Northwest Business Magazine

Spider Company’s Growing Role in Aerospace

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Manufacturing has changed quite a bit, but it still provides nearly a fifth of our local jobs. Step inside this Rockford aerospace manufacturer that embraces both old-school production and new-school technology.

CNC machinist Tim Trost programs a Swiss turning lathe, one of the high-tech tools that Spider Company uses to produce aerospace components. (Chris Linden photo)

The talking heads will tell you that manufacturing today is clean, high-tech, push-of-a-button kind of stuff. And, to an extent, it is. Complex, computer-driven machines are producing incredibly high-precision parts, quickly and profitably, operated by highly skilled workers.

Technology is transforming the way we produce things, and it’s driving the success of manufacturers like Spider Company Inc., 2340 11th St., Rockford. But this manufacturer is also a study of contrasts.

On the one hand, it’s that clean, high-precision technology that allows Spider to handle tiny components and durable products for commercial and fighter jet engines. On the other hand, this company also embraces a wild side, an old-school, greasy, dirty and incredibly inventive producer of industrial goods. This wild side is the part that forms metal tubes and sheets into everyday items, and creates tools and equipment used in-house.

“We’re pretty much start to finish – all we’re not doing is producing raw material,” says Tom Diehl, company president. “We’re purchasing raw material, such as tube stock, bar stock, sheet stock, and delivering finished hardware to aerospace providers, and in some cases directly to contractor built sites.”

A decade ago, manufacturing seemed to be down for the count. Between 1995 and 2010, Rockford-area manufacturers collectively shed 43 percent of their workforce, dropping to just 26,500 jobs in 2010, according to the Bureau of Labor Statistics (BLS). But last year, when some employment sectors were shedding jobs, local manufacturers boosted their workforce 4 percent.

As it always has done, the greater Rockford area still lives and dies by manufacturing. It’s the greatest single industry, employing about 32,000 people – a fifth of our local workforce, according to the BLS. In Illinois, a state that ranks fourth in the nation for manufacturing employment, Rockford ranks third in output – behind only Decatur and Peoria, homes of Caterpillar.

Within Rockford’s manufacturing sector, one of the strongest segments is aerospace production, a cluster that includes nearly 200 companies within a 150-mile radius. These manufacturers contribute parts to commercial jets, military equipment and space explorers. With just 150 employees, Spider is a relatively small part of the picture, but over the past seven years, its staff has nearly tripled. As a major supplier for Woodward, which has some 1,400 local employees, Spider is in an ideal position for even more long-term growth.

Spider embodies both gritty fabrication and high-tech, innovative production, making it the real face of today’s manufacturing. It’s adding jobs and new technology, and it expects a very bright future in this community.

“It’s all about positioning, getting the right people in, doing the right things, and we were able to position ourselves for growth. Everything has fallen into place,” says Diehl. “Throughout the economic decline, we have sustained growth and maintained profitability. I think we’ve been very fortunate.”

Life as a Supplier

The noises inside the deburring department are incredible. Dozens of handheld rotary tools whine and whooshes of high-pressure air fill the room, as workers polish small engine parts and remove the tiny burrs, or imperfections, leftover from metal casting and machining.

At each station, a worker inspects the piece under a large microscope, polishes a little more, and blows away the dust. In the next room over, workers are deburring fuel control housings, a process that may take up to 13 hours. In still another room, an electrochem deburr machine uses saltwater and electricity to burn away imperfections in hard-to-reach spaces.

“In simple terms, it’s critical in the aircraft industry for there to be no excess material or sharp edges in these assemblies, to assure long-term reliability,” explains Diehl. “Burrs are removed to the point of magnification.”

Deburring is a niche skill that requires extensive on-the-job training; it’s a service few competitors invest in so heavily. In fact, Spider does it so well – and has, since the company opened in 1976 – that it’s the sole source supplier for several local companies. Spider has worked with Woodward’s Rockford location for 36 of its 37 years. Today, almost 65 percent of Spider’s business involves deburring, fabrication and machining for just one customer.

Spider ships material back and forth from Woodward’s Rockford, Michigan and Colorado facilities, at the rate of up to three trucks a day. Diehl expects that rate to jump in the next decade, as Woodward constructs a new 300,000-square-foot production center in Loves Park, Ill. By 2021, Woodward’s local workforce is expected to double.

