s changes, the company currently occupies the number one space in its industry for a variety of products, and Bryant states that the only reason that some products are in the number two space is because of the lack of a need to grow into certain areas at the moment.
Wastequip is set to take over a number of segments, but for now, the company is working on a strategy that runs very deep, and that strategy includes evaluating safety, efficiency and employee satisfaction.
“We do take our management very seriously, and we’re also serious about our safety culture and employee happiness,” states Bryant. “The first money spent upon acquiring Wastequip went toward upgrading bathrooms and breakrooms, things that really matter to our employees. We also haven’t raised our insurance rates since 2012, and this year, we expect to reduce costs a bit further.”
In the waste disposal and treatment industry, most large companies have several facilities in a geographical area, but due to Wastequip’s footprint across North America—including plants in the United States, Mexico, and Canada—it can service national brands easily.
In fact, last year, Republic Services, a respected waste services provider, struck a deal with Wastequip to only buy steel containers from the company, something that Bryant says speaks volumes about Wastequip’s ability to deliver quality products and superior service.
Positioning Itself Strategically
Bryant is definitive on the company’s North Carolina location: “While Wastequip was headquartered in Charlotte in 2012 at the time of our purchase, we had the opportunity to move the company anywhere in the United States, but we stayed here for a multitude of reasons. You can be at the beach in a few hours, you can be in the mountains in a few hours, you’ve got great arts and entertainment here.
“Opportunities as far as education abound, and it’s one of the fastest growing cities in the country. We have yet to call and recruit someone and say we’re from Charlotte and it’s not a bonus, whether they’re in New York, Los Angeles, or anywhere in between.”
Aside from selecting great employees and managing staff like pros, Wastequip also has an eye for the long term. In the past, the company only offered steel containers, but now, it is concerned with everything from how to collect waste to where it’s going for recycling, waste energy, and landfill transfer.
Wastequip has products to suit individual consumers, small business owners, all the way up to the larger commercial side with its steel containers. And it also provides hoist truck components that pick up the steel containers, tarps that secure waste in trucks, compactors that require fewer pickups, vacuum trucks that work in oil and gas exploration, and a parts division that services all of its products.
“As the company has split itself into divisions and brands,” comments Bryant, “it has not only grown in size, but also in customer base, and experienced the synergies of vertical integration.”
“Marketing our brands includes direct sales employees who are long-term waste industry veterans, but we also market to authorized dealers who are exclusive to us. Then again, with Toter, for example, we market through retail in stores like Lowe’s and Home Depot,” says Bryant.
“So, we go across all three of those depending on what’s best for the specific brand. However, our new parts division that launched in 2014 (www.gotoparts.com) is taking off, and customers can order directly from the website, making it a huge plus for both Wastequip and its customers.”
The company has also helped customers by building brand loyalty—creating products that customers need before customers even know they need them. Constantly creating and innovating, Wastequip’s research and development team looks through customer feedback surveys in order to find out what works and what doesn’t.
On top of that, the company is working with UNC Charlotte on a new way to address consumer convenience issues, signaling a major shakeup in the way that waste is processed.
Bryant continues, “When it comes to building brand loyalty, our research and development team works very hard to constantly create new and innovative products for our customers, but also, the main part of our core business is that we take our customer service seriously. When a customer has worked hard to earn a dollar, and he or she has decided to share that dollar with us, we truly value that, and as a result we have to ensure quality products are delivered on time, every time.”
“Our Galbreath hoist systems and Pioneer tarp systems are by far the most preferred in the industry,” Bryant adds, “and that’s why we hold command positions with those products…that’s something we’re very proud of.”
Waste Disposal and the Future
In order to keep up with advances in waste disposal technology, Wastequip has already taken steps to maintain the lead. The company’s Galbreath brand above-frame hoist allows customers to rapidly switch to compressed natural gas, and the switch to natural gas is a trend that the waste disposal industry is quickly adopting due to its lessened impact on the environment.
“Additionally, Wastequip is supplying intermodal containers that are steel and leak-proof to commercial customers in New York City to remove trash and ship it on barges in order to reduce pollution,” says Bryant.
“If you think about it, every segment of every industry produces some type of waste, so there’s no limit to who we can serve. We sell a lot to haulers that are serving every industry from health care to schools to private homes. A lot of our Toter products are sold to government, and Cusco products, provided by our vacuum truck systems division, are used heavily in the oil and natural gas industries.”
To meet the growing need for waste disposal, transport and processing into the future, Wastequip is taking a very active role in selecting employees. The company is focusing heavily on human resources, an area that has not been broken out like its other divisions, and candidates are heavily screened not only to see if they fit the culture of Wastequip, but also to see if Wastequip is the right fit for the candidate.
Bryant continues, “Supervision is team-based; we pay attention to how many supervisors we have. We try to keep the organization as flat as possible. Measuring success, on the people side, we do an annual, anonymous survey to see where concern areas are. For two years in a row, Wastequip’s Charlotte headquarters has been selected as one of the best places to work in the city by the Charlotte Business Journal, and that means a lot, not only for professional success, but also in personal satisfaction.”
Going forward, Bryant is excited about the manufacturing sector. In the waste industry, he says that keeping communities healthier, safer, and more beautiful is a major priority, but he views things on a nationwide basis.
“The waste industry will expand as populations grow, not only in the United States, but across the world, and there will always be a need for professionals to collect, process, and dispose of waste. Additionally, technology is making it so that consumers have to think less and less about their disposal choices while taking still caring for the environment,” Bryant points out.
“There are a lot of inventors out there, and that’s good for the industry. The fact is, you’ve got a core set of products that are always going to be there, but you also have fringe products that are helping to move things forward. The industry is getting more sophisticated.
“For example, many garbage trucks today have GPS tracking, and they can measure the amount of trash in a can so they can be routed more efficiently. Technology is definitely a major factor, and we are fully embracing innovative ideas.
“We’ll continue to stay organic in our drive to bring in new customers, but with the launch of our parts division at gotoparts.com, I’m sure we’ll drive additional business as well,” comments Bryant.
“We’ll also continue to expand into new services, and we’re always evaluating acquisitions that make sense for us as a company.
“It’s a great time to do business in the Carolinas!”
Just a short drive south of Charlotte, in Rock Hill, S.C., is the headquarters of a global company whose technology could change everything—from the way things are manufactured, to how things are designed and prototyped, to ultimately who and what is being produced. It will touch every individual in terms of what they can individually produce, how they will undergo surgery, even what they eat.
