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13 Success Stories Tom McKaig


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13 Success Stories Tom McKaig

  1. 1. Acme Manufacturing Company Designs & Builds Integrated Finishing and Manufacturing Systems for Customers Worldwide <ul><li>Centerless Grinding Systems </li></ul><ul><li>Coil Grinding Systems </li></ul><ul><li>Integrated Robotic Finishing Systems </li></ul><ul><ul><ul><li>Buffing </li></ul></ul></ul><ul><ul><ul><li>Polishing </li></ul></ul></ul><ul><ul><ul><li>Grinding </li></ul></ul></ul><ul><ul><ul><li>Deburring </li></ul></ul></ul><ul><ul><ul><li>Superfinishing </li></ul></ul></ul>Thomas M. McKaig, CFO Acme Manufacturing Company Auburn Hills, Michigan, USA COMPANY BACKGROUND
  2. 2. <ul><li>G.A. Carlson, Sr. interviewed with Henry Ford </li></ul><ul><li>Founded Acme in 1910 in Detroit, Michigan </li></ul><ul><li>Early machinery made by Acme polished parts for the Model T </li></ul><ul><li>Four Generations of the Carlson family have led the company </li></ul><ul><li>Operating in Michigan for over 101 years </li></ul><ul><li>In the 1990s decided to diversify away from automotive industry </li></ul><ul><li>Automotive is now less than 5% of sales </li></ul>G.A. “Fritz” Carlson III and Glen A. Carlson Jr. G.A. Carlson Sr. COMPANY BACKGROUND
  4. 4. <ul><li>Acme has been exporting equipment since the 1950s </li></ul><ul><li>Recipient of the President’s “E” Award in 1992 from The U.S. Department of Commerce as recognition for efforts in export expansion </li></ul><ul><li>Acme first used The EXIM Bank Working Capital Guarantee Program in 1994 </li></ul><ul><li>You do not have to be a big company to export </li></ul><ul><li>Acme covers the world with approximately 60 people and six representatives </li></ul>EXPORTING HISTORY
  5. 5. <ul><li>China – Acme Mfg. Co. China - Ling Yun </li></ul><ul><li>India – Acme Mfg. Co. India – G R Reddy </li></ul><ul><li>Brazil - Pungibtecnica – Marcelo de Americo </li></ul><ul><li>Ireland – Acorn Processes – Pat Murphy </li></ul><ul><li>United Kingdom – SAL Abrasives Ltd.– Nigel Pendlebury </li></ul><ul><li>Korea – Shinkie Company Ltd. – Mr. Cho </li></ul><ul><li>VERY IMPORTANT TO HAVE A LOCAL PRESENCE </li></ul>INTERNATIONAL REPRESENTATION
  7. 7. <ul><li>Acme equipment sells from $250K to $5M and can take up to twelve months to complete </li></ul><ul><li>Typical payment terms on foreign sales </li></ul><ul><ul><li>10% down payment against a standby LC </li></ul></ul><ul><ul><li>80% at clean on board bill of lading </li></ul></ul><ul><ul><li>10% after final acceptance </li></ul></ul><ul><li>Ordinarily, banks will not lend on WIP or foreign accounts receivable </li></ul><ul><li>Standby LCs are required for advance payments and must be 100% collateralized </li></ul>NEED FOR EXIM BANK
  8. 8. <ul><li>Without the EXIM Working Capital Guarantee Program, Acme would not be able to accept foreign orders with unfavorable payment terms </li></ul><ul><li>The EXIM program has enabled Acme to grow its export business and consequently grow the company </li></ul><ul><li>Over $10M in contracts have been financed under the EXIM Working Capital Guarantee Program over the last 18 months </li></ul><ul><li>EXIM helps level the playing field when quoting against foreign competitors who receive support from their governments </li></ul>NEED FOR EXIM BANK
  9. 9. <ul><li>Politics can influence EXIM Bank (i.e lobbyists) </li></ul><ul><li>Start the application process early </li></ul><ul><li>Talk to your bank about the transaction on the front end to make sure that there are no issues </li></ul><ul><li>Factor the cost of EXIM into your selling price </li></ul><ul><ul><li>75 to 150 basis point facility fee </li></ul></ul><ul><ul><li>Attorney fees </li></ul></ul><ul><ul><li>Letter of credit fees </li></ul></ul><ul><li>When at the negotiating table in a foreign country, it is nice to know EXIM support is available </li></ul>THINGS TO KEEP IN MIND
  10. 10. <ul><li>Canada </li></ul><ul><li>Mexico </li></ul><ul><li>Venezuela </li></ul><ul><li>Brazil </li></ul><ul><li>China </li></ul><ul><li>Korea </li></ul><ul><li>Taiwan </li></ul><ul><li>Germany </li></ul><ul><li>Russia </li></ul><ul><li>India </li></ul><ul><li>Participating in International Trade Shows is very important and very expensive (Acme has spent over $100K on shows in 2011) </li></ul><ul><li>Our European competitors have been subsidized by their local governments for years </li></ul><ul><li>Acme is interested in learning more about the new Michigan STEP Program to help support international trade show participation </li></ul>INTERNATIONAL TRADE SHOW PARTICIPATION