The volatile price of steel coupled with the crash of the U.S. automotive industry might spell doom for many steel manufacturers in North America. But the family owned Hascall Steel Co. has seen its share of ups and downs since its inception in 1971, and if there is one thing President Dag Hascall learned from his father, founder Wayne Hascall, it is how to keep the business afloat.
“The pricing for steel has been very volatile, and with a commodity, it is very difficult to time those markets,” Dag Hascall says. “It’s forced us to find different profit centers by controlling costs within the industry.”
Hascall Steel was launched in 1971 in Grandville, Mich., to provide steel components to Michigan’s automotive manufacturers. The company purchased its first facility in the early 1980s and expanded into a 150,000-square-foot plant in 1989. Dag Hascall says he began taking over operations from his father around this time, and he and his brother Karl bought out Wayne in 1994. Today, the company has seven facilities that serve customers east of the Rocky Mountains and west of Pennsylvania.
While the bulk of the business caters to automotive producers, Hascall Steel also supplies raw material to tubing, perimeter and appliance component producers. It is this diversification and an ability to adapt to any clients’ needs that separates Hascall Steel from its competitors.
“It’s our ability to react quickly, and we carry a large inventory that is very diverse,” Hascall says. “Not many small- to mid-sized shops can get all of their products out of one shop.”
Finding New Opportunities
Hascall says the market is saturated with inventory because of the economic downturn. He estimates mills are running at 70 percent capacity.
With these depressed numbers, Hascall Steel has shored up other parts of the business to cut costs.
This includes idling two of its seven plants, increasing productivity at the operational facilities and improving the health and wellness of employees, which lowers insurance premiums.
“We had to work on productivity, and safety has a cost relating to insurance,” Hascall says.
The company also has expanded its subsidiary – Steel Studs – which manufactures steel framing components, drywall track and steel studs. While this division accounts for 8 percent of Hascall Steel’s business, Hascall expects that number to grow this year as commercial construction and green and LEED construction initiatives dominate the marketplace.
Ready for Anything
To handle any order customers throw at the company, Hascall Steel keeps 60 percent of its inventory of steel on hand while purchasing the rest on an as-needed basis.
“Having a diverse understanding of the main requirements in the industry helps give us the foundation to choose items we prefer to inventory,” he says. “If we feel that one market may increase, we will stock the entire contract of steel and make the buy in advance. But there are minimum inventory levels we like to have, and we’re constantly having to replenish that on a daily and weekly basis.”
Hascall Steel has developed relationships with mills that allow the company to find competitive pricing for its materials. This is especially helpful with mills that specialize in steel for automotive parts.
“There are many products that are highly formable, which helps us maintain relationships with integrated mills,” Hascall says. “We try to do business with a wide variety of suppliers to match our customer’s requirements.”
The Grandville plant is certified to ISO 9000:2008 standards, which means corrective action programs are instituted throughout the facility to identify patterns of opportunity or defects that would require changes in the system.
Hascall says the company constantly invests in equipment upgrades to increase productivity.
The company hosts monthly meetings at each of its plants and rotates through a number of topics throughout the course of a year. These training sessions focus on issues like safety and production procedures.
“We initially base these off our orientation program, and we keep rebuilding the fundamentals over time and enhancing that training on a monthly basis,” Hascall says.