The light-filled lobby of 3D Systems (NYSE: DDD) could be the lobby of any large company, except for the display of objects. To the left is a fancifully intricate guitar, a teapot, a woman’s shoe and beautifully detailed dollhouse furniture. To the right is a delicate scoliosis brace, a helicopter part and farther back, a car engine block casting pattern. All of the items were created on a 3D Systems’ 3D printer.
Assembling the Technology
3D Systems pioneered 3D printing under the leadership of Chuck Hull, the inventor and patent-holder of the first stereolithography (SLA) 3D printer in 1983. Hull went on to cofound 3D Systems in Valencia, Calif., in 1986.
Hull’s 3D printer enabled engineers for the first time to instantly create functional parts from digital designs, substantially reducing the time it took to prototype parts, which until then had been done using costly and lengthy traditional manufacturing methods. This greatly accelerated product development and compressed time to market.
The first adopters of the technology were America’s carmakers, who saw this capability as a chance to speed up their innovation cycle and reclaim a competitive edge against the rise of cheaper and nimbler foreign imports.
But, despite their obvious usefulness, early 3D printers were complex and costly and therefore limited to deep-pocketed corporations, such as Detroit’s automakers, with the financial and human resources to take advantage of the technology.
However, advances in 3D printing and its associated materials and software have pushed prices sharply lower and improved the quality and usability of 3D printers. This, in turn, has opened up new possibilities across a broad range of industries, including transportation, health care and consumer products. At the same time, thanks to expanding capabilities of 3D printers, companies have begun to use 3D printers to directly manufacture end-use parts.
In 2003, Avi Reichental was appointed president and CEO of 3D Systems. Prior to joining 3D Systems, Reichental served for more than 22 years in various senior executive positions with Sealed Air Corporation. Both Reichental and Hull are listed among the top 20 most influential people in rapid technologies by TCT Magazine. Hull remains an active member of 3D Systems’ board and serves as the company’s CTO.
In 2007, 3D Systems relocated its headquarters to Rock Hill, S.C., in an effort to support an ambitious growth strategy. Over the past few years, the company has implemented a series of well-executed organic and acquisitive growth programs. These investments have helped 3D Systems consolidate key 3D printing technology building blocks, create a one-stop-shop covering the entire content-to-print supply chain, and gain valuable first mover advantage in key areas like health care and direct metal printing.
What differentiates 3D Systems from others, Reichental says, is its ability to address a broad range of design-to-manufacturing applications. In fact, today, 3D Systems is the only company to commercially provide 3D printers in all seven print engines and offer over 120 functional print materials that are complemented by powerful on-demand print services and software specifically tailored for users in each of its verticals.
Traded on the New York Stock Exchange (DDD), 3D Systems today employs over 2,000 worldwide, with more than 300 located in Rock Hill. It has operations throughout the U.S., Europe and the Asia-Pacific region. It is a global leader providing comprehensive 3D design-to-manufacturing solutions including 3D printers, print materials and cloud-sourced custom parts with a $4 billion market cap.
With the goal of pioneering 3D printing for everyone, the company is forward-thinking and future-focused. And with its strong advanced manufacturing customer base, it truly embodies its slogan, “Manufacturing the Future.”
A Disruptive Technology
3D printing is considered a “disruptive” technology in as much as it has the potential to revolutionize manufacturing and even effect societal change. According to Reichental, surprisingly, some of that change may make our future more like our past.
At its heart, 3D printing makes things. It’s an additive manufacturing process that creates three dimensional objects by building them, layer by thin, successive layer out of a variety of materials—over one hundred now and still counting—but usually from plastics, nylon and even metal.
The making of things is part of why Reichental connects 3D printing with our pre-Industrial Revolution heritage, but it’s the ability of 3D printing for mass customization that strikes a chord with Reichental.
“My grandfather was a cobbler,” Reichental says. “Back in the day, he made custom-made shoes. I inherited his love for making, except that it doesn’t exist much anymore. While the Industrial Revolution enabled amazing advancements for mankind, it also atrophied our craftsmanship skills and eradicated hyper local manufacturing, leaving us with cheap, uniform and commoditized goods that churn off assembly lines half a world away.
“Think about the products we consume every day. Almost all of them were designed to be mass-produced so that producers could achieve economies of scale, making them more readily available to a wider number of people. We call that ‘design for manufacturing,’ but in reality, it is ‘design for manufacturing constraints’ because mass-produced goods inevitably compromise performance and personalization for production efficiency, cost and uniformity.
“3D printing is turning this traditional approach to manufacturing on its head. A 3D printer requires no tooling or set-up so there are no economies of scale to be achieved from mass production. Per-part costs are the same whether you are producing a batch of one or one million, and this gives companies the opportunity (and the incentive) to personalize each product to an individual consumer’s needs.
“We are at the dawn of the mass customization era where products you buy—from clothing to consumer electronics to medical devices—will be tailored to your individual specifications.
“If this sounds futuristic, consider this,” continues Reichental. “Currently, Align Technology, the maker of Invisalign clear orthodontic braces, is using 3D printing to produce more than 20 million one-of-a-kind aligners each year. And almost every in-the-ear hearing aid today is 3D printed to perfectly fit each wearer’s ear canal.”
One salient example of mass customization is 3D Systems’ work on a continuous high speed manufacturing system that can print 50 times faster than today’s technology and produce functional full-color multi-material parts for automotive, footwear, toys and consumer electronics companies requiring continuous high speed manufacturing.
Manufacturing the Future
Automobile manufacturers were early adopters of Hull’s technology, discovering that 3D printing substantially compressed their time to market with new cars, giving them a meaningful market advantage.
3D printing remains a mainstay in automobile manufacturing. General Motors (GM) uses several 3D Systems’ technologies in their Rapid Prototype Department, allowing quick iteration of parts with no tooling and permitting engineers and designers to visualize a part or use it for a mock up or small batch production.
GM considers the 3D Systems-powered design and manufacturing as a strategic investment, citing the quality and fidelity of the parts as well as the speed and labor cost savings involved in making them.
Aerospace companies were also early adapters of 3D printing, and rely on the technology today for everything from prototyping to manufacturing end-use parts. The Boeing Company, for example, makes use of 3D Systems’ Selective Laser Sintering (SLS) printers to design, test and manufacture parts for its air vehicle products that include the AH-64D Apache Longbow helicopter.
