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Temper mill purchase scrapped for lower cost stretcher leveler: McNeilus management is betting that the ability to produce a dead flat blank will revive relations with former customers and attract many new ones. (MCN case study: McNeilus Steel Inc.).

Article Excerpt
Executives at regional general-line service center McNeilus Steel Inc. of Dodge Center, Minn., predict their recent investment in a new stretcher leveler, the biggest capital investment in the company's 55-year history, will yield dramatic sales growth in the next two years.

The company's roots date back to 1948 when Harry McNeilus, a farmer, purchased a scrap yard and sold scrap off the back of a truck. Later, the company started purchasing new steel for resale to local blacksmiths. "The company slowly evolved into a steel distributor in the 1950s and 1960s," says Chief Financial Officer Daniel Blaisdell.

Revenues rose from $80,000 in 1970 to a peak of $102 million in 2000, says Pat McNeilus, who took the corporate reins from Harry in 1980. Current sales are around $85 million, partly because of the weak economy, but also due to the loss of a major customer. Pat is optimistic sales will rebound, especially with additional markets that will be opened by its new stretcher leveler.

McNeilus Steel has always stressed customer service, offering next-day deliveries early in its history, Operations Manager Jeff Braun says. The company has a fleet of more than 90 trucks manned by drivers who know the business. Many of them are former warehousemen.

"Service has always been a big business for us," Blaisdell says. "Being located where we are (about 75 miles from Minneapolis), we had to work twice as...