Volume 41, Issue 2 February 2006
A New Bend
When Imports Overtook Its Market, CHMI Had to Reinvent Itself
by Brigid O'Leary
Johnny Carson’s joke went something along the lines of “What the yuck’s in Keokuk?” Tony Lambros says as we drive north on Highway 61 from St. Louis toward Keokuk, Iowa.
What, indeed, is in Keokuk?
Along with the rows of cornfields and other family-run farmland, as well as some agri-industrial businesses such as a soybean processing plant, Keokuk is home to Custom Hardware Manufacturing Inc. (CHMI).
2006 is a big year for the company, first and foremost because CHMI will celebrate 20 years in business this summer. The company got its start in June of 1986 when Lambros opened the doors of the business in a nondescript “Quonset” hut, as he calls it.
“Some people make fun of Iowa, asking if we have electricity and running water,” says Jan Walker, architectural handles manager. “In that first building, sometimes we didn’t.”
“It was a very humble beginning,” adds Lambros.
And, apparently, a very rustic one.
Raised in Chicago, Lambros was born into the metal finishing industry. His parents owned and operated the contract hardware company Brookline. When they sold the company, they signed a non-compete clause that bound their son as well. Though they had sold the company, Lambros’ parents, as well as an aunt and uncle, retained health insurance through the Brookline company. For Lambros to go into business in Chicago would jeopardize those health insurance policies, and as all four relatives had serious health problems ranging from cancer to heart problems, Lambros decided it would be better to start his metal finishing company in a different state—and he chose Iowa.
“Sometimes, we’d open a desk drawer and there would be a mouse inside,” says Julie Maddox, inventory control manager, recalling the first building, with its hand-painted, plywood sign.
And sometimes, keeping the business running meant that Lambros found himself finishing metal or on his hands and knees, trying to ensure that his clean room was, in fact, clean.
He can still name the company’s first two accounts: PPG, for which it made endcaps for doors, and Dundee Glass of New York, for which it provided glass furniture connectors.
From that little Quonset-building, the work put into the company by every member of the CHMI staff made the company grow steadily. The company moved into its current home, a 30,000 square foot facility on Industry Road, approximately 15 years ago.
Lambros’ mantra about his company is one word, thrice repeated: quality, quality, quality. He says that without quality products, quality people and quality customers, CHMI wouldn’t exist.
All of that—including the existence of the company as a whole—was challenged recently. Pressure has come from many different angles during the last few years. As competitors outsource the manufacture of products to other countries where labor and stock are less expensive, the market prices of many of the same products the company offers have dropped significantly.
“Some of our competitors, and even our clients, think we don’t manufacture our products, but we do. Some of our competitors claim they are domestic or U.S. manufacturing companies, but I challenge them to open their doors to [industry magazines] and show you [their manufacturing operations],” Lambros says.
But the company has battled back. How has CHMI managed to compete against such offshore competitors?
“I’ve been on a mission for seven years. It’s not easy to be a domestic manufacturer and fight the imports,” says Lambros. “It’s hard to bounce back. Every time you think you’ve got a plan, they beat it. They lower the price. It’s been hard over the last six or seven years.”
His mission has been ongoing: to keep below the industry radar for the most part; and to pour a lot of energy and resources into research and design. New products are kept under wraps until ready for sale and the company’s marketing strategy has been retooled for maximum effect.
“In the end, we’ve survived through it, but it has taken hard work,” says Lambros.
There’s an emphasis on “we.” Lambros readily praises the work of his employees in every segment of the job.
“People are the backbone of this company,” he says.
Quality, Quality, Quality
Building that backbone was the first step in building a successful business, especially the way CHMI got its start. It’s never easy becoming an entrepreneur and it’s doubly difficult to locate a new business unlike anything else in the area in a new state and town. But that’s what Lambros did. By opening CHMI in Keokuk, he brought an unfamiliar industry to the city. This also made hiring people an interesting prospect.
“It was a tough start,” Lambros admits. “Metal finishing was not a big industry in this rural area.”
He started by running help-wanted ads for metal polishing in newspapers from Minneapolis to Indianapolis, down to Kentucky and Kansas City, Mo. All that effort resulted in just one reply. Lambros discovered Keokuk’s lack of familiarity with the metal industry could actually work to his advantage. In Chicago, he says, there were plenty of people experienced in metal finishing and that led to rapid turnover, as metal finishers moved from one job to the next at will.