“If I were to add up all the tooling costs we’ve eliminated, all the parts we’ve made, and all the man-hours we’ve saved by using our SLS system to create prototypes and parts, I could easily say we’ve saved enough to pay for the system—and potentially even a second machine,” says Jerry Clark, manager of the Air Vehicle Configuration Design, Integration and Rapid Development Department of Boeing.
To further assist manufacturers, large and small, 3D Systems offers Quickparts, the company’s on-demand parts service. Quickparts provides quick-turn custom manufacturing parts, offering services throughout the entire development of a product, from rapid prototyping and pre-production, to tooling and production.
And while Quickparts is a natural choice for manufacturing companies like Siemens and Whirlpool, Quickparts’ speedy turnaround and cost-effectiveness appeals to audiences outside of manufacturing as well. Using 3D Systems’ SLS printing technology, Quickparts printed the main helmet bases and structures of the white helmets worn by George Clooney and Sandra Bullock in the Academy Award-winning film “Gravity.”
Quickparts’ ability to manufacture whatever product a company needs anywhere—a movie prop one day, a functional car part the next—illustrates how 3D printing is already changing the face of manufacturing.
“3D printing is quickly turning conventional manufacturing wisdom on its head, and in particular challenges the notion of economy of scale,” Reichental maintains. “Because 3D printing eliminates the need for expensive tooling, set-ups and change-overs, companies are free to onshore and relocalize their manufacturing closer to their marketplaces.
“This form of distributed/localized manufacturing can substantially reduce freight costs and the associated environmental impacts, and provide the flexibility for unlimited product segmentation to cater to local taste and demand.
“A shoe company selling 3D printed sneakers might market a sneaker line throughout the U.S., but print it with more rugged winter-ready treads in its Oregon production facility and flatter, smoother treads in its Florida facility.
“The relocalization of manufacturing is not just about manufacturing a single line of products close to the consumer, but also about creating local fulfillment centers, where any number of companies or consumers can have products manufactured on demand.
“And parts can be literally teleported (specs shared digitally and manufacture done locally). Anywhere, anytime. And because this is all done on demand, there is no need for inventory!”
But hyperlocalization of manufacturing and on-demand inventory is only part of the 3D printing story. “With a 3D printer, complexity is free,” explains Reichental. “A 3D printer does not care if it makes the most rudimentary geometry or the most complex. There is neither barrier nor penalty for complexity.
“With 3D printing, designers are uninhibited by yesterday’s manufacturing constraints and are free to produce whatever they can dream. That has powerful implications for sectors like aerospace, automotive and health care, where complex design is essential to unlocking better performance and durability.”
The Health Care Digital Thread
If health care is not the first industry that comes to mind when you think of 3D printing, 3D Systems’ medical applications could change that.
“Personalized medical devices are among the most exciting applications today. And they are arguably the most impactful,” says Reichental. “Already, we are able to use CT/CBCT scan data from individual patients to create patient-specific dental restorations and anatomical models, custom surgical guides, implantable devices, exoskeletons, hearing aids, prosthetics, and braces for scoliosis and other applications. And that’s just to name a few.
“Beyond that, we’re also able to use the same patient-specific data to provide surgeons with accurate planning models and virtual training and operating platforms for use in some of the most complex surgeries performed today.”
3D Systems’ Virtual Surgical Planning (VSP) technology allows surgeons to work with 3D Systems’ Medical Modeling experts to create a surgical plan and print 3D study and practice models as well as actual surgical instruments and implantable devices, providing them with tools and guidance to virtually plan and physically practice and perform critical steps of an operation before a patient ever steps into the operating room and while the patient undergoes the actual procedure.
In a recent case, a surgeon successfully used the VSP technology to assist in correcting the undersized jaw of a one-month-old, allowing her to properly breathe. This saved the child from enduring a tracheostomy until the age of six when this surgery is traditionally performed.
“This integrated, personalized approach to health care is what we refer to as ‘the digital thread’,” explains Reichental, “and it is revolutionizing health care as we know it. In 10 years, I believe we will look back on medical procedures that don’t use a 3D digital thread as crude.”
The Democratization of 3D Printing
While many industries have been using 3D printing to strategic advantage for decades, Reichental is a strong champion for democratization of the technology for use by everyone.
“3D printing is an exponential technology,” he says. “It is becoming faster, cheaper and easier to use at an exponential rate. For its first few decades, 3D printing was complex and expensive and, as such, was only available to deep-pocketed corporations.
“But the costs of 3D printing have fallen so much that this technology is finally opening to the consumer for home use. This year, we introduced plug-and-play consumer 3D printers for under $1,000, which are supported by a vibrant ecosystem of design tools and creative communities that allow users to effortlessly create and share content.”
3D Systems’ Cube 3 printer offers dual color printing, touch screen controls and printing direct from your mobile device. Ideal for hobbyists or anyone interested in 3D printing things for use and wear, the Cube is enhanced and supported by 3D Systems’ Cubify.com, an online platform that enables users to share designs, download free designs, order printed products or use Cubify tools and apps to design and create objects on their home 3D printer. Cubify.com also offers a Cloud Printing service that can print and deliver a user’s specific design to their doorstep in days.
The company also introduced a line of Sense 3D physical photography devices priced under $500 that can digitally capture objects and quickly turn them into 3D printable files.
To further democratize the technology, 3D Systems is actively involved in advancing digital literacy in grades K-12 S.T.E.A.M. education with its First Robotics, Level Up Village and M.21 Lab education programs available to schools, libraries and museums.
“Kids just get it, instinctively and instantly,” says Reichental. “They are at home with tech and immediately understand how to bridge the virtual with the actual using our 3D scanning devices to digitize their environment. Then they begin to create, customize and bring their ideas to life.
“The sooner kids are exposed to this digital literacy, the faster they master tomorrow’s competitive skills.
“But not every kid wants to learn CAD, nor should they have to, so we are developing intuitive, gamified apps that make creating content fun and coloring-book simple.”
To further its goal of ease of use and enhance the design experience, this year the company debuted the Touch haptic 3D stylus, which gives instant force feedback that mimics physical sculpting and transforms 3D modeling to a simple, easy sculpting experience for users.
Other new 3D Systems’ product offerings include the Ekocycle Cube 3D printer which uses recycled post consumer plastic such as from discarded plastic water or soda bottles and the ProX400, a direct-metal printer for large scale industrial manufacturing use, unveiled at EuroMold 2014 last month.
