Alloy shows steely dedication
CHAMPAIGN – Five months after Alloy Engineering & Casting was acquired by Indiana-based Wirco, the company is picking up new business from steel mills.
Alloy, which employs 89 at its plant at 1700 W. Washington St., C, continues to serve the heat-treating industry clients it's always served.
But now working in tandem with Wirco's fabrication plant in Avilla, Ind., Alloy is providing steel companies with gas-fired radiant tubes used to heat their furnaces – and at a more competitive price.
"We're really putting the hurt on the competition with that," said Chad Wright, Wirco's vice president of operations. "The steel-mill business has been strong."
Rich Grimm, Alloy's manager of engineering and sales in Champaign, figures Alloy's steel-mill business has picked up 50 percent in the last six months. He figures it now accounts for 25 percent to 30 percent of Alloy's centrifugal casting business.
Meanwhile, business related to the automotive sector is slower as a result of a general slowdown in that industry.
"We're not getting nearly the demand from the auto sector that we've seen in the past," Wright said. "We used to get huge-volume casting orders. Now we get smaller orders, or it takes several months for orders to be released."
Alloy makes tubes and trays used in heat-treating parts and equipment. In the automotive field, that includes transmission parts, power-steering components and axle components. Among the end users: Caterpillar, Ford Motor Co. and General Motors and its suppliers.
In acquiring Alloy, Wirco planned major changes at the Champaign plant, including selling off countergravity casting equipment that was no longer used.
However, Wright said it's taken longer than expected to sell that equipment. Wirco hoped someone would want to buy the whole countergravity system, but the company concluded it had to take the system apart and sell it piece by piece.
The proceeds "won't come close" to recouping the original cost of the system, Wright said.
Eventually, Wirco plans to move its finishing work – including surface grinding and sandblasting of the castings – to that section of the plant.
The company would also like to move the patterns used to make molds for the castings to the area where finishing work was done. Currently, the patterns are stored in Bondville.
Wirco is also in the process of buying automated equipment for Alloy's centrifugal casting line. The estimated price tag: between $850,000 and $1 million.
"We should place the purchase order in the next two weeks," Wright said, noting the equipment ordinarily takes six to eight months to come.
In the meantime, Wirco is repairing a big section of the roof at Alloy. It's also considering tearing down the front office and building a new one. That decision will likely be made by the end of summer, Wright said.
Grimm said Alloy's major competitors in the United States include Steeltech Ltd. of Grand Rapids, Mich.; Alcon Industries Inc. of Cleveland, Ohio; and Castalloy Corp. of Waukesha, Wis.
"We're starting to see competition from China and India," he said. "We've also got competition from England."
But Grimm said Alloy's business is expanding and the company is picking up new customers.
"We have the best design and best-quality product in the market," he said. "I'm confident we're the No. 1 supplier of heat-resistant castings in the United States in terms of design and quality."
Alloy's products are sold through independent sales representatives who work with the company and cover different parts of the country.
The newest independent sales representative will be Matt Wright, son of T.J. Wright, a sales representative for Wirco for more than 20 years.
Matt Wright now works for Rockwell Automation and will assume his new duties Feb. 1. He will represent Wirco in Indiana, Kentucky and parts of Tennessee. A Spanish speaker, he will also represent Wirco in Mexico.