Greater Charlotte Biz 2013.02 February 2013 by CLT.biz & Charlotte Biz & Greater Charlotte Biz

f e a t u re s . . . . february 2013

SteelFab Southeastern Metal Products P.T. International MBAJ Architecture

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HERE Advanced Manufacturing Vital to Charlotte’s Economic Strength

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Coverage for the health of your employees and the life of your business

Smart choices and healthy savings for you and your employees At Blue Cross and Blue Shield of North Carolina (BCBSNC), we’re committed to making health care available to all North Carolinians – and to helping businesses stay competitive. Blue Select is an innovative tiered benefit plan that offers value to you and your employees – with savings up to 10%*– without compromising the quality of care. It keeps costs low by steering members to Tier 1 providers – based on quality, cost-efficiency and accessibility – for the richest benefit. To find out more, contact your authorized BCBSNC agent or your BCBSNC sales representative today. NOTICE: For costs and further details of coverage, limitations and exclusions, and terms under which the policy can be continued in force will be provided in your free information package. * BCBSNC Internal Data; January 2013 premium difference for Blue Select compared to a comparable Blue Options PPO plan with $1,000 Deductible and 80% Coinsurance. Actual savings will depend on geography and plan design(s) selected by group. ®, SM Marks of the Blue Cross and Blue Shield Association. An independent licensee of the Blue Cross and Blue Shield Association. U8764, 09/12

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Advanced Manufacturing “We can’t have a vibrant economy without a world-class manufacturing sector. Without it, money only leaves the country. The future is in Advanced Manufacturing…that segment of manufacturing where you gain a competitive advantage for success by the application of specialized knowledge and technology,” remarks Dr. John Ziegert, heading up the UNC Charlotte initiative for Advanced Manufacturing and long-time advocate for smart manufacturing.

Front Cover: Original photo by Wayne Morris Photography

SteelFab Headquartered in Charlotte with seven divisions spanning the Mid-Atlantic, Southeast and Texas, SteelFab is a national leader in the fabrication of structural steel. Ron Sherrill views the family business as a group success with 800 people who can take the credit.

Southeastern Metal Products “We pride ourselves in the ability to use our manufacturing and engineering expertise to manage any type of project, ranging from ‘build to print’ to assisting our customers in product design for manufacturability,” says Southeastern President Richard Wright.

P.T. International

MBAJ Architecture

CEO Tom Haffner says P.T. International is somewhat unique because, unlike most other American companies in this industry, they focus on industrial power transmission products that conform to European standard metric dimensions rather than American inch-based standards.

23 38

“Critical thinking, problem solving and collaboration form the foundation of our work,” says Ron Johnson, one of the principal architects of the firm that designs educational, civic and governmental, religious and commercial facilities, determining best-fit solutions.”

o f i n t e re s t …

6 2

A Cause Worth Fighting For: The United States of Ownership Is Exit Planning Worth the Time and Money?

8 15 44

february 2013 | greatercharlottebiz.com

Analysis of American Taxpayer Relief Act of 2012 Cybersecurity for Small Businesses publisher’spost

Setting Sights on the Future of Charlotte

Reason says: go with the well-known. Instinct says: go with the know-how.

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You only have a moment … to capture your customer’s attention

February 2013 Volume 14 • Issue 2 Publisher John Paul Galles x102 jgalles@greatercharlottebiz.com

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Account Executive Celia A. Klein x105 704-502-8112 cklein@greatercharlottebiz.com

partners Advanced Mission Systems Central Piedmont Community College Potter & Company, P.A. Wishart, Norris, Henninger & Pittman, P.A.

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Contributing Writers Zenda Douglas Barbara Fagan Jim Froneberger Casey Jacobus Pete Prunkl Contributing Photographers Fenix Fotography Wayne Morris

Galles Communications Group, Inc. 7300 Carmel Executive Park Dr., Ste. 115 Charlotte, NC 28226-1310 704-676-5850 Phone • 704-676-5853 Fax www.greatercharlottebiz.com • Press releases: editor@greatercharlottebiz.com. • Editorial: mlane@greatercharlottebiz.com. • Advertising: jgalles@greatercharlottebiz.com or sales at greatercharlottebiz.com. • Subscription or change of address: subscriptions@greatercharlottebiz.com. • General: info@greatercharlottebiz.com. © Copyright 2013 by Galles Communications Group, Inc. All rights reserved. The information contained herein has been obtained from sources believed to be reliable. However, Galles Communications Group, Inc. makes no warranty to the accuracy or reliability of this information. Products named in these pages are trade names or trademarks of their respective companies. Views expressed herein are not necessarily those of Greater Charlotte Biz or Galles Communications Group, Inc. No part of this publication may be reproduced or transmitted in any form or by any means without written permission from the publisher. For reprints call 704-676-5850 x102. Greater Charlotte Biz (ISSN 1554-6551) is published monthly by Galles Communications Group, Inc., 7300 Carmel Executive Park Dr., Ste. 115, Charlotte, NC 28226-1310. Telephone: 704-676-5850. Fax: 704-676-5853. Subscription rate is $24 for one year. POSTMASTER: Send address changes to Greater Charlotte Biz, 7300 Carmel Executive Park Dr., Ste. 115, Charlotte, NC 28226-1310.

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OF Interest: Survey of Business Owners

A Cause Worth Fighting For

The United States of Business Ownership Thriving in the new economy

Author of How Owners Who Survived Will Thrive in the New Economy

Frowine

Last year, I set out to update my book on business owners and their money, which was first released in 2006. Things have changed much since then, so listening intentionally to the voice of today’s owners seemed critical to reflecting the new economic reality in the second edition of my book. I decided to survey, interview and dialogue with business owners to learn about their views on ownership since the economic shift of 2008. The survey asked owners how their perspective on ownership has changed, about the risk of ownership today versus the rewards, and about the message they wanted to share with our nation’s leaders. It wasn’t scientific, just real-world listening. Their responses come from across the U.S. The majority of respondents have been in business more than 5 years, many of them for more than 10 years (73.4 percent). They are sole proprietors as well as employers of dozens. Most are between 40 and 60 years old (57.4 percent). They are in service industries, distribution and manufacturing, technology, retail, health care, entertainment, transportation and more. This is not a homogenous group, except in their role as owners. Their responses are encouraging and discouraging, angry and hopeful, determined and uncertain and insightful. I want to share the insights and conclusions I’ve drawn. Conclusions that I strongly believe are critical to recovering, even thriving, in the new economy.

A cause worth fighting for First, three key findings from the survey and interviews. Business owners are not a single-minded political voice, but they do share a common belief that private enterprise is more vulnerable today than they can recall. Our political landscape may seem different, but there is a strong sense that we have a common sentiment that private enterprise is our nation’s economic backbone. Business owners have a sense of entitlement that is uniquely ours. We believe we’re entitled to a government that supports our best interests as job creators, and not just the special interests of billion-dollar corporations or people and families caught in a disintegrating middle class.

february 2013 | greatercharlottebiz.com

Business owners, having seen private enterprise threatened, value it more than ever. Very, very few are ready to walk away from ownership. My conclusions are many, but one big one is this: Business owners have a rallying point with the potential to cross political and ideological boundaries—the value of private enterprise as a force for innovation, creativity and financial freedom. And we have the strength in numbers to create impact around this common belief. But our voice is fractured. The time has come for business owners to acknowledge that we have a cause worth fighting for and come together to make our voices heard.

Claiming our collective power Owner after owner who participated in my survey talked about the regulations and tax codes and other policies that make it harder— impossibly hard, it sometimes seems—to be profitable. Among the issues mentioned as the biggest threats to private enterprise today, 44.7 percent mentioned the cost of health insurance; 19 percent mentioned other types of government interference. And their comments are telling. “Get out of the way of my success,” wrote one respondent. “Don’t make decisions for us. The more we fail on our own, the stronger we become. The more you fail on our behalf the more we lose faith. Can we have the reins now?” Another said, “Stop stacking the deck in favor of mega-business.” And many echoed the sentiments of the owner who said, “Open the flow of money to small business.” With so much common ground, why don’t owners have a stronger voice in the public dialogue about our nation and its issues? I believe it’s because we are more inclined to narrow our focus to our own companies. We are often renegades and one-gun-slingers, convinced that no one else has our interests at heart in the same way we do. And that’s true, of course. So business owners and entrepreneurs have never stepped up to own our collective power. We’ve allowed corporate Goliaths to set political agenda, to impact the outcome of elections and public policy with the outsized checks they write and the unchecked influence they wield. As a result, the playing field tilts in their direction.

Regulations and tax code and power structure favor the corporate structure. This behemoth receives the attention of (corporate-owned) media and (corporate-indebted) elected officials. Business owners, in contrast, have settled for a small, fractured voice.

Stacking the deck in our favor In my 2012 survey, owners like you told me in high percentages that they were hoping, post-election, for government leadership that would become their champion in our nation’s capital. Instead of joining together to champion our singular issue—the power of private enterprise—we continued to speak with our fractured voices. We complained a lot and we voted without much effort to create unity and we crossed our fingers when we exited the polls. Here’s my message: We can continue to blame or we can own our power for finding solutions. The hope is in finding solutions. What if the next major grassroots movement in the U.S. isn’t the Tea Party or Occupy Wall Street or the Left or the Right? What if the next major grassroots movement in the U.S. is the Owner’s Voice? The United States of Business Ownership? Job Creators United? What if we set an agenda that reflected not politics, but healthy economic choices that have nothing to do with Wall Street or Washington and everything to do with restoring the strength of private enterprise on Main Street? Content contributed by Sam Frowine, an author and coach to business owners, a role he has filled for owners across the U.S. and Canada for almost 20 years. For the complete results and a white paper on the specific conclusions of Sam’s Ownership Survey 2012, visit his website at www.SamFrowine. com or email him at Sam@SamFrowine.com.

