Snappy's snaps back: Things looking up at Detroit Lakes plant
DETROIT LAKES, Minn. — It's shaping up to be a good year at Snappy Air Distribution Products.
Assembly lines are humming in the 151,600-square-foot plant in the Detroit Lakes industrial park, and management is psyched up about the future.
A new union contract includes profit sharing, and plant manager Paul Kizewski says that will give a financial boost to the plant's production workers, who make from $12 to $16.50 per hour. Another 15 employees work in the office.
"There's a lot of skeptics, but I think next year when they find out how much they're going to get paid, they will be very happy. We're doing that well," Kizewski said.
Snappy is a leading supplier of metal pipe for the residential heating, ventilation and air conditioning market, and recently signed a new three-year contract with Sheet Metal Workers International Association Local No. 10 in Detroit Lakes.
The contract ensures labor stability to fulfill ongoing demand for the company's products and is the final lynchpin in a yearlong turnaround at Snappy, said Chief Executive Officer Chris Thomas.
"We have achieved our goal of creating a fair agreement for all involved parties," Thomas said. "The new agreement continues to provide above-market wages and benefits for our 104 union employees, while providing an opportunity for them to share in Snappy's profits. I'm extremely proud of our union employees' craftsmanship which provides our customers with industry leading quality and service."
Thomas framed up the significance of the deal. "This contract, along with the Medina, N.Y., agreement signed in 2015, delivers labor stability to meet current and expected demand for the foreseeable future," he said.
"In addition, we have rebuilt our financial strength, enabling us to invest in strategic opportunities. For example, we have circumvented the current steel supply issue as our rebuilt supply chain provides ample access to steel into early 2017 and beyond.
"I look forward to leading our employees, customers and vendors into the future and continuing to position Snappy as the go-to source for our industry partners and a leading company where employees are proud to work."
Last September, Snappy concluded the final stages of its business restructuring, returning the company to profitable operations.
Restructuring began in July of 2014 with closure of Snappy's Philadelphia location and continued with the May 2015 sale of its Portland operations.
The Powder Springs, Ga., facility wound down operations in June 2015; completion of the facility sale was finalized late last year.
In Detroit Lakes, the union bargaining team "exhibited tremendous persistence and focus on detail in achieving this new agreement, which I'm confident will be viewed by our membership as a fair contract," said Ricky Englund, business representative for the local union.
"I'm very pleased that the Collective Bargaining Committee leaders have endorsed this contract for ratification by their members. I want to thank our membership for standing so strongly behind us throughout this process."
New housing construction has been in a historic slump since the Great Recession of 2007-08, but Snappy's "has been able to outgrow the slowdown by gaining market share," Thomas said.
Now, the company is well-positioned to take advantage of a comeback in the housing market.
"Pockets of the housing market are coming back quicker than others," Thomas said. "The demographics are very good in some of the major cities we deliver to out of the Detroit Lakes location."
The U.S. housing market is still at a historic low, and the need for housing has been building up since the recession, he said.
"We'd like it to ramp up in a nice productive way — we like that nice steady growth."
The Snappy's plant in Detroit Lakes cuts, bends, staples, boxes and loads about 60,000 galvanized steel pieces on a normal day, said Kizewski, the plant manager.
"We've had days when we made 95,000 pieces," he said.
At full capacity, running three shifts, the plant is capable of producing 300,000 pieces a day.
Snappy's in Detroit Lakes is fortunate to have a very seasoned workforce, Kizewski said.
"Half the workforce has been here since 1980," he said. The plant is looking to add 15-20 more workers as the construction season heats up, he said.
Kizewski has been at the plant about 18 months, brought in to help turn things around by the private equity firm that bought the company in 2012. He also worked at the Detroit Lakes plant about nine years ago, "before the trouble started," he said.
Snappy workers were locked out in 2010 and again in 2013 when contract negotiations failed.
The private equity firm, Blue Wolf Capital LLC, has invested in new technology, including a fiber laser that does computerized cutting.
Snappy, which was founded in 1955, developed a number of innovations over the years, including its snap-locking pipe. "That's where 'Snappy' comes from," Kizewski said. "Snappy also invented these elbows," he said, pointing to a stack of pipe elbows. "Every company (in the industry) now uses our elbow machine."
Four full-time maintenance workers keep the assembly lines rolling, cranking out a full line of 4,000-some components — galvanized pipe, duct and fittings, as well as complementary accessories like drain pans, aluminum and venting products — that fit together seamlessly and are safe for end users.