Hypertherm sets a unique standard



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For more than 40 years, Hypertherm has served as a kind of role model for the Upper Valley tech economy and beyond.

Besides being voted best company to work for by local and national publications, the Hanover firm has earned a slew of awards for its commitment to its associates, who are also owners, and has set high standards when it comes to commitment to the environment and social causes.

But the company's highest standards have been -- and continue to be -- set through its ground-breaking high-temperature metal cutting products, all of which are built in the United States.

And it all started in 1968.Working out of a two-car garage, Hypertherm's founder, Dick Couch, then a Dartmouth College student, and his associate, Bob Dean, were messing around with plasma cutting when they stumbled on a breakthrough.

Though plasma cutting had been discovered in the 1950s, they found that by radially injecting water into a plasma-cutting nozzle, they could create a narrower arc. This made the process faster and more accurate.

Couch ran with the idea and started Hypertherm. Since then, the company has generated nearly 100 patents -- it dedicates nearly 10 percent of its staff to research and development -- and has grown a global reach.

Plasma is a form of matter that when heated from solid to liquid to gas reaches an ionized state where it can conduct electricity, explained Charlie Hackett, corporate improvement leader at Hypertherm.

Very much like a welding arc, a jet of plasma gas is used to cut metal, usually steel. The plasma is heated to a very high temperature, so it melts the metal and then the jet pushes it out of the way, producing a controlled, severing cut.

"The technology that we have developed over the past 40-some-odd years helps us control the arc and deliver a very precise and repeatable cut for our customers, and that's really what they value," Hackett said. "And we see our business growing, into not just plasma, which is where the core of the business is, but also into laser cutting, where we have a small but growing presence."

Global sales

The company -- whose products are used in a variety of industries, including agriculture, construction, railways and shipbuilding -- can also claim something that's becoming a rarity in the U.S. manufacturing industry: Though it has partners in 93 countries, all of its systems are built in the United States.

Hypertherm's headquarters is at its Great Hollow Road facility in Hanover, which is one of 11 facilities and counting in New Hampshire. The company broke ground in 2011 on a 160,000-square-foot, $35 million facility on Heater Road in Lebanon. It also owns CAM Solutions in Lockport, N.Y., which develops Cutting CAM software.

Though the manufacturing remains local, sales are certainly global. In 2005, about 46 percent of Hypertherm's sales were in the global market. Today they're over 60 percent.

But, beyond its technology, said Hackett, "we've also found that it's important to invest in our people and our operations."Hypertherm is a privately owned company with a long history of profit-sharing, he said.

"I think the last five years we've averaged 24 percent of base salary for each employee," he said. "And that's a tremendous incentive. If you know at the end of the year there's potential for a 20 to 25 percent profit-sharing payout, that is a tremendous incentive to contribute to the overall improvement of the company."

Additionally, the company has had an Employee Stock Ownership Plan since 2001, when Couch announced that 30 percent of Hypertherm's stock would go the associates. Each May, shares are turned over to employees.

"As the company grows, the value of the company grows, the ownership of the company for associates grows as well," Hackett said. "So that's more of a way to see the long-term health and stability of the company."

The company also has created training academies for its employees to learn different aspects of the business and advance their careers within the firm.

The machining process is complicated, and finding machinists is an ever-growing area of demand. The challenge, said Jim Miller, vice president of manufacturing, is finding workers qualified to do the job.

The result has been a partnership with River Valley Community College in Claremont, where new employees are sent for a nine-week training program. After employees have been screened for learning aptitude and cultural fit within the company, they are sent to the paid program where they learn machining programming through classroom training, bookwork and hands-on training.

In addition to getting paid during the training, the employees are also halfway to earning an associate degree with the credits they earn -- and are encouraged to complete the degree.

"This helps us ramp up more quickly and helps us set up our associates to be more successful," Miller said. "Prior to the training institute, we used to train people in production. You take your best people and pair them up with someone new while they're trying to meet more production than we can handle at the time, and it was a bad combination. It wasn't an effective way to train. It really slowed down a number of things and wasn't fair to the new associates."

Community serviceFurther, Hypertherm's "no-layoff" policy allows it to retain institutional knowledge and experience even during tough economic times.

Between 1996 and 2011, Hypertherm's workforce has grown from 449 to 1,242 employees. Though the numbers dipped to a low of 1,110 in 2010, the company has since added more than 100 people and is actively looking to hire more.

The company's philosophy has also been felt outside its walls. For starters, each Hypertherm employee is entitled to offer 24 hours of paid community service.

"Things like that matter to the associates," Hackett said. "And it's a benefit not only to Hypertherm, but to the community organizations we work with."

In addition to the reported thousands of volunteer hours and millions of dollars donated, the company also started The Hypertherm Owners' Philanthropic Endeavors -- or HOPE -- foundation.

"The mission is really to find and create change in our local community," Hackett said. "And that can be in various forms."

Environmental sustainability is also a part of the company's philosophy, with a commitment to produce zero landfill waste by 2020.To that end, in 2011, the company saved 52 tons of waste through zero-sort recycling and 13 tons through the company's composting program in the cafeteria. The firm also has identified reduction potential at the supplier's end and will be hiring a packaging engineer this year.

Among its sustainability efforts, the company has reduced heating oil use from 155.86 gallons to 75.85 gallons per day; installed LED lights and removed extra bulbs, saving 1,062 kWh a year; changed the coolant used in manufacturing to canola oil, then created an in-house filtration and re-use system; and it returns shipping materials to our suppliers for reuse, according to company officials.

"We realize that we are an industrial company and that we make products that build bridges and ships and so forth," Hackett said. "But we also know it's important that we do our part to reduce our environmental footprint."


 

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