Ownership Survey 2012 1. How has your sentiment changed about owning your own business since 2008? Answer Options

Response Percent

Response Count

12.8% 24.5% 22.3% 33.0% 7.4%

12 23 21 31 7

Much more positive More positive No change More negative Much more negative

2. My pressures as a business owner have increased significantly in recent years. Answer Options

Response Percent

Strongly agree Agree No opinion Disagree Strongly disagree

Response Count

36.2% 34 44.7% 42 5.3% 5 11.7% 11 2.1% 2

3. I am inspired about the future of my business.s. Answer Options

Response Percent

Strongly agree Agree No opinion Disagree Strongly disagree

Response Count

26.6% 25 43.6% 41 9.6% 9 16% 15 4.3% 4

4. What are the three biggest threats to my business today?s. Answer Options

Response Percent

Finding working capital The stress of changing technology Bad debt from customers and clients Increased competition Cost of health insurance Increasing cost of goods from suppliers Other

Response Count

39.4% 37 23.4% 22 20.2% 19 38.3% 36 44.7% 42 26.6% 25 54.3% 51

5. Which one is the biggest?s. Answer Options

Response Percent

Finding working capital The stress of changing technology Bad debt from customers and clients Increased competition Cost of health insurance Increasing cost of goods from suppliers Other

Response Count

21.2% 18 7.1% 6 8.2% 7 15.3% 13 10.6% 9 11.8% 10 25.9% 22

6. The rewards of ownership outweigh the risks today.s. Answer Options

Response Percent

Strongly agree Agree No opinion Disagree Strongly disagree

Response Count

34.0% 32 43.6% 41 10.6% 10 8.5% 8 3.2% 3

7. I think about selling my business more than I ever did before.s. Answer Options Strongly agree Agree No opinion Disagree Strongly disagree

Response Percent

Response Count

18.3% 17 32.3% 30 12.9% 12 25.8% 24 10.8% 10

8. It is harder than ever to make a profit in my business.. Answer Options Strongly agree Agree No opinion Disagree Strongly disagree

Response Percent

Response Count

17.0% 16 40.4% 38 9.6% 9 23.4% 22 9.6% 9

9. How long has your current business been in operation? Answer Options Less than 2 years 3-5 years More than 5 years More than 10 years

Response Percent

Response Count

1.1% 6.4% 19.1% 73.4%

1 6 18 69

greatercharlottebiz.com | february 2013

OF Interest: Transforming the Business of Law to Meet the Needs of Business

Is Exit Planning Worth the Time and Money? When we talk to business owners about the value of Exit Planning, we are talking about planning their exit from their business in a manner that fulfills their unique financial and personal goals. Since tackling a task of this magnitude can be daunting, owners sometimes ask whether devoting the necessary time and money to this project is really worthwhile. In working everyday with owners of small and midsized companies, we have learned that failure to plan for the owner’s exit can mean the difference between a successful closing of the ultimate sale of their business and a complete derailment of the sale process. According to Kevin Short, an investment banker who works with owners of small and mid-sized companies, “The element of Exit Planning that gives an owner the biggest bang for the buck is, without a doubt, Step 3 of The Exit Planning Process: Building and Preserving Value.” One of the “Value Drivers” used to build and preserve value is called a Stay Bonus—a technique we use to motivate managers to remain with a company post-closing.

sale of his company when the buyer met with each of his key employees to reassure them that they’d be retained by the new owners at their existing compensation levels. At its meeting with one of the owner’s top salesman, the buyer was lavish about how important the salesman’s continued success was to the company’s future success. When the buyer then asked the salesman to sign a covenant not to compete before the closing date, the salesman asked for a break and headed straight to talk with the owner. He reminded the owner that he had helped build the company to its current value during his tenure, and ever so generously consented to wait until the closing date to collect his $1 million bonus. Our client paid the ransom. He understood that if the salesman servicing one of his top clients left the company, the buyer would likely scrap the deal. If the buyer did come to the closing table, it would reduce its purchase offer by $3 million—far more than the $1 million the salesman demanded. As a result of this and many similar experiences, we recommend that owners get very aggressive about implementing Stay Bonuses long before a sale is planned with anyone who has a significant impact on a company’s performance. In most cases, instead of $1 million, the Stay Bonus would be calculated at 50 percent to 200 percent of an employee’s annual compensation and should be tied to a covenant not to compete (or similar agreement). As Exit Planning advisors, we also work with owners to protect business value. One method is to clean up shareholder agreements (again, well in advance of any contemplated sale or transfer of the business). “If a shareholder agreement does not force a minority shareholder to sell when the majority shareholder does, majority owners can (and often do) find themselves unable to sell, or held hostage by minority shareholders,” Short observes. “By and large,” adds Short, “entrepreneurs ignore both Stay Bonus plans and shareholder agreements because they believe that other shareholders or employees will ‘come along’ on closing day.” Short observes, “What owners forget is that every shareholder and every employee figures out leverage and most intend to use it.” From these and many other examples from our practice, we believe that Exit Planning is indeed well worth the time and money owners devote to it as these and other issues which desperately need to be addressed are “flushed out” and fixed during the Exit Planning process—long before it costs the owner huge amounts of money.

P L A N N I N G

Contributed by

An effective Stay Bonus accomplishes three tasks:

Norris

It gives the key managers a reason to stay.

It is structured so that it increases the value of the company.

It includes a penalty (usually in the form of a covenant not to compete and a non-solicitation of customers and employees) that prevents key managers from taking key clients, vendors, employees or trade secrets with them should they leave before or after the sale. There are far too many horror stories about owners who, believing that their loyal employees were happy and already well compensated, have been held hostage by those same employees. For example, we represented a business owner who was within a couple of weeks of closing on the

february 2013 | greatercharlottebiz.com

Article presented by Robert Norris, founder and managing partner of Wishart Norris law firm, a member of Business Enterprise Institute’s International Network of Exit Planning Professionals. © 2013 Business Enterprise Institute, Inc. Reprinted with permission.Wishart Norris law firm partners with owners of closelyheld businesses to provide comprehensive legal services in all areas of business, tax, estate planning, exit planning, succession planning, purchases and sales of businesses, real estate, family law, and litigation. For more information, contact Robert Norris at 704-364-0010 or Robert.Norris@wnhplaw.com.

OF Interest: Accounting, Tax and Consulting Solutions

Analysis of American Taxpayer Relief Act of 2012 As you are likely aware, Congress passed a new tax act on January 1, 2013 which has been signed by the President. First, here are a few changes, which were already signed into law and effective January 1, 2013. 1. The expiration of the 2% employee-side payroll tax cut. Effective January 1, employees and self-employed taxpayers return to paying 6.2% FICA tax rather than 4.2% 2. The 3.8% surtax on net investment income, including capital gains, for single filers with $200,000 AGI and joint filers with $250,000 AGI 3. The 0.9% surtax on wages or self-employment income exceeding $200,000 for single filers and $250,000 for joint filers Following is a summary of the largest, most-impactful provisions of the new tax act.

» Income Tax Rates

The reduced tax rates enacted in 2001 and 2003 are made permanent for all taxpayers other than the highest earners. For the latter, a new income threshold of $450,000 for joint filers, $400,000 for single filers, and $425,000 for head of household will apply, and these individuals will now pay 39.6% income tax on taxable income exceeding these thresholds. Previously, this rate was 35%. Long-term capital gains and qualified dividends continue to be taxed at 15%, unless a taxpayer’s income exceeds the thresholds shown above, in which case such income would be taxed at 20%. The 0% rate on such income for lower-income individuals will continue. The phase-out of personal exemptions and itemized deductions is reinstated at thresholds of $300,000 for joint filers, $250,000 for single filers, and $275,000 for head of household.

» Estate and Gift Taxes

The $5 million estate and gift tax exemption (adjusted for inflation after 2011) is made permanent, and the tax rate is raised to 40%. The portability law that allows a spouse to transfer his or her estate tax exemption to a surviving spouse is also made permanent.

» Permanent Extensions

Certain benefits that were enacted in 2001 that were scheduled to expire along with the reduced tax rates were made permanent. These benefits include the following: 1. Marriage penalty relief—increased size of 15% bracket and increased standard deduction for married joint filers

2. Child and dependent care credit of up to $3,000 for one dependent or $6,000 for more than one 3. Exclusion for employer-provided educational assistance 4. Enhanced rules related to the student loan interest deduction

» Temporary Extensions

Other benefits are extended for a temporary period of time and may be renewed from time to time if Congress determines Contributed by the benefit is worth the cost. Below are benefits that are extended with the new legislation for businesses. 1. 50% bonus depreciation (Section 168)—extended to include new property placed in service by December 31, 2013 2. The Section 179-dollar limitation is restored to $500,000 for taxable years beginning in 2012 and 2013, with reductions if total additions exceed $2 million. The $25,000 dollar limitation now returns in 2014 3. Section 179 deductions for qualified real property—retroactively extended for 2012 and 2013 4. 15-year depreciation for qualified leasehold improvements, qualified restaurant property, and qualified retail improvement property—retroactively extended for property placed in service between January 1, 2012 and December 31, 2013 5. Reduction in S corporation recognition period for built-in gains tax to 5 years—retroactively extended to taxable years beginning in 2012 and 2013 6. 100% exclusion of gain from sale of small business stock under Sec. 1202—retroactively extended to qualified small business stock acquired between January 1, 2012 and December 31, 2012 7. Credit for increasing research and development activities— Kapelar retroactively extended for 2012 and 2013 8. S corporation basis reduction for charitable contribution of property, reducing basis for adjusted basis of the property rather than for the deductible amount passed through— retroactively extended to contributions made between January 1, 2012 and December 31, 2013 9. Work Opportunity Tax Credit—retroactively extended to 2012 and 2013 (no longer applying only to qualified veterans in 2012) Content contributed by Potter & Company, a local certified public accounting firm offering core services of audit, tax, business consulting and financial analysis. Written by Eric Fletcher, CPA, Tax Director; edited here for length; comprehensive details available under News/Articles on the website. For more information, contact him or John Kapelar, CPA, Partner, at 704-283-8189 or visit www.GoToPotter.com.

greatercharlottebiz.com | february 2013

Click Here Click to view behind the scenes look at the Greater Charlotte Biz photo shoot with John Ziegert and Fenix Foto.

MAKE IT

HERE Advanced Manufacturing Vital to Charlotte’s Economic Strength

“We can’t have a vibrant economy without a world-class manufacturing sector. Without it, money only leaves the country. The future is in advanced manufacturing…that segment of manufacturing where you gain a competitive advantage for success by the application of specialized knowledge and technology.” 10

february 2013 | greatercharlottebiz.com

by pete prunkl hen North Carolina lost most of its furniture and textiles production to Mexico and Asia, it looked as though all our manufacturing was dying. Like a tsunami,

factory closures sent tidal waves across a vast supply chain of producers. As the disaster deepened, many envisioned a future without manufacturing. They predicted that cleaner, greener and safer service sector jobs would emerge to dominate the North Carolina economy. During the 1980s and ’90s, North Carolina lost not only its factories, but also its confidence in manufacturing. “Manufacturing became a dirty word,” remarks Dr. John Ziegert, heading up the UNC Charlotte initiative for advanced manufacturing. “It was dumb, dark, dirty and disappearing.”

