CEO Dan Welch’s small business is building on investments in very large machines, fabricating boat hulls and windmill blades even as it pivots to new opportunities.
Welch describes the advanced composite parts and tooling business he built with his wife, Lori, as “a small, almost boutique type of shop where we give 100 percent of our attention to each project.” Having graduated college with an engineering degree before starting — and then selling — another company, he had amassed a large roster of engineers and other contacts who quickly became clients of Phoenix Technology Works.
Within the company’s 20,000-square-foot manufacturing space in Maricopa is a cleanroom for doing prepreg carbon fiber layup, a ‘dirty room’ for sanding and grinding, and a 27-foot paint booth in which the team applies finishes. A 65-foot CMS Poseidon CNC Machine enables Phoenix Technology Works to manufacture extremely large components such as boat hulls, windmill blades, and airplanes.
“We’ve done probably 60 aircraft,” Welch says, “and by that, I mean the prototyping and tooling. Sometimes we do first article parts. We typically take a customer through design and concept to first or very low-rate production to qualify. Then the customer takes that and sets up manufacturing and production of their own.”
Welch notes that his company’s customers are primarily military, aerospace, wind energy, or marine in nature. The team rarely works on the same type of project more than once, and there’s a lot of variety in their day-to-day.
“I tell the guys all the time that we do nothing twice,” he explains. “If we do it twice, then we did it wrong the first time. But we always apply everything we learned from previous jobs to the next. I always use the adage that it’s like a mechanic’s toolbox. You have five different screwdrivers in the drawer, so which one are you going to use for this job? Through years of doing this, we can take what we maybe did on a boat and apply it to an airplane, or windmill blade, or a widget.”
Though Welch says the company has bid on numerous large projects that are close to being awarded — and which would lead to exponential growth — he likes keeping his company small. “I had a big company previously, and I didn’t want to do that again,” Welch continues. “A small business is more rewarding because you get to bounce around all aspects of the project from start to finish. The only problem is trying to create a pipeline full of work. Because you don’t really know where the problems are going to show up, you don’t really know when a project is going to end. All of a sudden, you’re an extra month or a week out and the next project is lined up. Now you’re behind.”
Challenges: “Everything is so expensive right now,” Welch says. “I just stumble when I look at the prices. Like, what happened? I wasn’t paying that last year. I wasn’t paying that two months ago for that raw material. We had a project six months ago with a budget that was developed pre-COVID. The guy had to hold his pre-COVID numbers. There was no way I could do that, and we had to walk away from the job. We had another project where the customer wanted us to hold pricing for a month or two. I was afraid to tell them what the new prices were going to be, so we just gave them a multiplier and said it was our best guess. Fortunately, they were good with that.”
Opportunities: Welch say military contracts are the company’s biggest current opportunity. “I think our military is ramping up within the drone stages,” he continues. “With all the stuff that’s happening in Ukraine and things of that nature. We’ll probably actually switch a little into production, instead of just development, on little drones. Because instead of needing one or two for proof of concept, they’re going to need 300 or 400 of the things.”
Needs: “Getting exposure and letting the customer base know our capabilities, what we have, and what we can do” is the biggest need Phoenix Technology Works has right now, Welch says. “I think we’ve underserved ourselves there by depending too much on prior history and contacts with engineers. We need to get back out into the marketplace and let people know that we have these large capabilities thanks to the 65-foot machine. Those are the people who need to know what we can do on larger projects.”