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NAECO’s company explainer video has a few parts that make its founder especially proud.
In an effort to sum up some of the Peachtree City-based company’s key products — metal switches used in planes, cars and even high-speed trains — the narrator resorts to a pithy saying that borders on sloganeering: “Remember: If it flies, drives, roars or soars, odds are NAECO products are nearby.”
David Bergmann, who started the company around the kitchen table with his wife in the late 1990s, gets a kick out of that bit of wordsmithing.
“That part’s mine,” he tells Global Atlanta during a visit to the company’s office and factory.
Mr. Bergmann, an engineer by training who previously worked at German industrial giant Siemens, then goes on to prove another of the video’s proud assertions: that the Georgia exporter has some of the “geekiest” engineers in the business.
He deftly explains how switches arc with electricity, the differences in the properties of copper and other conductive metals, and how adding the “fairy dust” of other elements creates alloys that enable these critical parts to stand up to the most demanding environments and government standards — important especially when selling to defense contractors.
But that exacting attention to detail correlates to NAECO’s own growth story — an exercise in entrepreneurial alchemy that turned a middleman into a growing manufacturer.
The company first worked out of a mother-in-law suite at the Bergmanns’ house, where they bought contact-metal parts that could be resold to other suppliers. At one point they were getting so many deliveries in the 440-square-foot space that UPS and FedEx trucks cracked the driveway, but the neighbors never complained.
“Maybe they thought I was addicted to eBay,” Mr. Bergmann said.
Finally the company moved into a “real office,” then bought its current location in 2011, where CNC machines churn out a variety of metal parts. An on-site quality control lab tests to ensure they meet the standards of customers not only in aerospace, but also in sectors like medical devices, power generation and consumer electronics.
Mr. Bergmann is the first to admit NAECO’s journey has been a process of trial and error. At times the company took orders that were unprofitable in the short run to prove to big companies that NAECO could keep them from sweating the small parts.
“Not everything I’ve tried has worked,” Mr. Bergmann says.
But enough of it has to keep the nearly 30-person company growing, and now that his sourcing is more sophisticated, NAECO is starting to claim a bigger chunk of the value chain by taking on more of the manufacturing.
“My name isn’t Rockefeller, so the only way I could stay in business was to find good suppliers and make sure they could do the work,” he said. “Now that that part’s mature, I’m in-sourcing as much in as I can. That’s what the expansion is for.”
With his own machines, Mr. Bergmann’s commodity components have morphed into combined assemblies that boost sales and better serve customers. The machines, in turn, can be used to make parts for other industries — like bone screws for medical applications — that can fetch even higher prices.
Now, NAECO is working on a 10,000-square foot expansion next to its current building, increasing its total footprint by more than 60 percent as it creates the NAECO Advanced Manufacturing Center. Plans call for more machines and advanced robotics that will help out after-hours. Permits were granted in November and construction is under way, with completion scheduled for mid-summer 2018. The new facility will include an expanded quality-control lab and more space for research and development.
Partially driving this new era of growth is the company’s openness to foreign markets, particularly those with a well-developed supply chain for aerospace parts.
“The fact is, when you go down to Mexico, every single facility is huge and getting bigger, so you’ve got to be in Mexico,” Mr. Bergmann said. “They’re like our China, but they’re not communist. They’re allied with us, and they allow us as a hemisphere to compete.”
Protectionist rhetoric and calls to renegotiate NAFTA, he said, are “populist and naive,” and they fail to take into account the quality and professionalism of Mexican partners.
France, the home of Airbus, is another key market. NAECO this year exhibited the Paris Air Show at Le Bourget jointly with its French customer, which has also helped make inroads with SNCF, which operates high-speed rail system in the country. Canada — home to Bombardier — is key as well, though the components can take round-the-world trips before they reach the end user.
“It’s crazy how much our product travels,” Mr. Bergmann said.
China is now a customer, and business is set to boom in Mexico with new customers and big plans for export expansion in 2018.
In a world with a huge backlog for planes, finding orders may not be the problem. Mr. Bergmann places an even greater emphasis on finding skilled technicians who can operate the machines at his factory. As he goes global, local support will continue to be crucial.
This year, help came in the form of a $5,000 grant though the Atlanta Metro Export Challenge, backed by JPMorgan Chase and as part of the Brookings Institution‘s Global Cities Initiative. Mr. Bergmann said NAECO has used the grant for marketing and travel to export customers, as well as some R&D. The company plans to pitch for an additional $20,000 in February.
In April, NAECO was also nominated for the fourth time as manufacturer of the year in the small business category during Georgia Gov. Nathan Deal’s Manufacturing Appreciation Week.
See more on Mr. Bergmann’s views on NAFTA here: Georgia Factory Owners Split on Trump’s ‘America First’ Trade Policies
See the NAECO video below: