San Diego Business Journal

Making Manufacturing Work

PRODUCTION: McCain Sees Formerly Outsourced Work Return to the U.S. By Mike Allen Monday, August 20, 2012
McCain Manufacturing’s overhead I-Beam conveyor system has a 7-stage pretreatment wash, electrostatic application and curing process. The system features dual coating capabilities that can apply multiple coats of paint in half the time of previous processes.

McCain Manufacturing’s overhead I-Beam conveyor system has a 7-stage pretreatment wash, electrostatic application and curing process. The system features dual coating capabilities that can apply multiple coats of paint in half the time of previous processes.

McCain Manufacturing, the outsource manufacturing division of McCain Inc., has expanded its North American powder coating operation in Vista, adding two cutting-edge installations that involve painting.

One line handles automated powder coating in a conveyor system, while the other line allows manual paint application for equipment too large for the automated line.

President Jeff McCain said the latest additions to the 100,000-square-foot plant within a mile of its headquarters is getting more business, particularly from companies that formerly made things in China.

“I’d say probably about half of our customers are those who are bringing back manufacturing from China,” McCain said.

The customers hail from a variety of industries including information technology, telecommunications, solar energy, aerospace and defense, automotive, and medical equipment. McCain declined to reveal names, citing nondisclosure agreements the company signed, but characterized the businesses as larger entities.

“We tend to deal with higher end customers,” he said. “What we offer is low volume, high quality, quick turnaround, and competitive prices,” he said.

Hired 66 People

McCain opened the plant in January 2011, and has invested a total of about $20 million into the venture. Since its launch, the operation has hired 66 people.

All total, McCain has nearly 600 employees, including some 400 in Tijuana. The Mexico operation fluctuates from the low 300s to high 400s, depending on the workload. The company has its headquarters site on Oak Ridge Way in Vista, where it maintains design and engineering, marketing and sales, quality assurance, warehousing, and administrative operations. The new plant at Progress Street is about a mile away.

The contract manufacturing part of the business now contributes only about 10 percent of the company’s revenue, but Jeff McCain said, over the next five years, he expects it will grow to providing about half the company’s annual revenue.

Last year, McCain did about $90 million in sales, up from about $80 million in 2010. The company has been growing by an annual average of 12 percent, McCain said.

McCain’s core business is making all types of traffic control equipment, including traffic signals and regulating systems and parking guidance systems.

A former electrical contractor, McCain started the company in 1987 after getting frustrated with the quality of the professionalism of some of the contractors that he worked with on new traffic control equipment. He decided his firm would specialize on everything associated with the traffic control processes.

Business Is ‘Hanging Tough’

The recession and the subsequent years have dampened McCain’s core business to some degree, McCain said.

“It’s hanging tough. The economy is bouncing along the bottom and we’re along for the ride,” he said.

The company should benefit from the passage of a key federal transportation bill that was recently signed into law, which should provide about $60 billion for funding transportation projects over the next two years, McCain said.

With that help, state and local governments could resume delayed road projects, which entail building traffic signals and installing other types of management equipment, he said.

Meanwhile, the contract manufacturing unit that McCain launched some two years ago is starting to bear fruit, and is doing its part to decrease the regions still above average unemployment levels.

Once the contract division is in full operation mode, maybe in 18 to 24 months, McCain says his business could triple its staffing.

The business is proving there that manufacturing hasn’t all disappeared, and it is still viable if it’s done in a certain way, he said.

“It’s not for everything but with right type of products, you can be successful with the right plant,” McCain said.