It took a while before the state put the loss of its furniture industry in perspective. Wooden case goods were the economic equivalent of silk-screened tee shirts. This was an industry ripe for export and vulnerable to duplication by low-wage, low-technology operations across the pond. Despite a generalized loss of faith in manufacturing, North Carolina remains the most productive manufacturing state in the Southeast and third in the nation. Over 400,000 North Carolinians work in the state’s 9,300 manufacturing companies, with Mecklenburg County the state’s manufacturing leader. Even with the Great Recession, North Carolina’s manufacturing output has grown over the last decade. Looking at the larger picture, the United States today produces 21 percent of the world’s manufactured goods and manufacturing employs one in six American workers. That leaves plenty of room for improvement. During the 1970s, approximately 25 percent of American workers were employed in manufacturing. Globalization experts are coming to the understanding that manufacturing plays a vital and essential role in our economy. “We can’t have a vibrant economy without a world-class manufacturing sector,” says Ziegert. “Without it, money only leaves the country.” Due in large part to the vision of then-Chancellor Jim Woodward, UNC Charlotte has never lost its emphasis on manufacturing.

losing the gap between innovation and commercialization is the key to boosting the national economy. Industry leaders say economic growth triggered by American ideas needs to be kept within the United States, instead of being monetized and manufactured by global economic competitors. “Innovation here, commercialization there,” describes the pathway for many great American ideas that too often end up manufactured overseas, literally a situation where, by inventing things, we are subsidizing the acceleration of our own economic decline. It is very difficult to bridge the divide between a basic research discovery and a viable product

“Valley of Death”

“During the past two decades when most universities were running away from manufacturing, UNC Charlotte identified advanced manufacturing as something we’d be good at,” asserts Ziegert, a professor of mechanical engineering and engineering science at UNC Charlotte. “The school continued to build its strength in manufacturing when others like Purdue and the University of Illinois were downsizing and letting professors working in manufacturing retire without replacement.” Ziegert’s area of expertise is not just mechanical engineering, but advanced manufacturing. This is the type of manufacturing that business leaders do not want to export. It holds the key to manufacturing’s long awaited American Renaissance, a revival that could even extend to the now-crippled furniture

or marketable technology. Experts who study innovation refer to the gap between federally funded research and a new commercialized technology as the “valley of death” where new technologies go to die. Bridging that chasm is crucial for the nation’s prosperity, but it is not easy, and many companies don’t even try. UNC Charlotte’s Advanced Manufacturing initiative and programs like the NNMI Innovation Institutes are trying to bridge the valley of death chasm where new technologies would otherwise go to die.

industry. With all the problems of high transportation costs, poor quality and long lead times associated with furniture produced overseas, it may be time to think about “advanced” manufacturing of furniture in North Carolina.

What is “Advanced Manufacturing”? ”Advanced manufacturing” has been defined in numerous ways. In fact, there have been entire government studies devoted to developing the concept, part of which involves defining the concept.

Manufacturing Innovation: Investment Gap

Investment Gap in Manufacturing Innovation Investment

Government & Universities

Private Sector

GAP

Technology Readiness Level

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Source: AMP Steering Committee

In part, the valley of death is attributable to the significant differences in the way activities in research and in manufacturing are conducted. Basic research and new discoveries tend to be curiosity driven, with the end goal often being validation of an idea. Conversely, manufacturing activities are competitive, focused, and systematic, driving system engineering to design, develop, and scale replicable high yield, high quality, low cost products and processes. This illustration depicts the gap in investment between technology readiness level (TRL) 4, the technology development phase, and TRL 6, the technology demonstration phase.

Original photo by Wayne Morris Photography

greatercharlottebiz.com | february 2013

■ Does advanced manufacturing have to be born in university science and engineering departments and then transferred into manufactured products?

(l to r) John C. Ziegert Professor of Mechanical Engineering and Engineering Science UNC Charlotte Photos: Fenix Fotography In the November 2012 issue of Industry Week, Editor-in-Chief Patricia Panchak tackled advanced manufacturing’s untidy definition: ■ Is advanced manufacturing just “newer” manufacturing, like aerospace compared to auto production?

■ Should leadership systems like lean management, lean production, Six Sigma, supply chain integration, and advanced planning and scheduling be part of the definition?

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“Advanced manufacturing… involves both new ways to manufacture existing products and the manufacture of new products emerging from new advanced technologies.”

■ Are its products designed with CAD, CAE, CAM, modeled by high performance computing, simulation and analysis, and produced by advanced robotics, additive manufacturing and other intelligent systems?

These are not just academic concerns, argues Panchak. “How we define advanced manufacturing determines the metrics we’ll use to evaluate success and shapes public policy and business strategy,” she stresses. Panchak found an acceptable definition in the June 2011 Ensuring American Leadership in Advanced Manufacturing report by the President’s Council of Advisors on Science and Technology (PCAST): “Advanced manufacturing…involves both new ways to manufacture existing products and the manufacture of new products emerging from new advanced technologies.” To some extent, the definition is a moving target. Ziegert has his own take on the subject: “Advanced manufacturing is that segment of manufacturing where you gain a competitive advantage by the application of specialized knowledge and technology as opposed to low labor rates.” Universal in any definition is a dynamic element. “What is considered advanced manufacturing today may be commonplace in 20 years,” says Ziegert. The smartphone is an all-too-obvious example. While it is undeniably high-tech, assembling it is not.” Examples of advanced manufacturing range from the microscopic to the majestic. Ziegert points out one that is large and dramatic: aircraft manufacturing. Thirty years ago airplanes were made of sheet metal and metal component parts were folded and riveted together. In work pioneered by Dr. Scott Smith of UNC Charlotte, that has all changed. Smith and others learned how to take a solid piece of aluminum and machine it into complex shapes with sheet metal thickness. That research, combined with high speed milling techniques that Smith also helped to

Source: AMP Steering Committee based on data from Bureau of Economic Analysis, Input-Output Tables available at www.bea.gov/iTable/index_industry.cfm.

The benefits to focusing on advanced manufacturing are many. As the chart shows, manufacturing creates more value across the economy per dollar spent than any other sector. Manufacturing produces new goods that fundamentally change or create new services and sectors. february 2013 | greatercharlottebiz.com

develop, led to what is referred to today as monolithic construction. “As a result,” Ziegert says, “the structural components of virtually all United States military aircraft are no longer built by folding sheet metal.” The technique has revolutionized aircraft construction and Boeing has estimated that implementing it has saved as much as $500 million on the F-18 program alone. As a result of PCAST report in 2011, President Obama appointed Mike Molnar, a manufacturing executive from Cummins, chief manufacturing officer of the National Institute of Standards and Technology and director of the interagency National Program Office for Advanced Manufacturing whose mission it is to foster industry-led partnerships and to form a “whole of government” approach to strengthen competitiveness and innovation in U.S. manufacturing. Molnar is a self-described “manufacturing guy from industry” and is seen by Fred Wetzel, executive vice president for the National Council for Advanced Manufacturing (NACFAM), as an effective “inside guy.” In July 2012, Molnar’s National Network for Manufacturing Innovation (NNMI) announced a $1 billion proposal to create 15 public/private manufacturing innovation institutes around the country. The Charlotte Research Institute at UNC Charlotte is bidding to become one of the centers.

Innovation Institute at UNC Charlotte The job of shepherding UNC Charlotte’s application for an Innovation Institute was a star attraction in John Ziegert’s move to the University two years ago. Currently in the University’s William States Lee College of Engineering and a researcher in the Center for Precision Metrology, his background is steeped in smart manufacturing. Before Charlotte, the University of Rhode Island Ph.D. was at Clemson University as Timken Chair in Automotive Design for the International Center for Automotive Research. Prior to Clemson, Ziegert spent 17 years at the University of Florida, progressing from assistant professor to the Newton C. Ebaugh Chair and director of the Machine Tool Research Center. The Carolinas Manufacturing Innovation Institute (CM2I) that Ziegert envisions will concentrate on large-scale, high-precision manufacturing. “The United States exports far more

Courtesy of Siemens

“[UNC Charlotte] has the largest, strongest, most respected and best equipped advanced manufacturing group in academia in the United States.”… “UNC Charlotte is one of the primary machining facilities in the world. In manufacturing research and machining, Georgia Tech and MIT pale in comparison to UNC Charlotte.” than we import in aircraft, industrial engines, excavators and railway and mining equipment,” he says. And with the experts Ziegert intends to bring to CM2I, he is determined to keep that trade imbalance tilted in favor of the U.S.A. “A key to success in high-precision manufacturing is integrative precision manufacturing,” Ziegert says. “One result of this type of production is a rapid and automated correction of production errors before they spread through the system. That’s a vast improvement over what’s been cynically called ‘inspecting quality into manufactured goods.’” Ziegert was attracted to UNC Charlotte for a rather straightforward reason. “This department has the largest, strongest, most

respected and best equipped advanced manufacturing group in academia in the United States,” he says unequivocally. That assessment is not hyperbole. The International Academy for Production Engineering (CIRP, French) is the world’s leading professional organization in production engineering research. It is at the forefront of design, optimization, control and management of industrial processes, machines and systems. Researchers are invited to join CIRP and each industrialized country is limited to 20 Fellow members. In the delegation from the United States, five of the Fellows are from UNC Charlotte. “M.I.T. has two members. No other U.S. university has more than one member. That was an easy sell to get me here,” says Ziegert, nodding. The five CIRP Fellows from UNC Charlotte are Scott Smith, Robert Hocken, Chris Evans, Gert Goch, and Matt Davies. All are Ph.D. professors in the department of mechanical engineering and engineering sciences. Dave Barton, co-founder of BlueSwarf, agrees wholeheartedly with Ziegert’s assessment, and, he’s willing to take bets on UNC Charlotte’s chances of success with funding for CM2I. Barton’s company, a developer of software for the machining industry, is now located at Penn State University’s Innovation Park, but would move to UNC Charlotte in that event. “Chances are good that UNC Charlotte will get one of the 15 spots,” says Barton. “UNC Charlotte is one of the primary machining facilities in the world. In manufacturing research and machining, Georgia Tech and MIT pale in comparison to UNC Charlotte.”

greatercharlottebiz.com | february 2013

“The experiment of going to China didn’t work out for many companies. Perhaps experiments in the labs at UNC Charlotte coupled with an American work force more willing to work for lower wages will help reshore— and restore—the American economy.”

