Compass Growing in Space, Many Other Markets
Compass Precision is expanding its business into new markets at all of its operating companies. In particular, Compass is growing in the space industry.
With that growth, now is a perfect time to talk with Compass VP Sales Jim Miller (shown second from right in photo above, taken during recent Boston Red Sox game at Fenway Park with CEO Gary Holcomb (far left), communications contributor Dave Holcomb (second from left), and COO Bill Canning (far right)) about the company’s progress and future goals:
What is Compass Precision’s new market focus?
We’ve got several market focuses. One where we are seeing a lot of traction is in the space sector. We’ve had a nice presence in space mostly through our Gray Manufacturing company out of Denver, North Carolina, which is about 30 minutes northwest of Charlotte. They have had a presence in space for a number of years.
So we really started looking at how they developed in the business and how we helped them leverage their equipment and people to develop that business. Then we wanted to see if we could use that knowledge and expertise to take advantage of it and spread it to some of our operating companies that have the equipment, capacity and the technical expertise. Because you really can’t take on some of these parts that literally go to Mars, whether through satellites or rockets, without having the infrastructure to do that. So we really put a giant focus on leveraging Gray, their experience and relationships, and then starting to spread the word about our other operating companies, specifically Advanced Machining out of Salisbury, North Carolina, which is about 50 minutes of Charlotte, Quality Products, where our corporate headquarters is located in Charlotte, R&D Machine, which is in Oldsmar, Florida, and then Strom Manufacturing, which is in a suburb of Portland, Oregon.
What we’ve done is introduce these companies to some of the bigger players, and we’ve been able to gain some real traction. We see space not only as an industry that’s growing now, but as an industry that’s going to keep getting bigger and bigger over the next 10 years. We’ve been fortunate enough to get involved with some brand new platforms, and the traction we are seeing has been tremendous.
We’ve gotten involved in several new programs that all of the companies I’ve mentioned are beginning to dip their feet in. So, we’re really excited about the future. In the same vein, what that’s allowing us to do, and Compass as a whole, is not only spreading these opportunities and developing market share, but bringing on even more quality people, processes and capital investments. We’ve made several investments this year on that front, and with these new opportunities that we’re seeing, we’re going to be doing a lot more in 2025.
Why are these new industries, particularly space, so appealing to Compass and its operating companies?
There’s probably a few reasons. I think one of the main things is it’s a growing industry. Our Gray group basically got in on the ground floor too, so that helped give us a bird’s eye view of what the space industry could be. But furthermore, we’ve got several of our companies that have the capabilities and the capacities, and for the most part, the technical acumen to be able to take on these sophisticated parts that require exacting tolerances, unique materials, and because we’ve got the people, the processes and the equipment, we’re able to jump into those areas and do it somewhat seamlessly.
One element that’s really unique and cool about the Compass business model is we do a lot of collaboration. We’re not just Compass Precision, we’re eight operating companies, and with that, you get a lot of experience, know-how and equipment capabilities. So, we’ve been able to use some of our companies, Gray and Advanced in particular, that have vast technical expertise as it relates to programming, engineering, design, and they’ve been able to impart some of that wisdom to the other companies that weren’t as versed but they have different equipments that allowed us to take advantage of their equipments and capacities, along with the know-how of these other folks, and then spread that to our new space customers.
How is this different or unique from other CNC machining companies?
As it pertains to space and what Compass is focusing on is our uniqueness. As I’ve mentioned before, we have a bunch of different companies that can collaborate and that brings a whole versatile group of skills whether it’s equipment, people or processes. We have 5-axis lights-out capabilities with some of our companies, but they might not have a big enough footprint to take on some of these large space parts that you need.
What I mean by that is parts that might be 30 inches by 120 inches. We don’t have equipment at some of these companies to take that on, but we do at some of our other companies. But maybe they didn’t have the skillset, if you will, to jump into that market. But now with everyone working together, we’re able to leverage all of our skill sets, knowledge, and technical expertise. So we’re able now to offer those kinds of advantages, opportunities to our new space customers, as well as our other aerospace and defense customers.
