IdraPrince, Inc.

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IdraPrince, Inc.

670 Windcrest Drive
Holland, Michigan 49423
U.S.A.
Telephone: (616) 394-8248
Fax: (616) 394-1250
Web site: http://www.prince-machine.com

Wholly Owned Subsidiary of Idra Presse S.p.A.
Incorporated: 1965 as Prince Machine Corporation
Employees: 220
Sales: $42 million (1999 est.)
NAIC: 333513 Machine Tool (Metal Forming Types) Manufacturing

A subsidiary of Italian corporation Idra Presse SpA, IdraPrince, Inc. is North American's largest maker of die casting equipment, used mostly in the automotive industry. In addition to being a full-service provider to Ford Motor Company, General Motors Corporation, and DaimlerChrysler AG, IdraPrince also serves the auto industry's Tier I suppliers (companies that sell finished components to automakers) and Tier 2 suppliers (companies that sell items to Tier 1 suppliers). Products include the Revolution Two Platen machine, offering a number of innovations in die casting machine technology; cold chamber die cast machines, large units designed to make items such as engine blocks, transmission cases, gear boxes, clutch housings, and dashboards; hot chamber machines, appropriate for producing zinc, lead, and magnesium castings; and liquid metal squeeze cast systems, used to inject molten aluminum into a casting die. Other products include software to monitor the process of die casting; temperature controllers; vacuum systems to remove air and gases from a die; and a range of hydraulic presses. The company is also capable of producing custom-built die casting machines and assembling turnkey automated casting systems. In addition, IdraPrince services, rebuilds, and upgrades die casting machines. The company maintains its headquarters in Holland, Michigan.

Founding the Company in the Mid-1960s

IdraPrince was founded in 1965 by 33-year-old Edgar Prince, who quit his job as the chief engineer of Buss Machine Works in Holland, Michigan, in order to start his own die cast business—one that would reflect his deeply held religious beliefs. Holland, Michigan contained one of the largest concentrations of Dutch-Americans in the country, a community that adhered to the Calvinist values of the Christian Reformed Church. Prince also applied these values to Prince Machine, which later became part of Prince Corporation. His operations were always closed on Sundays and he flew his salespeople home to their families almost every night on a fleet of company planes. One of his chief lieutenants, John Spoelhof, who joined Prince in 1969, explained in a 1991 interview the company's philosophy: "We don't apologize for our Christianity. We have a unique opportunity in the business world to let our light shine…. We're not standing on a soapbox, but our walk and talk … will show to others that Christianity is important."

Although he wanted his business to offer a positive image about his religion, Prince shunned the limelight. He could have received a great deal of attention, given that he became a philanthropist as his wealth grew, contributing money to schools and colleges and playing a key role in the revitalization of downtown Holland. Prince also became a player in politics, albeit in the background, becoming a major contributor to Republican candidates around the country and to the Christian conservative movement. He helped religious right leader Gary Bauer establish the Family Research Council, a "pro-family" lobbying group. Prince gave one interview around 1980, felt he was misquoted, and refused to speak to the press again. The Prince family and Prince personnel also were guarded about his life. Hence, there was little known about Edgar Prince beyond his business success.

Early 1970s Switch to Car Components

A major turning point for Edgar Prince came in 1972 when his company moved beyond making custom machine tools for the die cast industry, a highly cyclical business, and became an automotive original equipment manufacturer. In that year Prince Corp. invented the lighted vanity visor for front-seat passengers, first used in the 1973 Cadillac. It would be the first of countless interior items Prince sold to carmakers, which soon began to regard Prince Corp. as a model supplier. According to Forbes, "The carmakers appreciated Prince for his willingness to back his gadgets with his own development money. With a product prototype in hand, Prince's salesmen would put it in some cars and then ask the carmakers' representatives to try it for the weekend." Says Chrysler's [David] Swietlik, [procurement manager for large cars]: "Prince comes in saying, 'You don't know you want this yet.'" Forbes noted, "Over the years Prince created dashboard cup holders, movable armrests, illuminated visor mirrors that automatically adjust to external lighting, a garage door opener button mounted on a sun visor." Fortune offered its own take on the company: "Around the auto industry, Prince is infamous for its tight-knit culture and aggressive selling. 'Swarming the customer' is the way McKensey & Co.'s Glenn Mercer describes it. Prince makes three-dimensional prototypes as well as CAD/CAM printouts when it presents a new design, and prides itself on beating deadlines. Adds Mercer: 'They make it difficult for somebody to say no.'" The company became especially adept with electronics, recognizing early on that electronics would become increasingly important in cars. Rather than just making parts, Prince integrated electronics, and was especially good at packaging it in trim, in order to create very profitable value-added components.

By the early 1980s die cast machines were superseded by the auto interior parts business and Prince Corp. enjoyed a major growth spurt. Employment grew from less than 600 people in 1980 to more than 4,500 in 1995. In addition, sales grew from $30 million in 1982 to more than $300 a decade later. About two-thirds of that amount came from the sale of interior auto components. All told, about three-quarters of all revenues came from the "Big 3" automakers. Along the way, Prince developed a long-term goal: to become the first partsmaker capable of supplying an entire car interior, from roof to door to floor trimmings and instrument panel. It was a lofty goal, one that would be complicated by the globalization of the auto industry. As the Big 3 automakers opened plants around the world, they expected suppliers to follow suit and establish their own global footprints. How to finance such a major expansion was a challenge for a private company like Prince Corp. But events would intervene in 1995 to change the course of the company's history.

