Past Execs Bemoan Loss Of Worcester Firm
How missteps led to the demise of Presmet
When Jack Healy left the Presmet factory in Worcester for the last time in 1992, after nearly 10 years as the company's president, it was still locally owned, and he felt like he was leaving family behind.
With the factory scheduled to close for good this fall, Healy feels like he's preparing for the wake of a seldom-seen, hard-luck relative who's been in a fatal wreck. After more than six years of poor decisions and neglect on the part of its corporate parent GKN, the remains of the once-proud Harding Street powdered metal factory is bruised, skinny and unrecognizable.
For Healy and others who worked there in the good times, it's sad that the GKN Sinter Metals plant has to close. What would be worse is if it closed behind a chagrined cloud of resignation, with no one really knowing what the generations of workers there made or accomplished.
Failure To Change
In 2002, Britain-based GKN bought Presmet from Michael Gaffin and the Boorky family. It was the second time GKN had bought Presmet. At the time, Presmet employed about 350, was doing $30 million in business every year and was profitable.
Perhaps from the outside, from corporate headquarters, it appeared as if GKN had bought just another shabby Worcester factory that happened to make auto parts. What GKN was really getting was a highly trained workforce used to inventing and developing new and better products in order to compete with industry powerhouses like DuPont. The products made at 112 Harding St. were innovative, high-density, high-strength designs that not many other manufacturers could match. The folks at Presmet didn't take any guff from anyone, not Ford, not Chrysler. They didn't have to.
In its most recent financial report, GKN - which did not respond with comment for this story by deadline - blames "significantly weaker" North American sales on the ever-shrinking market share of its customers, the American automobile manufacturers - an eventuality Healy and fellow Presmet executive Ted Bauer saw coming more than 10 years ago.
"Over the past two years, GKN Sinter Metals has focused on maintaining the profitable expansion of its European sintering business whilst returning its U.S. operation to profitability following a number of years of heavy losses," the company said in the report.
The report features a photograph of the company's newest sintering plant in Pune, India.
The Humble Smitty
Powdered metal sintering is not unlike making sand castles, Healy explained. Metal powder is put in a mold; the mold is twisted and lifted away and the product is heat-treated. The process allows intricate, strong metal parts to be shaped without machining, casting or forging.
The company that would become Presmet started just after WWI as the Boorky family's blacksmith shop. It eventually added on Massachusetts Steel Treating, and in the 1940s Morris and Harry Boorky were convinced by Worcester Polytechnic Institute professor and powder metallurgy pioneer Carl Johnson to invest in the powdered metal business.
With Johnson as a consultant, the Boorkys founded Presmet, short for "pressed metal," and the company took off making millions upon millions of high-quality powdered metal parts for IBM, Yale Lock and Xerox.
Throughout the 1950s, Presmet's customers were fast-growing, technology-driven companies that required "repeatability of quality," said retired Presmet executive vice president Reynald Sansoucy. "They were forcing us to upgrade our quality control all the time," he said.
In 1968, Morris Boorky had a heart attack, and decided to sell Presmet. In 1971, "the English," as Sansoucy called GKN, bought Presmet for the first time. The company called the hard-driving, charismatic Morris Boorky a consultant, stuck him in an office and never called on him for anything.
GKN was bent on automotive parts, which at that point accounted for as much as 80 percent of the powdered metal industry's business, Healy said. GKN Worcester started off well enough, but ended in disaster. The company botched an expansion into Holden, and "started to lose money big-time," Sansoucy said. It sold Presmet back to the Boorky family in the early 1980s.
In 1984, Morris Boorky died.
Turnaround Time
When Healy arrived at Presmet in 1985, brought on at the suggestion of Shawmut Bank and by company owner, lawyer and Boorky's son-in-law Michael Gaffin, the company's relationship with Xerox was at an end, and the automotive business was not going well.
Within three months, Healy was company president. By the end of 1985, Ford had trimmed its list of powdered metal suppliers from 400 to 10, and Presmet was one of the 10. DuPont was not.
Presmet prided itself on engineering expertise, and was powered by what Healy called "native intelligence," rather than business or academic credentials. Soon, the more than 300 workers there were reliving the glory days of 20 years earlier, inventing, developing, making and marketing parts upon which automobile safety depended.
The company was supplying Ford and GM, and with the invention and gradual refinement of the grooved locking lever for automobile steering columns, won a contract with Chrysler.
The company was profitable again, but it wasn't easy. Its success was the result of grueling training and retraining as the struggling American automotive giants offered work they could no longer afford to do in-house to outside manufacturers. Presmet was there not only to say, "We can make that," but "we can improve that."
"That's how we grew," Healy said.
Jack Healy, former Presmet president.Size Matters
But GKN was too big to be so nimble.
After buying Presmet in January of 2002, the corporation completely disrupted the Worcester plant. GKN centralized all of Worcester's sales and marketing to the Midwest, and "those people had no idea how to market it," said Bauer, who ran the sales and marketing department at Presmet until 1997 and now also works for MassMEP. "GKN didn't appreciate the talent and the products."
Leander Pease, founder of Powder-Tech Associates of North Andover, did business with Presmet and GKN and watched the company's slide from the outside.
"I had a high opinion of their ability," Pease said. "They had a lot of people, at one point in the past, who were very good."
But where Presmet relished the challenge of staying on the industry's leading edge, GKN was intolerant of anything other than clock punching. "They said, 'You have one thing to do, you stick to what GKN does,'" Pease said.
There was no more balance. GKN pushed the automotive business to the point where it couldn't do work for any other industry.
And that was at a time when a smart, forward-looking company should've been preparing for fundamental change. Since the late 70s, the American automotive industry had been in a long demise.
"No market lasts forever," Healy said. "You have to change. New process, new development, that gets you new business. Standing still is never an option for a business."
By the 1990s, Healy and Bauer could tell that Presmet's relationship with the American automobile industry would soon reach its end. "We didn't have the lowest cost, or any of those things," Healy said, and the big automakers started asking for give-backs and discounts.
Quality may still have been job one for Ford, but price was becoming a problem. Chrysler started sending yearly invoices to Presmet with an automatic 3 percent price cut already figured in.
Soon, the company wasn't making enough money to reinvest in the business. "And without the reinvestment, there's an endgame," Healy said. "Companies that make the investment and train their employees are successful."
Elegy
A photograph of the Worcester plant is the last thing GKN would want in its glossy reports. It's an old, ramshackle inner-city building of brick and steel and odd siding. Healy always refused to have it painted. "People want the place on the hill with fountains and swans and ducks," he said. "But if you paint it, your taxes go up."
Besides, the people inside were what mattered. Presmet wasn't just another mill, another godforsaken hellhole of a factory. It was an innovator, a small, local, family company at the very leading edge of powder metallurgy thanks to the smarts and insistence of a WPI professor, the charisma of its owners and the hard work and dedication of the local workforce. For many of them, Presmet was their only education. It was the kind of business the city would grovel to have today.
Sansoucy, who worked at the plant for 46 years, said of word of its closure, "I was discouraged about it. It was sad to see all that work...All that stayed here in Worcester. We would see our people buying cars, buying homes. That's what made the business go. I think they did pretty good for a while."
"I never would have dreamed that that place wouldn't be here 50 years on," Bauer said.
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