Bluegrass Spring Company Continues to Grow With New KHIC Investment
Friday July 26, 2002
Additional funding means bigger factory, new equipment, more employees
Kentucky Highlands Investment Corporation (KHIC) has learned that you don’t mess with a good thing.
KHIC is making another investment in Bluegrass Spring Company, a precision spring, wire form and stampings maker, to buy a new machine and expand factory floor space to 10,000 square feet.
The investment continues a long history with KHIC. The economic development organization provided funding to Bluegrass Spring in 1997 to purchase one of its first coiling machines. A 1998 loan allowed the company to build a 4,000-square-foot manufacturing facility. And a 1999 working capital loan helped the company take advantage of a market opportunity.
As a result, Bluegrass Spring Company grew from a couples’ basement hobby to a strong and growing firm employing 12 Kentuckians, with a sales growth of 1,200 percent over 5 years.
In fact, company owner Jack Grosswiler, who took early retirement to start the company with his wife, Kathy, hopes the additional machine and space will allow the company to hire five to 10 new employees, plus a manager for stamping operations.
The company started in 1995 when Jack, a 30-year veteran spring maker, and Kathy, a special education teacher, opened up shop in their basement. While Jack worked on the springs, Kathy became the company’s customer service representative, accounting clerk and dynamic sales force.
State funding allowed the company to hire and train five workers. And business was growing strongly enough that Jack and Kathy used some retirement and personal funds to buy land for a future factory.
But as the company grew and began looking for more funding in 1997 to keep the growth going, it faced a roadblock.
“We couldn’t get a loan,” Jack Grosswiler said. “Most springs are made in Northern Illinois, the Detroit area and Connecticut. Local banks just didn’t know enough about the spring industry to be able to loan to us.”
One bank suggested the Grosswilers talk to KHIC. After visiting the Grosswilers’ basement to see the products and a customer list, KHIC officials soon gave Bluegrass Spring financing for a programmable wire-forming machine and drew up a three-year business plan. A loan to build the factory came soon after that.
“It was a no-brainer,” KHIC’s Stephen Taylor said. “They reinvested earnings to purchase used machines that Jack fixed up to fill more orders so they could purchase more machines to fill more orders that Kathy secured. And they invested their own money in the company. It proved they believed in the business and could grow it.”
The company added 2,000 square feet to the factory, and another KHIC loan in 1999 let the company take advantage of a market opportunity.
“Kentucky Highlands has been helping us out all along,” Grosswiler said. “They’ve been there for every step of our growth.”
Bluegrass Spring makes a variety of products for a variety of industries: automotive, electrical, hardware—even the springs for cat toys. This has helped the company weather dry spells: When automotive orders fall off, electrical orders may be up.
Customers include major national and international corporations, including Bay West Paper (through Blue Star Plastics) and Therm-O-Disc in Kentucky, along with TPI, Hurd Corporation and Cat Craft in Tennessee. Recent additions include Matsushita, which makes Panasonic sweepers for Sears; Suntec, which makes fuel pumps for oil furnaces; Matthews Conveyers and Alabama-based Bretha Power Tools. The company’s springs end up in factories throughout the world.
Despite all the growth, Jack said he is still meeting the company’s goal of employing locals. The 12 employees operate on two shifts, keeping the factory open 16 hours a day, five days a week. All employees go through a three-year training process before they can operate equipment alone. Those employees then train others.
“We try to keep people in the area, especially our young people,” Grosswiler said. “We provide steady jobs, steady paychecks and health insurance for employees.”
Jack also said he sees a lot of room for growth for the business.
“We’re one of the only spring makers in the Southeast,” he said. “And since we’re a small ‘job shop,’ we can fill small orders really quickly.”
One recent customer, in fact, approached Bluegrass Spring after a bigger spring supplier stopped delivering products on time. The supplier didn’t consider the customer’s smaller orders as important. Bluegrass Spring did.
Others have discovered Bluegrass Spring through its Web site, www.bluegrassspring.com.
Bluegrass Spring also offers its customers the latest advancements in the spring industry: a state-of-the-art quality control lab, specialized computer gauging that monitors springs as they come off the coiling machines and Computerized Numeric Control (CNC) machines. The company will have four of these programmable CNC machines thanks to the new KHIC loan.
“There’s a reason Bluegrass Spring is attracting customers,” Taylor said. “Jack has the technical expertise to make parts. He can troubleshoot production problems. And he can custom design products that cost less and work better than customer expectations.”
Taylor also said the company has an effective team approach. He called Kathy Grosswiler the perfect choice for marketing and collections, since she was so “outgoing and personable.”
“The Grosswilers are in regular communications with us,” Taylor said. “That is the key to us being able to serve our customers like we want to.”
“Stephen and the rest at Kentucky Highlands have been big fans of ours since Day 1,” Kathy Grosswiler said. “It’s important to have people who believe in you. Without support you fail. We couldn’t have done it without them.”