Although not yet commercially available, 3D Systems also debuted a 3D printer that can print in sugar or chocolate at the Consumer Electronic Show 2014. Think wedding-cake toppers or personalized candies—the uses of this technology are only limited by the imagination.
Competitive Marketplace Fuels Innovation
While ever-expanding applications continue to grow the 3D printing market, it remains a highly competitive industry. Stratasys Ltd. is a large player and Hewlett Packard just announced they will enter the 3D printing field. Reichental comments that he finds HP’s announcement “enormously validating to us.”
In the meantime, new products and innovation continue to fuel growth and revenue for 3D Systems. The company expects annual revenue for 2014 to be in the range of $680 million to $720 million, and the company’s continuing affinity for acquisitions is expected to better its share of the 3D printing market, especially in key areas of health care and aerospace.
And while it expands its global network, 3D Systems is also renewing its commitment to the Charlotte region with the lease of a 200,000-square-foot manufacturing and distribution center near its existing headquarters in Rock Hill.
“When we decided to move our global headquarters from California in 2007, the Charlotte region was the obvious destination for a high-tech, high-growth business like ours,” attests Reichental. “While selecting a vibrant, pro-business destination was a major part of that decision, we were equally looking for a community in which entrepreneurial thinking thrives.
“With a long list of business success stories, a talented labor market and world class infrastructure, the Charlotte region had all the right ingredients for us to develop and scale our business. The city’s location—balanced between Asia and Europe—also made it much easier to manage our expanding global operations in real time.
“Since our arrival, we have enjoyed a terrific and constructive relationship with the South Carolina Department of Commerce. Our collaboration has already resulted in the creation of hundreds of jobs and is built on the shared belief that building a center of excellence in advanced manufacturing can bring strong benefits to this region.
“For more than 30 years, our success at 3D Systems has come down to the effectiveness of our technology,” Reichental continues. “We invented 3D printing, advanced it and continue to lead the democratization of access to this transformative technology for the benefit of manufacturers, health care providers, consumers and educators.
“From the home, to the school, to the office, to the kitchen, this technology is going to change everything; from how we design, to how we make, how we learn, how we live, how we eat, how we stay healthy, how we share. Everything.”
3D printing’s potential to revolutionize our lives is quickly becoming apparent, and 3D Systems is poised to be a major force helping shape the new order of things.
Forbes has ranked 3D Systems No. 13 among the Most Innovative Growth Companies with a market capital less than $10 billion, and just recently No. 43 among America’s Best Small Companies in 2014.
Planning around life’s unknowns can be difficult to explain and do and, often, even to think about. But a single life event such as an accident, storm, disability, or death can suddenly change the direction of an individual’s, family’s, or company’s path.
Father-and-son team Henry B. Cantrell, CLU and John F. Cantrell, CIC, CEO and president, respectively, and co-owners of H. B. Cantrell & Co., spend much of their time helping people protect themselves, their loved ones, and/or their businesses and property against the unexpected.
“There’s no problem until there’s a problem,” says Henry. “We help potential clients understand the damage they may sustain if a certain occurrence takes place with life, property or business. When there is a problem, we want to make sure the solutions are there.”
“We take a complicated subject and make it easier for people to understand,” continues John. “While clients may not want to talk about such things, we can help them contemplate unforeseen circumstances and navigate through what is needed, presenting solutions that make sense—making it more palatable.”
On the other side of an incident causing loss or damage, Cantrell is there to help clients through a bad situation and make it less burdensome by the protections that were put in place. “Our product for over 35 years, now, is peace of mind,” says John.
Cantrell Insurance is regarded as an “all lines insurance broker,” which means that they work with a broad range of insurance products in the areas of auto, home, business, life and disability. Each partner is fully licensed for both life and property/casualty insurances.
“Our philosophy is to find the best product for the client and then service that client for the long term,” says John. One of the ways they do that is by working with a large and varied list of reputable insurance carriers that consistently offer competitive rates and excellent claims response.
“The selection of insurance carrier is very important,” comments Henry. “Everyone wants the most competitive price and everyone, after the fact, wants the best possible outcome. We want to provide the personal aspect to the client while dealing with the carrier. I am available personally 24/7 with the exception of when I am asleep,” laughs Henry. “I want to know if there are problems.”
Henry balks at the idea of “selling” insurance. “We do not sell—I am not a salesman,” he states emphatically.
“I want to evaluate and show you where you’re at and see if I can be of assistance. I always come away feeling good if I’ve made you aware and educated you to the risks and the available protection.”
Most clients have a need for more than one type of insurance, according to Henry. “I work to build a relationship so that when a client thinks about insurance, they think about us.”
Sixty-five to 70 percent of the company’s book of business is in property/casualty. Commercial versus personal business is about 50/50. “This diversification is intentional and is what helped us through the economic downturn,” says Henry.
The company is not normally involved in group medical and employee benefit plans. “For my first 10 years, 30 percent of my income came from medical,” continues Henry, “but then the market changed and the customer was not happy with what was occurring. I can’t be dealing with a product where the customer is not happy, so I redirected into other areas. I didn’t want to be the communicator that gets killed.”
Cantrell focuses on the Charlotte and surrounding area, but handles business as their clients’ needs demand in other areas. “Working with our clients is more about relationships than geography,” explains John. “If clients have business in other areas, we will follow that.”
The business started out in the South Park area of Charlotte and then was moved to East Seventh Street just a few doors away from where they are now. The purchase of an insurance company named Bowers changed the dynamics of the company and doubled it in size. Outgrowing their space, the company moved into its current offices in 1998.
Assessing Risk Carefully
Consulting over the unknown can be risky business. And in an industry where competitive pricing is strongly demanded, it is all the more challenging to manage risks effectively.
“It is important to evaluate risk carefully,” says Henry. “In any situation, we look at the history of claims, accidents, behavior, activities and habits.”
“We are taking great latitude with the carriers,” explains John. “Carriers look at loss ratios. They look at agents based on the business they write and whether or not these agents help them to become profitable. We can write a contract that can cost them a million dollars tomorrow, so they evaluate us based on our ability.”
Cantrell helps their clients identify, measure and reduce risks for their business, their personal property and their lives. In today’s busy world, people don’t necessarily stop and think about things and the risk they may be exposing themselves to.
