Manufacturing upheaval leads to metal shop¡¯s rebirth Manufacturers

WATERLOO ¡ª By 2007, David Jones realized the business he had invested heavily in was no longer sustainable.

Jones and a former partner bought J. Gerth Custom Toolage Inc. in 2000 and poured about $1 million into upgrading the Waterloo company¡¯s metal stamping capabilities and expanding into fabrication by buying equipment such as brake presses.

A few years later, it was as if a tornado had hit the manufacturing landscape. From 2005 to 2007, many manufacturers Gerth did work for were either outsourcing production or going into receivership.

¡°There were fewer and fewer good, meaty stamping jobs,¡± Jones recalls. ¡°But the way you have to look at it is, ¡°Ok, I am here. Now what do I do?¡¯¡±

What he did was change everything, even the name of the business, which was founded by John Gerth in 1977.

With the help of rebranding experts, the business on Northland Road became Perfexia, playing on the concept of ¡°perfection,¡± with a tag line ¡°design taking shape¡± to reflect the process of going from a computer-aided design to metal product.

Employees were invited to a Kitchener Rangers hockey game in March, where the new name was announced to ¡°a lot of applause¡± just before the puck dropped, Jones says.

But the changes had been underway for several years. A new partner, Ken Bott, who had a background in laser cutting, fabrication and plant management, came into the business in 2008. They invested in laser-cutting machines so the business could respond to same-day manufacturing needs.

Jones explains that with metal stamping, it takes weeks of lead time to build tooling, which suits manufacturers doing high-volume production where design doesn¡¯t change much.

But with the shift in manufacturing, the company needed to become capable of doing work that couldn¡¯t be done offshore ¡ª parts that either require a lot of design changes, are needed quickly or are ordered in lower volumes. In those cases, it is cheaper to use a laser to cut the parts rather than build tooling, Jones says.

It was a scary transition, because laser cutting equipment is very expensive, Jones says. ¡°There was so much money involved. It costs about $500,000 to buy a laser and we had just spent about $1 million on stamping equipment we now had no business for.¡±

So Jones, who has a master of business administration degree from Wilfrid Laurier University, proceeded carefully. ¡°We hired a salesperson who went out on the road, with a mandate to bring in the laser business. So at first, we outsourced the work.¡±

When the company reached a certain critical mass of laser business, it bought a laser cutting machine. As the business grew, it bought a second one.

Now, the company is thriving. It has 28 employees in its 10,000 square foot facility, doing laser cutting and stamping, forming and fabrication, welding and product assembly.

Perfexia Inc. make metal parts for customers in a wide range of industries, from workbench systems and office furniture, to metal frames for structures used in agriculture and in arenas, as well as solar roofs.

The transformation required different skills, Jones says. ¡°But we had good people and so we kept them and trained them.¡±

Jones says the changes undoubtedly saved the company. ¡°If we had not gone down this road, we would have been out business three years ago,¡± he says.

Now, Perfexia is getting ready to grow again.

The company is planning to add about 5,000 square feet to the existing building. The extra floor space will allow the business to keep more materials in stock so it can respond even faster to customer needs, Jones says.

¡°I love emergencies,¡± Jones says. ¡°If a customer comes in with a disaster that we can fix, I love that we can respond to that.¡±

It will also allow Perfexia to add more equipment and people. But Jones says he will keep the business at a manageable size. ¡°I need to know everybody¡¯s name,¡± he says.