Meet Obama's new favorite small business
Obama's stimulus sales trip this week will feature Cardinal Fastener, a manufacturing company that has reinvented itself for the alternative-energy future.
(CNNMoney.com) -- Never mind Joe the Plumber; meet John the Manufacturer. That's what President-elect Barack Obama will be doing Friday, when he stops in Ohio to pitch his $825 billion economic recovery and job creation package.
While in Bedford Heights, Ohio, Obama will be touring the Cardinal Fastener & Specialty Company, a local manufacturing company that supplies steel screws, washers and bolts to industries such as construction and mining. The company is a carefully chosen poster child for Obama's stimulus plans: While so many manufacturers struggle with slowing sales, Cardinal Fastener is growing and adding staff, thanks to its focus on the green energy industry.
"People call it the next automotive industry for the United States," said John Grabner, 56, president and owner of Cardinal.
Cardinal traditionally supplied parts to customers such as John Deere and Caterpillar (CAT, Fortune 500). Those sales have slowed during the recession. But Cardinal also sells fastener joints, nuts and washers to wind turbine manufacturers - and there, the growth has been explosive. Grabner expects green energy clients to account for 90% of Cardinal's growth in the coming years.
"We hired two people last week," Grabner said. "We're experiencing the opposite of what's happening [with the economy]."
Creating jobs in the green energy sector is the centerpiece of Obama's plan to revitalize the stagnant American economy. The package he hopes to sign into law by mid-February, the American Recovery and Reinvestment Plan, calls for $54 billion to double production of alternative energy, and aims to create half a million new jobs in the industry.
Grabner expects some of those new jobs to be at his plant. "We think [Obama's initiative] is going to give us at least a 50% growth rate in 2009," he said.
That's the kind of story Bedford Heights Mayor Fletcher Berger wants to hear more often. Located 15 miles southeast of Cleveland, Bedford Heights has an economy heavily tied to the slumping steel and auto industries and their aftermarkets. Recently, several local manufacturing plants have geared down from three shifts to one or two. That means that many of Bedford Heights' 11,000 residents are looking for jobs.
"I'm hoping Barack Obama's visit will give companies in our area an opportunity to be on the leading edge of energy programs, infrastructure programs," Berger said
Cardinal Fastener got into the field by aggressively courting wind turbine manufacturers - most are headquartered in Europe - just as they began setting up supply chains in North America. What Grabner calls "Putting the Fast in Fastener" has helped the company draw in clients such as Danish wind turbine giant Vestas. Part of what attracts buyers, Grabner says, is his company's quick turnaround and quality product. All raw materials are melted and manufactured in America, and each of Cardinal's 45 plant workers are trained to operate every piece of equipment in the plant.
"They're not at one machine all day long doing one operation," Grabner said. "Having the worker do five manufacturing steps himself means we can make the stuff in hours from start to finish and ship the product within the same day."
With $10 million in annual revenues, Cardinal occupies a tiny niche in the $14 billion fastener industry, but it exemplifies the kind of business success Obama's administration hopes to nurture. Grabner launched Cardinal Fastener 25 years ago with 11 employees and equipment purchased from a defunct manufacturing company. Today, the company employs 65 people, including two of Grabner's three sons.