For more than 30 years, this business has made its living by manufacturing parts and buying up service parts divisions of other companies. See how leader Jimm Grafft’s keen senses have led to big developments.
The secret to Jim Grafft’s success has been excellent timing. Since 1976, the owner of Certified Parts Corporation (CPC) in Edgerton and Janesville, Wis. has been successful at partially or fully buying companies that go out of production.
In 1982, Jim purchased the Arctic Cat snowmobile division, including tools, dyes, intellectual property and trademarks. He immediately started working with the employees in the Thief River Falls Minnesota manufacturing plant and successfully pulled together a group of investors to begin production in 1983.
“Only two people can say that they have owned Arctic Cat. Edgar Hetteen and me,” Jim says.
Jim licensed Arctco to manufacture the snowmobiles in the Thief River Falls plant and was controlling shareholder. Soon after, he formed a joint venture licensing agreement with a Swedish distributor to manufacture and assemble snowmobiles for the European market.
“My father recognizes the importance in taking care of a customer after the sale,” says Jim’s son, Jay Grafft, vice president of CPC’s Comet division. “He saw a need to provide service parts for companies that are no longer around, and that’s how CPC began.”
CPC started when Jim was working at Fox Corporation, a mini-bike factory that shut down in 1976. Jim knew that eventually, the already-purchased bikes would need repair, whether it was a new sprocket, new handlebar grip or new tire. So, he bought the service parts division from Fox.
Since then, he’s amassed dozens of service parts divisions. In 1982, he branded his company ‘Certified Parts Corporation’ and hasn’t slowed down since. The customer base includes names such as Yamaha, Kawasaki, Ariens – a snow blower manufacturer – and Honda.
“It’s a pretty impressive list,” Jay says. “We carry service parts for John Deere snowmobiles from the early ‘80s. All sorts of mini-bike, snowmobile and go-kart manufacturers went out of business back then, and we’d buy the existing inventory, the intellectual property and the tools to re-manufacture more parts when they run out. If there’s still a need for it, we’ll make it.”
In 2009, Jim bought out Comet, a manufacturer of clutches for the power equipment industry. The decision has significantly added to CPC’s success story. Steven Consigny, CPC’s president, received an email in 2008 that Comet was “closing its doors for two weeks.”
“Right away, I thought that sounded odd,” Consigny says. “What kind of major business shuts down for two weeks and then opens back up? We began to monitor the situation closely.”
Within months, CPC bought out Comet’s entire company at an auction.
It wasn’t easy to ship Comet’s inventory to Wisconsin, get the product line back together and re-acquire lost customers, but the CPC decision-makers knew the purchase would pay off. Comet has been a standard bearer of clutches since its inception, so to obtain the brand has added to CPC’s prestige.
There are many businesses that need service parts from Comet. For example, every Yamaha golf cart made from 1986 through 2005 was made with a Comet clutch. Comet is also a supplier to major manufacturers such as Arctic Cat and John Deere.
“To this day, when you say ‘Comet,’ people know it,” says Nancy Terrill, CPC’s marketing and business development manager. “It was a smart move on Jim’s part to purchase it because it’s a name everybody recognizes.”
The timing of that purchase was critical. Not only did CPC survive the economic recession of 2008, but it exponentially grew in products produced. Since 2009, CPC has grown from 10 employees to upwards of 70 employees.
Jay attributes the successful timing to his father’s astute awareness of the industry. Jim reads the news, pays close attention to email, and actively looks for opportunities to make a new purchase.
“Some people see businesses going down and think ‘oh, I don’t want anything to do with that,’” Jay says.
“But more often than not, that business was just poorly managed. CPC has had great timing with its purchases because we’ve been able to spot deals and then have the wherewithal to buy them and get them back in production.”
Believing in Comet has thus far paid off. Though Jay admits there’s room for growth, he doesn’t foresee progress slowing down.
“We’ve been able to get a lot of customers back that Comet had alienated through late deliveries and poor quality,” Jay adds. “It took us time, but we’re showing people that we’re a different company with the same name.”
Besides Comet, Jim discovered a fruitful business endeavor when he made a deal with TecumsehPower, a manufacturer of engines for power equipment. Jim read an article in the Wall Street Journal that referenced how one of Tecumseh’s customers had a low inventory.
Right away, Jim began to research why.
“Tecumseh has been around for over 100 years, so this clue that they weren’t making engines didn’t make sense,” Jay says.
Jim found out that private equity company bought out Tecumseh. Right away, he had Consigny reach out to make a deal.
“For a while they just never got back to us,” Consigny says. “Then all of the sudden, on Thanksgiving Day, they expressed interest in doing business. In less than two months we were able to buy the business.”
It all goes back to Jim’s awareness of the industry.
“He really has his finger on the pulse,” Terrill says. “Jim has always been very shrewd in his judgment and timing, with a little bit of luck thrown in. That’s good business.”
In his efforts to remain observant, Jim’s also not a stranger to the warehouse. Though he’s the CEO and founder of the company, he makes sure to walk around the buildings and frequently speak with his employees.
In addition to supplying vintage service parts, CPC also conducts original equipment manufacturing (OEM) for businesses. By using computer numerically controlled (CNC) machines, as well as other advanced technology, CPC can customize parts for individual needs.
All machining is done in house, warranting an accurate “Made-in-the-USA” label.
“I’m incredibly proud of the ‘Made-in-the-USA’ sticker we can put on our logo and associate with our name,” Jay says. “Very little manufacturing is done in the U.S. anymore. We do all assembly in house. I’m proud we can put the USA sticker on our product and not think twice about it.”
Having a diverse range of products helps the company to thrive as a business, Jay adds. CPC makes parts for industrial, recreational and commercial products. That way, if one area suffers or remains stagnant, there’s something else to fall back on.
Though CPC may not make the original parts again for years, Jim makes sure to store the equipment within the company’s 200,000-square-foot industrial building.
“That’s the dedication to the service parts business that we have,” Jay says. “We can make parts to exact specifications, and we won’t scrap out the equipment, even if a decade goes by. A lot of companies won’t do that unless you order a large volume of pieces.”
Though CPC continues to grow, Jay hopes to always maintain a small-business attitude.
“We’ve grown a lot over the years, but we’re still a small company at heart,” Jay says. “Everyone has to wear multiple hats and do multiple things, and we won’t accomplish that unless we do it together.”