Supplier thrives amid auto industry turmoil
Business has been pretty steady for John Fulton's company, Freer Tool & Supply, for about the past five years.
Despite the slump in the auto industry, Freer has been adding new business and increasing sales. In fact, Freer has bought seven new pallet-style vertical milling machines for $3 million. "It's a heavy investment up front, but in the end it pays for itself," Fulton said of the machinery purchase for his Clinton Township business. "When you compete against the world, you got to have the best people, the best machines and the best tooling, which I do."
Freer Tool & Supply is among a new breed of manufacturers which remain in Michigan. Despite the economic challenges to doing business in this sector, Freer has managed to adapt its strategies to the new realities of American manufacturing and the company continues to thrive. Fulton attributes his company's success to its 30 employees, the quality parts his shop produces, customer service, the delivery of parts on time and within cost, and his Christian faith. Fulton became the sole owner Freer Tool & Supply in 2003 after partnering with its former owner in 1999. The shop makes tools and other metal pieces for the automotive, solar and aerospace industries.
When he joined the company in 1999, Fulton said sales were $1.2 million a year. Since 2005, sales have been between $5 million and $10 million year, Fulton said. He projects his company's sales will reach between $15 million and $20 million in two years.
Distribution of other companies' parts needed by his customers is an area where Freer's business is growing, Fulton said. Freer stocks about 20,000 different parts, and has become a large distributor for DE-STA-CO -- maker of clamps, grips, transfer and robotic tooling, and Carr Lane Manufacturing Co.--a maker tooling components, clamps, fixtures and products for all areas of manufacturing. Since distribution is growing and his shop no longer makes dies, Fulton recently renamed his business Freer Tool & Supply.
While distribution is emerging as a revenue generator, much of Freer's work still comes from making precision parts for manufacturers of solar panels and the auto industry, he said. "We have been doing solar work since 2001," Fulton said. "This business has increased slowly over the years, but now it has gone crazy with higher energy prices."
Freer's automotive business, mainly in precision parts that fit the North American Metric Standards or NAAMS -- a standardization of certain parts by General Motors Corp., Ford Motor Co. and Chrysler LLC that helps reduce costs.
However, these parts are not only used in the auto industry, but can be used in the aerospace, food and other industries, Freer Vice President Lon Parker said.
"NAAMS parts are the future," Parker said. "NAAMS are Lego-like pieces that engineers can use when they design something. Since they are standardized, companies can buy them for $12 instead of engineers designing a whole new part that would cost them $200."
Freer prides itself on making quality NAAMS parts, many of which affix body panels to vehicles, Parker added.
Making quality NAAMS parts has led to steady business from Chrysler since 2003, Fulton said. Now, Freer is working with GM and hopes to grow business with Detroit's largest automaker. This comes as Detroit's automakers are re-evaluating their relationships with suppliers.
Chrysler's Procurement Chief John Campi said recently the company will cut 25 percent of its supply chain costs, get rid of many non-core suppliers and develop closer relationships with the ones that stay in the fold. However, Fulton said he doesn't fear that his company will be one of those cut loose by Chrysler.
"I've done everything (Chrysler) asked," Fulton said. "They asked to cut 5 percent (off the price), I gave them back 18 percent. Our quality is impeccable, our customer service is the best. I see us growing with them instead of them cutting us."