february 2013 | greatercharlottebiz.com

What It Will Take… NACFAM’s Wentzel is skeptical about funding the new Institutes: “Nothing will happen until the money is available.” Acknowledging that that depends on the administration and Congress getting together on spending, he says in light of recent history, “I wouldn’t hold my breath.” Ziegert is more optimistic. Based on conversations with people in the government’s National Program Office for Advanced Manufacturing, he feels confident that there will be calls for proposals in the spring with awards for the first institutes by the end of fiscal year 2014. If successful, CM2I will be an independent, not-forprofit research and training institute run by a board of directors composed largely of representatives of its member companies. The new institute would rely on NNMI dollars only for its start-up phase. Once it matures and attracts industrial partners, it will survive on dues, fee-for-service activities, competitive federal research contracts and license fees. One part of CM2I involves a partnership with area community colleges such as Central Piedmont. Ziegert says their cooperation is necessary in the vital area of work force development. He is looking to train entry level shop-floor machine operators, technicians and mid-career engineers for positions in digital manufacturing and manufacturing analytics. To get there, he has fashioned a training laundry list that includes apprenticeships, short courses, flexible degree programs, internships and certificate programs. There is another reason Ziegert purposefully chose to come to Charlotte: He is also point man for the partnership between the University and Siemens Energy centered on creating the Siemens Large Manufacturing Solutions Laboratory, a place where Siemens engineers and UNC Charlotte grad students can engage in short-range applied research to make Siemens more profitable and competitive. Ziegert is still looking for a permanent home for the lab, but that hasn’t stopped Siemens engineer Michael Jones and his student researchers from tackling some practical manufacturing-related problems. Jones is generator manufacturing development manager for Siemens Energy in Charlotte. He winnowed

dozens of suggestions from other Siemens engineers into five practical student-centered problems. “What better way to educate students than to investigate real life projects?” says Jones. “It is a perfect setup. What an opportunity for UNC Charlotte students!” Since May 2012, the students, working with UNC Charlotte faculty and Siemens engineers, have tested high-strength alloys for gas turbine parts, developed new methods to accurately measure a round spinning shaft, compared the effectiveness of side-entry milling and broaching, automated the measurement of large, high volume valves, and tried to solve vibration problems associated with deep hole drilling. All are practical problems that Siemens would like solved. “This is neither fundamental research nor is it research that will revolutionize the way gas turbines or electrical generators are manufactured,” says Ziegert. “But the challenge is to see beyond the immediate practical problem to what is fundamental beneath it; to invent something new that will not only solve this problem, but will also solve related problems or help prevent them altogether.” Ziegert’s hopes for the success of the Siemens lab and Innovation Institute are intimately related to his hopes for reinvigorating the manufacturing sector of the American economy. His field of advanced manufacturing is one of the reasons companies are “reshoring”—returning manufacturing operations from Asia to the United States. Economic factors such as transportation expenses across the Pacific, custom duties, communications difficulties, product quality, labor unrest and rising wages are also energizing the trend. A 2012 M.I.T. survey of 108 American firms with Asian production found that 14 percent have already brought some manufacturing home and another 33 percent are actively considering it. “The experiment of going to China didn’t work out for many companies,” confirms Ziegert. Perhaps experiments in the labs at UNC Charlotte coupled with an American work force more willing to work for lower wages will help reshore—and restore—the American economy. Pete Prunkl is a Greater Charlotte Biz freelance writer.

OF Interest: Delivering Vision and Security

CYBERSECURITY FOR SMALL BUSINESSES

yberattacks are in the news every day. “Hackers,” operating as individuals and loosely-integrated teams, continually attack corporations and government agencies for reasons ranging from sport to financial gain. In October, Governor Nikki Haley announced that South Carolina’s servers were compromised and more than 3.6 million social security numbers and 387,000 credit card numbers were stolen. Small and medium-size businesses are often very vulnerable, because they lack the sophistication, resources and infrastructure to protect their data and information and those of their customers. A recent poll showed that less than 15 percent of small business owners felt that they had adequate protection for their IT systems, but only 10 percent were planning to make major IT investments this year to reduce their risk and exposure. In small businesses, a few people often do many different things. The company “IT guru” often maintains the web portals and sites, social media pages, email server, phone system, router, server, and firewall as a collateral responsibility— often with minimal or no formal instruction. In addition, a small business typically does not have a large IT budget, so the guru often uses whatever works to keep everyone up and running. This leaves dangerous gaps in the company’s digital armor and puts everything at-risk. So what can a small business do to protect itself ? Well, it’s a combination of educating the work force, making prudent investments in technology, and implementing a set of best practices for safeguarding data. Over the next few issues, we will describe some simple things that you can do to reduce your risk of a catastrophic breach in your IT infrastructure. So let’s get started with the ubiquitous IT tool: email. Hackers often use email to exploit their victims because it easy and effective, and there are many options available to dupe the unwitting email recipient. The hacker simply attaches a virus, trojan horse, key logger, or other malware to an email; disguises or embeds it in Adobe Acrobat, Microsoft Office or other common file type; and then makes it irresistible to open or launch—such as naming the file “Company Salaries and Bonuses for 2013 / HR Confidential / President Eyes Only” Nearly everyone who receives such an email will open it. Once opened, the malware is uploaded and the hacker then owns that machine and assumes all the authorities assigned to that user. Company confidential information is immediately and continuously stolen with the malware running in the background and without the user’s knowledge. Often, the hacker uses the compromised machine to then attack the system administrator from the inside, which is significantly easier than from outside a firewall. If the system

administrator account is compromised, the small business is going to pay a significant price—in lost sales, damaged reputation, or capital expenditures to reclaim/replace most of its IT equipment or all of the above. To reduce your vulnerability to email exploitation, there are a few simple things that every small business owner should consider:

PART ONE OF FOUR

 Subscribing and maintaining an annual service agreement for virus protection, anti-spyware and personal firewall and ensuring that the settings allow for automatic updates. Products such as Norton Contributed by 360 provide a comprehensive protection for less than $100/year per user. This is very intuitive, but many companies do not subscribe after the trial period or unknowingly allow the agreements to expire.  Transitioning to a cloud-based email service and rerouting your incoming and outgoing email traffic through a third-party service to scan for spam, viruses, phishing scams, directory-harvesting, and denial-of-service attacks. McAfee and Symantec are two of the leaders in email protection. Their solutions are very affordable, relatively easy to setup, and do not require new hardware. Once their service is active, it is a very effective for sanitizing emails and requires little or no continued maintenance or support.  Require your employees to use a two-step login procedure. Email accounts are often exploited by a hacker that “guesses” a user’s password using available information. A two-step procedure requires the user to use a complex password and another means of digital identification such as a coded message sent via SMS to mobile phone or key fob.  Lock and encrypt your mobile devices. Email user account and password information is readily accessible from a smartphone. Most people will enable the password feature on their mobile device, but if that device is lost or stolen, the password is easily bypassed within minutes. To protect your email account information and other data stored on the mobile device, it is highly recommended that you activate the option to encrypt all data—including that on the SD card. Consult your user guide for instructions on this simple procedure. In the next edition, I will make some recommendations for protecting your identity while online.

Snyder

Content contributed by Advanced Mission Systems, LLC, a company specializing in technical surveillance and physical, electronic and cyber security for military, law enforcement, commercial and individual use. For more information, contact Jerry Snyder at 980-819-2600 or visit www.amsdv.com. greatercharlottebiz.com | february 2013

Photos: Fenix Fotography

february 2013 | greatercharlottebiz.com

by barbara fagan he Charlotte Knights’ baseball season at the new BB&T Ballpark uptown will begin next year. Construction of the state-of-the-art stadium can be viewed in real time via webcam at the team’s official website and soon will show the erection of the steel columns, beams

and metal decking for the 10,000-seat facility. The 1,035 tons of steel needed to build the $54 million

stadium will be provided by SteelFab, Inc. But the ballpark is hardly the first high profile project for SteelFab. Within sight of the ballpark, the peaks of several other SteelFab projects carve out the Charlotte skyline. Duke Energy Tower, the NASCAR Hall of Fame Convention Center, and 1 Bank of America Center were all built with steel fabricated by SteelFab.

Steeling Themselves for

Success SteelFab Transcends Generations to Become a National Player

Other SteelFab projects nationwide include the Georgia Aquarium, Temple University Fox Business School, UNC Dental Science Building, TRADOC Headquarters, 12 Crate & Barrel stores, as well as paint shops for car manufacturers Kia, Volkswagen, Honda and Nissan. The company has worked on projects in industries as diverse as commercial health care, energy, food processing, heavy industrial and defense. For the last three years the company’s jobsites have included two naval shipyards where they’ve fabricated the staging and temporary shoring needed for work on nuclear submarines. Headquartered in Charlotte and with seven divisions spanning the Mid-Atlantic, Southeast and Texas, SteelFab has become a national leader in the fabrication of structural steel. The company’s success is a source of pride for Chairman and CEO Ronald G. Sherrill, but Sherrill views the

success from a broader perspective.

greatercharlottebiz.com | february 2013

“This company was never built on dreams. We came to work each day, we worked hard, we took care of our customers and our people, and our growth was a byproduct of that. It’s a family business and a group success.”

(l to r) Ronald G. Sherrill Chairman and CEO R. Glenn Sherrill Jr. President and COO SteelFab, Inc.

A Steel Core At its core, SteelFab is a family business, founded in 1955 by Sherrill’s father J. Glenn Sherrill, who grew up on a farm and dropped out of high school after the ninth grade to work in a cotton mill before starting work building handrails for a local steel fabricator. After a tour of duty in the Navy in WWII, Glenn Sherrill returned to Charlotte to work for the same company before starting his own business in a barn off West Boulevard fashioning ornamental handrails for a local house builder. “I was about seven,” Ron Sherrill recalls, “when I would ride with my dad on the weekends. We’d measure for the handrails and then in the next week, he’d fabricate them and put them up the following Friday or Saturday. I have two brothers and a sister and my brothers and I would work for him during summer breaks and holidays growing up.

february 2013 | greatercharlottebiz.com

When I graduated from college in 1970, I knew I wanted to work for my dad.” At the time Sherrill joined his father in the business, the company had 15 to 20 employees and had branched out into jobs involving smaller structures like one-story office buildings and shopping centers. Brothers Don and Phillip soon followed Ron into the business, but the brothers quickly realized that something needed to change if the family business were to continue to succeed. “So,” says Sherrill, “in the late ’70s, we started buying more equipment. We began investing so we could do bigger work. Some contractors and developers we worked for started expanding, and because we did a good job for them, we started growing as well.” In the early 1980s, the company became involved in more office buildings, manufacturing facilities and several high-rise buildings in Myrtle Beach. Although the brothers continued fabricating handrails, stairs and other miscellaneous type jobs, in 1985 they decided, for efficiency’s sake, to move that work to a different location. So, in 1985, they opened a new division, CM Steel Inc., continuing the early legacy of SteelFab with those fabrications as well as structural steel in a 70,000-square-foot plant in York, S.C. The next decade was a time of expansion for the Charlotte-based company. In 1988, SteelFab opened a new structural fabricating facility in Florence, S.C. Named SteelFab of South Carolina; the new facility was followed by SteelFab of Virginia in Emporia in 1990, SteelFab of Alabama in Roanoke in 1996, and SteelFab of Georgia in Dublin in 2000. Sherrill credits the expansion to the regional growth of their business. Not only is it more cost efficient to fabricate the steel nearer to building sites, but “it’s nice to be closer to your customers,” explains Sherrill. “This really is a relationship business. From

the very beginning our philosophy has been to take care of our customers. We realize we’re only as good as our last job.” With a small marketing staff and no outside advertising, SteelFab is a word-ofmouth, repeat business success. Sherrill says many of their customers are longterm, and notes that they’ve been doing business with several local contractors and developers for more than 35 years. Clients aren’t the only long-term aspect of the company; when Sherrill’s sons, Stuart and R. Glenn Sherrill Jr. joined the company in the 1990s, it became a third generation family business.

