Advancing Innovation

Indiana's advanced manufacturing traditions have their roots not only in steel and metal, but in the upper Midwest stronghold of automotive as well, with the presence of Toyota, General Motors, Subaru-Isuzu and AM General assembly plants, buttressed by major operations by suppliers like Navistar, Cummins and Caterpillar and countless smaller suppliers.
        Other clusters are not so obvious. Despite the tech decline, 8 out of 20 of Indianapolis' fastest-growing private companies are in the technology arena, including IT consultants, software engineers, Internet companies and IT systems developers. One cluster that Ken Robinson says does not receive the recognition it deserves is plastics, which boasts such innovative practitioners as Inliner Techologies in Paoli, maker of cured-in-place pipes that save pipe replacement crews the time and cost of excavation. Ivy Tech offers a plastics center, and the expertise in the field spreads into other clusters, like pharmaceuticals, or packaging, or the recreational vehicle/mobile home industry in Elkhart, where auto and RV part maker Elkhart Plastics recently invested $5 million in an expansion.
        Corporate observers say that as these clusters mature, their collective capabilities inure to the benefit of all concerned, providing opportunities for relationships, however tangential they may be to core business.
        "I think so, particularly with the automotive and engine technology that's required today," says Cummins' Niemczura. "We have a lot of component manufacturers in Indiana, and that developed technology has been very beneficial."
        "Absolutely, " says Leicht of Eli Lilly. "When you make things, you have to have suppliers who are reliable, especially in today's environment, and who can work in a collaborative fashion with the people who are within the company that's ordering the goods."
        Those connections can be seen in new projects that combine the state's traditionally strong clusters. In April, Canadian modular and manufactured home manufacturer Winalta chose to invest $4.9 million in the renovation of the former Sunbeam building in Linton, in order to eventually employ 257 people in making 600-1,000 homes a year. The project was aided by $1.1 million in tax credits and a $2-million loan from the Indiana Dept. of Commerce, as well as 10-year property tax abatements from Greene Co.
        Indianapolis-based Delta Faucet Co., a division of Masco Corp., has broken ground for a manufacturing expansion in Greensburg, Indiana, and a new central distribution center in Jackson, Tennessee. The Greensburg expansion will add another 27,000 sq. ft. (2,508 sq. m.) to the existing 477,000-sq.-ft. (44,313-sq. m.) plant. Once completed in April 2003, the growth will stretch the company's finishing capabilities, both for existing product lines and for the development of new finishes.
        "Greensburg was our first manufacturing plant and remains a key to our future growth," said Delta President John C. Wills of the 43-year-old facility. "We have continually updated equipment and processes there to keep it state of the art. It has an experienced staff and is close to our headquarters in Indianapolis where our R&D and product development teams are. It is the best location to build on our position as the industry leader in finishing technology."
        AM General Corp., the Jeep maker based in South Bend, has been manufacturing military Hummers since 1984 and a civilian version since 1992. In early 2000, General Motors Corp. and AM General announced an agreement by which GM would acquire exclusive ownership of the Hummer brand name. AM General proceeded to pour $250 million into a new 663,000-sq.-ft (61,593-sq.-m.) manufacturing facility adjacent to its existing factory, where an estimated annual production of 40,000 new-model H2 vehicles just began rolling off the assembly line in February 2002. Eventually, 1,500 jobs will be added to the payroll there, where operations were established in 1903.
        Of course, a big secret to AM General's success has been that one major customer: the U.S. government. But there are others, particularly in a time of growth. While the new Hummer might be both literally and monetarily a big step up (it sports a $52,000 price tag), the implementation of its manufacture has been a simple step forward.
        "Right now we're at around 3,000 employees, the largest we've been in 15 years," says Craig MacNab, director of public relations. "but our senior management is a dozen people, and we all work for the boss (President and CEO James A. Armour)."
        "It's a very flat structure, which is one of our virtues, for instance in the H2 program," says MacNab, whose company can eschew multiple committees and strategy sessions. "We used to be part of a conglomerate," he says, "but now, when Mr. Armour decides we're going to do X, we're doing X five minutes later. It makes us very fast and agile, and we have a management team that's worked together for a long time. We don't have a lot of the burdens that bigger organizations suffer from."
        That special blend of discipline and agility has made for a remarkably smooth H2 launch, says the former military man, a move bolstered by the continuing solidity of that very military business. Nearly as certain is the company's stolid presence in South Bend, a presence that some consultants have tried to change from time to time, to no avail.
        "They tell us to go somewhere else," says MacNab, "and we always don't."