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Company moving headquarters to Wexford as boat-making breakthrough propels expansion Catching the wave Friday, January 19, 2001 By Joyce Gannon, Post-Gazette Staff Writer
Western Pennsylvania is hardly recognized as a mecca for the marine industry. But a Mercer County company is making huge waves in the pleasure boat business. VEC Technology Inc., a Greenville company that plans to move its headquarters and 100 employees to Wexford next month, has developed a computer-controlled process for producing hulls -- the main bodies of boats.
The digitally controlled technology reduces boat production time from eight hours to 35 minutes and greatly lowers the pollution caused by traditional methods of spraying fiberglass and resin to construct boat hulls, the company says. It will be on display today through Sunday at the Pittsburgh Boat Show at the David L. Lawrence Convention Center.
Though VEC and its automated boat-building process is relatively unknown in these landlocked parts, it has huge resources behind it.
Irwin Jacobs, the Minneapolis investor who earned the nickname "Irv the Liquidator" in the 1980s when he was an aggressive corporate raider, bought VEC two years ago. Last summer, Jacobs' company, Genmar, opened a new factory in Minnesota to produce 10,000 boats a year using VEC's technology. The automated system is being used on Genmar's Larson and Glastron models that are 17 to 21 feet long but eventually could be used on boats up to 24 feet long.
Genmar, an $858-million boat manufacturing business, stumbled on VEC when the Greenville company, then called Pyramid Composites, was making fiberglass parts for fitness equipment and other applications.
Pyramid was founded by Gene Kirila, an Ohio native who played football at Youngstown State University but dropped out of school in the mid-'80s to launch a fitness machine business.
According to Steve Kubisen, president of VEC, Kirila was unhappy with the quality of the fiberglass parts being used in his custom exercise equipment and decided to design his own.
In 1993, Kirila sold his fitness machine company and started Pyramid Composites. Along with engineering chief, Bob McCollum, he came up with a computer program to control the fiberglass manufacturing process.
Genmar heard about the technology and in 1999 contracted Pyramid to build a 17-foot boat hull. Jacobs was so impressed with the resulting boat that he decided to buy the company and has invested $30 million in it so far, according to Genmar.
The basic difference between conventional boat construction and VEC's technology, said Kubisen, is in the molding process.
In traditional boat making, an open mold of the boat is coated with gel and sprayed with a mix of fiberglass and resin. The process is extremely labor intensive, causes environmental problems, and the resulting boats may be prone to cracks and leaks.
Using VEC, which stands for "virtually engineered composite," a computer controls the thickness and strength of the fiberglass and the mold "floats" in water instead of sitting on steel and wood supports. Precut pieces of fiberglass and urethane are laid into the mold before a resin mixture is injected. The computer system controls hundreds of variables, including temperature and gel times, that can cause fluctuation in the strength and weight of the boat.
For example, say a particular 18-foot boat is supposed to weigh about 400 pounds. With all the variables in traditional boat manufacturing, Kubisen said, each of those models produced in a particular week might be 80 pounds heavier or lighter than the next.
Using VEC, he said, "The same hull would be plus or minus less than a pound" than other similar models.
"The assembly is easier, all the parts fit and it's very consistent; so that translates to every boat having the same performance."
Long term, the automated process also should help slash the price of boats, which now start at $10,000 to $15,000 for a 17- to 19-foot model, Kubisen said.
The VEC process recently earned the 2001 Design and Engineering Award from Popular Mechanics magazine, and Genmar is so confident in its superiority that the company is offering a lifetime warranty on boats that are made using the process.
Kubisen acknowledged VEC was exploring how to apply the technology to other industries, including automobiles and fiberglass tubs and showers. But he declined to name specific customers.
Kubisen joined VEC about the time Genmar was getting ready to take it over.
"I came in ready to be the CEO and within two weeks found out that our largest customer wanted to buy us," said the 48-year-old Chicago native, who spent a couple of years as director of marketing for Alcoa's Corporate Technical Center in New Kensington.
But Jacobs' interest was good news to Kubisen.
Though Pyramid had some funding from a group of Pittsburgh investors, including Respironics Inc. founder and Chairman Gerald McGinnis, it needed more.
"Genmar has deeper pockets and has the ability to allow us to grow even faster," Kubisen said.
VEC's revenues are less than $10 million, he said, but it expects to at least double that amount this year.
The move to Pittsburgh's northern suburbs will allow VEC to tap into engineering talent at Carnegie Mellon University and the University of Pittsburgh.
"We're hoping to add mechanical and electrical engineers, computer-aided design operators and others. And there's a larger population of those kind of people in the Pittsburgh area," Kubisen said.
The move also shaves a couple of hours from his daily commute since he lives in Gibsonia.
Company founder Kirila, who sits on VEC's board and has ownership stakes in other ventures including Bridgeville company Efficient Machine Tool Sales Inc., will remain in Greenville.
"He's a concept guy," said Kubisen. "He'll continue to work for Genmar and is setting up a venture capital fund for Genmar to invest in new technologies."
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