The 2am Parts Run

The phone rang at 2am and my father was already moving before the second ring. He knew who it was. There was one caller at that hour, and it was the night maintenance lead at the Black & Decker plant 25 minutes down the road, and it meant a line was down.

I was 4, maybe 6. I do not remember which. I rode along because there was nobody to leave me with, so a small boy in pajamas went to the factory at 2am. What I have are a child's details: the cab of the truck, the part wrapped in a shop rag on the seat between us, the loading dock lit up like a gas station, and a man in a stained shirt waiting at the door who shook my father's hand like he had just been rescued. The line had been down about 3 hours by the time we pulled in. Nobody in that building was thinking about the quarter. They were thinking about the next 20 minutes.

He did not hand the part over at the dock. He walked it in. I followed him onto the floor and stood there while he talked with the maintenance crew for 45 minutes, about the part, about the machine that ate it, about the kid he could not leave at the house. Then he stayed. He did not leave until the line was running again and the man in the stained shirt had nothing left to worry about. He did not have a choice about bringing me. It turned out to be some of the best education I ever got.

My father ran his own machine shop. The plant had its own machinists, good ones, on the payroll and in the building. He still got the call. It took me 30 years and a lot of plant floors to understand why.

The Blanks on the Shelf

His advantage was never the lathe. The internal shop had better equipment and it had drawings he had to borrow. What my father had was a shelf of half-finished parts. He knew which parts that plant broke, because he had made them before, so he kept blanks roughed out and stored. A 2am call meant a finish pass and a drive, not a start from bar stock. The internal shop would have started from bar stock, after they found the drawing, after they found the material, after someone with the authority to open the tool crib at 2am answered a phone.

The other thing he had was the people. He was excellent with them, the kind of man a night maintenance lead calls directly because he knows he will pick up and he knows he will not be lectured about the hour. The 45 minutes on the floor was the sales call, and the hour he stayed afterward was the contract renewal. Every customer he had was a friend first. I learned how to sell and how to build a network standing next to him at 3am in my pajamas, and I did not know that was what I was watching. The relationship was the service. The part was the proof that the relationship worked.

I did not have the vocabulary then. I do now. He had engineered responsiveness, and responsiveness was worth more to that plant than ownership of the machine shop that technically existed to provide it. Three hours of a line standing still was the only number anyone cared about at 2am, and he was the fastest route to making it stop growing.

What Three Hours Costs

We do the math on every plant we look at. A business running 60m USD of revenue across 2 shifts gets roughly 4,000 production hours a year, which puts each hour of line time at about 15k USD of output. Three hours of unplanned downtime is 45k USD of product that was scheduled and did not ship, and whatever contribution margin was riding on it. Do that twice a month and you have found a 1m USD problem that never appears as a line item, because it is spread across overtime, expedited freight, a customer who quietly moved 10% of the volume to a second source, and a maintenance budget that keeps getting cut because the downtime is invisible in the P&L and the parts are not.

The math matters. I would not buy a business without it, and the people who read this letter and send me deals know I run it hard. The math also has a ceiling. It tells you the downtime happened. It cannot tell you why the call went to an outside shop 25 minutes away instead of across the hall, and that why is where the money is.

Every plant has a man like my father. The question is whether anyone in the front office knows his name.

Paul W. Swaney III

The Question on the Floor

It is not the first thing I look at, and it should not be. The first things are the market and the revenue: who the customers are, how concentrated they are, what the pricing power looks like, whether the end market is growing or shrinking and what the margin does when volume moves. A plant with a great maintenance culture in a dying end market is a well-run liability. That work comes first and it is never skipped.

The plant assessment comes after, and inside it, somewhere between the OEE pack and the walk through the tool crib, I find the person who got the last 2am call and I ask how long it took to get the line back. Who did you call. Did they pick up. What did you wait on. It is one question in a long assessment, and it tells me more about how the asset actually runs than most of the data room.

The reason is simple and uncomfortable. Reports are produced by the people furthest from the value. The operator standing at the machine has been quietly solving the plant's real problems for years with no budget and no title, and nobody has asked him what he would fix. When you do ask, the answers come out fully formed, because he has been rehearsing them on the drive home. We still run the numbers. The operator's voice is where the outsized return hides, because it is the one input nobody else in the process bothered to collect.

I have watched that play out in adhesives, chemicals, distribution, paper, machining and utility services. The name on the sign changes. The man at the dock does not.

Swaney Group Capital proudly uses Attio CRM as part of our unified sourcing transacting and operations technology stack

The Plant Is Gone

The Fayetteville plant closed nearly 20 years ago. The announcement came as part of a restructuring after an acquisition, and the public record is blunt: 675 jobs, the steel operation moved to Tennessee, the motor and aluminum die casting work moved to Mexico. It had been the sixth largest non-government employer in the county. The men on that floor at 2am were somewhere in that number. Some followed the work. Most did not have that option.

I love factories. It is what I was raised on, and it is why I do what I do. I also do not romanticize them. That plant did not close because the people were bad at their jobs. It closed because a spreadsheet in another state said the same tools could be made cheaper somewhere else, and in the short run the spreadsheet was right.

There is real value sitting in the plants that are still standing, and I think more of this work comes back than the pessimists expect. It will not come back on its own. Reshoring is capital, public and private, spent on machines and on the people who run them, and it is a decade of decisions made by owners who are willing to put money into a maintenance culture that never shows up in the multiple. The buyers who understand that will own very good businesses. The ones who are only reading the reports will keep buying the P&L and wondering why the line goes down.

The Playbook

Anyone who owns or runs a plant can do this next week. Find the last unplanned stoppage of more than an hour and walk it backward, minute by minute, with the people who were there. Write down every wait: for a part, for a drawing, for an approval, for a phone to be answered. The waits are the business. Fix the longest one before you touch anything else, and then ask the operator what the next one is, because he already knows.

My father kept the blanks on a shelf because he had spent 45 minutes at a time listening to the people who called him. The plant that employed 675 people and had its own machine shop never asked.

Walk the part in. Stay until the line runs. Then do the math.

I am the founder of Swaney Group Capital, a fundless sponsor focused in the lower middle market. LeverUp® is published weekly. More if I have something else to say.

Notes:

1 Source: WRAL, Aug 3 2006, Black & Decker to close Fayetteville plant by year end, 675 full-time jobs, steel operations to Jackson TN (about 250 jobs), motor manufacturing and aluminum die casting to Reynosa, Mexico, restructuring after the Oct 2004 Pentair Tools Group acquisition; plant was the area's sixth largest private employer.

2 Downtime math (60m USD, 2 shifts, 4,000 hours, 15k USD per hour) is illustrative.