New Leader Drives Komo's Comeback
Sauk Rapids Business Rebuilds Image, Work Force, Morale
By Sue Halena
shalena@stcloudtimes.com
August 12, 2004, Sauk Rapids, Minnesota
- Charles Zajaczkowski remembers coming to his new job Dec. 18 with
one question: Do we really have a company left?
It didn't take long for the new
president of Komo Machine Inc. to determine that a strong brand plus
valuable equipment plus loyal workers equaled a yes.
Eight months after launching deep
layoffs, the industrial router maker has partially restored its work
force and calmed customers.
It has squelched rumors of closure and
laid the foundation for a powerful presence this month at the biggest
trade show in its industry.
That's good news for workers and the
city of Sauk Rapids.
"We've seen a lot of ups and downs
around here," engineer Keith Card said. "Morale is a lot better. You
can see it when you walk around the shop."
Employment is almost 100, and rising.
That's only one-third of the company's all-time high but almost a 30
percent increase from the start of the year.
Monthly orders are increasing from 12
machines in July to 20 in September. As of July, sales were closing at
twice the company's expectations.
"The city is very excited about the
turnaround over at Komo," Todd Schultz said. Schultz, Sauk Rapid's
community development director, said city officials have visited Komo
to hear about the shop's new direction.
Zajaczkowski credits employees;
employee Tony Fiereck says workers appreciate Zajaczkowski's
leadership style. He comes with more than nine years of experience at
other subsidiaries owned by Komo's parent company, PMC Inc. He held
executive positions at three of the six companies.
Komo continues to focus on making
computer-controlled routers that cut wood, aluminum, plastic and
composite materials. About 60 percent of the machines it makes are for
woodworking businesses, including some of the nation's largest
furniture manufacturers. Others go to aerospace or automotive
businesses.
Restoration
Zajaczkowski's first tasks were to set
sales goals, restore morale and overcome rumors of the company's
demise.
Troubles came from lagging demand for
the automated equipment Komo once produced, Chinese competition in the
router business and some bad management decisions, Zajaczkowski said.
For 18 months, competitors in the
struggling industry had taken advantage of Komo's faltering position
to suggest that the manufacturer might not be around to serve new
accounts. That's a serious matter for customers spending $125,000 or
more on a machine.
Communication and visibility are at the
heart of the turnaround strategy.
Zajaczkowski tells employees about
company financials and expectations at monthly half-hour meetings. The
only way you fix problems is to get everybody involved, he said.
His first few months were full of phone
conversations with customers. He talked about Komo's budget,
production and hiring plans - signs of its commitment to stay in the
game. He also was in touch with Komo's 18 distributors.
"It was stressful at times," he said.
Image and Beyond
The company is beefing up advertising
and tradeshow activity - areas that had been cut in hard times. A new
brochure emphasizes Komo workers' skills. Internal cash flow pays for
the promotional work - not an infusion of new PMC investment.
Low interest rates and improving
economic conditions are helping orders grow. Large manufacturers are
replacing machines that are worth half a million dollars or more. One
customer needs three machines within four months so it can cut
aluminum plates for plasma TVs.
Some employees are testing new ideas,
including a business plan that would turn some machine milling
equipment into a profit center for contract projects.
"We're going to try to capitalize on
that a little bit," Zajaczkowski said.
And a few old ideas have gone out the
window. Zajaczkowski reversed an earlier decision to sell machines
made in Taiwan.
Komo is finding new ways to keep the
customer happy, even taking a few routers on trade-in.
Loyal Crew
Some things needed no change: Employees
already had well-honed a production process and quality checks.
"The work force here is unbelievable,"
he said.
Central Minnesota has long been known
for its productivity. Zajaczkowski also notices a strong ethical
backbone and dedication to the job.
"I'm not sure if I'd been put through
the same things as they were over the last two years that I'd be as
dedicated to Komo," he said.
"Anything we ask them, they jump up and
do. You never hear, `No we can't do that.' "
Restructuring
Komo had about 80 workers nationwide
and was scheduled to go down to 72 when Zajaczkowski arrived.
Layoffs stemmed from widespread
downturns in manufacturing and Komo's exit from the equipment making
business. Besides routers, the company previously built assembly-line
equipment for manufacturers such as Electrolux Home Products.
The company has hired or rehired 21
workers since Jan. 1 and hopes to hire more before the end of the
year. Those who were rehired came back at the same pay levels.
The core staff that stayed through the
transition avoided mud-slinging sales pitches and aimed to prove their
endurance, said Jeff Erickson, director of sales and marketing.
Soon customers saw that Erickson and
other longtime employees were still around. Zajaczkowski's clear plan
for regrowing the business helped turn the tide, Erickson said.
"Each month it gets a little bit easier
to tell that story because here are the facts to back it up," Erickson
said.
Komo plans to show off four routers and
secure a month's worth of work at the International Woodworkers
Federation show this month in Atlanta. The company has always taken
fewer than four machines to the show before.
"I want to make a statement,"
Zajaczkowski said. The display area will be as big as a house - 4,000
square feet.
The message will echo in the daily
routines of the Sauk Rapids shop.
"The only way we are going to prove we
aren't going out of business is to stay in business," Zajaczkowski
said.
About Komo
*Started: 1966
*Product: 22 models of
computer-controlled industrial routers, programmed to efficiently cut
wood, plastic, aluminum and composite materials.
*Ownership: A subsidiary of PMC Inc.,
which has 50 to 60 subsidiaries in industries ranging from children's
cosmetics to electronics.
*Location: 11 Industrial Boulevard,
Sauk Rapids
*Employees: Almost 100. The total was
above 300 as recently as 1998.
*Other locations: Service centers in
New Jersey, California and South Carolina. The Sauk Rapids plant also
staffs service lines 24/7 and offers two-week training sessions for
customers.
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