Aggressively pursuing success, Overton Chicago Gear Corporation continues to grind away, but as Armando Diana learns, a change in gears along with strategic direction is the secret to success.
Two acquisitions, an overseas strategic alliance and the final step toward 100 percent employee ownership have highlighted the six-year tenure of the aggressive president of Overton Chicago Gear Corporation. The virtually non-stop pace has kept the heat on OCG’s competition in more ways than one.
With more than 30 years in the gear manufacturing industry, Louis Ertel took over as president of Overton Gear in 2002. He had a simple plan of action: Grow the Addison, Ill.-based gear manufacturing company into one of the leaders in the industry. By most standards, Ertel has already succeeded in his mission, but he says he is always looking for other growth opportunities – if they make sense.
“We have positioned ourselves pretty well to ensure success, but we need to keep the heat on and keep ourselves moving forward at all times,” Ertel says.
And by heat, Ertel not only means the pressure OCG’s competitors are feeling from the 52-year-old company, but from literal heat. One of the biggest differentiators the company enjoys is the heat treatment facility used for making its gears.
In early 2008, the company completed a 10,000-square-foot expansion of its heat treat facility. Heat treatment is a method used to alter the physical properties of a material and involves the use of heating or chilling to extreme temperatures to achieve a desired result, such as hardening or softening of a material. In the case of gear carburizing, the heat treatment allows carbon to absorb into the steel surface, resulting in a harder, stronger product.
Additions to the heat treatment facility include two state-of-the-art carburizing furnaces that employ the latest U.S. and European technologies, along with an 84-inch quench press. The additions complement the company’s existing five pit furnaces and five integral quench furnaces.
“The expansion gives us capabilities unrivaled in the industry,” says Ertel. “We can now heat treat gears up to 80 inches in diameter and our new quench press is believed to be the largest in the world.”
Custom designed and manufactured, the quench press minimizes distortion during the hardening process by varying the pressure and quench oil flow. The new vertical pit furnaces are state-of-the-art carburizing furnaces that accept work pieces up to 80 inches in diameter and 100 inches long. Each is computer-controlled to continuously monitor the entire carburizing process. Rapid cooling systems cool both the retort and workload.
The heat treatment facility offers annealing, normalizing carburizing, nitriding, hardening, quench and tempering. The company also has shot peening and shot blasting capabilities. Each furnace is computer-controlled for temperature and atmosphere to monitor all elements of the process for computer-controlled auto adjustments.
HEAT = PRESSURE
In addition to the literal heat being used to manufacture the gears, the aggressive approach Ertel has unleashed on the industry has been paying immediate dividends. With acquisitions and strategic alliances, the company has added new capabilities to meet customers’ gearing needs and completed a high-tech makeover of its brand to better reflect its state-of-the-art facilities, high-tech processes and global capabilities.
Overton Gear recently acquired Chicago Gear D.O. James Corp. The combination of the two companies will result in one of the largest full-service gear and gearbox suppliers in the world. Chicago Gear D.O. James is a combination of two gear companies that date back over 120 years. D.O. James is known around the world, in virtually every industry and has produced more than 350,000 large, specially designed gearboxes. Chicago Gear is the open gearing branch of the company, with a product line that ranges from gears produced at its small products division to large gearing that exceeds 100 inches in diameter. This move complements Overton Gear’s acquisition of Illinois Gear a few years ago.
To ensure the company would have the latest technologies for bevel manufacturing, Ertel forged a strategic alliance with Klingelnberg GmbH of Germany. The alliance is for the manufacture and supply of high-quality large spiral bevel gears for the worldwide market. Through this cooperation customers can anticipate greater availability of high-quality, large spiral bevel gears.
Klingelnberg GmbH is an internationally active mechanical engineering company with production bases in Hückeswagen in the Bergischen region and Ettlingen near Karlsruhe. The company also has facilities in Italy, France, Spain, Belgium and Japan. Klingelnberg GmbH, Hückeswagen is engaged in: spiral bevel gear cutting machines for the small and mid series, spiral bevel gear grinding machines, worm and thread grinding machines, tool sharpening and grinding machines, gear measuring machines and job gearing for spiral bevel gears.
As a result of these actions, Overton Chicago Gear now has the ability to produce spur, helical, bevel, herringbone and double enveloping worm gears, as well as custom designed gearboxes that will conform to customers’ every specification and deliver the performance the application requires. The company also has a dedication to quality. The recent spate of activity has expanded the company’s offering but the company still maintains the personal service and individual attention essential to meeting customers’ expectations. Dedicated employee-owners and loyal suppliers utilizing superior information technologies and integrated systems have allowed OCG to streamline production scheduling and provide gearing to the most demanding quality standards in the industry’s shortest lead times.
This is verified by the modern state-of-the-art metallurgical laboratory where samples from each load are analyzed and accurately recorded. The company is an ISO: 9001:2000 registered gear supplier using statistical process control in the manufacturing process. The company’s modern, state-of-the-art, climate-controlled gear metrology laboratory is capable of measuring to AGMA 2000, AGMA 2015, ISO 1328 and DIN 3962 gear accuracy tolerances.
Measuring instruments are regularly checked against calibrated and certified masters to maintain accuracy and reliability. Nondestructive testing includes magnaflux and nital etch capability.
The company’s 15 state-of-the-art gear tooth grinders provide the versatility to perform both generative and form grinding, including CBN Grinding. More than 100 machine tools – most NC or CNC controlled – allow the company to control turning, milling, drilling, broaching, hobbing, shaping and grinding for improved efficiency. All of the gears are manufactured to the customers’ predetermined specifications.
Overton Chicago Gear supplies custom gears for the marine, offshore, locomotive, mining, wind energy, transportation and construction industries. Ertel says all of the company’s products are well suited for harsh environments, but each customer segment requires different standards, which OCG seamlessly delivers. The fastest growing of those customer segments is wind energy and other renewable energy industries.
Wind Power is the conversion of wind energy into a useful form, such as electricity, using wind turbines. According to industry analysts, worldwide capacity of wind-powered generators was 94.1 gig watts at the end of 2007. Wind produces about one percent of worldwide electricity use, based on a study by the Worldwide Wind Association. Europe is ahead of the United States in wind power with wind producing 19 percent of electricity production in Denmark; 9 percent in Spain and Portugal and 6 percent in Germany and the Republic of Ireland.
Completing the cycle of change, the company became 100 percent employee owned in 2006, when it purchased all of the outstanding privately held shares of the corporation. The stock was purchased by a trust and shares were distributed to employees as part of a transaction known as an Employee Stock Ownership Plan (ESOP). Overton Gear had originally established an ESOP in 1985 when it purchased 49 percent of the outstanding stock of the company.
Ertel says having each employee have a stake in the company’s success has created synergies among groups and departments that continue to pay dividends. In the past six years, OCG has gone from a mid-tier gear provider to a leader in the industry and continues to grind away for more success.