MARCH 17, 2008
Source: Andy Domino
Job Title: MiBiz
Email: adomino@mibiz.com
CASSOPOLIS – Some businesses are stepping into sustainability because it’s the right thing to do for the Earth. K&M Machine Fabricating is working on alternative energy machines because it’s the right thing to do for the business.
K&M builds the “guts” for wind turbines, the huge windmills used to generate energy across the United States. Other companies provide the turbine blades and exteriors and assemble the pieces together.
“We build what clients want,” K&M CFO Gary Galeziewski told MiBiz. “There are many companies trying to retool themselves into alternative energy (equipment developers). Our reputation has spread.”
Galeziewski said he expects double-digit growth in the alternative energy sector over the next few years thanks to a growing interest in generating power from sources other than oil and coal. Most of that interest comes from foreign investors, but there’s also been a shift in public policy at home. Several states – like Texas, Iowa and Pennsylvania – are requiring utilities to get a certain segment of their power from sources other than oil or coal. Michigan is not one of those states, though Galeziewski said there is a wind farm being planned for Huron County, at the tip of Michigan’s thumb.
Manufacturing wind turbine parts is only one segment of K&M’s business. Its major work is in building equipment for the mining and metalworking industries, something the Cassopolis-based company has been doing since 1951.
“If you’re driving down the road around here and see that Caterpillar yellow, there’s a very good chance that we made it,” Galeziewski said.
The construction vehicle manufacturer is K&M’s largest customer, though it also counts John Deere and locomotive maker Electro-Motive Diesel among its clients.
Galeziewski said much of the company’s growth has happened in the last decade thanks in large part to the need for energy, both “green” and traditional. Despite talk from politicians about generating more alternative energy in the United States, Galeziewski said “business is booming” for the construction equipment his company manufactures. That’s because of increased pressure to find sources of oil.
Galeziewski said many companies are ordering larger pieces of equipment, too. Right now, most wind turbines generate between 1-1.25 megawatts of electricity, but there’s a growing trend toward larger turbines, those that can generate twice as much power.
One of the barriers to stepping into the alternative energy business is scale: companies simply can’t compete if they don’t have the room and equipment to handle massive machinery. K&M has three buildings covering nine acres in Cassopolis.
Right now, the company has about 250 employees, but Galeziewski said he’s looking for more as the company grows. K&M announced annual bonuses of $4,200 to each hourly employee for 2008 and is building a 52,000-square-foot addition to its machine shop. It was also the first stop on Gov. Jennifer Granholm’s November 2007 tour of alternative energy businesses in Michigan.
“We got a lot of media calls after that,” Galeziewski said.
The only stumbling block in K&M’s path is finding acceptable workers. The company plans to hire some 120 people in the next two years in fields like welding and CNC machinery. Nationwide, Galeziewski said the funding is “drying up” for skilled trade workers, despite a steady and even growing need for their abilities. Though he credits Southwest Michigan school systems for having active programs in the skilled trades, he said the type of work K&M does requires only the best.
“With the size of equipment we make, these things can’t fall down,” he said. “It demands a high level of skill. If there’s any limiting factor to our growth, it would be on the employment side.”
The company has relationships with local colleges, including Southwest Michigan College and Kalamazoo Valley Community College, which have strong skilled trades programs, Galeziewski said. It’s also looking to keep Michigan workers in the state. He said K&M would welcome any out-of-work engineers and machinists from the Big Three automakers or any of their suppliers.
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This article appeared in the Monday, March 17, 2008 issue of MiBiz, read by upper management executives in West and Southwest Michigan. Print subscriptions are free to qualified individuals who are employed in West and Southwest Michigan. For further information about MiBiz, visit www.mibiz.com.