New owner integrating Palmer Manufacturing

5/22/2013

By RUTH CAMPBELL

By RUTH CAMPBELL

rcampbell@gctelegram.com

Worthington Industries, which acquired Palmer Manufacturing in April, is now integrating the companies, a process it expects to last until about Sept. 1.

The firm will be adding capacity — and personnel — to the Garden City facility to serve existing customers. And there are no plans to leave town.

Palmer Manufacturing, which employs approximately 200 people, makes steel and fiberglass tanks and processing equipment for the oil and gas industry, and custom manufactured fiberglass tanks for agricultural, chemical and general industrial applications.

The previous management, led by Steve O'Brate, is assisting with the transition and will remain in a consultant role for the remainder of the year, Gary Rano, director of energy operations for Worthington Cylinders, said in an email to The Telegram.

Along with Rano, Worthington Integration Team members include Nate Stahl, Ryan Berrigan, Melinda Warner, Heidi Ayers and Melissa Eaton, Rano said in the email. An operations manager for Garden City will be named in early summer, he wrote.

Rano said the company needs 90 to 120 days to do its business and cultural integration.

"We have a company culture, ways of doing things, but we appreciate the local culture," he said.

The first things Worthington tackles when it "brings new companies into the family" are safety, business, opportunities and process improvements," he said.

"We're going to be adding capacity," Rano said in a telephone interview.

Four salaried positions will be added, along with additional salespeople positioned in North Dakota, Texas and other territories where the company's products are sold.

Help wanted ads are currently being run in The Telegram, Dodge City Globe and Scott County Record, Rano said.

"We hire into a market location, region and city," Rano said. "We typically use a wage analysis from that area to determine what we'll pay. We're not paying Baltimore, Md., wages in Garden City, Kan. We try to fit into the wage scenario of the markets we have our factories in. Worthington pays market wages and a good benefit program for their positions."

Office space will be upgraded and added, along with conference and training space, Rano said.

"We will not be moving out of Garden City," he said. "We've had those questions from our employees, too. We don't anticipate moving it to a new location in Garden City. We have 52 acres on the existing site," he said about the location at 2814 W. Jones Ave.

Worthington may use the additional acreage within its current campus to add more customer tank inventories and truck operations.

Two to seven people will be in town during the integration phase, Rano said. He added that the workers here and former owner Cecil O'Brate have been gracious to Worthington executives.

"It's been a pleasure to be introduced to the people in town and through the gracious introductions of the O'Brate family. ... They do a very nice job of hosting us. ... We get the same feeling from the community," Rano said.

Steve O'Brate said Tuesday that the transition is going well.

"There's lots of stuff to do. ... They're a good bunch of people to work with," he said, adding that he's been pleasantly surprised.

O'Brate said he's also pleased that Worthington officials are trying to learn Palmer's business quickly and that the firm plans to stay and "just grow, grow grow, which is good. We wanted to keep growing," he said.

O'Brate said he thinks Worthington is on the right track with its plans and is following through with what company executives said would be done. He noted that a building, which housed the fiberglass portion of the tank shop that burned down in December 2012, should be up and running in 30 days.

Worthington, a Columbus, Ohio-based diversified metals manufacturing company, had $2.5 billion in sales in fiscal year 2012.

It has 10,000 employees, including more than 5,000 workers in its pressure cylinders segment worldwide. About 4,000 of those employees are in North America, and the remainder in Slupsk, Poland, Visakhapatnam, India, Kienberg, Austria and Hustopece, Czech Republic, Worthington Vice President of Corporate Communications Cathy M. Lyttle has said.

Worthington acquired Westerman for $70 million in September 2012.

Westerman Companies, in Bremen and Wooster, Ohio, makes tanks and pressure vessels for the oil and gas, nuclear and marine markets, according to an article on Worthington's website.

Worthington got into the energy business in September 2011 with its purchase of Westerman and Palmer came to its attention.

"Palmer's service and quality and long-standing reputation in business are what drew," Worthington to the Garden City firm, Rano said. Worthington acquired Palmer for $113.5 million, according to Lyttle and Securities and Exchange Commission documents.

"Once we got deeper into the opportunity (and) culture, as well, we thought we could make it work. (Palmer) has a good workforce and good product reputation. We did a substantial amount of customer surveys to reinforce what we felt and what the customers felt as well," Rano said.

He added Worthington has developed a good relationship with Palmer — prior to and following the sale.

"We want to maintain a good relationship with the O'Brates, the founding family," Rano said.

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