Relationships are paramount at owner and President John Cornell’s 39-year-old Southwest machine shop, Atec Engineering.
“I took the course, Atec liked me, I liked them, and they hired me,” Cornell says. “I thought it was the best thing ever to get paid to work in a machine shop. It was a great opportunity. I didn’t think at the time that I’d ever own the company. All I cared about was keeping a job.” And keep it he did, rising through the machinist ranks, then purchasing the company in 1996 from the original owners.
Atec has wide-ranging experience in contract work creating machined parts of various types for a variety of clients. In the 1980s and 1990s, the aerospace industry made up the bulk of the company’s customer base, but today the electronics business has surpassed aerospace as the primary source of revenue. The ISO 9001-certified company has long-term contracts that see them building machined parts, in some cases, for more than twenty years, as well as plenty of short-term, shorter run orders.
Although Atec Engineering is experienced with working in a wide variety of materials, Cornell says the vast majority of its work is in stainless steel. With the mills, lathes, and other machining equipment Atec operates in its 5,000 square-foot facility, the team has expansive capabilities that allow them to perform most work in-house. However, the company still uses outside contractors for specialized operations such as welding and sheet metal fabrication.
Material costs and availability are of concern to just about every business these days, and Atec Engineering is no exception. For example, Cornell says, “I was looking for some material for an aerospace quote, and I can’t get a material quote because the supplier doesn’t even know when it will be in. Every shop has to deal with those hurdles, and you have to be smart about it. When you find material, you buy extra and put it on your shelf, so you’ll be sure to have it. If you can’t get material, you’re dead in the water. It doesn’t matter what orders you get if you don’t have the material to complete it.” That said, he does feel that availability has improved somewhat over the last several months, even if pricing hasn’t. The company uses local Phoenix area suppliers for most of its needs but does have to venture farther afield for some materials or when supplies tighten.
Atec Engineering has enjoyed a generally steady workload over the years, and Cornell unquestionably attributes that to relationships that the company has built since its earliest days. “My customers have known me for a long, long time, and I’ve known them for a long time,” he says. “They know that when they need you to come through for them, you’re going do it, because you have many times before, and they stay loyal.” That loyalty means that the company doesn’t need an active sales effort for new customers because its existing relationships provide enough work to keep everyone busy. Word of mouth brings in the occasional new clients to add to the bottom line.
There’s loyalty in Atec’s workforce, as well, with very little turnover. When things get busier than normal, retired former employees are usually ready to step in to help handle the load. That’s fortunate, too, because Cornell says qualified machinists can be hard to come by when needed. The company made it through the worst of the COVID-19 economic slowdown without too much trouble. “A lot of the time, we may have a two or three-month lead time,” he says. “So, when COVID hit, we were pretty busy, and had quite a backlog. New jobs weren’t really coming in, but we had work that we could do. It was definitely tough at times, but we were able to get through.”
Challenges: “I wish I had that crystal ball that I could tell you what might happen,” says Cornell. “Like everybody right now, we’re looking at inflation. Gas is going up, and not just for us but for our employees, and they’re feeling the pinch. We have some tough times ahead, there’s no doubt about it. But I don’t like to worry too much about stuff like that, because when problems you can’t control come up, you just have to do the best you can do.”
Opportunities: The company has just purchased a new Hyundai CNC lathe with a sub-spindle and bar feed, which should improve overall efficiency. Cornell says, “We got every bell and whistle we could get with the machine, and that’s a huge addition for us. We’re still installing it right now, and I’m hoping it’s going to increase our capabilities and take a step toward a certain amount of automation, because it can be very hard to find people when you need them. I think that’s part of the answer going forward.”
Needs: Cornell stresses the need for growth — but slow growth — so that it can be managed in a way that will allow Atec Engineering to maintain the quality and dependability of its work. “You have to be on time, and the parts have to be good; I feel like that’s more important now than ever,” he says.