“We were able to bring on and train great, down-home, hard-working people with the Midwestern work ethic. Those people are the reason we continue to survive,” says Lambros. “Turnover hasn’t been the way of doing business for us. Many of the people who started with us are still here.”
And so are some of their children. Jaime Gonzalez, production manager, has been with the company for 15 years. His son Jimmy recently joined the team while he works his way through college.
Long-term employees of the company can be found in all areas of the job, too, not just senior management. Lambros’ brother-in-law and sales manager, Mark Kemp, has been with the company since its start, as has Walker. Daniella Jones, shower products manager, joined the company two years later, as did Vickie Westermeyer and Yvonne Young in packaging.
One part of what Lambros says makes the company so successful is the products.
“We feel we make the best shower hinges in the world. The 200 series hinge comes with a lifetime guarantee. We’re still in business, so you can see we’ve not had many returns,” he explains.
During a tour of the manufacturing facility, Lambros takes guests through the fabrication area where they meet Mike Woods, who bends handles.
“How many bends, Mike?” Lambros asks, greeting the man with a handshake and a slap on the back. “How many bends have you made while you’ve worked here?”
“Oh, I’d say a million, probably,” Woods replies as he picks up another soon-to-be handle and bends the ends.
From there it’s off to the manufacturing area—three CNC machines, though they have the capacity to run four if need be—then over to polishing. Everything gets polished, Lambros notes, from the handles and the knobs right down to the washers and screws that hold everything together.
A Breakout Year
This year will be a big year for CHMI. In addition to marking 20 years in the business—a milestone that until recently wasn’t guaranteed—Lambros plans to make 2006 the company’s breakout year.
“We’re coming back to the game and it’s been a long time coming,” says Lambros. “2006 is our year. It’s our run for the roses.”
The company plans to introduce to the market over the next few months including a 266-page catalog of products, complete with description, images and photos of projects in which each product is used. The catalog, a brainchild of Lambros and marketing manager Ed Vinson, has been in the works for three years and became available at the end of last month.
The company is also adding 60,000 square feet of production capabilities. Recently, it began collaborating with three European companies for joint product development and manufacturing: KL-Megla, out of Germany, Lobnique from Switzerland and Sadev in France.
And there are other areas of the business that CHMI plans to capitalize on in the future.
“Our finishes are some of the best. We’re like Kohler in the way we finish metal,” Lambros says. “We’re filling a void. When some of the goods for Kohler, Delta and Moen come out and customers need to match other accessories to those name brands, we have the ability to match it and finish the look.”
Also aiding the company is its use of physical vapor deposition (PVD) coatings. According to Lambros, CHMI was the second company in the United States to use PVD. The PVD finish can provide the ultimate shiny surface or, for a completely different look and style, a darker “brushed” look. PVD coatings can be used on just about any surface, and it is among the finishes offered for all of the company’s products.
“It would be boring to make the same product every day, but to make the best [product] you’ve got to make it the best every day,” says Lambros.
“When you get [a product looking] good, you have to make sure you do it better the next time and better than the guy next to you, even when you’ve all been trained to do the work the same way,” adds Jim Morgan, purchasing manager.
“Our customer base wants more than normal. They demand a product that is going to perform,” Lambros says; he is supported in this thought by his employees.
He cites an example of a recent trip he and director of engineering Rodney Garrett made to a client. The client was under the impression that the hinge pin [of another company] in a product was of a particular quality and non-corrosive. Garrett took the pin and dropped it in a glass of salt water; a day later it was rusted out.
While Lambros shared this anecdote as an example of what outsourcing products can do to a company when they don’t have immediate oversight of the production, Garrett sees the situation more as the effect caused by companies buying for the wrong reasons.
“They’ve changed with the times and offered the best quality products. In price, service and delivery, they’re second to none,” says Bob Trainor, owner of Trainor Glass in Chicago, one of Lambros’ long-time customers and friends. “We have complete trust that they’ll deliver on time and Tony is one heck of a hardworking guy.”
Those customers who have been with CHMI for years, those “quality customers” who demand more than what is “normal” understand why CHMI charges the prices it does.
“You get what you pay for,” says architectural handles manager, Walker.
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