John explains, “At a recent business insurance review, we discovered that the client had purchased another business and forgotten to call us. It’s important to think about how what you do might impact your level of risk.”
The process for evaluating a person’s or company’s level of risk is called front-end underwriting. The agent attempts to evaluate the situation in areas that the carriers cannot see. This process is largely responsible for the management of risk and the ultimate success of the insurance industry in terms of financial stability and profitability, according to the Cantrells.
Henry and John express frustration over some companies that tend to operate on the back end, totally on price. These companies, they say, sell a lot of low-priced policies to high-risk customers, who often come away underinsured.
“Due to the widespread appeal of these types of companies and their advertising focused on price only, much of the public has begun to see insurance as a commodity rather than a service,” says John. “You can’t really commoditize it—you can’t take away the fact that people are emotionally tied to their homes and businesses. When something goes wrong, you want to sit down with someone you know and work through it,” says John. “There is still a place at the table for the local guy who maintains a relationship.”
“You’re not really giving them the lowest price by giving them the lowest coverage,” adds Henry. “Those limits are often not sufficient to cover them or another person injured (in the case of an automobile accident). We want to make sure that clients are sufficiently covered. We explain the limits so they can make an educated choice.”
Most of the Cantrells’ clientele are generated by referrals from other personal and commercial business. Proof of insurance is often required by financial lending institutions, state governments, and even discerning customers. Regulation is handled on a state-by-state basis.
The Cantrells are proud of the long-term status of their employees, and attributes longevity at the company to its philosophy, flexibility and family-friendly orientation. Most their employees have been with them for more than 10 years.
“Most of us spend more time at work than with our family,” says John. “We treat employees like family with flexible working hours and time to do things.”
The company also offers fitness programs and lunch-and-learn sessions on parenting, health, nutrition and other topics. Cantrell offers up an unusual order of priorities for its employees.
“We believe your faith is first; family takes priority over your job; then your job,” says Henry. “The reason is simple. We want employees to work in a moral manner and, for most people, this is guided by their faith, whatever that may be. When people see how you work, they see who you are.”
The company emphasizes teamwork, a concept that they had opportunity to test a number of years ago. “Dad had double bypass heart surgery,” remembers John. “But the business didn’t miss a beat, the company progressed and he was able to heal. The team effort carried things forward.”
Still, the biggest challenge is regarding staff, according to John. “It takes time to build and train staff. It’s a complex business and takes time to put the right people together.
Henry graduated from East Carolina University in 1965 with a degree in business. After working for a brief period of time with Pure Oil Company, he was drafted into military service where he attended Officer Candidate School and graduated as a distinguished cadet. He ended up serving in Germany as a company commander and was awarded the Army Commendation Medal for his service.
Returning to the company, now Union 76, he moved between Richmond, Raleigh and Charlotte. While in Raleigh, he realized that the corporate life was not a good fit.
He entered the insurance business in 1973 with Travelers Insurance Company. “It was basically a three-year salaried training program. They provided zero leads; everything I had was what I could come up, with but they gave me facilities and a cushion to get started.”
From there Henry started his own company. “I wanted to have a job that would allow me to be of service and allow me to be rewarded based on my ability to be of service to people. I’ve had a philosophy of customer service and being empathetic with whom you’re dealing with.”
In a deliberate move, Henry let go of the businesses in 1985, entering into a three-year employment contract with what was then First Union National Bank.
“I did that for two reasons. It gave me opportunity to receive a payment that would provide some security for the future and also to see how the big boys did it. What I came away is that they didn’t do it as good as I was already doing it. So after three years and two months I returned to being an independent broker.”
John joined his Dad in the business after graduating from East Carolina University in 1992 with a degree in finance.
Serious about their role in the community, the Cantrells have a long family history of civic involvement including Rotary Club and the Charlotte Chamber of Commerce. John, an Eagle Scout himself, is an assistant scout master at Troop 11 meeting at Providence United Methodist Church.
The pair are active at Covenant Presbyterian Church and offer support for breast and brain cancer research, Samaritan’s Feet, and the YMCA. John enjoys athletics and has completed several triathlons including an Ironman Triathalon. “Being a part of the community is an extension of who we are; what our business is,” says John.
Henry lives in Charlotte with his wife. His younger son is a 19-year veteran of the Charlotte Mecklenburg Police Department. John lives with his wife, Ashley, who is a neo-natal intensive care nurse, and his three children, ages 15, 14, and 12.
Henry and John have an obvious bond and rapport—they enjoy and appreciate the opportunity to work together. “We get to see each other every day and talk whenever we can,” says Henry. “I don’t try to ‘big-dog’ and I don’t dictate. If you look on my card, you don’t see a title. That’s the way we manage the whole office.”
“I feel blessed,” says John. “I like that there is opportunity to provide a legacy to my children in that they could have a legitimate place to make a living. Plus, I get to go home every night. Lots of people have to get on an airplane and stay in a hotel to have a successful career in sales. I have been able to participate in my kids’ lives. It’s been good.”
Asked about potential for retirement, Henry states that he has begun to work fewer days and hours but is still quite active in the business. “I want to deal with those customers who want to deal with me for as long as I am able,” he says, his commitment and determination apparent.
The cost of day care now rivals the price tag for college tuition in some parts of the U.S., according to a recent Child Care Aware of America report. Day care expenses are overshadowing the amount a family spends on housing, food and transportation.
The eye-popping figures include $16,549, which is how much parents had to pay per year on average for infant day care in Massachusetts in 2013, according to the report. Or $12,280, which was the price tag for a year of day care for a 4-year-old in New York.
In fact, the average annual cost for infant day care was higher than a year’s tuition at a four-year public college in 30 states and the District of Columbia. For parents of two children, full time day care is the highest single household expense in the Northeast, Midwest and South.
And the trend of increasing cost and increasing importance is only escalating. As the report points out, “The economic recovery will greatly benefit the day care industry. As parents and guardians, particularly females, rejoin the workforce, demand for day care services will grow. Additionally, expected increases in disposable income will allow families to spend more on child care, including high-value services such as early education programs.”
Few people are more familiar with the impact of an early and high quality preschool education than Bill and Amy Strickland, owner-operators of two locations of The Goddard School. The pair, hailing from the Southeast themselves, opened their first private preschool in Fort Mill in 2009, and a second in Rock Hill in 2013. At present, there are 10 Goddard School franchises throughout the greater Charlotte region.
