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Published: Monday, 11/5/2001

Montpelier Hause built on quality machinery

BY JULIE M. McKINNON
BLADE BUSINESS WRITER
Larry Henry works on a lathe at Hause, which began in 1933 by making underground oil well equipment. Larry Henry works on a lathe at Hause, which began in 1933 by making underground oil well equipment.
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MONTPELIER -- Nearly 50 years ago, avid marksman and inventor Ralph Hause devised a way for gun makers and other manufacturers to automatically drill holes in their products.

Some early Hause Machines, Inc., power feed units, simply dubbed “Holomatics,” continue to be used in factories - and occasionally find their way back to Montpelier for repairs. Twenty percent of the 300 to 325 Holomatics serviced at Hause Machines annually were made before 1965.

“It's amazing,” said Tim Friend, Hause Machines' sales manager. “I hate to say it, but I think we build them too good.”

Founded as Hause Valve Co. in 1933 to make underground oil well equipment, the late Mr. Hause's business venture morphed into a company offering a wide range of industrial equipment. Besides machine components that drill or do other tasks, Hause Machines designs and builds machines engineered to customer specifications that cost $5,000 to $5 million, said James Fruchey, executive vice president and general manager.

Hause Machines' products are used to make parts for a variety of items, including missiles, hand tools, water heaters, airplanes, guns, appliances, and - most often - cars and trucks. The auto industry accounts for 75 percent of the company's business. Total sales are expected to be $8 million this year.

“This is not a company that turns out part after part after part,” said Paul Pellioni, president and chief executive. His partner in the company is Jim Smythe, president of Toledo's Habitec Security, who bought Hause Machines in 1987 when sales were about $1.7 million.

The company's bread-and-butter remains the Holomatics and other components, Mr. Friend said. It decided last year to expand its offerings by partnering with a group of Taiwanese companies, Shawn Tech.

Instead of investing a lot of money in research and development, the firm started looking for an international partner about four years ago, said Mr. Pellioni, who also is Habitec's executive vice president.

Hause Machines is the sole U.S. distributor for Shawn Tech, which makes some machines and components not made by the Montpelier firm, such as rotary index tables used to turn parts as they are being built. Hause Machines tests all of Shawn Tech's products and offers service and parts for them, Mr. Friend said.

About 30 percent of sales this year will come from Shawn Tech machines and components, Mr. Fruchey said.

“It gives us a good, quality product both machinewise and componentwise that we can give to customers at a more competitive price,” he said.

About 70 percent of what Hause Machines sells are specialty machines, while the rest is equally from components and servicing, Mr. Fruchey said.

The company would like to see that divide be half-and-half and has added two direct sales people in Michigan, he said.

Manchester Tool & Die of North Manchester, Ind., which makes machines for auto suppliers, has been pleased with Hause Machines for a quarter of a century. The company makes assembly machines for power-steering and air-conditioning hoses and uses various Hause components.

“We just have a very good working relationship with them,” said Joe Deal, Manchester Tool's manager.

Nationwide, though, sales of machine tools through August this year were down 31 percent, compared with the same period in 2000, according to the American Machine Tool Distributors' Association and the Association for Manufacturing Technology.

Still, sales for August were up 21 percent from July, according to the two groups. Machine tool sales nationwide totaled nearly $1.9 billion through August, the latest month for which statistics are available.

Servicing Holomatics and other equipment sold through the years, meanwhile, remains a top priority for Hause Machines.

“We try to give as much as we can as far as service goes,” Mr. Friend said. “Our good service means additional sales in the future.”

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