Metal Powder Molds Regional Industrial Powerhouse

There’s more to metal technology than great open furnaces and sheets of white-hot steel. More than 5,000 years ago, ancient civilizations were using a process known as powdered metal technology to make ornaments and weapons.

Today, this technique once used by Incans and Egyptians means thousands of jobs at 150 companies around the nation that make metal parts ranging from napkin rings and religious medals to gun sights, triggers and sprockets for car engines.

The powdered metal business generates $1.5 billion in sales nationwide, and is so strong in north-central Pennsylvania that shopkeepers and others can’t find the staff they need--the 40 metal companies in the region are draining the pool of workers.

The technique involves compressing metal powder--usually bronze, iron or steel--into molds. The molded parts are then baked for hours at high temperatures to make them as strong as machine-cut parts. They’re usually cheaper because the technology involves less labor and waste of materials.

“It’s such an economical way of making parts that the automotive and automatic power equipment industries are constantly pushing for more,” said Michael Stauffer, sales manager at Keystone Carbon Co., a 1,300-worker firm.

Other companies are much smaller, with a handful of workers, but the technology they use is basically the same.

“I just can’t get it out of my blood,” said Norbert Arnold, who joined Keystone Carbon with a correspondence-school degree in chemistry in 1939 and stayed until 1986. “It’s just a great metalworking process.”

Like many people in the industry, Arnold keeps a collection of gizmos made from powdered metals in his basement office where, flanked by trade journals and jars of metal powder, he offers technical advice on the business and serves as a local expert on its history.

In 1900, the lumber magnates whose huge lodges still dot the hills of the area had no idea that powdered metal was the key to the area’s future. They knew, though, they needed a new industry because the timber was disappearing.

Andrew Kaul, one of the lumber barons, took a chance on the industry, Arnold said. He put his money behind John Speer, who founded Speer Carbon early in the century.

The company and its imitators used powdered carbon to make graphite brushes for electrical motors, incidentally laying the technological foundations for the powdered metals industry.

The industry took off in the late 1930s as the world prepared for World War II and companies discovered how to use powdered metals to make self-lubricating ball bearings. By the mid-1970s, hundreds of people had learned enough to leave the big companies and start their own businesses.

Eric Wolfe’s grandfather, Arnold, and his father, Richard, founded Windfall Products Inc. in 1976 with four workers. By 1982, they had about 100 employees.

The privately-held company now has 635 workers, $60 million per year in sales and income of $3.6 million to $4.8 million, Wolfe said.

For those with expertise, powdered metals companies are fairly easy to set up. “You don’t need a lot of capital equipment,” Stauffer said. “One press, one furnace and you can get started.”

Hugh Dornisch, his brother Blaise and Frank Beimel Jr. decided at a New Year’s party they would go into business. In two months, they found a fourth investor, put second mortgages on their homes and raised the $400,000 to $500,000 they needed to open Precision Compacted Components.

Production began in May 1994 in an old, gray brick building once used to make turbines for submarine engines. Other powdered metals companies, temporarily facing more work than they could handle, sent jobs to the newcomers.

“We’ve done OK,” said Blaise Dornisch. “We haven’t lost any money. We have shown a profit, but everything has gone back in.”

For small companies such as his, surviving long-term may be harder. Wolfe and Stauffer said the automobile industry, the industry’s biggest customer, is demanding more and more from its suppliers, both in pricing and quality.

“The competition has been very fierce,” Stauffer said. “The buyers are taking advantage of that.”

To do well, Wolfe said, powdered metals companies must persuade auto makers to replace wrought metal parts with powdered metal ones. He estimated each American car now contains 25 to 30 pounds of powdered metal parts. The total could rise to 50 pounds, he said.

Business people in the area expect continued prosperity.

“It’s like Silicon Valley,” said Raymond W. Klaiber, director of the St. Marys Area Economic Development Corp. “I would say that as far as the powdered metals industry is concerned, it could grow another 100% . . . because there’s a lot of technology here.”