A Company Reborn: SETAAC Helps West Point Industries Transform Its Operations

Hydraulic lifting system designed and manufactured by West Point Industries to support maintenance of a 70-ton M88 tank recovery vehicle for the U.S. Army.The ITMA show in Paris in 1999 was supposed to have been a high point for West Point Foundry and Machine Co. Instead, the event has passed into company history as the start of an extremely tough period. The quadrennial ITMA is the international textile and garment machinery industry’s premier meeting, and West Point kicked off that year’s show with a headline-grabbing opening-day announcement. A U.S. textile manufacturer had agreed to buy seven large pieces of equipment from the company for more than $4 million.“It was the largest order we had ever received,” said Pate Huguley, then the marketing director of West Point. A changing business climate would leave the firm with virtually no time to celebrate. Almost immediately, Huguley recalled, the impact of low-cost textile imports from China and Mexico began devastating West Point’s domestic customers, who at that time accounted for 70 percent of the firm’s business.That, in turn, would send West Point reeling. At the time of the Paris announcement, the company had 355 employees. Over the course of the next decade, that number would drop to 62, and West Point’s sales would plunge by 80 percent. And in the end, the customer in the deal announced in Paris would only end up purchasing 20 percent of its order.

The downward spiral spurred the firm to reach out to the Southeastern Trade Adjustment Assistance Center (SETAAC), a federal program based at Georgia Tech’s Enterprise Innovation Institute. With the assistance of SETAAC, the firm, now called West Point Industries, has been transformed with a new set of products that allowed it to add employees and increase revenue.

“We had hit bottom,” Huguley, now president and CEO of the company, said. “In our darkest days, we reached out to SETAAC and now we’ve been reborn.”

In the Beginning

West Point Iron Works was founded in West Point, Ga., three years after the Civil War ended. The company started off as a supplier of individual components, such as pulleys and gears, to nearby textile mills.

The firm had fallen on hard times by the 1930s, when Huguley’s great-grandfather purchased West Point and the firm began manufacturing complete machines for textile plants. At that point, the company was renamed West Point Foundry and Machine Co.

The ensuing decades were good to West Point. The firm began exporting its equipment in the 1950s and before too long had installed its machinery in textile plants in 70 countries.

“Everyone knew the name West Point,” Huguley said.

The 2000s, however, were a brutal period for the company. The transaction unveiled at ITMA marked the last time West Point would sell a complete textile machine to a U.S. customer. In 2006, the firm decided it could no longer produce the equipment and decided to return to making individual components for industrial machinery.

“We had to amputate the leg,” Huguley said of the change. “It was a very shaky time. We [produced individual parts] for a couple of years, and then we decided we had to really grow to turn this company around.”

Enter SETAAC

West Point turned to SETAAC, which helps companies that have been negatively impacted by imports develop and implement turn-around strategies. Companies in Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, Puerto Rico, South Carolina and Tennessee are eligible for help from SETAAC, which is funded by the U.S. Department of Commerce.

Typically, companies that are involved in the SETAAC program receive assistance in marketing consulting, manufacturing improvements, information systems improvements, employee training, and maintenance and quality systems improvements.

Marla Gorges, who was director of SETAAC at the time of the project, and James Seals, a project manager for the program, conducted a diagnostic review of West Point’s operations and helped prepare its application to the U.S. Department of Commerce. “They were wonderful,” Huguley said. “The process was painless.”

Like other firms applying for the program, West Point paid for 25 percent of the diagnostic visit. The federal government typically splits the costs of the improvement projects with a company, and in West Point’s case, the Commerce Department agreed to provide up to $75,000 in matching funds to be administered by SETAAC. Under the program’s rules, private sector consultants submit quotes for implementing improvement projects and the company selects the consultants that will execute the outlined changes.

A New Face

Armed with the new strategy, West Point set about changing its operations. Huguley and other executives at the firm had long been interested in using the firm’s engineering and production expertise to provide products to the U.S. military. SETAAC put the company in touch with consultant Dori Pincombe, who worked with West Point to market its capabilities to the federal government.

With her help, the firm received certification from the Historically Underutilized Business Zone (HUBZone) program, which helps small businesses in urban and rural communities gain preferential access to federal procurement opportunities. Pincombe also assisted the firm in achieving a designation that makes it easier to obtain contracts from the General Services Administration and took Huguley to numerous trade shows to help him network with government officials.

Under Pincombe’s direction, the firm also changed its name to West Point Industries to emphasize its broader client base. It also redesigned its website and other marketing materials.

The work paid off, as the company now provides an ammunition testing system for the Air Force, a hydraulic lifting system used to conduct vehicle maintenance activities for the Army and weapon racks for the Army.

West Point also now makes component parts for manufacturers in a wide range of industries. Current clients include makers of slurry pumps, industrial compressors and blowers, and water and sewer pipe components.

Finally, the firm has just completed the design, manufacture and installation of a prototype turbine that can be used in wastewater treatment plants to generate electricity.

A Bright Future

As a result of the SETAAC program, West Point has revitalized its operations. The company has grown to 85 employees and has experienced a 10 percent growth in revenue during the past few years. At the end of first quarter 2012, the firm was on track for a 25 percent increase in revenue when compared with 2011.

“SETAAC has never hesitated when we’ve asked for help,” Huguley said. “They’ve been incredible. They helped guide us out of our darkest days.”

“We could not be more thrilled about West Point’s turnaround,” Seals said. “Their story is what SETAAC is all about.”