Clean cut

American manufacturers have gotten a bad rap.

Compared with overseas competitors, U.S. manufacturers get blamed for being less productive and unresponsive to their customers.

Surprisingly, one small manufacturer in Naples agrees with that assessment. “A lot of manufacturers have gotten complacent,” says Vincent Farengo, who with his sister Josephine Farengo owns Everlast Saw & Carbide Tools in Naples.

Farengo's company, which makes specialty saw blades and other cutting tools, shows how Americans can compete globally by being super-efficient. Everlast competes with much larger companies in Israel, Czechoslovakia, France, Italy and Germany.

The Farengos are masters at running their facility efficiently, shaving seconds off their manufacturing processes, investing in technology and never paying overtime.

In the starkest terms, Vincent Farengo explains his company's survival this way: “It's the difference between eating and not eating,” he says. “It's that simple to me.”

It helps that Everlast's saws are sought-after, high-quality blades used by professionals in the woodworking industries. Some of its customers have been buying blades for three decades.

Every second counts
In the early 1980s, Everlast Saw had as many as 23 employees. Now, the company has four people doing the same amount of work and it doesn't pay overtime.

The Farengos say they pledged during the last recession in the 1980s to run more efficiently with the staff they had. “We will never have overtime again,” Josephine Farengo says.

Instead, the Farengos decided they would have fewer employees, pay them better and invest in technology. The newest employee today has been with the company five years. The longest-tenured employee has been with Everlast since 1974.

Vincent Farengo, who runs the manufacturing plant, is always figuring out ways to shave seconds off the process of making saw blades. For example, he figured that employees lost 30 seconds drying the blades and a few more seconds moving them between grinders.

By moving the equipment a few feet, Farengo figured he could shave a few seconds off the manufacturing time. “If you can shave a second off every grinding, it adds up,” he says.

Farengo spent years figuring how best to arrange the wheels that cut the metal for the blades, shaving seconds more off the work. “It's a consistently ongoing process,” he says.

Special machines that cut the blades are so sophisticated now that Farengo can dissect the diagnostics to measure quality and speed. And they've reduced the need for labor. “One man runs seven machines,” Farengo says.

Efficiency is the key because the company can't raise prices or customers will flee. That's despite the fact that steel and carbide prices have risen 30% in the last two years, threatening to eat into profits.

Everlast's competitors are mostly European and Israeli. Because Everlast is a specialty blade maker for the woodworking industry, its blades are highly sought by professionals. “You can't compete with these people unless you know what you're doing,” Farengo says.

American manufacturers aren't competitive because they haven't changed the way they do business. For example, Farengo says, many manufacturers haven't converted to the metric system, the global standard for measurements.

And many manufacturers shrug off small-batch requests for work. Farengo says he'll make a single blade if a customer asks. “You need a product to sell,” he smiles.

From New York to Naples
Vincent and Josephine's late father, Pat Farengo, was a coat cutter in the garment industry in New York City. Josephine doesn't exactly remember what year her father started the business in the basement of their Brooklyn house, but both she and her brother started helping out when they were youngsters. Benna, their late mother, kept the books.

The Farengos started making blades in 1974 for cabinetmakers, slowly growing the business. They make dozens of different blades for cutting wood, aluminum and Corian. “The picture framers are the fussiest customers,” Josephine chuckles.

The brother and sister have clearly defined roles. “I love to sell,” Josephine says. “I know nothing about the back.”

“The back” is the manufacturing operation in a building tucked away off Rail Head Boulevard in the industrial area of Naples. “Vincent loves to solve problems,” she says.

While the Farengos don't share financial information, Josephine says sales dropped 27% in 2009 (most saws cost in the $100 to $200 range). “The worst was last year,” she says. “This year there seems to be a little more activity.” Fortunately, she says, Everlast has no debt.

But the recent orders are relatively small and they come in spurts. For example, there were three weeks of solid orders in February and one weak one. “Florida is bad,” she says. “Our business is tied to housing.” Cabinetmakers and picture framers have gone out of business as the real estate recession hit the region.

Still, customers in the Northeast and the Midwest were better off than their peers in the south. Josephine Farengo forecasts a 5% increase in sales, but nowhere near the height of a few years ago. It's going to take five to 10 years to return to those days, she estimates.

What will it take to reverse the losses in business of the last few years? “Confidence in our government,” Josephine snaps back.

The Farengos have built a successful business without relying on government aid. “If we're capitalists, then let us be,” she says. If large manufacturing companies such as General Motors fail, smaller firms will fill the gap. “Let the chips fall where they may.”

And that, ladies and gentlemen, is how you create and keep U.S. manufacturing jobs.
— Jean Gruss