April 27, 2000 First-Place Metals

Volume 3 | Issue 2

Janis Hubschman investigates how the specialty metals manufacturer helped that industry jump-start its great future.

In 1907, an enterprising German immigrant named Carl A. Phanstiehl founded Phanstiehl Electrical Laboratories to supply the fledgling automotive industry with wound coil for its ignition systems. In 1913, at about the same time the automotive industry was undergoing a radical transformation with the introduction of the moving assembly line, Phanstiehl’s company was taking steps toward becoming the specialty metals manufacturer it is today. It began producing tungsten, a rare metallic element used as, among other applications, contact points in ignition systems.

By the 1930s, the company (now renamed Fansteel Inc.), which had manufactured electric irons, battery chargers and radios in addition to automotive parts, decided to focus on its growing expertise, metallurgy. With the company’s production of Ramet® (a trademark name for a grade of tungsten carbide powder), tungsten carbide cutting tools and components became a major business for the company.

In 1950, to expand its cutting tools operation, Fansteel acquired Wesson Tool Company, which now forms part of one of its subsidiaries, Fansteel VR/ Wesson. Through the 1960s, Fansteel continued to acquire businesses with high technical competency in metallurgy. Then, in 1976, Fansteel was bought by HK Porter, a large Pittsburgh multi-industry manufacturer. The company owned Fansteel until 1983, then spun it off to shareholders, according to Fansteel Chairman and CEO Gary Tessitore. “After the spin-off from Porter,” Tessitore says, “Fansteel continued to acquire businesses and technology and to exit certain businesses, and it began changing into what it is today.”

Fansteel Inc. Today

The Chicago-based company has come a long way since its first days as a wound coil manufacturer for the automotive industry. Today, the specialty metals manufacturer turns out a broad range of quality products, including: cutting and milling tools; tool-holding devices; coal mining tools and accessories; construction tools; wear-resistant parts; aluminum and magnesium sand castings; machined aircraft components; aluminum, titanium and alloy forgings; special wire forms; commercial-grade investment castings; and powdered metal components. Divided into three independent segments – Industrial Tools, Advanced Structures and Industrial Metal Components – Fansteel serves a variety of industries, including aerospace, metalworking, automotive and transportation, lawn and garden, coal mining and construction.

Industrial Tools

Fansteel’s Industrial Tools segment is a leading supplier of highly productive tools for the metalworking, mining and construction industries. The division includes Fansteel VR/Wesson and Fansteel VR/Wesson-Hydro Carbide.

Last November, Fansteel consolidated these businesses under the direction of a newly appointed group executive, Thomas B. McLaren. In his new position, McLaren oversees operations at four facilities: VR/Wesson cutting tools in Plantsville, Conn. (75,000 square feet); VR/Wesson mining and construction tools in Lexington, Ky. (98,000 square feet); Hydro Carbide tungsten carbide rotary tool and wear part components in Latrobe, Pa. (37,000 square feet); and a facility in Gulfport, Miss. (26,000 square feet).

The consolidation of these businesses allows Fansteel to leverage market strategies, technical skills and administrative resources. “Where it’s appropriate, we will share resources, information and technology using those synergies to assist in the overall growth of the Industrial Tools Group,” says McLaren, who was most recently the general manager of Fansteel’s Hydro Carbide operations.

Advanced Structures

Three businesses make up Fansteel’s Advanced Structures segment: California Drop Forge, Fansteel Schulz Products Inc. and Wellman Dynamics Corporation. The California Drop Forge division produces a wide range of closed-die forgings for the aerospace and medical equipment markets in a 52,000-square-foot plant in Los Angeles, Calif. Fansteel Schulz Products Inc. machines and assembles high-precision aerospace components in a 9,000-square-foot facility in San Gabriel, Calif. Working hand in hand with California Drop Forge, Schulz produces components found in the fuel, hydraulic and safety systems of some of the country’s most advanced fighter and cargo aircraft. Together with California Drop Forge, they serve a number of aerospace leaders, including Boeing and Honeywell.

Wellman Dynamics Corporation, a magnesium and sand-castings manufacturer, supplies complex components for helicopters, missiles, rocket engines and jet engines, as well as structural parts for both military and commercial aircraft. At its 285,000-square-foot facility in Creston, Iowa, Wellman Dynamics produces parts for an impressive list of customers, including Pratt and Whitney, Sigorsky and Rolls Royce.

Industrial Metal Components

Fansteel’s Industrial Metal Components group includes Escast, Inc., Washington Manufacturing Company and American Sintered Technologies, Inc. A leader and innovator in the investment casting industry, Escast is a major producer of investment castings for commercial grade, automotive and industrial applications. It operates facilities in Addison, Ill. and in Reynosa, Tamaulipas, Mexico. Escast’s Automated Equipment and Tooling operation produces a variety of products for the investment casting industry in its 5,000-square-foot facility in Sarasota, Fla.

At its 100,000-square-foot facility in Washington, Iowa, Washington Manufacturing Company produces custom wire forms and components for a wide variety of industries, including outdoor products, appliance, recreational, agricultural, electrical, secondary automotive and home products. Washington’s clients include John Deere and Frigidaire.

American Sintered Technologies, Inc., manufactures powder metal components at its Emporium, Pa., facility for a host of industries, including automotive; lawn and garden; hardware; power tools; recreational vehicles; electrical devices; and plumbing.

Metals Reclamation Facility

After Fansteel Inc. discontinued its Metal Products division in 1989, it was required by law to decommission the division’s primary plant in Muskogee, Okla., which processed tantalum-bearing ore that also contained low levels of radioactive material. According to Tessitore, the company’s metals reclamation facility in Muskogee will operate as a separate business of Fansteel Inc. “The facility will process residues from the previous operation and extract the metal and chemical values. The plant will produce sodium sulfate, cryolite, tantalum, columbium and scandium,” Tessitore says.

Future Prospects

All three business groups have significant growth opportunities through internal growth as well as through complementary acquisitions. Fansteel is committed to long-term profitable growth through leveraging its substantial technological capabilities.

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