When Rex E. McCray joined Weber Knapp as a management trainee, he expected to work at the Jamestown manufacturer for a couple of years and then move on from his hometown.
That was 38 years ago. McCray, 60, is now the company’s president and CEO. In 2011, he was part of a deal to buy the company, ensuring the manufacturer stayed in town.
“One of my personal goals was to own a manufacturing company someday,” he said. “I never envisioned it would be Weber Knapp.”
The purchase by McCray and his business partner, Donald Pangborn, restored local ownership to the company for the first time since the 1920s. The deal meant a lot to McCray and Pangborn, two longtime employees who went to high school together. Pangborn is senior vice president of engineering at the company.
Chautauqua County in recent years has suffered setbacks in manufacturing, with plant closings by Carriage House, Petri Baking Products and now Berry Plastics Corp. The county’s manufacturing job count has dropped 33 percent over the past 25 years. But Weber Knapp, in business since 1909, has endured.
The company has a long history of making counterbalance hinges for customers like Xerox, grill maker Kamado Joe, and appliance maker Sub-Zero Wolf. Weber Knapp also rode a wave of high demand for ergonomic workstation components.
Today, the company employs 135 people and expects to generate $19 million in sales this year. Weber Knapp even paid off an important loan five years ahead of schedule.
McCray recounted how everything came together:
Q: How did you end up in a position to buy Weber Knapp?
A: When I started, we were still owned by Keeler Brass (based in Michigan.) In the early ’80s we were purchased by a U.K. company (FKI). … We were always a subsidiary held by them, totally operating independently. In 2008, they were bought by another U.K. conglomerate (Melrose) for their legacy debt.
There were no games … no hiding secrets. (Melrose) came in and basically said, “We do not come in here and try to run your company. We’re going to look at it. If we can improve it, we will, then we’re going to sell it. If we can’t improve it, we’re going to take what we can out of it and sell it. You’ll be lucky to be here three to five years.” That’s where they were, right up front.
I came back and basically worked through it with Don and said, “We have to do this together or Weber Knapp won’t exist.”
Q: You received a loan from the county IDA’s revolving loan fund. How did that help you with the deal?
A: I basically went to them and said, “Aside from coming up with a price, I’ve got to come up with the money.” The IDA has an Al-Tech loan … just for helping manufacturing companies invest capital in themselves, relocate to here, all that. It’s basically a 10-year loan for low interest compared to what the market is, and a commitment to pay back, stay in the area, increase your employment.
Q: You received an $800,000 loan. How were you able to pay that off in five years?
A: Probably the fundamental reason is, we’re keeping our cash versus sending it to the U.K. And we’ve invested in the company. We were lucky enough to have the cash flow. I say lucky – it’s good management, but that’s my finance guy, not me. And we have not used our line of credit, which was part of the deal up front. We’re old school. You don’t want to have to pay interest if you don’t have to. Our business has actually increased 25 percent since 2012.
Q: Some manufacturing plants in the county have closed in recent years. How has Weber Knapp avoided that fate?
A: I would say it’s our employee base, because we had some tough times going through that, too. We’ve got a really long longevity situation with the employee base, and we wouldn’t have even thought about doing this without that group coming with us.
And the other is, we’re in niche markets. We never seem to go down as far as the economy seems to, and we never seem to go up as far as the economy seems to. We’re always kind of lagging two years behind what the economy is doing, never as bad, never as good.
Q: Ergonomic products for office furniture were a big source of sales for Weber Knapp into the 1990s. Why did that change?
A: Just the sheer volume. We were one of four players in ’95. If you go online now and look for keyboard mechanisms, you might find 700 to 1,000 hits. It’s a mature market.
Technology is moving away from big, huge keyboards. You’re going to touch screen, to voice activated. Longer term, we’ll still be in the market. But instead of being 70 percent of our business, it’s going to be 20 percent of our business.
Q: You’ve got a new product line of counterbalances. What makes them different from what you’ve sold before?
A: Typically a counterbalance solution for any application is a long development time. It’s very custom to the situation of the lid you’re opening, etc. We made the (product) family called Vectis. You can go into the (website), put in your specs, and we can send you something very close to what you need specifically.
And if you only need one or two or 50, that’s a great solution. This new segment that we have allows us to make adjustments, fine tune these general sizes to your particular application.
Q: What advantage does that give you?
A: What we’re really after in the big scheme is the (product orders of) ones and twos and tens that we never were able to really address before. And maybe out of our 500 different applications, we catch another Kamado Joe or another Xerox or another Sub-Zero, where it’s a big corporation that we can catch something early, because we actually got to one of their engineers in their design process, versus after they have a design complete.