“This really is a relationship business. From the very beginning our philosophy has been to take care of our customers. We realize we’re only as good as our last job.”

for the first time, they fabricated over 100,000 tons of steel in one year. But SteelFab isn’t just about big projects. “The first job I ever sold was for $3,000,” remembers Sherrill. “We grew up on very small projects and we’re still very involved in that market. A large percentage of our projects are under $500,000. We also handle $200 jobs.”

Commitment to Quality Whatever the size of the project, SteelFab has become known for its commitment to quality. “It’s an excellent

Sherrill admits that being family didn’t make joining the family business any easier. “There’s no training program,” he says. “You get a desk and a computer and you’re expected to learn on the job and set a good example for others.” When SteelFab of Georgia was having a rocky time, Sherrill’s son Glenn volunteered to save the ailing facility. Within a couple of years, he turned it around, and in 2007 when SteelFab of Georgia merged into SteelFab of Charlotte, Glenn became and today remains president and chief operating officer. Business milestones were reached in 1999, when SteelFab fabricated and erected the 42-story Hearst Tower, and in 2008, when SteelFab provided 23,500 tons of fabricated steel for the 2.1 millionsquare-foot NCE project in Fort Belvoir, Va. The year 2008 also was a record production year for the company when,

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greatercharlottebiz.com | february 2013

company,” says Eric Reichard of Rodgers Builders, “very professional and good to work with.” In his position as COO, Reichard has personally worked with SteelFab for over 20 years on projects ranging from Lowe’s

“Labor’s still a big part of it. Our employees are highly skilled craftsmen. But we’ve also invested in computerized processes and state-of-the-art equipment to help them achieve even greater accuracy and efficiency.”

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corporate headquarters to the Levine Center for Wellness and Recreation at Queens University. Currently they are teaming up to build the BB&T Ballpark. “We had a project in the limited space of the city where two cranes were needed simultaneously to pick up one steel beam,” Reichard adds. “They did a great job. Another time, they had to haul large trusses to a jobsite in the middle of the night because that was the only time allowed by the permit. SteelFab sets the bar very high for any other subcontractor.” And the bar has changed dramatically since Sherrill started with the company. “All the shop drawings used to be done by hand,” says Sherrill. “And the actual fabrication was very labor intensive. Labor’s still a big part of it. Our employees are highly skilled craftsmen. But we’ve also invested in computerized processes and state-ofthe-art equipment to help them achieve even greater accuracy and efficiency.” The role of technology continues to grow in importance. The company began using BIM (building information modeling) technology in 1997. Its initial role of transferring basic information to equipment has expanded to the point where it now enhances the functions of purchasing, production, estimating and 3D modeling. SteelFab provides three-dimensional modeling on all its projects to minimize errors and provide better information to the design team. SteelFab also uses bar coding technology to track material through production, to assist in shipping, and to provide important information to workers both in the shops and in the field. Investments in equipment have also helped SteelFab remain competitive and able to handle even the most demanding projects. Each of SteelFab’s fabricating facilities contain several pieces of CNC (computer numerical control) equipment that allows them to saw, drill, punch, shear and burn every type of structural steel. The automated equipment enables them to fabricate up to 2,000 tons of material each week companywide. One of the machines performs in 20 seconds what used to take 30 minutes by hand. The company has also invested in heavy cranes and forklifts in order to handle large and complex assemblies that can weigh upwards of 120,000 pounds. They have a dedicated shop for these heavier fabrications and specialized truss and

frame fabrication areas which allow finished assemblies to be fabricated together to ensure that pieces fit perfectly when erected in the field.

Commitment to People Given the materials involved and equipment used, Sherrill admits that safety is a big concern but also a source of pride for SteelFab. SteelFab has full-time corporate safety personnel that strive to meet or exceed all local, state and federal guidelines, standards and rules. Sherrill states that their philosophy behind safety is driven by the company’s belief that “We must be each other’s keeper” and that working safely is a condition of employment. “Our safety record is one of the things that make me most proud,” Sherrill says, “The Charlotte facility’s last lost time accident occurred more than three years ago and all the SteelFab facilities together total more than 4,000 days without a lost time accident.” Sherrill is also proud that SteelFab employs 800 people companywide; 250 of them at their 285,000-square-foot facility on Old Dowd Road in Charlotte. Many employees, such as engineers, project managers and estimators, have engineering backgrounds. Production positions include skilled welders, machine operators, material handlers, fitters and quality control personnel.

“We want our people to work here because it’s a good place to work,” Sherrill says. “We want to treat each other, our customers and our vendors by the golden rule. It’s a pretty simple thing to do—treat people the way we want to be treated. We’re proud of our culture here.” Part of the corporate culture is community involvement. SteelFab donates hundreds of thousands of dollars annually to the Muscular Dystrophy Association, United Way, Teach for America and over a hundred local and national non-profits. “It’s our way of giving back to our communities and to our customers,” Sherrill says. SteelFab continues to grow. It opened a Washington, D.C. Mid-Atlantic sales office in 2010, and in 2012 it purchased Alpha Industries, Inc. in Texas. The newly named Alpha SteelFab Inc. expands their project footprint as far west as Colorado. In 2012, SteelFab companies did work in 14 different states. Sherrill smiles. “It really is amazing,”

he says. “When I first started working here I never dreamed we could be where we are today. “This company was never built on dreams. We came to work each day, we worked hard, we took care of our customers and our people, and our growth was a byproduct of that. It’s a family business and a group success. “I can’t take the credit. We’ve got 800 people who can take the credit.” Sherrill winks. “I just happen to be the oldest,” he says. Barbara Fagan is a Greater Charlotte Biz freelance writer.

SteelFab, Inc. 8623 Old Dowd Road Charlotte, N.C. 28214 Phone: 704-394-5376 Principals: Ronald G. Sherrill, Chairman and CEO; R. Glenn Sherrill Jr., President and COO Employees: 800; 250 in Charlotte Divisions: North Carolina, Virginia, Alabama, South Carolina, Georgia, Washington, D.C., and Texas Founded: 1955, by J. Glenn Sherrill Business: Fabricator of structural steel and miscellaneous steel products. www.steelfab-inc.com

greatercharlottebiz.com | february 2013

by casey jacobus

Southeastern Metal Specializes In Custom Products

Southeastern Metal Products specializes in high quality sheet metal stamping and fabricating, with over 100,000-square-feet of manufacturing and warehouse space and a skilled dedicated work force prepared to handle projects, large or small, from start to finish or anywhere in-between. Through its in-house tool design/ manufacturing capabilities, Southeastern is able to assist its customers in drastically reducing the time and cost required to launch a new product.

february 2013 | greatercharlottebiz.com

anufacturing is important to North Carolina, the country, and even the world because manufacturing makes the things that we depend upon in our daily life. From our computers to our automobiles, everything we use and rely on is manufactured somewhere. However, the products being made in North Carolina have changed dramatically in recent years. Traditional industries such as furniture production and textiles are being replaced by industries which produce the things we need in the construction industry, in the telecommunication industry, and in the pharmaceutical industry. In addition, labor-intensive practices are being replaced with innovative technological processes and a highly skilled work force. Southeastern Metal Products LLC, a major metal fabrication company based in Charlotte, is in one of the industries shaping this new manufacturing world.

Southeastern specializes in high quality sheet metal stamping and fabrication for commercial and industrial needs. It operates more than 20 punch presses with a broad range of tonnage and supplies a wide range of machined and fabricated parts for a variety of industries. Southeastern Metal Products bends, stamps, laser cuts and welds various type of metal into parts used by the heavy truck and construction industries, health and safety companies, and the data communication industries. “We pride ourselves in the ability to use our manufacturing and engineering expertise to manage any type of project, ranging from ‘build

to print’ to assisting our customers in product design for manufacturability,” says company President Richard Wright. “In addition, we are constantly working to develop new products, exploring new markets, and learning to make our operations more efficient and sustainable.” Southeastern Metal Products has been serving customers since 1952 and has established a reputation for high quality workmanship, dependable delivery and first-rate customer service. With 100,000 square feet of manufacturing space and a skilled workforce, it is prepared to handle any metal project, big or small, from start-to-finish or anywhere in between.

Photos: Fenix Fotography

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Southeastern can produce a variety of stampings for commercial and industrial needs. They operate more than 20 punch presses with a broad range of tonnage. Their presses include automatic straighteners, feeding, and part ejection, assuring proper material flow and high quality performance. They make their own dies. Their in-house tooling capabilities and experienced personnel permit them to use the latest manufacturing techniques for the most economical approach to each job.

greatercharlottebiz.com | february 2013

Fabricating a Business Southeastern Metal Products grew out of a friendship between two tool and die makers during the 1940s. Don Cumberworth and Hayes Risk first met at Super Metal Products in Auburn Heights, Mich., and continued their relationship while working as tool and die makers at Chrysler and other plants in the Detroit area. In 1952, with funding of $8,000, they incorporated Southeastern Tool & Die Co., Inc., and started operations at 226 Cedar Street in Charlotte, hiring grinders and craftsman and making high quality tools for other manufacturing companies. By 1960, when the company had grown to 15 employees, it moved to a new 10,000-square-foot facility at 1420 Metals Drives. As the business continued to grow, so did the space it occupied. In the ’60s and ’70s, additions brought the building size to 67,000 square feet. In 1966, the partners decided on a change in the nature of the business itself. They entered the metal fabrication business. “That was the true birth of Southeastern Metal Products,” says Wright, “although the name change didn’t come until 1979.” Don Cumberworth died in 1979 and that is when the company’s name was changed from Southeastern Tool & Die Co.

february 2013 | greatercharlottebiz.com

“We pride ourselves in the ability to use our manufacturing and engineering expertise to manage any type of project, ranging from ‘build to print’ to assisting our customers in product design for manufacturability.”

to Southeastern Metal Products LLC. Then, in 2006 the company was acquired by Juno Investments LLC, a New York-based private equity firm specializing in the acquisition and consolidation of both privately and publicly held middle and lower middle market companies. Today, Southeastern Metal Products occupies over 100,000 square feet of manufacturing and warehouse space and employs a skilled workforce of over 100 that include engineers, designers, quality technicians and factory workers.

Wright, who took the position of president at Southeastern Metal Products in 2010, is responsible for overseeing the daily operations of the company, as well as business development, strategic planning and customer relationships. Although only 41, he has a rich and varied resume, which makes him an excellent choice to lead the company. During a career, which spans 17 years, he has been successful in supervising all stages of an organization’s life cycle, from business start-up to turning around under-performing companies, as well as improving upon already profitable entities.

Richard Wright President Southeastern Metal Products, LLC

“Southeastern is a good company that is growthoriented, but we also believe in taking care of existing customers. The ownership group is committed to long time viability and to growth.” Wright holds a bachelor’s degree in business from West Virginia University. He began his career in the rail and automotive industries, where he developed a talent for building collaborative business relationships with his clients. “I was a plant manager at 25,” Wright explains. “I wasn’t ready for it, but I learned a lot and rolled with it. Being thrown in the fire so early, it tempered me.”

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Welded to Charlotte Wright’s experience has equipped him with exceptional leadership and organizational developmental skills, as well as an affinity for controlling profit and loss. He has overseen complex operations for toptier companies in support of revenue, cost, productivity, delivery, safety and quality goals. He sees his skills and Southeastern’s needs as “a perfect fit.” “This is the place for me,” he asserts. “Southeastern is a good company that is growth-oriented, but we also believe in taking care of existing customers. The ownership group is committed to long time viability and to growth.” Juno Investments LLC, which acquired Southeastern Metal Products in 2006, focuses on acquiring and enhancing U.S. based manufacturing companies.

It employs strategies that enable portfolio companies to grow to their fullest potential. Wright sees the company as a long-term patient owner. Wright, who has worked with a lot of equity groups over his career, believes Juno is a good partner for Southeastern. “Juno is a buy and build company,” he says. “They are a sound firm with an interest in growing Southeastern. They have no

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exit strategy, which is very important to us.” In 2009, Juno purchased $2 million in assets from a High Point, N.C., structural metal fabrication company that closed its doors due to the downturn in the economy. “In a down market, Juno afforded us an opportunity to grow by investing $2 million for the future,” explains Wright. “And it worked. Southeastern has experienced a 10 percent growth directly related to the acquisition of those assets.” One of the reasons Wright is working at Southeastern Metal Products is its location in Charlotte. He and his family wanted to relocate from the north and he had worked in Charlotte for five years in the early 2000s. He believes it is a good place to raise a family and provides a business community in which a manufacturing company can thrive.

“In one sense, Charlotte is a small, close-knit community,” says Wright, “but it has the desire to be something bigger. It is starting to be looked at as more than a banking town.” Although he admits that Charlotte hasn’t been a beacon for the manufacturing industry in the past, he feels that the diversity of the population is a big plus. As is the fact that it is a transportation hub with decent-sized airports and ports within reasonable distances.

“We see technology as an opportunity. We are looking to grow through automation.” Wright also believes that changing global economic conditions, rising wages in developing nations and increased transportation costs will continue to make the manufacturing of metal products in the Charlotte area more attractive. “Our customer base is primarily regional,” he reports. “Ninety percent of our customers are within a four-hour drive, but we do supply products as far away as Texas and Mexico. Metal parts can be big and bulky and that makes transporting them potentially expensive—especially from overseas. In addition, rising wages and security risks abroad are causing a lot of companies to rethink their strategies.” In addition, growing automation is reducing the cost of producing products in the U.S. If local companies can provide products at close to the same overall cost, Wright believes many companies will opt for local, rather than foreign, production.

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Wielding Technology While traditional manufacturing relied on labor-intensive production, modern manufacturing builds on technology. New machines, increased automation and smarter logistics define the future for companies like Southeastern Metal Products. “We see technology as an opportunity,” asserts Wright. “We are looking to grow through automation. Always though, we have to consider cost versus benefit.” Automation can reduce mistakes that cost money and upset customers— mistakes Wright refers to as “scrap and rejects.” Automation can also reduce the

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time involved in producing a product. And automation can make a positive impact on factory safety. “We have to have a plan and understand our objectives and how to achieve them,” Wright explains. “Our goal is to deliver a good quality product on time. We have to work out all the nuances of automation before we decide to proceed that way.” Still, robots are not about to replace a human work force any time soon. As technological change accelerates, so must the skill of the work force that engages with it. Instead of seeing the new opportunities in manufacturing, many potential workers continue to tie manufacturing to an outdated image of the industry, one which requires few skills and offers low wages. “As we grow, we need more skilled, trained employees,” says Wright. “They can be hard to find. There are few trade schools producing press brake operators, welders, or punch press operators. The ideal is to hire someone who has been there, done that, but with the experienced work force getting harder to find, we need to create our own apprenticeships.” In fact, Southeastern Metal Products is in the beginning stage of creating an on-site

job training program of its own, although Wright reports the program is still probably six months from institution. Meanwhile, the company is relying on other methods to acquire the good quality people it needs. It uses both classified ads and word-ofmouth to attract new workers. Additionally, the company has a program in place in which current employees can earn up to $500 for bringing in a good quality hire. It also works with CPCC and other local organizations, like Charlotte Works, to find skilled workers. Charlotte Works is a public/private partnership that attempts to link employers and job seekers. In addition to establishing a job training program to attract good quality people, Southeastern also works hard at retaining its valued employees. Looking for employees who will be on time and dependable and work safely, the company strives to create an environment that such people will enjoy working in. It also rewards success with celebratory lunches and provides excellent earning opportunities. The future of Southeastern Metal Products is focused on growth. Wright wants the company to grow as quickly as possible, as smartly as possible, while still

“We’re focused on building relationships with a high level of trust. At the end of the day, we need to communicate as much as possible, as accurately as possible, with customers, employees and owners.”

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serving the company’s existing customers. He believes that direct, honest communication is one of the best platforms on which to build a customer base. “We’re focused on building relationships with a high level of trust,” Wright asserts. “At the end of the day, we need to communicate as much as possible, as accurately as possible, with customers, employees and owners. This is still a people business—robots are not taking orders or talking about issues, people are. People get it done.” Casey Jacobus is a Greater Charlotte Biz freelance writer.

Southeastern Metal Products LLC 1420 Metals Drive Charlotte, N.C. 28206 Phone: 704-596-4017 Principal: Richard Wright, President Founded: 1952 Employees: 100-plus Business: Bends, stamps, laser cuts, and welds metal into parts used in a wide array of industries including heavy truck, health and safety, construction, data and telecommunications. www.sempllc.com

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Meeting Global Standards Photos: Fenix Fotography

ď&#x201A;ŤP.T. International Manufactures in Metricsď&#x201A;Ť

Thomas M. Haffner President and CEO P.T. International Corp.

february 2013 | greatercharlottebiz.com

by jim froneberger

Imperial  very time the New York Mets hit a home run at Citi Field, a 16-foot tall apple adorned with LED lights and weighing over two tons rises out of a housing in center field. While the apple itself is a well-known icon at the new stadium, most people don’t know that underneath the exterior façade is a little piece of Charlotte. Charlotte’s own P.T. International Corp., a leading manufacturer of industrial power transmission products,

supplied many of the bearings and other components that make the mechanism in the apple rise after each big homer.

Bearings, Gears, and Rails While Citi Field’s big apple may be their most visible project, P.T. International’s core business is supplying components for things like conveyor systems, textile machinery, and a wide variety of industrial manufacturing applications. Their industrial power transmission products can be found in the mechanisms of Carowinds rides, in commercial rooftop air conditioning systems, and in airport baggage conveyor systems—just about anywhere power needs to be transferred from a motor to a mechanism. “Many of our products are tucked underneath working mechanisms within machines and are not very visible,” says company cofounder and President Tom Haffner. “We help transfer the power from the machine’s motor using products like bearings, gears, couplings, drive components, rails, and linear systems.” Located off Westinghouse Boulevard in south Charlotte, P.T. International is somewhat unique because, unlike most other

American companies in this industry, they focus on industrial power transmission products that conform to European standard metric dimensions rather than American inchbased standards. While the company doesn’t actually manufacture these products in their Charlotte facility, they are ISO certified as a manufacturer and do their own design and quality control work. Most products bear the P.T. International name, but the actual fabrication and manufacturing is contracted out to shops in places like Europe, Brazil or Taiwan because metric manufacturing is still a very small slice of the U.S. market. “The shops we use can produce metric at a much lower cost than we can do it here in the United States because we just don’t have the volume here yet,” explains Haffner. “Those shops have the right kinds of cutting tools and grinding fixtures to manufacture metric parts cost effectively in volume because that’s all they use over there.”

 METRIC P.T. International Corp. offers a wide range of European Metric and American Standard industrial power transmission products. Whether in search of replacement parts for equipment built in Europe, or designing equipment that will export to a metric end– use market, or just in search of standard inch (imperial) products, PTI stocks a complete range of mounted bearing and drive-related products.



greatercharlottebiz.com | february 2013

The contract shops machine the parts to P.T. International specifications and then ship the completed components to Charlotte where they are warehoused in the Westinghouse Boulevard facility. The company sells to leading industrial and power transmission distributors and also direct to certain large OEMs which use the supplied components in the manufacture and integration of various types of machinery. They do not sell to the end users who employ the mechanisms on their assembly lines or in other facilities. The distributor network and the OEMs handle those relationships. Many of P.T. International’s products find their way into very high technology robotic assembly equipment used on automated manufacturing lines. While the bearings and housings themselves haven’t changed much over time, the ways they are used are constantly changing as automated technology continues to find its way into more and more of the manufacturing process.

Making the Move to Metric

With an undergraduate engineering degree from Purdue and a master’s degree in Engineering from Notre Dame, Tom Haffner began his career in the power transmission products business with Dodge-Reliance Electric, a company that now operates as part of the huge ABB Group of Switzerland. Like most other American companies in the industry, Dodge had concentrated their product lines on American standard products based around inch-based

february 2013 | greatercharlottebiz.com

“Many of our products are tucked underneath working mechanisms within machines and are not very visible. We help transfer the power from the machine’s motor using products like bearings, gears, couplings, drive components, rails, and linear systems.”

specifications. But Haffner began to see that to compete on the world market, American manufacturing would have to begin to embrace metrics. “If you want to ship something to a country outside of the U.S., you know they are going to want metric,” explains Haffner. “That has been a problem for U.S. manufacturing. Not many countries will want what the U.S. makes until it becomes metric. They don’t want a one-inch bearing in Germany or Brazil. More and more, U.S.-owned manufacturing companies are recognizing that they better look global to grow manufacturing and industrial exports. To do that, they must go metric.” So in 1994, after 18 years with DodgeReliance, Haffner ventured out on his own. He and partner Hartmut Kossack started P.T. International and decided

to focus the new company on European standard metric product lines instead of the American standards most others in the industry are focused on. They saw this as an opportunity to capitalize on the longterm trend toward metrics in American manufacturing. Today, P.T. International has grown to 30 employees. Kossack remains involved as a director. Recently, Tonka Bay Equity Partners of Minnetonka, Minn., completed a major capital investment in the company to help facilitate future growth.