“Goddard Systems, Inc. is the franchisor,” explains Bill Strickland, “and the interesting thing is, the guy who started the company—Tony Martino—was the same one that started Maaco.”
Anthony A. Martino, a well known and celebrated guru in the franchising world, took companies from the ground up and made them national brands. He was the force behind the Aamco (an acronym of his initials) Transmissions enterprise which he started up and sold, and subsequently Maaco Enterprises which he built into a 450-franchise collision repair and auto painting retail network.
Along the way he developed a franchise of tune-up shops he sold to Meineke, and also the early development child care franchise called The Goddard School.
The Goddard School concept came about in 1988, when Martino was approached by a former associate with an idea for providing upscale child care with degreed teachers at every level, he thought it could and should be duplicated. Based on an educational philosophy that emphasizes nurturing the whole child, the Goddard School focuses on emotional, social, intellectual and physical development as well as standard educational goals for children six weeks to six years.
Today, the franchise has grown to over 400 child care centers with more than 50,000 students in 35 states. It has been ranked the No. 1 childcare franchise for the last 13 years by Entrepreneur magazine, and in the Top 200 Franchise Systems (worldwide sales) by Franchise Times for the eighth year.
The Goddard School Attraction
“The Goddard Schools rely on the franchise model of offering a nurturing environment, advocating genuine learning, and collaboration with parents to help children reach their fullest potential,” says Bill. You can walk into any Goddard School and feel the uncommon level of quality, value and education—consistently.
“We’re both owner-operators of the Rock Hill and Fort Mill schools. I think what makes us work so well together is that we have complementary skills. My background is more in technology and business and consulting, while Amy’s is in retail, education, human resources and sales. As a result, we perform alternate but complementary functions.”
The couple began their journey toward becoming Goddard School franchisees in an interesting way. When first married, the Stricklands moved around the country and the world, living in places such as Atlanta, Singapore, Washington, D.C., and Cleveland. Having three daughters with Amy as a stay-at-home mom, the couple was always finding new pediatricians, orthodontists, and other care providers when they moved…including preschools.
“When we moved to a suburb just outside of Cleveland, I did what I always did and asked around for preschool recommendations,” says Amy. “Where do you hear good things, where do people seem happy? And Goddard Schools kept coming up. So I visited—just as parents visit our schools to see if we are the right fit for their families—and I just fell in love with it.”
Because the couple’s daughter was attending a Goddard School at the time, and because all Goddard Schools require on-site ownership, Amy was able to get to know the owner of her daughter’s school, learning about the challenges and rewards of franchise ownership in the process.
At the same time, Bill was getting tired of getting on an airplane every week for his consulting work, and was receptive to a small business opportunity. Together, the Stricklands found the Goddard School concept so compelling, that they decided to try it themselves as a franchisee.
“Ohio wasn’t home for us,” comments Amy. “The Southeast is more our home; we have family down here. So, we scouted a lot of locations and decided on Fort Mill. We opened our first location in January of 2009, and then expanded to a second location in Rock Hill in January of 2013.”
Bill adds, “One of the reasons we decided on the Charlotte area is because my background is in financial services consulting, so the thinking was that I could keep doing that while she was setting up and running the school. I did continue doing that for a few years, but now with two schools, I’m plenty busy.”
“Charlotte offers so much in the way of infrastructure, and the Fort Mill and Rock Hill areas are growing like weeds,” he continues. “Also, the reputation of the public schools in Fort Mill and Rock Hill is tremendous, and the Carolinas are a very pro-business environment.”
“I would also add that, in the greater Charlotte area, you’re a day trip to the beach or a day trip to the Great Smokey Mountains, you can easily get down to Savannah or Charleston or Atlanta, and the whole region has such a rich history,“ says Amy. “Also, the international airport is perfect for when you want to fly to Europe or the Bahamas. Climate is a big one too…here, you get a little bit of everything.”
“My primary focus is sales and marketing—to keep the schools full, to reach out to the community, and to set the culture for the school,” explains Amy. “I also do classroom observations. I’m heavily involved with recruiting and screening new teacher candidates, and I handle many of your typical HR issues. Bill’s approach is a little bit different.”
“My goal is to get the message out and craft the brand,” contributes Bill, “to keep reinforcing the message of education, to keep setting a higher standard for what we’re all about. I would say each school has a mission, and I’m very proud that ours is all about educational excellence—about preparing each and every child for kindergarten while becoming become independent, enthusiastic learners. In fact, lifelong learners.”
Amy explains, “Goddard’s educational philosophy is brain-based, which is learn through play. The way that I share that with families is, let’s say you’re working on letter formation. You could give a child a pencil and a piece of paper and have him or her practice writing the letter 25 times, which is not very fun.
“A more fun approach would be to take a cookie sheet and pour on a couple tablespoons of kosher salt and then have the child draw the letter in the salt with a finger. The, you shake it up or turn it and have the child repeat the exercise. You’re reinforcing the same skill, but one feels like fun and one feels like work. Play with purpose is one way I like to frame things.”
The word “preschool” means a lot of things to different people as it is often used interchangeably with “child development center” and “daycare.” The Strickland’s approach through their Goddard Schools, however, is different. The Goddard School educates children as young as seven or eight weeks old with the concept that learning begins at birth.
“Our ultimate goal for any of our learners is successful entry into any public or private kindergarten program,” explains Amy. “We use an overall approach in building skill sets, and that includes cognitive, social/emotional, gross motor skills, fine motor skills…those are all puzzle pieces that are necessary for a child to have a successful year in kindergarten.
“So, that doesn’t start at three years old…learning begins at birth. That’s why we write lesson plans in our infant classrooms. We’re trying to set up activities that foster the development of certain skills.”
Higher Standards for Higher Learning
“One of the main things that sets our schools apart,” Amy continues, “is the education level of our teachers. All of our teachers are degreed, something that isn’t common in many childcare centers. Early childhood education is all of the learning, both formal and informal, that takes place before kindergarten.
“Many people, including some universities with education programs, believe that early childhood education begins later in life at 3 years of age. We don’t agree with that, and there’s a lot of science behind the idea of having children engaged from birth. As a result, we also believe that having resources in the classroom—technological and traditional resources in the classroom—is very important.”
“Here, our teachers are working, teaching, educating each child, not just watching them,” adds Bill. “We set out at the beginning to say that we’re not going to be a daycare or a typical childcare center. We’re a preschool, and even at infant level, as Amy said, learning begins at birth.
