With New Owners, Drake Reopens Poised for Growth
WARREN, Ohio – Xiangen Hu, the chairman of China-based CW Bearing and Cixing Group Co., visited Drake Manufacturing Services Inc. for the first time as a potential customer four years ago.
Yesterday, he returned to the Champion Township plant as its owner.
“I’m here again,” Hu said to a crowd gathered outside the plant for a ribbon-cutting ceremony Wednesday hosted by the Regional Chamber. “It’s destiny that ties us together.”
On Aug. 8, a U.S. District Court judge approved the sale of Drake Manufacturing to Drake Manufacturing Acquisition LLC, which is owned by CW North America Inc., a subsidiary of CW Bearing. The purchase price was $2.1 million, according to court papers.
Earlier this year, First National Bank of Pennsylvania filed a complaint in U.S. District Court alleging that Drake defaulted on a $6 million credit agreement and requested the court appoint a receiver to manage or sell Drake Manufacturing’s assets. In April, the court appointed Compass Advisory Partners LLC of Pittsburgh as the receiver.
The acquisition by CW will recall about 20 employees to work who were placed on layoff when Drake hit difficult times earlier this year, said John Lirong Hu, president and CEO of CW North America Inc.
“This is a new day for Drake, a new day for CW Bearing,” he told employees and officials gathered at the plant Wednesday. “This is a good opportunity. We will keep Drake as an independent company,” he said.
Drake employs about 45 people at the plant at 4371 N. Leavitt Road.
“We plan to bring back all employees that have been placed on temporary layoff during this difficult time. Taking care of our employees and customers is our priority,” Lirong Hu said.
He thanked employees and customers for being patient as the acquisition process moved forward, and alluded to more investment in human machine interface, or HMI, and automation technology.
CW Bearing, based in the Zhejiang Province of China, is a global manufacturer of ball bearings for the electrical motor, gearbox, power tool and automotive industries. The company has offices in Asia, North America and Europe.
“We bring a global footprint with a diversified customer base,” said Jay Click, vice president for CW Bearing’s North American operations. “We see a huge opportunity. We believe the synergy with their advance grinding technology can help develop our products and help us expand in a new product line.”
Drake Manufacturing, founded in 1972, manufactures precision CNC machine tools used for thread grinding. Drake’s CNC machines are used in the automotive, medical, aerospace, and job shop industries.
“Anything that needs a thread, we’ll make a machine to grind that,” said Stig Mowatt-Larssen, chief technology officer at Drake. “Our market is all over the world.”
The company moved to its current location in 1976 and expanded from 10,000 square feet to eventually 40,000 square feet of manufacturing space today. Drake began building and refurbishing CNC machines in the late 1980s, and shipped its first machine to China in 2002, Mowatt-Larssen said.
In 2007, founder John Drake retired, and a group of five long-term employees, including Mowatt-Larssen, purchased the company. The new management decided to focus on building thread grinding machines, and the strategy worked.
Then, the company employed more than 100 and shipped 50 machines that year. After eight years, two members of the ownership group opted to retire, and in 2014, Drake was sold to UniWorld Investment Group.
Slow machine sales forced the company into financial trouble earlier this year, which led to the purchase by CW Bearing. “As a group of employees, we’re excited to be working with CW Bearing,” Mowatt-Larssen said.
The acquisition opens up new potential for Drake, said Mowatt-Larssen, who has been with Drake for 30 years. “CW needs machines, so this is going to allow us to develop new machines that they can use in their own production facilities to produce their parts,” he said.
CW also has the financial wherewithal to step up investment in the company and introduce new technology to its processes, Mowatt-Larssen said.
“They have deep pockets,” he remarked. “That gives us the ability to invest in new technology and continue operation.”
Copyright 2017 The Business Journal, Youngstown, Ohio.
Published by The Business Journal, Youngstown, Ohio.
CLICK HERE to subscribe to our print edition and sign up to our free daily headlines.