This month we would like to share with all our customers and friends a recent article that was published in the Ann Arbor News on March 22nd, 2009. This article was in the "Annual Business Outlook 2009" and highlighted the actitivities that Protomatic and other companies have experienced recently. Below is the reprint, if you can't display, the link is:

http://www.mlive.com/special-sections/ann-arbor/index.ssf/2009/03/ann_arbor_area_auto_parts_comp.html

Ann Arbor area auto parts companies make shifts to other fields

by Tina Reed | The Ann Arbor News
Sunday March 22, 2009, 5:15 AM

For Protomatic Inc., the downturn hit in 2000. The small Dexter machining company had mostly focused on supplying parts for the automotive industry and auto companies were looking to cut back on the kind of prototyping work Protomatic did, recalls Doug Wetzel, vice president and general manager.

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"We saw the writing on the wall and transitioned," Wetzel said. "We were one of the lucky ones." Transition for Protomatic meant a shift from making products like alternators or instrument panels for cars to making chambers to grow nerve cells for the medical industry or landing-gear sensors for F-16 and F-18 military jet planes.

It was a move that ultimately, Wetzel said, saved the company in light of the worldwide downturn in the automotive industry.

The company is one of several in the Ann Arbor area that have made a shift from the automotive market they traditionally served to alternative energy, medical, defense and aerospace industries in recent years.

• Ann Arbor-based Coherix, a privately held supplier of high-tech optical-based measurement and inspection products still does work for the automotive industry, but it diversified into making parts for the semiconductor industry.
• OG Technologies Inc., another Ann Arbor-based firm, started in 2000 with machine "vision" products for the automotive industry, but developed inspection systems for the steel industry.
• Universal Parametrics Inc., in Pittsfield Township, which performs 3-D modeling and engineering, began consciously moving from working on almost solely projects for automotive industry companies to almost solely working on projects in other industries, like defense, after auto suppliers began taking longer and longer to pay the company. "Good design is good design. It doesn't matter if it's automotive or it's missile launchers," said Steve Frey, vice president and co-founder of the company.

In the push to diversify the state's economy into one that's more knowledge-and technology-based, economic development groups have worked to identify manufacturers that can make changes. Economic development groups, particularly the state Michigan Economic Development Corp., have provided some funding help.

For example, Protomatic received training grants from the MEDC to retrain employees in producing the new products.

The company had a few things working in its favor to make the change easier, Wetzel said. For one, the company didn't have a lot of the debt that many companies had built up in the late 1990s. It also already had highly adaptable equipment to transition.

It only needed to invest in earning specialized certification for building products in the medical and military aerospace fields.

Investing in employee training to improve efficiency, rather than buying new equipment, was ultimately the best investment the company has made.

This year's outlook appears relatively strong for Protomatic, Wetzel said. The company had to lay off a few people back in 2001, reducing its workforce to 18. Today, 25 people work there, up from 21 a year ago.

The company is working with battery and fuel-cell groups and looking to work with high-tech startups. Wetzel thinks businesses with stories like that of Protomatic should create hope in the region, despite poor economic conditions in 2008.

"During down economic times, there are a lot of people who are unemployed, and they start thinking," Wetzel said.

That, he said, is when the truly creative and business-changing ideas happen.

Contact Tina Reed at 734-994-6843 or treed@annarbornews.com.

2009,The Ann Arbor News. All rights reserved. Reprinted with permission.