“Research shows that if you don’t give kids a good start, they tend to fall behind sooner rather than later, and in some cases, they may never catch up. The later you wait, the harder it is for those kids to get back on track, and this can go on to affect their entire lives.”
Although Goddard Systems provides franchisees with a multitude of educational resources, Bill and Amy have found that, because many of their students were coming from homes where learning was already a part of everyday life, they needed to raise the bar. In fact, some of the local schools are taking note as graduates of Goddard Schools often crave even more education and are surpassing their peers upon entering the public school system.
“One of our philosophies is to adhere to continuous improvement. We set the bar in one place, surpass it, and then move it again,” explains Bill. “We also revamped our educational processes to embrace 21st century skills, an initiative that looks to go beyond just reading, writing and arithmetic to additionally teach critical thinking skills, creativity, communication and collaboration.
“An organization that supports 21st Century Learning (Washington, D.C.-based P21.org) visited our schools in 2012 and recognized our schools as being Exemplar in 21st Century Skills learning, one of 20 in the United States.”
Bill continues, “Today, businesses are saying to the educational community, ‘We need people who can think, not just memorize.’ When you look at it, all the information you need is available at your fingertips on the Internet these days. But, now that you have information, can you solve problems with it?
“We’ve changed how we teach, and then we started taking it up another notch and rolled out a S.T.E.M. program that focuses on science, technology, engineering and math. We have kids building robots, kids as young as three doing computer programming.”
Additionally, the Strickland’s Goddard Schools use iPads, interactive whiteboards, and other technology in the classroom in order to prepare students for the digital landscape that is unfolding before them.
“This is where Bill and I bump heads a little bit,” laughs Amy, “because I’m more old-school. I certainly recognize the value of technology, but as we often say, ‘Parents are teachers too.’ We encourage our parents to unplug from the technology for a while.
“While you’re walking the dog with your child, encourage them to find a license plate from another state or one with a certain letter or number. Identify living and non-living things. Challenge your child to find things that come in pairs in the bedroom when tucking him or her in at night. So, yes, technology is important, but so is person-to-person interaction.”
Bills adds with a smile, “And that’s one of the strengths that Amy and I have—we push each other and challenge each other, but that’s how innovation and achievement come about. Study the problem and negotiate. And that is one of the many reasons we’re successful.
“Our mission is educational excellence, and through our two Goddard Schools, we’re proud to combine our skills to complete the mission.”
Air travel is a necessity for most businesses, but if you ask any business traveler what he or she thinks about air travel you are likely to hear a litany of complaints about high costs, lengthy trips, time away from the office, stress, and concern about safety protocols.
Ryan Stone and Eric Legvold are making it more convenient and faster for business people to travel and offering an alternative that will allow them to work while they travel. Their businesses, Jetpool and SmartSky, work to relieve the stress of commercial business travel while providing a speedy, reliable and capable telecommunications connection.
The two business partners go back a long way. Growing up in Florida, they lived across the street from each other and attended middle school together. Fast forward a number of years when the two friends relocated to Charlotte around the same time, and reconnected.
Legvold, a pilot, was flying planes for a charter company. Stone, a Naval Academy graduate and submarine officer, was working as an engineer for Duke Energy. Stone was also pursuing an MBA and was looking at new business opportunities. The two started talking about using their different areas of expertise to start a business, and the genesis of Jetpool was underway in 2004.
Legvold had started flying at the age of 18. He learned corporate aviation during his eight years working as a corporate and charter pilot. He has more than 19 years of professional aviation and industry experience.
Stone’s contribution was his business acumen and his access to business coaches and professional reviews of business plans through the MBA program at UNC’s Kenan-Flagler Business School.
“There is a lot of room for companies like ours that focus solely on aviation,” explains Legvold, Jetpool’s cofounder and CEO. “We provide charter services to clients in planes that we acquire or lease. We also maintain the aircraft and provide all the regulatory compliance.”
Even in the early days of Jetpool, the partners couldn’t help but notice another big issue in business air travel—how to increase productivity on electronic devices by surmounting telecommunications constraints.
“Making a mobile phone call, let alone conducting business via telecommunications connections via video or audio during a flight, has always been fairly impractical, to say the least,” says Stone. “As a consequence, businesspeople are forced to figure out what they need to download before they travel.”
Enter SmartSky, the partners’ new launch, to provide interconnectivity with air-to-ground transmitters, allowing business travelers to work during air travel on anything that requires connectivity—making phone calls, downloading documents, or conducting video conferences.
Both businesses are located near the Charlotte Douglas International Airport, where it is easy to meet with customers.
Getting Off the Ground
Both Stone and Legvold are quick to credit the Charlotte business community as essential to the establishment of their companies.
“We’ve found some nice partnerships,” comments Stone. “Charlotte is the kind of community where people work together to help each other with business needs.” Both praise Packard Place, a hub for business start-ups, as extremely helpful. They also laud the Business, Innovation and Growth Council (BIG), which the two joined when starting Jetpool, and a place they returned to later.
“When we were ready to open SmartSky, we went back to BIG and got feedback and pushback that was helpful in starting the second company and separating the two,” adds Stone.
Stone’s MBA coaches and classes offered assistance. The Jetpool founders presented a business problem to a class asking for assistance with cloud-based computing. The students returned good business advice, even recommending three vendors to consider, from which Jetpool selected one to develop its IT system.
Stone and Legvold also consulted with the Golden Leaf Foundation-backed Wireless Research Center of North Carolina on patent work and wireless analysis.
Jetpool was incorporated in 2006 with three partners; Paul Sameit, another pilot, joined Legvold and Stone as CFO. Opening during the recession was difficult, but soon after its start, Jetpool was asked to bid on and won a contract for aviation from a local Fortune 500 company. Day-to-day operation benefitted from Stone’s systems engineering and Sameit’s business background, while Legvold provided the aviation and aircraft system experience.
“We provide aircraft management and charter services; we are a turnkey operation,” says Legvold.
“We offer our clients safe travel on their time, and have the ability to schedule and maintain airplanes to the level required by a Fortune 500 company,” assures Legvold. “Business executives and corporations have come to view business travel as a necessity, with the goal being to use it as a tool and a time machine.”
Private jets allow key executives to pack more into their day. Private jets typically land five to 10 miles from the traveler’s ultimate destination, allowing executives to avoid long waits for commercial flights, overnight stays and long rental-car rides. In addition, there are no security checkpoints to endure, saving even more time.
