Past Winner Stories
Electro-Spec
www.electro-spec.com
Riding the wave of the tele-communications industry boom in the late 1990s, Electro-Spec grew from 11 employees and $1.6 million in sales to a company of 40 people responsible for $4.2 million of electroplating business. Then the wave crashed.
“The telecommunications industry took a huge dive, going into one of the largest free falls it had seen in years,” recalls Electro-Spec President Jeffrey Smith. “Our biggest customer closed its facility and shortly thereafter we discovered that the previous owner’s stepdaughter had embezzled more than $200,000 from the company.”
When Smith’s partner retired a year later, Electro-Spec suffered an additional loss, this time in terms of technical knowledge. Smith explains, “My replacement for him lasted only 10 months when we discovered he had fabricated his background and education. As if the challenges at that time weren’t enough, a fire destroyed our entire facility and everything in it. In a matter of six hours, 44 years of history were gone.”
The company lost its customers’ parts and inventories, vendor equipment, data systems and the staff’s personal belongings. Trying to come to terms with that, Smith then learned that the toxic chemicals released during the fire created immense environmental concerns and that the company was inadequately insured to cover anything close to the expenses that seemed to be mounting moment by moment. In order to rebuild the business, Electro-Spec would need to start from scratch, beginning with a new site.
Smith immediately met with the company’s legal team and insurance agents to discern the scope of the disaster. Because of the environmental concerns, crisis communications management with the media was paramount if Electro-Spec had any hope of rebuilding in the same community. Relying on an environmental response firm to handle the clean up, the company turned to its staff for support.
“We met with our employees and kept 28 of our best people to manage the recovery,” says Smith. “People were assigned to various teams to address customer relations, community relations, site clean up and shut down, insurance issues and new site planning. Everyone had a purpose, a plan and a mission, which was to make the transition of closing one business down, retaining our image and customer base, and opening a new plant a reality.”
Business interruption insurance would cover eight months at most, so the plan went into immediate execution. With regard to customers, the company kept in constant contact via phone and e-mail. The Electro-Spec Web site featured a regularly updated Web cam to show customers and the community the construction efforts and progress. Electro-Spec executives worked with the city of Franklin to create a package that would allow them to rebuild and refinance equipment, and with lenders to put the plan in place right away.
“Knowing about being out of business for eight months, we realized our customer base would have to go elsewhere for plating. To win them back, we would need to build the most state-of-the-art plating facility anywhere in the United States. That plant was designed with our customers in mind, offering complete plating automation and a closed-loop, computerized waste treatment system,” Smith explains. “In the end, we were able to clean up our old property and sell the land in order to reimburse every dollar of parts lost in the fire.”
On March 18th, the fire destroyed an entire facility. On October 24th, Electro-Spec plated its first part. Shortly thereafter, 24 of the company’s top-25 customers returned.
“The telecommunications industry took a huge dive, going into one of the largest free falls it had seen in years,” recalls Electro-Spec President Jeffrey Smith. “Our biggest customer closed its facility and shortly thereafter we discovered that the previous owner’s stepdaughter had embezzled more than $200,000 from the company.”
When Smith’s partner retired a year later, Electro-Spec suffered an additional loss, this time in terms of technical knowledge. Smith explains, “My replacement for him lasted only 10 months when we discovered he had fabricated his background and education. As if the challenges at that time weren’t enough, a fire destroyed our entire facility and everything in it. In a matter of six hours, 44 years of history were gone.”
The company lost its customers’ parts and inventories, vendor equipment, data systems and the staff’s personal belongings. Trying to come to terms with that, Smith then learned that the toxic chemicals released during the fire created immense environmental concerns and that the company was inadequately insured to cover anything close to the expenses that seemed to be mounting moment by moment. In order to rebuild the business, Electro-Spec would need to start from scratch, beginning with a new site.
Smith immediately met with the company’s legal team and insurance agents to discern the scope of the disaster. Because of the environmental concerns, crisis communications management with the media was paramount if Electro-Spec had any hope of rebuilding in the same community. Relying on an environmental response firm to handle the clean up, the company turned to its staff for support.
“We met with our employees and kept 28 of our best people to manage the recovery,” says Smith. “People were assigned to various teams to address customer relations, community relations, site clean up and shut down, insurance issues and new site planning. Everyone had a purpose, a plan and a mission, which was to make the transition of closing one business down, retaining our image and customer base, and opening a new plant a reality.”
Business interruption insurance would cover eight months at most, so the plan went into immediate execution. With regard to customers, the company kept in constant contact via phone and e-mail. The Electro-Spec Web site featured a regularly updated Web cam to show customers and the community the construction efforts and progress. Electro-Spec executives worked with the city of Franklin to create a package that would allow them to rebuild and refinance equipment, and with lenders to put the plan in place right away.
“Knowing about being out of business for eight months, we realized our customer base would have to go elsewhere for plating. To win them back, we would need to build the most state-of-the-art plating facility anywhere in the United States. That plant was designed with our customers in mind, offering complete plating automation and a closed-loop, computerized waste treatment system,” Smith explains. “In the end, we were able to clean up our old property and sell the land in order to reimburse every dollar of parts lost in the fire.”
On March 18th, the fire destroyed an entire facility. On October 24th, Electro-Spec plated its first part. Shortly thereafter, 24 of the company’s top-25 customers returned.