- November 23, 2024
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For most of its 50 years in business, Pelican Wire, a manufacturer of resistance and thermocouple wire, has been a well-kept secret outside its niche loyal client base: parts suppliers that incorporated its components in products designed to either generate heat or measure temperature in a wide variety of industrial or practical applications.
Operating from a facility about as far southeast as you can go in Naples before entering the Everglades, its products are but one, albeit inarguably necessary, component of parts that ultimately make their way into recognizable products.
After founder Larry Bill died in 2008, his son, Ted, 48, left an engineering career at Walt Disney World to guide the transition of Pelican Wire to employee-owned. He had no intention of staying.
“It was not in my career path to come back and make wire,” says Bill, president of Pelican Holdings Group, the ESOP that owns Pelican Wire and the company it acquired in 2012, Rubadue Wire of Loveland, Colo., which specializes in wire for the electronics industry. “But I fell back in love with the business and what had been built here, and really saw a lot of potential and opportunity. We had grown to the point to where I could look at it and see that there was a real opportunity here to build something really cool.”
Since converting to an ESOP in 2008, Pelican Wire has grown to a $37 million company, its more than 14,000 SKUs found in a wide range of industries, from aviation and aerospace to medical devices and automotive.
But the behind-the-scenes nature of the business is about to see some sunlight. That stems from an aggressive marketing effort Pelican Wire is embarking on, based on educating current and potential clients — rather than simply selling them. It's a subtle yet significant shift, in business model and mindset.
Subtle, in that with a dozen engineers on staff, Bill says Pelican Wire has long emphasized development of proprietary solutions. Those solutions, in turn, become manufacturing orders.
“I joke sometimes that we are more like an engineering company that makes wire than we are a wire manufacturer,” says Bill. “We have a lot of clients who come to us needing a solution. We do a lot of the engineering up front at no cost to the client with the expectation we are going to build the wire for them.”
One such client is a manufacturer of components for electrocardiogram equipment that needed the development of thread-like wire that can safely deliver 10,000 ohms. Pelican Wire’s engineers devised the solution without charge, and as a result now manufacturers the product.
“We will never try to sell wire,” says Trent Dunn, Pelican Wire’s marketing manager. “Our marketing push is to lead with value. Between those dozen engineers we must have 300 years of experience. If what they know can be shared with the customer, that's what sets us apart."
Dunn adds that Pelican Wire's value doesn't come from a "splashy logo or because our website was easier to navigate."
"You’re going to go with us because we're the smartest guys around," adds Dunn. "We give as much free education as we can and believe the system will pay us back in return because we believe people will buy from someone who makes them smarter.”
Growing in the new strategy will eventually mean expanding manufacturing capacity. Pelican Wire leases from the Bill family its 33,000-square-foot facility near Interstate 75 off Exit 101 in southeast Naples, within view of the Alligator Alley toll plaza. There is space to expand the plant to nearly 50,000 square feet, which Bill says will be necessary if production demand grows 30%. The company currently runs three shifts, five days a week.
Growth would also require more employees. With a limited manufacturing employment base in Collier County, about 35% of Pelican Wire’s 80 employees commute from Lee County, namely Cape Coral, San Carlos Park and Lehigh Acres. Dunn commutes from Fort Myers and another executive from Sanibel Island.
That presents the company with what Bill calls a good problem: Either expand the current facility that will serve its needs for an additional five to 10 years, or relocate the operation to Lee County where the majority of its employment candidates live and where costs are lower. Based on recent experience moving Rubadue to a larger plant in Colorado, Bill estimates it will cost at least $500,000 to move Pelican Wire.
Bill, for now, has time to contemplate the choices.
“It all depends on what the environment is at the time the tipping point arrives," Bill says. "It’s going to be a tangled web, but I will be the guy with the biggest smile when we can’t make it happen in this building anymore and we have to do something.”
It’s Dunn’s job to make Bill smile.
“We’re just now starting to broaden ourselves,” says Dunn. “The marketing initiative is to put on a new face every other week for whatever we are in front of. We have business development people scouring the globe attending trade shows and going to meetings, and one week we are in front of the ceramics folks so we have to tell a story that supports that industry, and the next week we are in front people who have to know the product is safe because it's going in a 737."
"The true marketing challenge," adds Dunn, "is to identify those groups, infiltrate those groups and educate those groups.”
Until the conversion of Pelican Wire to an ESOP, the company’s marketing and growth efforts were comparably passive.
“My father had a philosophy of marketing that he liked to hang out in the bushes and wait for people to find him,” says Bill. “We’re really working to change that.”
'My father had a philosophy of marketing that he liked to hang out in the bushes and wait for people to find him. We’re really working to change that.' Ted Bill, Pelican Wire
Longtime clients who bought resistance wire from the company, says Dunn, were unaware it also manufactured thermocouple wire. Companies that manufacture components that create heat with resistance wire often also need a way to measure temperature with thermocouple in order to control it. That’s one market Dunn is working to exploit.
“We’re in the huge wind blades that companies like Siemens are making,” says Dunn. “They have to be poured into mold that has to be heated to cure them, and we’re in the mold. The mold is a disposable piece, so they use our wire one time and then they have to order more."
Being in that kind of "narrow vertical," Dunn says, makes more business an easier sell. "Once you get inside the space you are part of the conversation,” says Dunn.
Emerging markets identified by the company, Bill says, include electric vehicles and what he calls an underserved market in heated car seats. Like the wind blades, Dunn’s work is to identify the name brands, then work downward through the vertical to find the manufacturer of the part that goes into the part that goes into the part that allows the finished product to function.
Because their name isn’t found in the retail environment, Bill says educating employees on the value of their anonymous components into a larger piece of well-known equipment is important.
“We try to instill in our employees what it is they are building,” says Bill. “They aren't just making a piece of wire here, they are making a device that could ultimately save somebody's life in an MRI. We've been involved in fire suppression systems for military vehicles. We are in components that help keep military aircraft de-iced. Some of it is basic industrial stuff that doesn't have an exciting story, but everything we do here does serve a purpose, and the more they understand its purpose, the better they will be at delivering the right quality level for the customer.”
The conversion of Pelican Wire to an ESOP has also played a vital role in the company’s growth. Employees are enrolled in the program after their first year and fully vested after five. In addition to building ownership with stock purchased back by the company at retirement, the company offers additional financial incentives that include profit sharing and a graduated compensation program for skill development.
The ESOP's sense of ownership among employees also fosters accountability, executives say, to themselves and each other. In their annual statements, employees see tangible evidence their success is directly tied to the company’s profitability. “The ESOP program demonstrates that the employee is not here just to serve the individual, but rather serve the company,” says Bill. “In turn, the company serves them through the ESOP program and profit sharing."
It took four years, until 2012, says Bill, for employees to truly see value in the ESOP. One way it became clear? When employees saw it provided the equivalent of one year’s compensation per employee within a five-year period. By comparison, Bill says a typical 401K with a 4% employee match would take 25 years to build that level of value. “And the ESOP program," he adds, "doesn’t cost the employee anything."