“Over the long term, the effects of wasted time and added stress can even affect career choices or early retirement options,” Stone points out. “We are able to offer a time-effective, cost-effective, productivity-effective alternative at Jetpool.”
Jetpool clients are a mix of large companies and smaller clients. For companies that require extensive executive travel, Jetpool offers charter management. Companies that don’t require as much time in the air can access private aviation through hourly chartered flights or by participating in Jetpool Shares, which combine the access of jet ownership with the financial accessibility of a lease.
Essentially, Jetpool acts as an outsourced aviation department, maintaining aircraft, providing pilots and scheduling fights. At present, the company has 30 employees; 15 full-time and three part-time pilots with seven airplanes, up from four in 2013.
“Jetpool has grown every year, and been profitable since it began,” boasts Legvold. “Year-over-year we’ve seen a 35 percent growth in revenue. In the future, I see us holding to a minimum 20 percent growth rate.”
Legvold points out that safety is a core value of Jetpool, learning and adopting a mindset from its Fortune 500 clients on how to build a “culture of safety.” The company has earned an IS-BAO, an international certification for business aircraft operators similar to ISO 9000, becoming one of the first adopters of this certification.
Trust is another core tenet and a companion to safety for Jetpool clients.
“It’s different from commercial airlines where you don’t know who’s flying the plane and you’re not sure how well the plane was maintained or why there might be a maintenance issue delaying your flight,” says Legvold.
Legvold says the company gets to know its passengers over a period of years: “We know their habits and what they like so we can be better prepared and always ready to serve them. One client’s ‘few minutes’ might be an hour or so, while another client’s ‘few minutes’ might be 15 minutes. We’re always ready and operating on their time.”
He thinks that the company has the “right mix” of people working in maintenance, operations and scheduling to continue its expansion, perhaps into the Washington, D.C., market.
SmartSky Set to Launch
Stone and Legvold’s newest brainchild, SmartSky, will offer airborne connectivity with the same kind of service available in an office or home by connecting aircraft to ground antennas, rather than satellites in orbit, to allow for real-time sharing of data. SmartSky is scheduled for a beta-customer launch in late 2015, followed by a national commercial launch in 2016.
Stone says the impetus for the new venture originated from a Jetpool client: “We had a specific request for telecommunications connectivity, and when we looked at the options available, we found limited services available. So we set out on a quest, and SmartSky was born.”
SmartSky was incorporated in 2011. Stone takes primary responsibility as the new company’s president and director. The leadership team of Stone and his Jetpool founding partners Legvold and Sameit are rounded out by a fourth partner, Stan Eskridge, who served as Stone’s MBA business school coach, and is the company’s COO and a director.
“Particularly on a plane, everyone wants the same standard of connectivity they have everywhere else,” comments Stone. “The airlines have spent a lot of money to get to 3G, which is state-of-the-art for commercial planes. Unfortunately, that is like accepting a 3G level of performance on your cell phone while the rest of the world is becoming a 4G system.”
The 3G air connectivity standard for most commercial airlines leads to problems with speed and bandwidth, a function of the system which uses older technology or satellites in space.
“This is not an easy market to enter; there is so much noise in the market,” Stone points out. “We were able to acquire some patents and work on a ‘secret sauce’ that will allow us to offer a viable solution.”
The company’s initial plan was to offer 4G connectivity first to business aviation and later to commercial airlines, but, Stone says, “The airlines came to us and asked us to get to them sooner. We’re now involved in discussions with leading commercial airlines.
“The reason for the intense interest is clear—with the 4G connectivity experience, SmartSky will offer 10 times better than what you would get today,” continues Stone. “It’s the same as you would get in your home or office. You’ll be able to make video conference calls, download documents and watch movies.”
With its launch, SmartSky will be the first company in the U.S. that will have this combination of high bandwidth and low latency—or delay—for connectivity in the sky, says Stone.
Untangling the Regulation
“Nothing in aviation is simple,” Stone comments. “And starting SmartSky was a complicated business with the bureaucracy of the telecommunications industry and compliance requirements
“We realized very quickly that we needed telecommunications expertise,” says Stone. “We needed someone with an intimate knowledge of the marketplace. Haynes Griffin, our chairman and CEO, was the CEO of Vanguard Cellular (one of the co-owners of Cellular One), and the first chairman of the cellular industry association, and a mentor. We feel fortunate that he was interested in getting involved in our new venture.
“Haynes brought in other world-class experts, including former FCC Chairman Reed Hundt, to help us with regulatory strategy. We needed a view of where the world is headed and so we added two Intel Corp. board members.”
SmartSky also needed to line up partners. It worked with Textron Aviation (owner of iconic brands Cessna and Hawker Beechcraft), Duncan Aviation, and DAC International as partners to help with the certification and installation of hardware, Satcom Direct as a subscription and customer support partner, and Harris Corporation as a radio development partner.
“We decided to keep our launch of the business under wraps until we could check the boxes on all the major risk items,” says Stone. “We made our first public announcement at beginning of October after working with our partners for more than a year, and working on the business for more than three years.”
Cost for SmartSky’s new service will be comparable to its main competitor’s cost, Stone says, and likely to be embraced by potential customers, hungry for some new options in air travel telecommunications. Potential competitor AT&T backed out of entering the air-to-ground telecommunications field in April, based on its decision to focus on other core parts of its business.
“We have this unique vantage point. The vision of the company is to transform aviation through disruptive communication,” says Stone. “We can give customers something they desperately need and keep innovating so we won’t be disrupted ourselves.”
SmartSky’s closest competitor Gogo has 2,500 subscribers, using just 4 MHz of bandwidth. In contrast, SmartSky will access 60 MHz of spectrum and a huge, patented 4G pipeline, boasts Stone.
“The potential market is huge—there are about 12,000 business jets in commercial aviation so there is plenty of untapped market,” says Stone.
Business growth is good at Jetpool and expected to be in demand at SmartSky. Legvold attributes their business success to “finding the right people to grow the company.”
“As an entrepreneur, it never seems as fast as you want it to go, but what we’ve accomplished over the past few years is extraordinary,” reflects Legvold.
“Our growth is also a story of embracing local entrepreneurial ventures,” adds Stone. “If you start one business, you are more likely to start another.
“And, if our business plan goes well, we may be the next Fortune 500 company.”