“It will most likely more than double the size of the deburring department by around 2018,” says Diehl. “Just speculating on what Woodward’s speculations are for production, not to mention that we’re deburring for some of their suppliers and the new suppliers they’re bringing on, we’re attracting new customers monthly.”

Proximity plays a big part in Spider’s relationship with Woodward, and with its customers in west suburban Chicago. There’s a 10-minute trip between Spider and Woodward, and about two hours between Rockford and Chicagoland. That’s a huge advantage when suppliers need products or services on-demand.

“From the time an order hits an outgoing rack at Woodward to the time it gets over here, is only a couple of hours’ time,” says Diehl. “You can’t ship that work to Ohio or somewhere like that. You could lose several days in transit both ways, and lead time is critical in these markets.”

Even to Chicagoland, it’s possible to make quick, small-order shipments, profitably. Add to that Rockford’s large manufacturing labor pool and competitive labor rates.

“What we’re making is very heavy stuff, so it’s not the sort of thing that you would want to import or even ship cross-country, because the freight charges would be prohibitive,” says Brad Way, sales estimator at Spider. “Now, we may run our trucks into the Chicago area four or five times before they get a semi-load of product, but we can respond quickly and deliver product without having a full semi make the drive.”

Diversification

For a relatively small company, Spider covers a full range of production, from bending, shaping, coating or machining to deburring, laser cladding and basket washing.

The fabrication department is the epitome of old-school manufacturing. This is the place where stuff is made the old-fashioned way, bending steel sheets and tubes, welding components and coating them.

In one corner, a set of metallic benches, destined for a prison setting, hangs from a rack. Several others are wrapped in packing material. In another corner, there’s a stack of yellow forklift bumpers destined for a warehouse. They’re painted with yellow-stained powder coating inside ovens in the back corner. From the ceiling hangs a safety signal, a curious metal box that’s like a forklift stoplight. Produced for a customer, these boxes are formed here and assembled downstairs.

“A lot of time, it’s pretty easy to come down here and say, ‘OK, what do we need?’ and we’ll build it, rather than asking, ‘Where can we go buy one of these?’” says Way. “We don’t need to buy one of these – we’ve got everything we need right here.”

It’s easy to solve problems, and produce a great product, when you can make things for yourself. Just ask the deburring department. Back in 2007, the company’s electrochem deburr machines were breaking constantly. Replacing the machines was too costly, so Spider’s team constructed a better device, along the way fixing a common problem with similar machines that tended to destroy a small percentage of product. Today, these improved devices are manufactured in-house, used in-house and marketed to outside customers.

“They build the table in our fabrication department,” explains Diehl. “Our assembly department issues all of the components, then assembles and calibrates it.”

While the fabrication department bends and shapes its products, plenty of high-tech manufacturing is taking place in Spider’s CNC machining department, an area that’s growing the fastest. In just six years, Spider has built this department from the ground up, attracting 10 employees who have nearly 100 years of combined experience.

On one machine, an employee is pushing buttons on a computer dashboard, while monitoring the computer-driven machining taking place inside. Eventually, this metal block will be shaped into an airplane component. It’s a perfect complement to the deburring department downstairs.

“We decided it didn’t make sense not to provide a complete product for the customer,” says Diehl. “We’re already experts at deburring it, and with the background that I had at Woodward, I knew we could develop a CNC department. It just made sense.”

In a small side room, several employees use computer-aided tools to measure and inspect the pieces machined here. These components are designed by a customer like Woodward, and it’s up to Spider to program the machines that make them. Many of the pieces made here will fit inside an airplane engine.

Inside another side room, a large machine is producing cutting-edge fuel nozzles for a natural gas jet engine. One of only two such machines in the country, it performs laser cladding, a process that uses a laser to coat a small pipe-like component with a high-tolerance metal covering. Additional manufacturing is necessary to refine the cladded piece.

Jobs Scene

Both Diehl and Way gained an appreciation for manufacturing from their fathers. Diehl’s father taught him mechanics as a young child, when the pair constructed their own go-carts. Way’s father owned a die-casting business and trained his sons.

