Basic philosophy yields success with basic parts

Danboro, PA--Good technology and forward-thinking management. Relying on those basic principles, Penn Engineering & Manufacturing Corp. has moved to the top ranks of the fastener industry.

From modest beginnings more than 50 years ago, the company has expanded some 20 times since the early 1950s, including its latest and largest addition of 42,000 sq ft. In the past five years alone, the fastener manufacturer has doubled in size from a $70 to a $140 million business.

Making the right connection. In 1942, when RCA switched from using thick cast-metal sections to thin sheet metal for its military electronics enclosures, the company faced a serious problem--how to provide reliable threads in this new material for component attachment. K.A. Swanstrom solved the problem by developing the self-clinching nut.

Swanstrom's design was simple: As the fastener is pressed into a punched hole, the sheet material actually moves or "cold flows" into an undercut below the fastener head, locking the device securely into the sheet. The result is a reliable threaded insert that provides a means of assembling--and disassembling when necessary--other components with the thin sheet metal.

This self-clinching technology was Swanstrom's foundation for Penn Engineering. Today, the initial concept has expanded into 28 families of products comprising 12,000 different items, including threaded inserts for plastics and broaching fasteners. Penn Engineering has distributors in 40 countries around the world. And PEM(R) fasteners are in everything from computers, instrumentation, and medical equipment to garage-door openers, wiper blades, and airbags.

"We use the same basic technology as 50-plus years ago, and no one has come up with something that can do better," says Leon Attarian, manager of marketing information and communication at Penn Engineering, "And, we discover new applications all the time."

Fastener appeal. Chairman, CEO, president, and son of the company's founder, Kenneth A. Swanstrom attributes a great deal of Penn Engineering's success to its comprehensive catalog and readily available stock.

"Engineers generally don't like special designs because they mean long lead times and typically high costs," says Swanstrom. "We can lead a customer to a standard proprietary design stocked in fairly good quantities so he doesn't have to worry about designing a special product."

But don't be mislead: Penn Engineering hasn't abandoned the idea of special designs. The company still works with customers to develop such products if one of its standard items doesn't quite fit the bill. In fact, each of Penn Engineering's products has its roots in custom design. "We don't design our product lines in closets," notes Swanstrom. "They're all the result of requirements we've found common among our customers over the years."

Penn Engineering also manufactures automatic and manual installation presses for its fasteners, and provides inserts for use in thermoplastic materials as well.

One measure of the company's success is its production schedule. The plant has been operating two shifts 60 hours per week for the past three years just to keep up with demand for its products. That means Penn machines have been pumping out fasteners 120 hours a week for three years. At a rate of up to 1,000 per hour, that's about two billion fasteners per year. The company has even experienced problems with availability of cases for shipping its products.

Home-grown success. Even with Penn Engineering's range of products and services, Swanstrom acknowledges that the true source of the company's accomplishments is its employees. "Everyone is dedicated to seeing the company survive and flourish, and change as change is necessary," he says. "We treat our employees as people, not numbers, because it's the people that really make a difference."

With that thought in mind, Swanstrom tries hard to create and maintain a family environment at Penn Engineering. Pizza days and company picnics occur regularly. The company newsletter, with a special column written by Swanstrom, keeps current employees and retirees informed. And don't forget the annual Christmas party, to which all retirees are invited. "Our retirees are an important part of why Penn Engineering is where it is."

Proof positive. Penn Engineering backs up its commitment to its employees in the training benefits the company provides, including technical training, an apprentice program, and tuition reimbursement for both technical and general degrees. The profit-sharing plan, according to Swanstrom, makes employees feel directly responsible for what the company is doing to make money, and for seeing that the company succeeds. "Each person takes personal pride in that," he says.

The family atmosphere, good benefits, and plenty of extra work all add up to a pretty good deal says Curt Martin, supervisor of screw-machine operations at Penn Engineering. And though he admits a lot has changed over his 30-year career at the company, Martin isn't taking his job there for granted. "Anyone would be foolish to think they could go somewhere else and find a situation as good as this one," he says.

Judging from the employment history at the company, plenty of others agree. Of the 1,320 employees at Penn Engineering, almost 10%--107 people--have worked there more than 15 years. And 71 of those 107 have been with Penn Engineering more than 20 years.

A moral presence. Penn Engineering's goodwill doesn't stop with its employees. It extends outside the company walls and into the surrounding community. In addition to supporting a local technical school, Penn Engineering works with an area elementary school to provide funding for special school projects. The company also volunteers speakers and sponsors a school science fair--an event of which Swanstrom seems especially proud. "I made sure it was not a contest," says Swanstrom. "Everybody wins because all the children do their best."

Educational involvement isn't Penn Engineering's only step toward contributing to life in the area. The company makes an effort to be environmentally conscious, and has even gone so far as to clean up its own mistakes. At one time, Penn Engineering had 13 below-grade tanks containing various process liquids. The company removed the units and set up an above-ground tank farm well before being asked to do it. Penn Engineering also converted from using a chemical wash to using an aqueous washing machine. Though the company invested considerable funds in the project, Swanstrom prefers knowing the company isn't polluting the environment.

For all of Penn Engineering's success and involvement, it still remains a fairly low-key company. If you were to stop in the area and ask directions to their site, Swanstrom and Attarian joke, people probably wouldn't be able to help you. That seems unusual since Penn has been in this location since 1952, but Swanstrom isn't concerned.

"I think I just let awareness grow in a normal manner as opposed to putting on some big bash. Certainly working with the local schools gives us community awareness in areas we think are important. But just to make a lot of noise for the sake of making noise, I don't think that's worth anything," says Swanstrom.

When asked about the future of Penn Engineering, Swanstrom's answer seems simple. "I want us to be here many many years from now," he says. "I'd like to make sure everybody can retire from here." If Penn Engineering's record so far is any indication, Swanstrom may just get his wish.