“We help transfer the power from the machine’s motor using products like bearings, gears, couplings, drive components, rails, and linear systems.”

automotive business. Over the past 20 years, all American automotive manufacturing has gone fully metric. In addition to the cars themselves, all of the automotive assembly machinery that often comes from Europe, Taiwan, China, India or Brazil is metric. Some of the companies that make these machines are located in or around Detroit, but many of them are Swiss, Italian or -wned. The designs come out of Europe, and one set of drawings is used both here and in Europe to build the same machines. A piece of equipment could easily be

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“I think we have a good focus on the market and what is going on,” says Haffner. “Metric is still not the largest market here in the U.S., but we sell both nationally and internationally, to all the main national distributors, and to some large, wellrecognized OEMs. If you ask most of our customers, they would truly recognize us for our broad metric offerings.” Metrics still make up less than 10 percent of all U.S. manufacturing by Haffner’s estimate, but he says things are slowly starting to change. American manufacturing companies are gradually beginning to see that the equipment they design will have to begin to move beyond the legacy American standards, particularly if they want to expand globally. But for now, many American equipment manufacturers are forced to incur the added expense of maintaining dual product lines—inch-based for the U.S. market and metric for export. One of the first American industries to make a complete move to metric is the

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moved out of Detroit and put in Sao Paulo, Brazil, or Mexico City, Mex., if a car production line gets moved or reconfigured. “If we’re going to compete as a country, we must have designs that are in metric so they will be acceptable and appreciated worldwide,” stresses Haffner. “We make good products here, but the world doesn’t want them because they’re not metric. We’re slowly recognizing this and companies are realizing that we have to switch over.”

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“One local customer builds machines that are exported to many corners of the globe,” he continues. “In Germany they have another division, as well as India, Brazil and China. Each of these five manufacturing sites builds machine types for the entire globe, minimizing duplicate

production lines. Thatâ&#x20AC;&#x2122;s the globalization that we are finally seeing, and thatâ&#x20AC;&#x2122;s why metric will win out in the long run.â&#x20AC;?

Educating Future Engineers One of the most critical needs of any technology-oriented business is new engineering talent and a highly skilled work force. Thatâ&#x20AC;&#x2122;s also critically important to the Charlotte region as a whole. With major companies in the power generation business operating hereâ&#x20AC;&#x201D;firms like ABB,

â&#x20AC;&#x153;If weâ&#x20AC;&#x2122;re going to compete as a country, we must have designs that are in metric so they will be acceptable and appreciated worldwide.â&#x20AC;?

Areva, Duke Energy, Fluor, Mitsubishi, Shaw Power Group and Siemensâ&#x20AC;&#x201D; Charlotte is establishing itself as one of the major centers of expertise in the energy business. With engineering in his blood, Haffner is doing his part to help create this next generation of engineers. In addition to his role as CEO of P.T. International, he serves on advisory boards for UNC Charlotteâ&#x20AC;&#x2122;s School of Engineering and Engineering Sciences, as well as the CharlotteMecklenburg Schoolsâ&#x20AC;&#x2122; Academies of Engineering program. â&#x20AC;&#x153;UNC Charlotte is in the right place at the right time,â&#x20AC;? says Haffner. â&#x20AC;&#x153;Because of energy, Charlotte is ready to become a huge engineering center. The engineering school at UNC Charlotte has really wrapped their arms around the energy mantra and there is a technically diverse skilled work force need growing here.â&#x20AC;? The relationship with UNC Charlotte is a perfect example of how business can partner with academia for each otherâ&#x20AC;&#x2122;s mutual benefit. The University has stateof-the-art testing labs and facilities, so Haffner has hired the University for several projects such as stress analyses

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modeling on bearing housings and metallurgy analysis of components. “I don’t have enough daily need for that testing equipment, so it’s easier to source that out to the University when we need it,” explains Haffner. “It also helps the University professors and students by connecting them to industry and real world applications.” Taking it one step further, Haffner has also been instrumental in helping to build an engineering foundation in CMS with the Academy of Engineering program. These schools within a school feature a four-year specialized high school curriculum focused on mid-tier and at-risk high schools to help students understand future careers and increase graduation rates. The programs are sponsored by the National Academy Foundation out of New York, which receives funding from such organizations as Motorola, Verizon, and the Bill and Melinda Gates Foundation. By the fall of 2013, CMS will have seven engineering academies located at Hopewell, Vance, Mallard Creek, Philip O. Berry, Olympic, East Mecklenburg, and South Mecklenburg high schools. Haffner says this gives Charlotte the largest concentration of engineering academies in the nation. Haffner serves on the advisory board at Hopewell, which will graduate their first class from the academy program this year. He also serves on an advisory board for the National Academy Foundation as well as a regional board for the program. The engineering academy program offers a healthy dose of math and science, but also features specialized introductory engineering courses that expose the students to the major disciplines within engineering—such as mechanical, electrical, civil, chemical, and more. During the summer between their junior and senior year, the students are placed in a company internship so they can start to get an idea of what an engineer really does. “To me it all fits,” concludes Haffner. “The good jobs of the future will be technology driven, so education is one of the most important focus points that we can do for the next generation as industry mentors for students. It’s all about what we can leave behind and share with our kids and our neighbors’ kids. “Industry involvement and support for these focused Academy programs in education have exceptional success and

graduation statistics. Each Academy has an industry-chaired Advisory Board to support and mentor students and teachers. â&#x20AC;&#x153;Industry is stepping forward as they recognize that planning is important for an earlier grasp of a skilled work force. We still have one of the best education systems (including technology) in the world and industry support is making a difference.â&#x20AC;? Jim Froneberger is a Greater Charlotte Biz freelance writer.

P.T. International Corp. 1817 Westinghouse Blvd. Charlotte, N.C. 28273 Phone: 704-588-1091 Principal: Thomas M. Haffner, President and CEO Employees: 30 In Business: 19 years (since 1994) Business: ISO 9001-2008 certified manufacturer of mechanical industrial power transmission products. Broad product lines include European standard and American standard mounted bearings and driverelated products; North American customers including national industrial distributors and OEMs; also customers in South America, Europe and Asia. www.ptintl.com

greatercharlottebiz.com | february 2013

Intentional

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BAJ Architecture’s favorite projects are

MBAJ

the ones their clients love. Judging by the stellar reputation of the firm and the repeat business it enjoys, that means

Architecture Ushers in a New Era

that pretty much all of them.

From its inception in 1981 as a sole proprietorship in

Shelby, N.C., the architectural firm has experienced impressive growth, opening the Charlotte office in 1988 and the Raleigh office in 1996. MBAJ Architecture has six principals practicing out of four offices in North and South Carolina. The ownership of the firm is shared by 17 employee shareholders including the principals. In what Rob Johnson calls “a really good culture,” the firm focuses on leadership, serving projects which support their client’s mission and cultivating new opportunities. “What we don’t emphasize are hierarchy and seniority,” says Johnson. “Over the last decade, we have strategically aligned ourselves,” and Johnson lists the principals with their complementary emphasis: Stan Anthony, finance and business; Rick Brown, firm development and technology; John Thomas, project management and quality assurance; and Angie Crawford Easterday in Raleigh and James Golightly in Charlotte, the principals in charge day-to-day.

 38 District Three Auditorium

february 2013 | greatercharlottebiz.com

We work hard to respond to each client’s objectives. For instance, with the District Three Auditorium design, we used stone and a 30-foot high water wall to reflect a nearby natural area of community significance.

(l to r) Robert B. Johnson Jr. G. Richard Brown O. Stanhope Anthony III James S. Golightly (Not Pictured) John F. Thomas Jr. Angela Crawford Easterday

Principals MBAJ Architecture, P.A.

Photo: Fenix Fotography greatercharlottebiz.com | february 2013

First Ward Elementary

Powdersville High School

Bailey Road Middle School

Johnson, himself, has an emphasis on marketing, external relations and new business development. Each principal is a registered architect, actively engaged in projects, focused on client satisfaction and active in their community.

The MBAJ Blueprint

MBAJ Architecture provides a broad range of services from pre-funding studies and assessments, programming, and master planning to architectural design, bidding and procurement, construction administration, and digital imaging. Throughout the implementation of these services, the firm is committed to cost control, schedule management, quality assurance and sustainable design. “Critical thinking, problem solving and collaboration form the foundation of our work,” says Johnson. “We’re really helping people who have needs associated with educational, civic and governmental, religious and commercial facilities to understand and prioritize their needs and desires, so we can then creatively offer alternative ways to accommodate their needs, incorporate their desires and determine the best-fit solution to implement.” Frequently, MBAJ is called in before

february 2013 | greatercharlottebiz.com

“Now building is being done a lot more thoughtfully. People appreciate energy more. Before, the goal was to build it fast and inexpensively without much regard to sustainability.”

clients have obtained their funding for a project and, in today’s economy, clients are trying to decide between refurbishing, new construction or phasing over time. Typically, MBAJ Architecture is hired by the owners of the building project and often handles the bidding process for contractors. “Once contractors are awarded the commission, we look after it and make sure it’s being built according to the drawings and specifications,” says Johnson. Architects are selected on the basis of qualifications. “We primarily do public work,” says Johnson. “Consequently, we work mostly with boards of education, county commissioners, community colleges, local governments and state agencies.” The firm also does commercial/private work and has completed a variety of banking, office and church projects. Examples of the firm’s work include First Ward Elementary School, Myers Park High School, Selwyn Elementary School, Bailey Middle School, South Pointe High School (Rock Hill), Highland School of Technology (Gastonia), Mitchell Community College Advanced Technology Center, Surry County Judicial Center, Iredell County Department of Social Services, Yadkin Valley Bank, Holy Angels

Group Home (Belmont), Episcopal Church of the Redeemer, and Stuart W. Cramer High School (Cramerton). “We’ve been fortunate to work on a wide variety of new buildings and also many challenging additions and renovations,” says Johnson. The firm is also responsible for the architectural work at Central Piedmont Community College’s first satellite campus—the North Campus. The firm’s design teams are carefully compiled, according to Johnson; contracting and consulting with multidiscipline engineers and specialized consultants. MBAJ also assembles a project team that identifies key client participants.