“A lot of the guys I worked with, they started working in that while they were still in high school, and when they graduated, it was just a natural step to go into it full-time,” says Way. “They were maybe doing it after school, or on the weekends, that sort of thing.”

Way and Diehl honed their skills on the job, rather than in school. Today, most manufacturing jobs require a combination of on-the-job and technical school training. Our region’s community colleges offer specialty courses and certifications that prepare young people for working with high-tech CNC machines; to some extent, local high schools are following suit.

But in some areas at Spider, it takes a love of mechanics and a willingness to learn – not necessarily a degree. For the most part, employees have previous experience in a manufacturing setting. Some come from shuttered businesses, while others came from local aerospace companies and earlier experience at Woodward. On the fabrication side, everything is learned on the job.

“There’s no real training program, post-high school, that teaches someone how to do fabrication,” says Way. “You learn how to read a print, you learn how to weld, you learn how to do these little things that go along with it, but I don’t think there’s anyone who says, ‘This is how it goes.’”

But for jobs in the CNC department, experience and technical skills are a must. It takes an understanding of math and computers to control this high-tech equipment. Strangely enough, it’s these high-tech positions that are hardest to fill.

“Right now, one of the toughest things to find in the area is CNC machinists,” says Diehl. “We’ve been lucky enough to attract some very good people from the field.”

As baby boom employees retire, manufacturers are looking to younger generations of people to step into these high-tech careers. Diehl has engaged with tech programs in area schools, but, he says, a paradigm shift is an essential component to preserving local manufacturing jobs.

“We’re hoping that education systems can re-engage our youth in programs that allow future manufacturing opportunities to be explored,” says Diehl. “Unfortunately, during the downturn, manufacturing wasn’t even thought of as an opportunity when you graduated. It’s good to at least have attended trade school, but not everyone’s going to college, so some of these kids are coming out of school, going through training programs, and finding jobs in manufacturing.”

Diehl ought to know. He used his mechanical background to land a good job at Woodward right out of high school. Fixing cars at night, he attended Woodward’s in-house academy before entering the factory floor. He learned more skills on the job, and when he arrived at Spider in 2005, his inside knowledge helped him to grow the business.

“Parts that we’re producing now, I’ve run personally at Woodward, and so have the members who are running our departments,” he says. “They’ve actually built these things at Woodward.”

Similarly, Kenny Daraphet is rising through the ranks at Spider. Out of school, he landed a job programming CNC equipment. He became interested in product inspection, and today he measures precise dimensions of small aircraft components.

The laser-guided equipment he works with requires intimate knowledge of engineering drawings, math and computer software. His is a job that’s enhanced, rather than replaced, by technology. Daraphet has taken a lot of training, and invested five years of practical experience, to reach this point.

“We go through a PC-DMIS certification course,” he says. “There are about three different levels to it and it’s about a 40-hour course per level. They teach you things about the software, and teach you how to work with the CAD models and engineering prints to determine whether parts are good or bad.”

Daraphet doesn’t exactly make products, but his job is an important part of the process. Spider employs many “direct workers,” that is, people who actually make stuff. Behind them are teams of people like Daraphet, who inspect, engineer, sell and ship products, and handle paperwork.

“When I got to Spider, we were about a $2.5 to $3 million business, and we had maybe four to five indirect people working in this business,” says Diehl. “We’re almost $9 million now, and our indirect labor has gone from maybe 5 to almost 20. It’s not just because of evolution in the market, but evolution in our company.”

Growth Opportunities

Spider isn’t alone in its growth. Nationally, manufacturing output has risen by 25 percent since the bottom of the recession in 2009, according to the Bureau of Economic Analysis. Locally, output has risen 22 percent, and the workforce has re-gained almost 5,500 jobs.

Spider has grown from just 60 employees in 2005 to nearly 150 today, and expects rapid growth in the next decade. Diehl is optimistic about his company and has faith in the entire region’s competitive advantage. Mostly, though, he’s focused on finding quality employees to produce quality products.
This is how success is born.

“We’re very hard on ourselves, but the supporting entities – our banking, our customers – they meet with us, and praise our performance,” says Diehl. “We often wonder, ‘Why are we so hard on ourselves?’ When you live through all of these challenges, and someone looks at the results from the outside, it looks good. Sometimes, you have to step outside and look at it from that perspective.”

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