Rockford, IL--In the 1970s, Bob Schroeder had a career many would envy: A degree in mechanical engineering, broad technical experience, and industry training.
Then the roof fell in. In 1982, business at the Premac machine shop Schroeder ran with his father screeched to a halt.
|Technical nicheBearings that withstand contamination, shock loading, and water washdowns to replace linear ball bearings in manufacturing, test, and exercise equipment.
For thirty years, Premac had served two large customers with custom-engineered parts. But when the recession struck the Midwest, Caterpillar went on strike for nine months and International Harvester went out of the agricultural market. "Literally 100% of our business dried up," recalls Schroeder.
The prosperous Midwest had become the Rust Belt, and Schroeder's hometown of Rockford, IL, had the highest unemployment rate in the nation. "I made a decision," he says. "I said 'I'm never going to let this happen to me again.'"
So the 33-year-old engineer set about building Pacific Bearing Company. Today, the firm is booming. In 1993, revenue grew by about 30%. In 1994, that snowballed into 40% growth. This year, Schroeder expects Pacific to grow by 70%. The firm designs and manufactures bearings and mounts, linear slides, and patented pillow blocks.
Starting from scratch. "On paper, we were bankrupt in 1982," says Schroeder. "If the business had gone down the tubes, I would've lost my house, my folks would've lost everything they had. The only option we had was to somehow salvage the business." So they auctioned off most of the equipment and bought one new CNC lathe.
Schroeder's first design was an innovative bearing using Teflon® bonded in a metal shell. "Since we didn't have enough money to pay people in the shop, I ended up making the parts myself, then I'd go out and sell them. It was seven days a week, 15-18-hour days."
Schroeder sought a business approach that would combine the metalworking capabilities of the shop with needs in the marketplace--in particular, a niche market where he could offer products with unique capabilities. He set his sights on the self-lubricated plain bearing industry.
At the time the industry was dominated by two big OEMs. "Essentially, the products that they manufactured were to their own standards," says Schroeder. "They didn't like manufacturing products to their customer's standards."
"The thought behind Pacific Bearing was: If a company offers bearings that are size-interchangeable with the bearings currently being used by the customer, it will make the switch from one type of bearing technology to another much easier," says Schroeder.
Pacific's early business came from referrals from bearing makers Garlock Bearings, Inc. and Dixon Automatic Tool, Inc. "They told us about bearing applications where they were not able to solve the customer's problem," says Schroeder.
Some of the most difficult applications were in hydraulic pumps. In the early '80s, environmental concerns prompted companies to switch from PCB-based fire-retardant hydraulic fluids to high-water-content hydraulic fluids. But the new fluids wreaked havoc in the pumps, causing high failure rates in wear surfaces and bearings. "There was a great need to produce self-lubricated bearings for these pumps. And nobody in the marketplace was willing to meet their needs," recalls Schroeder.
An alternative bearing. Schroeder analyzed the linear ball bearing market and realized that most applications used linear ball bearings because there wasn't any alternative. "You either used a recirculating linear ball, or you had to dream up your own design," he says. The design he created answered a need in the market.
Schroeder observed that many users needed a bearing that was self-lubricated, would tolerate contamination, shock loads, and fluid washdowns, and would not catastrophically fail. His Simplicity™ linear bearing design offers those characteristics. The design gives users an alternative to ball bearings in automotive, electronics, machine tool, and other applications.
The bearing's liner--a specially compounded Teflon® called Frelon®--imparts low friction and self-lubrication, and uses fillers to provide long wear. The bearings can support 1,500 lbs per square inch over the bearing surface carrying the load.
Schroeder was patient with OEMs that were reluctant to make a quick switch. One early convert was domestic automakers. "We've seen applications where GM or Chrysler were changing bearings every two weeks because they just could not afford that catastrophic failure," says Schroeder. "In many instances, an automotive customer retrofitted with Simplicity bearings from Pacific, and two years later, those bearings are still operating within specifications."
Because the Simplicity bearings' mode of failure is continual rate of wear, the design eliminates unexpected--and costly--shutdowns, says Schroeder.
Survivor philosophy. Schroeder emphasizes the importance of a diversified background and sales experience. He also credits the extensive training he received as a young engineer at the Camcar Division of Textron, Inc. "One of the most important things I learned there was: Have products that are either proprietary or patented, to insulate you. And have a broad customer base. That impressed me as a very smart business philosophy."
Schroeder describes himself as a "typical" engineer--always thinking about new, better designs. "When Bob goes on vacation, he comes back with a arm-length list of things he wants to do when he gets back," says long-time friend and Public Relations Director David Bowers.
Today, Schroeder holds three patents and is co-inventor on a patent-pending automotive hose-clamp design. But he recalls a few rueful instances when he proposed a design, heard it dismissed as impractical, and watched as another firm patented a similar idea years later. "That taught me to trust my intuition," he says. "When somebody brings me an idea, I'm not going to treat it that way. I'm going to listen to every idea that's presented to me."
That philosophy carries over to Pacific today, where Schroeder encourages engineers to pursue new designs.
Last year, Pacific established distribution throughout Europe. Schroeder says the new customer base is a valuable resource to Pacific engineers. "They're like new product development engineers working for us. If they come up with a flaw, we're going to fix it. And if you keep doing that, your product just gets better and better."