Outsourcing is a word nearly synonymous with China, Mexico or elsewhere outside the United States.
But York County manufacturer Flinchbaugh Engineering is making a good living -- even despite this economy -- as a place for companies from Caterpillar to Volvo Trucks to outsource their production.Whereas some companies might outsource low-skill production, Flinchbaugh welcomes companies handing off their precision-part production to them.
Tom Frauman, business development manager for Flinchbaugh, said a big advantage Flinchbaugh has is that it makes a lot of high-grade parts, while a typical company only makes a few precision parts that are needed to finish its overall product for market.
And considering the types of parts it seeks to make, it can sell the idea of quality to its customers who are pondering outsourcing out-of-country.
Frauman used the example of a part on a wind turbine failing because it was mass produced overseas with what he called "standard" quality.
"Two hundred feet in the air, and there's a problem? That's a problem," he said.
In part because of the overall tactic, called Strategic Cell Migration, Flinchbaugh has been able to pretty much double its workforce and triple revenue since the last time U.S. Rep. Todd Platts visited about four years ago.
The York County congressman was on hand again Monday.
Company President and CEO Mike Lehman, told Platts that despite the success, he worries whether workforce training and other key resources will continue to be available to serve the company's growing need.
He said help from state and federal dollars, particularly through MANTEC, a local support nonprofit for small-and medium-sized manufacturers, has been instrumental in Flinchbaugh getting the resources it needs.
Lehman told Platts that while Congress debates a bailout for the automobile industry, it should make sure workforce development is adequately funded.
John Lloyd, president and CEO of MANTEC, was also at the Platts visit today and said MANTEC's state money through the Department of Community and Economic Development has been cut about 4.
Also, federal dollars from the U.S. Department of Commerce have been cut 15 percent.
He said he hopes restoration of those funds is passed with whatever stimulus Congress comes out with next.
Platts said he believes a large chunk of whatever stimulus Congress passes right out the gate when President-elect Barack Obama takes office will include large funds for infrastructure upgrades, and funding for workforce development and training.
Flinchbaugh also credits much of its success to its Employee Stock Ownership Plan, in which company employees have majority ownership in the company.
Frauman said some employees who have been part of the program for all seven years have accumulated about a year and a half worth of pay in their accounts. It's a powerful motivator to get the job done, he said.
Employee Linda Terrasi asked Platts if an Obama administration could have an affect on these accounts, including the one at Flinchbaugh.
Platts said he thinks it all depends on who sets the agenda in January; he has some confidence in Obama but said that could change if policy starts coming more from Democratic leaders in the House and Senate.
Terrasi said she hasn't heard anything in particular that makes her worry Flinchbaugh's employee ownership setup could be changed.
"It's the unknown," Terrasi said.
Flinchbaugh is a more than 260-employee company in Hellam Township that specializes in making precision parts that require a little more care and attention than an average part.
It started about 30 years ago by making pivot shafts that connect the operator cab to pieces of heavy machinery.
Today, it markets itself as a place for companies to outsource their production of precision parts, including key components in wind turbines or heavy equipment, in a similar way as companies outsource high-volume manufacturing offshore to save money.
The company is also 60 percent owned by its employees through an Employee Stock Ownership Plan.