Volume 6 | Issue 3 | Year 2003

NYX / Bates, LLC the auto-motive subsystems supplier based in Lobelville, Tenn., is better placed than most to service the automotive industry’s growing need for under-hood products made from materials like rubber, nylon and plastic.
In a tough economic period, Bates has continued to grow its sales, up from $54 million in 2000 to $72 million. Not bad for a company that started out as a two-man operation in 1974 when Michael Bates and his brother Howard established the firm.
NYX Inc. of Livonia, Mich., acquired Bates in December 2000, a deal that has proven fruitful for both parties. Bates gave NYX a bigger customer base and a strategic manufacturing location, while NYX provided Bates with resources and research and development. NYX’s commitment to engineering and design – it has a design center working round the clock in India – enables Bates to offer innovative solutions to customers’ needs. Those needs, said Michael Bates, grow ever more complex but also provide opportunities for Bates to show exactly what it can do. Major customers such as DaimlerChrysler, Ford, Siemens Automotive and Nissan are trusting Bates to do more and more of their secondary work.

Michael Bates serves as NYX’s vice president of under-hood operations and also general manager of Bates. He has seen big changes in the way major customers outsource work.

“We are now moving more and more into entire subsystems, as opposed to units,” said Bates. “There has been an evolution in our products. They are more complex now.” Products that drivers take for granted – sunroof drain tubes, vent grills, wiper and washer assemblies and ventilation systems – are the solutions that Bates provides.

International exposure
“It is where the industry is going,” said Bates. “We are seeing more and more that this is what they are looking for – someone to do the secondary operations outside the plant. We are reducing their cost base and doing their work.”

Bates’ products gain international exposure and use through the worldwide operations of customers such as Ford and DaimlerChrysler, and Michael Bates is only too aware of the value of such global reach.

“We are being asked to do more and more design work for our customers,” said Bates. “It is very demanding but absolutely necessary to maintain our position in the market.” Bates is also investing more resources in its subsystems solutions and enhancing its abilities in the areas of nylon and rubber injection molding, another growing market.

In order to maintain its progress, Bates soon will add an extra 30,000 square feet to its existing 240,000 square feet of manufacturing space and invest in 20 new injection machines. The firm expects to hire up to 100 new workers. It currently has 750 employees.
Despite the uncertain economic climate, Michael Bates remains upbeat on prospects. “In the past two years, in a very shaky automotive economy, we have continued to grow,” he said. “We have not cut any jobs. We have added jobs. Our growth plan is ambitious but it is achievable. From current sales of $72 million, we are hoping to achieve around $140 million sometime in the next five years. We are looking for sustained growth over that period.”

Crucial to the ongoing success of Bates is the collective experience of its executive and management team. Some came through the early, rapid growth pains of the firm and have helped it mature. Others joined along the way. All have a wealth of experience.

“Most of our management team have been with us for 15 years,” said Michael Bates. “We offer so much experience for our customers. And becoming part of NYX was very important for us. I can’t stress enough how important joining NYX was for this company.”

Strategic move
Chain Sandhu, CEO of NYX, took over at the firm in 1989 after 18 years at General Motors. Since 1989, NYX’s sales have risen from $2 million to $200 million. The CEO lists people, technology and quality as the cornerstones of what he calls his “invest and grow” policy for the NYX group.

Set up in 1959 as Nylon Extruders, Inc., Bates’ parent company has gone through huge changes under the direction of Sandhu. NYX bought Rebmann Plastic Molding in 1991 and then made a series of acquisitions, including Cavalier Manu
facturing and Service Plastics, strengthening the scope and reach of the firm.

Asked why NYX bought Bates, Sandhu replied: “The acquisition of Bates gave us a bigger customer base and it also established NYX Bates as a tier-one supplier in the automotive industry.

“It also gave us automotive manufacturing presence right in the heart of the country so it was a strategic move as well. So now NYX has plants all over the country. We are in the north, we are in the Midwest and we are in the south and we will be able to serve all those areas.”

Sandhu also revealed NYX will soon have a plant on the east coast of the United States, but would not divulge details. Meanwhile, NYX’s design center in India is working 24/7 on interior modules for the group.

He said that Bates, made known to NYX through its customer base, has an excellent management team and a very good workforce. “We are happy it is now part of NYX, because we are growing and it is growing with us. It has expanded its product line, it has additional manufacturing space and has added people. We are a people company. The workforce makes the company. That’s our basic management philosophy.”

He said engineering capabilities have helped to transform the company from manufacturing components to modules to system integrators. “And our customers, especially General Motors, have given us the opportunity to show that smaller companies can make a contribution to success.”