Ohio Star Forge Grows Through Diversification
Ohio Star Forge (OSF), an ISO 9001:2000-certified company, is one part of a five-plant International Forging Division of Daido Steel, Japan, and the only one located in the U.S. The other four forging facilities are in Japan. In the 1980s, accompanying a wave of burgeoning Japanese automotive production in the U.S., Daido Steel was encouraged by automotive producers to provide some steelmaking capabilities to the growing effort. Rather than start a greenfield facility, Daido partnered with Copperweld Steel Corporation to buy an existing mill in the Warren area.
In 1988, adjacent to this location, OSF opened its doors with the intent of supplying Japanese bearing manufacturers with the forged products they needed to supply the automotive companies. The first forgings shipped in 1989. In 1994, Daido Steel sold its steel-mill interests to Copperweld Steel Corporation, which eventually became Warren Steel Holdings. That same year, OSF became a wholly owned subsidiary of Daido Steel.
Company EvolutionAt its inception, OSF was primarily a bearing component manufacturer that served the domestic operations of Japanese auto manufacturers that were manufacturing or assembling vehicles in the U.S. The company did this successfully through the 1990s and built itself serving this market. Supervising this growth was OSF’s management team led by current president and CEO, Jeffrey P. Downing, who joined the company in that capacity in 1995.
“In the early 2000s, a lot of commodity bearing manufacturing migrated to China, so we decided to diversify our customer base by diversifying our product line as determined by customer needs,” Downing said. “We invested in equipment that added to our capabilities to diversify our product mix. And we worked long and hard to be an approved supplier to companies like, for example, Caterpillar.”
Despite its successfully diversified customer and product base, OSF still makes a lot of bearing components and boasts that millions of people in passenger cars, light trucks and SUVs ride safely on its products. The company produces a wide range of parts for Tier 1 and Tier 2 suppliers to the automotive industry.
Product Capabilities and EquipmentIn 2008, OSF shipped more than 50 million pieces of metal parts from its high-volume manufacturing operations. The breakdown of these shipments is as follows: 33% cold form blanks for bearing and fitting applications (always a significant part of their volume), 24% automotive wheel bearing components, 17% tapered roller components, 8% automotive transmission parts, 7% forged balls for bearings, 7% fasteners (nuts) and 6% general industrial components. About 70% of these products end up in automotive products, 10% are destined for the heavy-truck market, 5% each are used for the off-road vehicle and energy markets, and the remaining 10% goes to miscellaneous industries.
The company’s major customers include Timken, NSK, NTN and Caterpillar. Since 2005, the company’s sales have averaged more than $34 million annually on shipments ranging from 4-5 million parts per month.
These high-volume targets are met by four Hatebur machines (two three-stage AMP30 units, one four-stage AMP40 unit and one four-stage AMP50XL unit) and nine Kyoei Seiko cold-rolling machines. OSF uses the Hatebur process because it believes the process produces high-quality steel parts that meet or exceed the specifications set forth by its customers.
To produce its typical hot-forged parts, raw-steel feed materials are received in round bars up to 30 feet in length, often from customer-specified steel suppliers located in Japan, Europe or the U.S. No sawing is done on the premises, so off-loaded bars are placed into interior or exterior storage racks until needed.
Forged parts are then put on a conveyor that dumps them into a furnace tray for insertion into the spheroidizing furnace. After 18-20 hours of thermal treatment, parts are softened for further machining (at the customer’s plant) or cold forming. After annealing, the parts are shot blasted and passed through noncontact automated inspection lines that verify dimensional and weight specifications. After a final visual audit, the parts are packed for shipment to the customer.
The primary material used in OSF’s mix of products is 52100-grade steel. This is a high-carbon, chromium-containing steel used principally in rotational bearings. The company’s management is proud of its ability to successfully handle and work with this tough, abrasive material that is difficult to process and abusive to tooling. OSF both cold rolls and hot forges this material, a claim that few companies in North America can make.
OSF’s commitment to quality is evident through its ISO 9001:2000 certification as well as numerous supplier quality awards. The company uses data-collection devices to give its operators real-time process control and utilizes PLC controls and monitoring devices to maintain accurate equipment operation. Additionally, OSF utilizes parent Daido Steel’s complete metallurgical laboratory facility in Chita, Japan, to perform complete failure analysis.
Corporate CultureIt is frequently the case that U.S. operations of Japanese-owned companies are run and managed by native Japanese executives. At OSF, the chief financial officer, engineering manager and forging trainer are all Japanese nationals. However, the CEO, all other managers and the labor force are all local talent.
“One thing that is unique about us is the way American and Japanese staff members interact. We have a very cooperative relationship with our Japanese colleagues, and those who come over from Japan to work at OSF consider it an honor,” said Carl J. Paglia, OSF’s sales manager. “As a result, OSF has become a powerful synthesis of the best traits of American and Japanese manufacturing styles.”
According to OSF general manager William J. Orbach, “We run a very lean organization here with some duties shared across the entire management team. This wouldn’t be possible without excellent relations with our Japanese co-workers.”
The company’s labor force presently consists of 51 employees organized by the United Steelworkers.
Looking ForwardCompared to 2008, this has been a slower year for OSF. Like many manufacturers and many others in the forging industry, OSF has been forced to adapt to domestic economic realities to survive and eventually regain its path toward growth. Although OSF started the year with 82 employees, poor business conditions and a weak automotive market have forced the company into two rounds of layoffs that moved a significant portion of its workforce out of jobs. Managers were clear that they intend to call back these workers as soon as business conditions improve.
Apropos to that, OSF’s executives are very upbeat about the prospects for their company and about what they do. Everyone knows business conditions could be better, but doom and gloom do not permeate the executive offices. A walk out to the shop floor, where the sights and sounds of production were vibrant and where the Hateburs continued their high-volume production heedless of the state of the economy, reinforced the optimism that prevailed in the front office.