Rock Hill Aquatics Center

A New Era

Architectural Inspiration Johnson’s inspiration to become an architect arrived at the age of 10. Living in his hometown of Wilmington in the mid’60s, he experienced his parents building a new house. They sketched the plans and hired a local architect who refined the plans, drew sections and elevations, and on numerous occasions came to their home. “They let me sit in on the meetings with the architect and later the contractor and by my doing so, along with watching our house being built, I knew from that time that this was what I wanted to do. I’ve never wavered,” says Johnson. The second piece of direction came from his high school guidance counselor who told him about UNC Charlotte developing a new school of architecture. There he met fellow student, Stan Anthony III, who agrees, “We both feel that we received a fabulous education.” Johnson went on to earn his master’s in Architecture from the University of Illinois and Anthony did the same from Georgia Tech. He joined MBAJ in 1988. The other principals are similarly educated. Golightly and Thomas are also graduates of the University of North Carolina at Charlotte as is Brown, who additionally is a Virginia Tech grad; and Crawford Easterday graduated from Texas A&M and North Carolina State University. Anthony also serves as the mayor of Shelby, his home town. Johnson touts the academic rigors demanded of architectural students: “We receive a well-rounded education. As an architect, you are a generalist; you have to know a little about a lot of stuff.” Johnson likes to point out that the 1980s musical group Talking Heads was made up of architecture students, as was the late

songwriter, Dan Fogleberg. “It speaks well of our profession,” he chuckles. “We’re flexible and can blend into a lot of different professions.” More seriously, Johnson speaks of the need to migrate on your feet: “The difference between building airplanes and cars is that they are built inside. Buildings are built in the weather; coming out of the ground. There are a lot of decisions that happen in the field; it makes for an exciting way to earn a living.”

Holy Redeemer Episcopal Church

cool with The Idea People

Advances in technology have made huge inroads in architectural design and analysis, providing many opportunities for creativity and problem solving. First, there were two-dimension drawings, then some three-dimension tools. Now, all the components are ‘smart’ and work together. AutoCAD came along in the 1990s allowing drawings to be done by computer. Next came Building Information Modeling (BIM), which allows architectural, engineering and construction components to be observed and manipulated in relation to each other. “It’s incredible the power of the

greater

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greatercharlottebiz.com | february 2013



MBAJ OFFICES Davidson Community College Conference Center

“The downturn has actually helped in terms of people realizing what an architect can do for them. As a field, we are more appreciated. As we work to design buildings with much fewer resources, we’re back to being problem solvers. This means being involved from the beginning of a project and helping to determine the best use of space.”

District Three Auditorium

february 2013 | greatercharlottebiz.com

computer,” says Johnson. “What we’re seeing now will seem like child’s play in the future, but right now we’re greatly benefited by being able to create and visualize designs. It is a great communication tool for our clients and us. BIM can also run conflict resolution between the components to determine if that light and that beam and duct work are all in the same three-dimensional space.” As with any discipline or firm, there are challenges. “The main one is the reduced level of funding going into building facilities since the downturn,” says Johnson. “We also have a reduced number of architectural graduates continuing on to registration, preferring instead—and having the ability—to use their skills within other industries and concerns such as energy or real estate.” As the recession unfolded, 2010 and 2011 were wrought with challenges for the firm. “K-12 school projects stopped in their tracks,” says Johnson. “We were accustomed to a handful of large projects at any given time; however, the shift in the marketplace caused us to seek several handfuls of smaller projects. One of the main things that kept the firm going in the downturn were existing clients who used the downturn to assess their needs, conduct feasibility studies and complete very economical small additions and renovations. “Also, in that it can take a year to design larger projects and a couple of years to build, the cash flow income from these larger projects were a big factor in sustaining the tough times.” Johnson describes breaking even as the recession eases as ‘the new normal.’ “Although we’re still in the curve coming out, it is incrementally upward and our peace of mind is much better than a few years ago,” says Johnson. Johnson actually cites positive impact from the financial difficulty: “We’ve used the downturn in the economy as an opportunity to turn things around to fully utilizing BIM.” Plus, he sees a different, more responsible climate.

“Now building is being done a lot more thoughtfully. People appreciate energy more. Before, the goal was to build it fast and inexpensively without much regard to sustainability,” Johnson says. He also detects a new attitude towards architects: “The downturn has actually helped in terms of people realizing what an architect can do for them. As a field, we are more appreciated. As we work to design buildings with much fewer resources, we’re back to being problem solvers. This means being involved from the beginning of a project and helping to determine the best use of space. “There’s a lot more pre-design—analysis and feasibility studies. It used to be people figured out what they wanted and then called in an architect to draw up blueprints—just slide them under the door. Now, they call in an architect to figure out what they need and desire. The profession is a lot more challenging but fun because expectations have gone up. It’s a new day and forever different; it’s exciting.”

A Families Affair “The firm is made up of not just principals and employees, but 25 families,” says Johnson. “We know one another. We work hard and we play hard.” The firm values opportunities where employees and their families can spend time together away from the office: “We’ve had deaths and been faced with

cancer—we rally around each other.” “Our culture is an outgrowth of our shared kindred spirit,” says Johnson. “We all believe that our personal lives are just as important as our professional lives. It’s all about the people you meet along your path. In the end, you probably won’t worry about your sketches or technical aspects but you will be comforted by the fond memories of the many people you have met thorough our firm and the profession.” For the last eight years, the principals of MBAJ Architecture have been involved with UNC Charlotte’s architectural professional practice classes. “They ask us to come in and talk about all aspects of being a mid-size firm and our marketing, human resources, technology—things that make a firm work.” They also sit on the Central Piedmont Community College Architectural Technology Program Professional Advisory Board. Johnson attests, “Mentors were important to me and I want to mentor in turn.” “We seek to make a positive difference in the communities we serve,” says Johnson. “It’s good to be proud of the things you’ve been a part of but better, still, is the ongoing lineage,” he continues. “For an architectural firm to sustain multiple generations is a real accomplishment. “We want clients to describe us as genuinely good people—trustworthy people who greatly support and advance their mission—a firm they would like to work with again.”

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AEC

Zenda Douglas is a Greater Charlotte Biz freelance writer.

(architects, engineers, and contractors)

MBAJ Architecture, P.A. 1230 West Morehead St., Ste. 214 Charlotte, N.C. 28208 Phone: 704-731-7000 Principals: O. Stanhope Anthony III, AIA; Robert B. Johnson Jr., AIA; John F. Thomas Jr., AIA; G. Richard Brown, AIA; James S. Golightly II, AIA; Angela Crawford Easterday, AIA Established: 1981; incorporated in 1987 Offices: Shelby, Charlotte and Raleigh, N.C., and Lexington, S.C. Employees: 25 Business: Design and delivery of educational, governmental, commercial and religious facilities; also pre-funding planning, facility assessment, programming, master planning, digital imaging, phased construction administration and post-occupancy services. www.mbaj.com

create today? what will you

Manufacturing Printing Solutions

• AEC provides architects, engineers and contractors the full line of Autodesk software solutions including training, support, and implementation. • Manufacturing focuses on SolidWorks software solutions and technical support, training, and implementation. • Printing Solutions brings the latest in print technologies and document management solutions to businesses including copiers, scanners, plotters, and 3D printers, as well as service. • TPM Color Lab is the Carolina’s largest provider of large format graphics specializing in fabric applications, trade show displays and hardware, vehicle graphics, flatbed printing, and indoor/outdoor signage.

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Greenville, S.C. | Columbia, S.C. | Charlotte, N.C. | Raleigh, N.C. greatercharlottebiz.com | february 2013

[publisher’spost]

Coming into the knowledge age

Setting Sights on the Future of Charlotte

John P. Galles Publisher

ver the last 30 years, we have witnessed the population of the greater Charlotte region grow rapidly. In 1980, the city of Charlotte had about 315,000 residents. According to the 2010 census, the city grew to over 730,000. In 2012, the Charlotte Chamber pegged the population at approximately 772,000. The larger Charlotte region, known as the Charlotte-Gastonia-Rock Hill MSA, had a population of 1,830,400 in 2012. By 2042, it is projected that this region will grow to be over 3,000,000, a 64.7 percent increase. There is no doubt that the next 30 years will be much different from the last 30 years. Global economic competition will continue to cause money and jobs to move from country to country seeking lower costs and greater returns. To phrase it in some commonly used monikers, our U.S. economy has already transitioned from the Agricultural Age to the Manufacturing Age, and more recently to the Information Age. Looking forward, we have moved into the Conceptual Age where creativity, innovation and design skills build on the Information Age and steer us to advanced and automated manufacturing and technology. Looking deeper into the future, we can expect that the Conceptual Age will develop into the Knowledge Age. How do we get ready for more change? We set our sights on the future! The Knowledge Age is a new, advanced form of capitalism in which knowledge and ideas are the main source of economic growth, more important than land, labor, money or other tangible resources. New patterns of work and new business practices are developing, and, as a result, new kinds of workers with new and different skills are required. What is especially important to grasp is that the very meaning of “knowledge” is changing. Knowledge is no longer being thought of as ‘stuff’ that is developed (and stored) in the minds of experts, represented in books, and classified into disciplines. Instead, it is now thought of as almost a form of energy, as a system of networks and flows—something that does things, or makes things happen. Knowledge Age “knowledge” is defined—and valued—not for what it is, but for what it can do. Each new age has major implications for Charlotte, but more especially for our education systems at all levels. This new Knowledge Age is fueled by an educated and diverse population base. The latest census report identifies that 36 percent of Charlotte citizens have graduated from college. In Raleigh, that number climbs to nearly 45 percent. The concentration of higher numbers of graduates will support more jobs and wealth creation. Expanding the percentage of graduates is one measurement tool to determine our progress. Learning how Charlotte can aggressively compete in the global economy will provide the basis for economic progress for years to come. When New

february 2013 | greatercharlottebiz.com

Orleans was rebuilding after Hurricane Katrina, they chose to be service-focused. Other cities have chosen to target manufacturing, distribution or technology. Charlotte has been known as a banking center with a focus on finance, but is also recognized for energy. Regardless, over the long term, it is imperative that educational advancements become a key component of any economic strategy for success in the Knowledge Age. Building a community consensus around knowledge-based objectives can be tough and challenging. Nevertheless, higher wages and greater wealth will be concentrated in knowledge-based communities. These communities targeting business growth and economic development will reap substantial rewards. They will be the centers for advancements and innovations. Thinking and adapting and innovating are essential to the future creation of wealth and jobs. Implementation of knowledge-based initiatives is a growing worldwide trend as countries plan to be more competitive and gain greater advantage in the global marketplace. The Science Ministry in Great Britain is fashioning government investments in higher education to support technologies closer to commercialization. The Chinese government is investing heavily in higher education to expand beyond lowskilled manufacturing. Charlotte will lose out and fall backwards if it does not focus on higher education as a primary community objective. We are fortunate to have the UNC system, Charlotte Research Institute, Duke, Queens, Winthrop, Wingate, Davidson, Wake Forest, Northeastern, Johnson C. Smith, Gardner-Webb, Johnson & Wales, and CPCC expanding their facilities, capacities and specialties in support of our region. Greater engagement with them will open many opportunities to benefit our children and their children with big payoffs for years to come.

jgalles@greatercharlottebiz.com

tt o l ar

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