According to Forbes, "After finishing lunch on Mar. 2, 63-year-old Edgar Prince left the executive dining room at his Holland, Mich.-based business and took the elevator up to his office. When the elevator doors opened, Prince was dead on the floor, felled by a massive heart attack." Prince had already delegated a great deal of authority to Spoelhof, who had for several years been handling the company's day-to-day affairs, so the company was well positioned to carry on without its founder. More so, it had virtually no debt and was generating about $500 million a year in sales. But not only did the Prince family face paying sizable estate taxes, it also had to contend with the need to raise a lot of money in order to become a global supplier to its customers. In the view of Forbes' Marcia Berss, writing several months after Prince's death, the family was left with three choices: "Borrow a huge amount of money, go public or sell out. Of the three, the latter looks like the quickest solution and perhaps, from the family's point of view, the easiest and most lucrative."

There was no lack of suitors for the business, so that it came as no surprise, therefore, when in July 1996 Prince Corp. sold the Prince Automotive unit to Milwaukee-based Johnson Controls Inc. for $1.35 billion. The Prince family retained Prince Machine, which would become IdraPrince, as well as two other companies, Lumir Corp. (the family's real estate operation) and Wingspan Leasing, which leased airplanes. Prince's son, Erik D. Prince, who was in his late 20s, took charge of the family businesses, including Prince Machine and its 225 employees.

Like his father, the younger Prince was a devout Christian, astute businessman, staunch patriot, and somewhat sensitive. He attended a small liberal arts school, Hillsdale College, and became one of the first interns at the Family Research Council in Washington, D.C. He also undertook intern stints with U.S. Representative Dana Rohrabacher and the White House. He next attended the U.S. Naval Academy, but resigned before graduating. Instead, he joined the Navy, earned a commission as a lieutenant, and became a SEAL—and one of the richest men ever to serve in the U.S. military. He spent four years as a SEAL before leaving in 1996 to return home and attend to family business. In was also in 1996 that he started a professional security firm and bought 6,000 acres of land in North Carolina to build a major training facility. The company became a haven for former SEALs, Army Rangers, and Delta Force Troops, many of whom had been stationed in nearby Fort Bragg. It was called Blackwater USA, an allusion to peat-colored water in that region of North Carolina as well as the nighttime missions undertaken by military divers. Blackwater was in little demand until the terrorist attacks of September 11, 2001, on the United States, and it did not receive much attention (nor did Erik Prince) until the Iraq war. Blackwater was one of about 20 private security firms supplying personnel to serve in the war zone. The role of these private contractors, regarded by some as little more than mercenaries, garnered public attention in April 2004 when four Blackwater men were murdered in the Iraqi city of Fallujah. The gruesome treatment of their corpses was videotaped and shown on television around the world. As a result, a light was turned on the military's new outsourcing of security work, Blackwater USA, and the company's very private backer, Erik Prince.

Company Perspectives:

Our goal is to enhance our customers' success by providing productive, reliable and technologically advanced casting equipment and services.

Erik Prince served as chairman of Prince Machine until 2000, although he was more interested in launching Blackwater and building an elite training center than in the manufacture of die cast machines. One major step taken during his tenure was the 1998 acquisition of Zeeland, Michigan-based Quality Process Controls (QPC), the addition of which expanded Prince's plastic processing capabilities, allowing the company to better serve die cast companies on a global basis. QPC products included high-temperature oil circulating systems, portable process water chillers, and mold die water temperature regulators.

Sale of Prince Machine in 2000

But just as Prince Automotive was sold to a larger company because of globalization, Prince Machine soon experienced a similar fate. In August 2000 the business was sold to a rival firm, Idra Presse of Brescia, Italy, which manufactured and marketed die casting machines and automated work stations around the world, mostly to automakers but also to consumer electronics and household appliance manufacturers. With the addition of Prince Machine, Idra Presse became the largest supplier of die casting equipment in the world. Prince Machine was renamed IdraPrince, Inc., and then in January 2001 was merged with Idra North America.

Now better able to serve customers on a global basis, IdraPrince began to further develop its capabilities in the early 2000s. In July 2002 it won the worldwide licensing rights to a new rheocasting process developed at the Massachusetts Institute of Technology. In rheocasting a liquid metal, like aluminum, solidifies in a die. It also could be combined with squeeze casting to produce fiber composite materials. IdraPrince looked to use the technology to improve upon existing cold chamber die casting machines and to design new machines.

In February 2003, IdraPrince unveiled a new cold chamber aluminum and magnesium die casting machine product line, featuring a new design that reduced the required floor specification for a die cast machine by more than 30 percent. In addition, the units had less mechanical components, which in turn reduced the amount of required maintenance. The company also was working on a new injection system, which adopted a so-called "No Pipe/No Hose/No Leak" design philosophy. All external hydraulic pipes and hoses were either eliminated or designed to be leak free. The "S2" injection system completed its production trial in early 2004. Around the same time, the year-long production trial was completed on the company's innovative Revolution 2-platen, small footprint, die cast machine. Over the next year IdraPrince grew the Revolution product line to include six models with die locking forces that ranged from 900 tons to 4,000 tons.

With the backing of its Italian corporate parent, and still benefiting from the culture established by its American founder, IdraPrince had the products, personnel, and reputation needed to prosper on the global scene for many years to come.

Principal Subsidiaries

QPC Systems, Inc.

Principal Competitors

Alumasc Group Plc; Gibbs Die Casting; Productivity Technologies Corporation.

Key Dates:

1965:: Edgar Prince founds Prince Machine Corp. to custom build machine tools.
1972:: Prince invents the lighted vanity visor and begins producing car interior components.
1982:: Sales reach $30 million.
1995:: Edgar Prince dies.
1995:: Prince Automotive is sold, leaving Prince Machine as a die cast machine company.
2000:: Idra Presse SpA acquires the company, renamed IdraPrince, Inc.
2001:: The company merges with Idra North America.
2002:: Rights are acquired to the rheocasting process developed by the Massachusetts Institute of Technology.