That’s why Compass is unique, and that’s why we’re focusing on the space platform. Because we have the ability to take those kinds of tough projects that require exacting equipment, tolerances, inspection, and processes.
You don’t just wake up one day and say, ‘Hey, we’re going to do this.’ It takes a lot of forethought, a lot of understanding. Major investments and a lot of experience. We have that at Compass, and we’re super excited about being able to tell our new customers, especially in the space market that we’re here, we’re here to help and we’re here to grow and stay.
You’ve already touched on this a little. But at which Compass operating companies is this happening?
Advanced Machining has several brand new programs that they are running that are super difficult. Not any shop can take that on, and they have taken it on. What’s happening across the board is we are gravitating towards projects that may initially be outside our comfort zone, as we say “the tough stuff” and we like to do that. Because what does that do? We might stumble a little bit in the beginning, but it helps us grow. It makes us better as a company, as a group, and it only makes our customers better. Now, they are seeing what they can give us and we can handle it.
Quality Products has really stepped up to the plate taking on tough, large projects too – large parts, which they wouldn’t have done before, but with the help of super technical shops and adding new people and equipment, they have not only taken on these projects with great effort, they’ve been able to compress lead times.
That’s one of the things we’ve done too. With our people, processes and equipment, we’re able to spread the wealth. If one company might have a little bit of a capacity or equipment challenge, we can quickly pivot and have another one of our qualified and capable companies take on that project.
Quality and R&D have done an incredible job in the aerospace and defense industries. And now one of our newer acquisitions, Strom, is beginning to see opportunities in the space market. They’ve got some really great people and the largest concentration of horizontal mills in our group of companies, including – lights-out capabilities – that can only benefit those markets.
Other than space and aerospace and defense, what other industries is this new emphasis happening in for Compass and at what operating companies?
I don’t mean to make this seem like we’re only focusing on a couple markets. We’re focusing on a number of markets. There’s a few industries that we see as possible growth potential sectors to end 2024 and into 2025.
One of those is the semiconductor market. If you follow that industry, you know it’s been down over the past year, but we see things growing in that end of the spectrum. At Bergeron Machine in Westford, MA, which is about 30 miles northeast of Boston, they specialize in Swiss-screw machining. Very small, intricate parts made out of difficult materials – Inconel, monel, titanium, those types of exotics.
It’s a brand new discipline for us. Most of our machines at Compass are your typical 3, 4 or 5-axis kind of events, wire and sinker EDM, mill/turn, turning, sheet metal fabrication, laser, turrets. Those types of manufacturing disciplines. So this is a new arena for us. We’re excited about it, and they’ve got a ton of experience and a great foothold in the semiconductor industry (as well as others). We’re starting to see that grow, and we think this market is going to keep getting better in 2025, and we’ll ride that wave.
I also think Bergeron is poised to take advantage of that with their skill sets, their people, their capabilities, their equipment. They also have a very good footprint in the medical markets. Same kind of disciplines. We see that as a growth potential for 2025 along with our Douglas group, which is located in Winona, MN, a couple hours from Minneapolis. They are our largest company as it relates to mill/turn machines. They focus on the speciality sector, a lot of outdoor equipment as well as lighting and medical. They are positioned to take advantage of their equipment and their people. So, we see those industries as growth industries as well.
And I’d be remiss if I didn’t mention Tri-Tec Industries in Charlotte. They have been one of our bell cows. Great company and leadership which has grown tremendously. They are really focused on the medical markets. Just in the last couple months because of their growth, we’ve been able to purchase two really nice pieces of equipment for them to help their largest customer grow their business and grow our business.
That’s what Compass does. We invest and so we’re excited about those growth opportunities in those industries. We see the end of 2024 and 2025 being a time for us to continue to grow.
