Janesville company on the cutting edge of micro machining
It's easy, after all, to be stealthy when you make a product that's 1/10th the diameter of a human hair.
Founded in 2000 by Dave Burton and a partner in Michigan, Performance Micro Tool is a world leader in the design and manufacture of micro drills, routers and end mills. It also provides consulting and engineering support to more than 100 universities.
The company's unique ability to make tools has led to many firsts, including the first 5-micron end mill, the smallest in the world. The company's high performance products are used in the medical, aerospace and electronics industries, as well as for advanced academic research.
Performance Micro Tool's tools have been used to route communications equipment on the Mars Rover project, cut mother of pearl dots on the frets of Gibson guitars and make a harness for a fruit fly.
Its tools cut the "plus" and "minus" signs on the sides of 4 million iPhone 4s.
Burton said his company prefers a low profile, primarily to keep competitors off guard.
That, however, is becoming more difficult.
The Wisconsin Entrepreneurs' Network recently named Performance Micro Tool as one of 33 "Wisconsin Companies to Watch." The annual program recognizes companies that demonstrate high performance in the marketplace and exhibit innovative products, services or processes.
Performance Micro Tool got its start after Burton watched a progression of big companies pass along ownership of a Janesville facility. The companies started with International Carbide and ended with Kennametal, a huge company with more than 100 facilities.
"We were always owned by some out-of-state manufacturer, and in the public sector, the mantra is always the next quarter," Burton said.
Kennametal ultimately closed its Janesville shop and shipped the work to a plant in China.
Burton and his partner launched Performance Micro Tool. Kennametal soon found that its China plant couldn't do what Performance Micro Tool did, and Kennametal became one of Burton's largest customers.
The 12 employees of Performance Micro Tool work across three shifts in a shop on Kennedy Road on Janesville's north side. Machines that robotically grind the tools fill the shop.
Most of the 75,000 or so tools they make each month are 1/32nd of an inch and larger, but Performance Micro Tool's claim to fame is the smaller tools, some of which cost $250 each.
"Making them small is certainly our niche," Burton said. "We also do a lot of private labeling, which helps keep competitors off our backs.
"We try to keep our prices pretty low to keep competitors from getting into the business and keep them buying from us."
Burton credits the company's steady growth—March was a record month—to a stable group of dedicated, talented employees, many of who have been with him for years.
"These guys will take a bullet for me and this company," he said. "We have an open shop. We're pretty lax and encourage creativity and playing around."
Burton said the company pays high wages, covers 100 percent of its health care plan, provides a 401(k) match and often gives bonuses that have included companywide cruises, trips to Cancun and last year involved a Packer-Viking weekend in Minneapolis.
"These guys are really concerned about the health of the company," Burton said. "I give them a bonus, and they ask me if I'm sure.
"If I wasn't sure, I wouldn't do it. When times are good, we share."
Times have been good. A look at the company's growth chart shows a steadily increasing line offset by routine ups and downs.
Burton doesn't want to see his company grow too quickly. He knows that fast ups can create fast downs.
"If we were to double in size next year, our customer base would suffer, no doubt," he said.
In 2009, Performance Micro Tool's sales were off 15 percent when its competitors experienced declines of 45 percent to 60 percent.
"That was a time when my guys' motivation and skills showed," he said. "The market was down, and they came up with ideas."
Burton treats his labor costs as fixed costs, not as a variable of production costs. "Layoff" isn't part of his lexicon.
"In slow times, we go to the market, strategize or do things we've put off like maintenance," he said. "The last thing we do is lay people off because that's so difficult to recover from when things improve."
Burton said his customers are no different than those of any other company.
"They always want it free, perfect and now," he said. "We're small enough and nimble enough that we can react to that and accommodate customers," he said.
If Performance Micro Tool must, it can turn around an order in 24 hours.
"I might tell a customer it will be three days, but my guy on the floor will look at it and say 'I'm gonna knock this out in one day because there's potential here,'" Burton said.
Performance Micro Tool is the definition of innovation, said Phil Jackson, the Wisconsin Entrepreneurs' Network regional director who nominated the company for the award.
"These guys are doing cutting-edge work, no pun intended," Jackson said. "And they're not just sitting here in Janesville looking at U.S. markets. They're looking internationally."