A ‘Lean’ Vermont Castings Expects Sales To Rise in ‘09

A ‘Lean’ Vermont Castings Expects Sales To Rise in ‘09

Vermont Castings General Manager John Bledsoe, left, with Manufacturing Manager Rick Grant show what the new laser cutter can do in creating parts for the company's new line of steel stoves. (Herald / M. D. Drysdale)

By M.D. Drysdale

Thanks to customer desire for lower heating costs in a faltering economy, Vermont Castings in Bethel and Randolph expects sales this year to top last year by about 10%, according to General Manager John Bledsoe.

And if a new federal tax credit that applies to wood stoves catches on with the public, the growth could be even stronger.

The Randolph foundry is operating two shifts a day and the Bethel assembly and enameling plant is operating one full shift a day, said Bledsoe, who was recruited as plant manager three months ago by the parent company, Monessen Hearth Systems Co. of Kentucky.

The former general manager, Dale Trombley, is now in charge of product planning and marketing for the Vermont Castings division.

In an interview this week, Bledsoe and Trombley said the strong sales are driven by demand for wood stoves and fireplace inserts which can actually heat houses. Other companies compete with Vermont Castings for heating devices that look nice, but few of the other products can be used for primary heating, Trombley emphasized.

In another sign of the times, about 85% of stove sales are now for wood-burners, whereas just a few years ago, 55% of the sales were gas-burning units.

Meanwhile, the Randolph foundry has attracted more job work from other manufacturers, work that now accounts for about 50% of the production there. Bledsoe credited that success to the efficiency which makes the foundry able to compete successfully, even with Chinese companies.

Another positive factor for Vermont Castings has been a line of Dutchwest steel stoves, in addition to the cast iron products sold under both the Dutchwest and Vermont Castings labels.

A manufacturing line now uses ultra-modern laser machines to cut thick sheets of steel into computerized patterns that are then shaped, assembled, and painted.

Only about eight to ten steel stoves are produced daily—compared to 110 to 120 cast iron stoves. But Manufacturing Manager Rick Grant said the new line has had a major impact. High skill levels in a variety of operations have had to be developed, he said, and more and more of the stove-making process is done in-house. Some 95% of the steel used is shaped in the Bethel plant instead of being shipped in from outside, for instance.

New G.M.

Bledsoe came to Vermont Castings from 25 years in the automotive industry, where most recently he was vice president of engineering for Trico, which makes 88 million windshield wiper blades a year.

Bledsoe has presided over a continuation and acceleration of a move toward “lean manufacturing” concepts, which he and Grant noted have revolutionized production at the Bethel plant.

One sure indicator is the lack of forklifts zooming back and forth.

Forklifts, Bledsoe explained, typically just take material from one place to another, and don’t add value to it. Such things are discouraged in the canon of lean manufacturing.

The new rule, he said, is “If you touch it, you must add value.” So the movement of material within the plant was greatly changed, and the manufacturing lines themselves were greatly shortened, with work stations closer together. As a result, some 50,000 square feet of space have opened up for new uses—and three forklifts sit unneeded.

The lean process, Bledsoe, pointed out, relies on careful measurement of task time, and the establishment of detailed goals. Just as important are the weekly meetings of supervisors from both plants to discuss why certain operations have not performed as hoped.

“We find the reason, and then we eliminate the reason, and the process just gets better and better,” the general manager said.

He was enthusiastic in his praise of Vermont Castings workers to accept the workplace changes and make them effective.

It goes without saying that “lean” practices also mean fewer workers. Bledsoe would not reveal the current workforce numbers at the company.

When Monessen first took over the company last August, employment was said to be 160, compared to 210 at full production the previous year.

Another matter of pride for both management and the workforce is the firm’s safety record. As of Monday there had been 982 consecutive days without a lost-time injury—a rarity in an industry featuring blast furnaces and heavy parts. When the 1000-day mark is passed in about two weeks, management promises a party.

New Stove Each Year

Despite the tough economy, Vermont Castings is determined to keep its reputation for developing top-notch new products, said Mark Champion, a five-year employee who is the top combustion engineer for the firm.

A research and development division of seven workers labors to create new models and to make the existing ones better. The division includes an extensive laboratory to test new models for emissions controls and several other parameters.

(Another way the stoves are tested is to place them in the homes of employees for a year to try out.)

Vermont Castings and consumers have both benefited by the creation of national emissions control standards in the late ‘90s, Champion pointed out. It was an anxious moment in the industry, as 90% of the 300 stovemaking companies could not meet the standards, leaving just 30 in the marketplace.

But the public, Champion said, “has a much better product” because of the regulations.

The company tries to produce at least one new stove or fireplace insert model every year, targeting the annual national trade show in March.

The latest Vermont Castings product, a fireplace insert called the Merrimack, is expected to go on sale in eight weeks, he said.

30% Credit for Wood Stoves

A new energy tax credit that applies to wood stoves and fireplace inserts is “probably the best thing the government has done for our industry—ever,” says Mark Champion, the top combustion engineer at Vermont Castings.

The Energy tax credit, part of the national stimulus package, will pay 30% of the costs of many energy-saving improvements for homes, including heating with solid fuel.

The program will pay a maximum of $1500 for improvements that were put in place during 2009 or 2010.

The program has actually been in effect since January, but it’s not clear that the public has become widely aware of it. Vermont Castings will help its dealers advertise the money-saving opportunity, said marketing chief Dale Trombley.

Stores carrying Vermont Castings and Dutch Southwest products (also made in Randolph and Bethel), he said, include Mills Hardware in Bethel and stores in White River Junction, Montpelier, and Rutland.