When did this slight shift in market focus start to occur for Compass and when do you expect it to really take off?
Well, I think it’s going to be a never ending evolution as we grow. But I believe this recent new focus had its genesis at the tail end of 2022. We started to get more involved in space and a bit more in the aerospace and defense side as we continued to acquire companies, build relationships and gain more experience. At that time, we kind of looked at the tea leaves and said, ‘What sector is growing and how can we grow with it.’
So, through a lot of hard work, effort and collaboration, we started to put the foundation in place on people, process, technology, and equipment. And not only equipment that can make these parts but equipment that can inspect these parts too. So, we’re really big on investing in the quality side because you can’t build these parts without that. So, we started to focus on building our equipment, people and processes.
It didn’t happen overnight, but we’ve started to truly see the fruits of our labor. Especially, I’d say, since Q1 of this year. We’re gaining traction. We’re meeting a bunch of new people. We’re building relationships, and as a result, we’re making parts. It’s super fun to see, and I think everybody is excited. But not only that, it’s not only for today or tomorrow, it has a 15-year trajectory. We plan on riding that with acquisitions of companies, equipment, really zeroing in on 2025 and beyond.
As VP Sales at Compass, what is your role with this new emphasis in these industries?
Well, I guess I’m the driver behind it. You can’t do it without everyone buying in or at least the companies that you know have the capabilities, the wherewithal and the desire to take on exciting new projects. So, I have a lot of support, which is awesome.
But my role is to understand and then execute. To do that, though, you have to have the support and the confidence level that these things are going to get done. I have that confidence level. I know that I’m supported straight from the top of the company with our board, our CEO Gary Holcomb, our COO Bill Canning and Paul Wilhelm, our CFO. They have all been instrumental in supporting our growth initiatives
We’ve made a real emphasis and spotlight on growing the company and growing in these industries. We’re seeing it pay off but again, it doesn’t happen overnight. I feel blessed and fortunate that we’ve got the support, and we’re gaining that traction, and we’ll continue.
My job is a lot of fun. I say, “I get to go to work” not that “I have to go to work.” I look at the big picture view of where we can improve, which we’re constantly doing. How we can get better and what we need to do to get better and ultimately support our customers in whatever aspect that is. So that’s my job. I don’t take it lightly, and I love doing what I do. I work with not only fantastic super smart people from our customer base, but the people that run our operating companies that I work with daily and the folks on the floor. I learn something every day, and I’m able to pass that on to some of our other companies and our customers.
So, I kind of act like a point guard. I have a pretty good idea of operating companies capacity, capabilities and I distribute the opportunities to the best of my ability. You can only do that if your wings, centers, your forwards using the basketball term, if they can execute. Our folks are executing, and it’s really fun to see.
As you try to grow in these new industries, is it challenging to also continue satisfying existing customers and existing industries? How do you balance that?
That’s a great question. There really is a balancing act, no doubt. All of our customers are super important. But really, I look at it this way. All of our customers benefit from the new customers that we have that hold us to exacting specifications, manufacturing disciplines and quality.
Not to say customer requirements in the telecommunication, medical, power generation fields aren’t extremely complicated, difficult parts to make, they can be. But they still benefit from our growth in these other high-tech industries. What we do is we look at everything across the board and what we can do to not only grow our businesses but keep our customers happy. That includes our longstanding existing customers.
Let’s face it, we wouldn’t be able to grow and do the things that we’re doing without those folks as our anchors. They are super important, we take care of those folks, no one is any less or more important than the other. So we try to look at that as a way to grow and then go to these customers and ask, “What else can we do to help you?” Or say, “We’ve developed some new ideas, some new strategies, and new equipment to make your parts differently and efficiently, which in turn, can benefit you if not by cost, but compressed lead times.”
So they’re all benefitting, and we’re not dropping the ball. We’re keeping our eyes on these folks that have helped us grow, and we greatly appreciate that.