President and CEO Steve Macias anticipates big opportunities ahead for his precision machining and assembly company as the onshoring of semiconductor manufacturing to Phoenix continues.
When Macias and longtime friend Jack Cuddihy were in college together, they shared a similar dream. “We talked about building stuff versus pushing paper,” Macias says. When the pair realized seven or eight years later that neither of them was on the path to where they had wanted to see themselves in 20 or 30 years, they refocused and founded Pivot Manufacturing.
“There was a guy who had a couple of machines and one customer, and he was selling them,” Macias recalls. “We could afford them, so we bought them. Unfortunately, the one customer was in the semiconductor industry, [which] kind of went toes up for a little bit shortly after we bought it. But we had started making some inroads into defense contracting and were able to keep the doors open and the lights on.”
Pivot Manufacturing began growing slowly while gaining companies like Raytheon, General Dynamics, and Northrop Grumman as clients. “At least we weren’t losing money,” Macias chuckles. “And so, we went from literally the two of us and one employee to now 21 employees. We’ve also grown in terms of our capability and capacity. We started with those two older CNCs and now have 13 high-speed CNC machines.”
This steady investment in new equipment over a five-year period — upgrading every time an older machine aged out — allowed the company to transition from prototype and R&D jobs into production work. “I think the shortest run we do now might be 50 parts,” Macias continues. “It’s now not uncommon to see something come through where they want 500, or 1,500, or 2,000.” He also notes that CNC milling makes up 70 percent of the company’s business, with CNC lathe and assembly each accounting for 15 percent.
Macias adds that the company is always looking for new technology to improve its competitiveness. “We just started using some vacuum plates that help hold parts in,” he says, “which helps us increase the complexity of the type of parts we can make. We’re also playing around with robotics. We can get robots to maybe load a pallet or unload and load a machine. So, instead of having one guy run one or two machines, you can now have one guy run three or four machines because the robots are picking up the slack.”
Macias and Cuddihy — Pivot Manufacturing’s General Manager — recently bought the building they’ve been renting since their company’s inception. When the other tenants’ leases are up at the end of the year, Pivot Manufacturing will be expanding into the additional space. “We will go from about 10,00 square feet to about 14,000 square feet of manufacturing space,” Macias adds.
The expansion is necessary as the company is growing quickly — in part due to the relationships Pivot Manufacturing has built with its customers. “We’re very big on culture and communication,” Macias says. “Let’s say, for example, that I have a part due on Raytheon’s dock on September 2, but I find out today that my painter is two weeks behind. I’m immediately on the phone to Raytheon saying, ‘Hey, you know, on this part, it might be late. How does that affect you?’ Probably 80 percent of the time it’s no big deal and they’ll move the date out a week. However, sometimes the part might have to be there. So then, we work with our painters to do whatever we can to do get it done.”
Macias continues, “We have the technical stuff like the AS 9100. We have the small business certs. And our on-time delivery [rate] is great. But we try to make sure that they know that we really have their best interest in mind — even though that sounds kind of corny — because it’s in our best interest to do that.”
Challenges: “It’s probably managing growth,” says Macias of his company’s current challenges. While the COVID-19 pandemic made for a tough environment for many manufacturers, Pivot Manufacturing had its best and second-best years ever in 2020 and 2021, growing 44 percent.
“There’s a big difference between a company that’s doing $2 million a year and a company that’s doing $5 million or $6 million,” Macias continues. “In terms of processes, whether you want it to or not, you have to add layers of management and responsibility. And so, there’s some growing pains there. We still manage it ourselves, but we have to pop some people in between us and the shop floor guys, which we hadn’t done before.”
Opportunities: Macias says that growth in the semiconductor industry within the U.S. — and Phoenix in particular — is a big opportunity for Pivot Manufacturing. “Taiwan Semiconductor did a worldwide search for a location to build their new fab plant, and they settled on North Phoenix,” he explains. “I mean, this thing is a $25 billion investment. And not only is that plant going in, but all the support system of suppliers [will need to be] there. There’s going to be a lot of opportunity because that’s a lot of equipment. And a lot of that equipment [requires] very precise machined parts.”
While Macias notes that the company is only expecting 10 to 12 percent growth this year, they’re predicting 2023 will be “another kind of leapfrog year, based on the parts in the type of course we’re seeing right now.”
Needs: In short, finding workers who are the right fit for the Pivot Manufacturing team is a major need.
“We have a really good staff, and we treat them very well,” Macias continues. “We’ve got medical, dental, 401K, vision, retirement. Generally, folks don’t leave. But the last couple of folks that we’ve hired, we definitely had to look a lot harder. We’re not looking just for a warm body. We’re looking for somebody who fits in with everybody else, who plays well with others.”