Wellman Dynamics announced today that the U.S. Army Contracting Command has selected Wellman as the recipient of a Defense Production Act Title III award of $15.7 million.
As a condition of the award, Wellman is required to fund a matching investment of $7.9 million. The total investment of $23.6 million will be used for plant modernization in response to the growing demand for Wellman’s products. Wellman specializes in producing aluminum and magnesium sand castings used primarily on military and commercial helicopters –including the Presidential Helicopter, Marine One.
“This is great news for the Company and the City of Creston. Our customers include many of the world’s leading producers of military and commercial helicopters, aircraft engines, and missile systems,” stated Jim Pinto, CEO of Wellman. “Our customers rely on Wellman to supply some of the largest and most complex sand castings in the world. After years of negligible investment, the business is now positioned to modernize the plant operations into a world class foundry.”
In addition to the $23.6 million investment, Wellman will invest an undetermined amount to expand its Creston facility to include the addition of a standalone facility to produce aluminum castings for the US military’s next generation of heavy lift and attack helicopters. The expansion is slated to begin in spring of 2020.
The DPA Title III program provides the President broad authority to ensure the timely availability of essential domestic industrial resources to support national defense and homeland security requirements through the use of highly tailored economic incentives. The program is designed to sustain, expand, modernize, and restore the domestic industrial base.
“It’s part of the government’s committment to protect defense capability through the industrial supplier base ... a small business like Wellman on its own could never make those types of investments, so you apply for the grants and compete for them, and those grants are what make it possible for the suppliers in the industrial base to be able to modernize and stay contemporary with processes and technologies that allow you to compete,” said Pinto.
Unique domestic casting manufacturers, such as Wellman, have faced economic viability challenges, and industry consolidation over the last two decades. With few remaining specialty foundries, many of these complex castings pose a supply chain risk to the US military fleets. This award will support ongoing and next-generation work on military aircraft and missiles, notably including the Black Hawk, Apache, and Osprey programs.
“It’s a really, really big deal, not just for the business, but for the town of Creston,” said Pinto. “This 100% for this location and this location is the only location that makes up Wellman.”
Pinto said this investment will build on recent investments of over $6 million since the assets of the company were purchased by Trive Capital out of bankruptcy in May 2018.
“These investments will protect our multimillion-dollar payroll in the Creston community by better enabling us to meet our current product demand. On behalf of all our employees, we want to thank the U.S. Army and the President for their confidence in Wellman and the support of our business transformation,” said Pinto.
Pinto said plans include new capabilities and added capacity, along with upgrades to power systems and state of the art radiography capabilities.
“Our plan from day one has been to make this business a benchmark for the industry, a world class supplier to our customers, and a stable employer in the Creston community. These investments will modernize the business and sustain profitability for many decades to come,” he said.
Wellman Dynamics has been a member of the Creston community since 1965 and employs 375 people in its 225,000 square foot manufacturing facility. The assets of Wellman Dynamics were purchased by Trive Capital, a Dallas, Texas based private equity firm, in May 2018.
When asked if the expansion will bring more jobs, Pinto was cautiously optimistic.
“Part of that depends on the success of the business,” said Pinto. “Depending on programs we are competing for and whether or not we would win those programs ... there’s always a possibility of job growth.”