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A niche manufacturer motors to success Add to ...

Joe Aiello has never heard of Belletile Inc. or met Rahumathulla Marikkar.

But Mr. Aiello is already well into the same journey Mr. Marikkar recently embarked upon, creating a successful Canadian manufacturing company out of a plant abandoned by a multinational manufacturing titan.

Mr. Aiello is co-owner - along with Carlo Di Pietro - of Elettra Technology Inc. (ETI), a maker of electric motors that they formed in 1995 after Westinghouse Electric Corp. closed its electric motor plant in Hamilton.

Since then, ETI has leaped over every roadblock thrown up by the economy. Its success offers lessons on how a company created from destruction can thrive beyond its initial startup phase and compete as a Canadian manufacturer in an age when the perception is that the death of manufacturing in this country is inevitable.

They took over the electric motor manufacturing business after Westinghouse, a conglomerate that was once a household name throughout North America, closed the factory, throwing 280 people out of work.

The closing came seven years after Westinghouse began an intricate dance with Taiwan-based Teco Electric & Machinery Co. Ltd. that involved a Taiwan plant mass-producing standard electric motors while large, custom motors were designed and assembled by Westinghouse in Texas.

As Mr. Aiello recounts the tale, relations between the companies deteriorated and both the electric motor division and the Canadian plant began losing money. Teco bought out Westinghouse in 1995, kept the non-union Texas plant and closed the unionized plant in Hamilton.

That would have been the end of the line, except that Mr. Aiello had worked there 26 years while Mr. Di Pietro had put in 33 and both figured they could make a go of it.

"Carlo said to me: 'We can make these motors,' " he recalls. "We were received with huge skepticism. 'Are you crazy? You're going to do motors? You're going to do this?' "

They re-mortgaged their houses, contributed their severance payments, lined up financing from HSBC bank and found an abandoned factory a couple of blocks away in the heart of industrial Hamilton.

Mr. Aiello says he never had a doubt that he and the employees - some of whom as in the case of Belletile offered to work for free - could turn a cast-off business into a profitable venture.

There were days, however, when it seemed unlikely, such as the morning in February, 1996, when snow poured in through the open roof of the building they were refurbishing and collapsed the pits workers had dug for the company's stamping presses.

Mr. Aiello's wife, Ann McLaughlin, now ETI's manager of human resources and finance, says: "He came home and he said, 'This is not for the faint of heart.' "

But by that April, they were working on their first motor, which was shipped to packaging giant Sonoco of Hartsville, S.C.

ETI has just 38 employees. It has never laid off a single worker, although it has twice taken advantage of the federal government's work-sharing program - during a collapse in orders after the 2001 recession and through the most recent downturn.

One of the lessons Mr. Aiello has learned is that trying to compete with motor makers in China and elsewhere that can mass produce them at a low cost makes little sense.

"Would the Taiwanese or the Koreans care to make a motor that's one of kind? Not likely."

That's why, out in the shop, workers attach electric coils by hand to the guts of the electric motors ETI assembles, some of which take up to six months to complete.

"We're not interested in mass production," he says. "We're not in the right country to do that. We could not even purchase the materials that go into these machines for the price that Taiwan or China sells them."

Follow on Twitter: @gregkeenanglobe

 

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