A change of ownership and management at Trend Plastics Inc. and Tool Tech Corp. in San Jose, CA hasn't been much of a change for the nearly 1000 employees and the companies' many customers. Rather, the purchase of Trend from former owner and president Gino Cavallini by Stuart Benton, chairman of Plastics Capital, a holding company in New York, has resulted in staying the course for the 25-year-old custom molding and moldmaking firm. IMM talked to both Cavallini and Benton about the transition.
Currently, Trend has approximately 80 injection molding presses ranging in size from 75 to 1000 tons. A facility in Albuquerque, NM serves customers in the Southwest including the border area in and near Juarez, Mexico. But Benton has already started growing his latest acquisition by announcing the opening in October of a new molding facility in Southern California, in the Otay Mesa Enterprise Zone. A new 67,000-sq-ft building will house 12 injection molding presses and serve Trend's customers in Southern California and also in Northern Mexico's maquiladora region.
Benton praises Cavallini's efforts and vision over the past two decades that resulted in the companies' tremendous growth. Cavallini is still modest about his role in the companies' success when he speaks of Tool Tech and Trend Plastics, preferring to give the credit to those who've worked with him over the years. "I never realized what my potential was as a manager, so I just took it day-by-day and year-by-year and the whole thing just evolved," reminisces Cavallini. "I enjoyed what I did. It was a satisfying ride for me."
The Right Move
Cavallini believes he made the right move by selling the company when he did. Like many company owners in the plastics industry who've had a long history of growth over the past several decades, Cavallini struggled with just how to retire. Attempts to find someone to run the company, someone that he could mentor into taking the reins, failed. "If you don't find that person that meshes with your style, then you've got more problems than if you just keep running the company yourself," Cavallini says.
"If I could have found a person to run the operations and take care of the customers, the suppliers, and the employees, I would have done things differently," he adds, speaking of his decision to sell. "But, after a couple of strikes I changed my mind."
Benton is glad Cavallini did. "I've wanted for the last five or six years to find a good injection molding company," says Benton. "I was lucky to hit Gino at the right time."
Benton's Plastics Capital teamed with the Riverside Co. of New York City to get the funds needed to purchase Trend and Tool Tech. This isn't Benton's first foray into the plastics industry. In 1983, after doing some corporate ladder climbing in the computer and electronics industries, Benton did a leveraged buyout of a thermoforming company. "That got me out of the corporate world and into the entrepreneurial world," he says. "This [Trend and Tool Tech] is our first venture into injection molding but it's just a start." Benton, who's had "a lot" of experience globally, says the company plans to "look at other opportunities to expand globally including Ireland; Guadalajara, Mexico; and the Pacific Rim."
Benton says that the first step in transition and possible future expansion has been to go to the customers and ask each one, "what do we have to do over the next two years to satisfy you?" The answer, he says, has three components. Companies want global suppliers, they want suppliers who can perform value-added kinds of operations, and they want a one-stop shop for their molds, molding, and assembled units.
Benton says that of all the attributes of the company, he was most impressed with Tool Tech's ability to produce tooling that "works the first time" through a paperless system that includes state-of-the-art software and a total of 30 personal computers that proliferate the shop floor.
"Much of this was Gino's vision," says Benton. "He watched over every tool and made sure it worked right the first time."
Expanding on that, Benton says, involves reducing even further the time it takes to build a mold in answer to customers' critical time-to-market demands. "This is one of our challenges," he explains, "to figure out how to build all our tools in six weeks."
Expanding Trend and Tool Tech into multimillion dollar, global companies will be made easier by the corporate culture that Cavallini instilled over the years. Joseph F. Jahn, the new president and COO for the companies, says, "Gino's culture and work ethic are molded in here. When the customer calls, he or she gets immediate attention. We intend to remain at the top of the game in customer service."
Benton agrees. "Quality and service to the customer are embedded in the culture here and they're the keys to the success of this company," he says, emphasizing that his goal is to capitalize on what Cavallini built during more than two decades. "This company has a great history and we want to build on that."
When the Time Comes to Sell
When asked if he had any advice for other company owners in the molding business that might be thinking of selling, Cavallini responds immediately, "don't rush to get out."
Cavallini wanted to find a buyer that would keep the two companies together, take care of the employees to see that they were treated right, and grow the business by continuing Cavallini's tradition of superior customer service. For several years, Cavallini says people have solicited him about selling the companies, but he never felt "comfortable" with it. "I felt comfortable with Benton's group," he says, and advises that "people should wait until it feels right."
Although changes have been made over the years as the companies grew, Cavallini is convinced that some things stay the same. "To be successful you have to take care of your customers, take care of your employees, and respect your suppliers, in that order. Those don't change. Tooling, however, has changed dramatically since I started in the business 30 years ago," he says. "It's less art and more of a science."
And Cavallini was never afraid of science. Tool Tech invested in CAD/CAM long before the technology became a necessity, urging his moldmakers to become computer literate with his vision of the changes that would eventually dictate paperless moldmaking. "A lot of people in this business don't want to change," he says. "They want to survive doing things the old way, but that's just not possible today."
Staying on the cutting edge of technology helps increase the value of a company, making it more salable when the time comes. Cavallini says it becomes harder to survive as the company gets larger. "If you're a $10 to $15 million company, you can survive," he says. However, growing the critical mass necessary to serve the large, global OEMs requires suppliers such as Trend also to be large, global companies, something that's difficult without a large monetary investment and the management expertise to get it there.
Cavallini recognized that Trend was getting to a size that required new and different management to take the company to the next level.
"I sometimes wonder how I survived all those years," Cavallini says. "My customers taught me a lot about how to run a business. I went to them and asked them what they wanted, then I gave them what they wanted."
That's how Trend became involved in contract manufacturing, assembling computers for Apple Computer Co. while other molders were still just molding parts. "Contract manufacturing was one reason Trend became so successful," says Cavallini. "It was a novelty at first, but once we got into it and found out we could make money at it, it became serious business."
Building a successful molding business requires four things, says Cavallini: First, be sure you're profitable. Second, reinvest profits back into the business to help it grow. Third, invest in your employees. They make profits possible. And last, serve a variety of markets; stay diversified.
Cavallini also says that company owners need to recognize when it's time to get out. "I've worked hard for many years and I wanted to sell while I can still enjoy my life. I've met a lot of good people along the way, people I'll never forget. I've achieved what I needed to in this business and now's the time to make a change."