Shifting gears: Founder's daughter pulls HM Manufacturing out of trouble, earning CEO title
Nicole Wolter majored in chemical engineering and finance and was a year into her job at a Chicago securities firm when her father told her the family manufacturing business was losing money, blaming the recession in 2008.
Wolter, who knew almost nothing about the company her dad started in his basement about 38 years ago, returned home during the economic downturn to try to assist in the operation. Over the next several years, the energetic businesswoman worked to learn everything about HM Manufacturing, a power transmission components provider in Wauconda.
As she studied the company, she uncovered a scandal on the manufacturing floor that nearly drove the company into bankruptcy. She turned the company around, bringing sales from $80,000 to about $3 million in six years. “I love to go to the next level,” said Wolter, 32. Perseverance and determination are reasons Wolter was one of 21 local women recently honored by the Daily Herald Business Ledger during the 20th annual Influential Women in Business Awards. The awards were presented to women executives who excel in business, civic and personal arenas.
Wolter, a graduate of Stevenson High School in Lincolnshire who grew up in Kildeer, never imagined she would run the family business.
Race cars
Wolter's dad, Kenneth, started the company in the basement of his home as a hobby while he worked as an assistant chief engineer at Wisconsin Tool & Stamping. He enjoyed auto racing and made engine parts to make his car faster. Uniroyal noticed the speed increase in his cars and asked to partner with Kenneth on some of the belts and parts. Gates Rubber Co. then bought patents for the stronger belts Kenneth and Uniroyal created. This drove him to make his own motors and gear boxes and start HM Manufacturing. The HM stands for home made — words that his parents believed meant quality.
He grew the business to a space in Schaumburg and then bought the Wauconda property where the company now operates. Nicole, an only child, has vivid memories as a young girl watching the machines dig and looking over the blueprints. “My dad had the foresight and he planned for the future” when building the warehouse at 1200 Henri Drive.
When Kenneth Wolter started, he focused on pulleys and gears. The company has expanded over the last few years to include splines, sheaves, shafts and other custom parts and services. Customers are in the aerospace, automotive, marine, medical, food and beverage processing and packaging industries.
The scandal
During the economic downturn, Nicole left her finance job and returned home. “I'm super close with my parents,” said Nicole, adding that her mother is Colombian and her father, German. “So I'm a fiery, stubborn” mixture of the two, the 5-foot-tall entrepreneur said with a laugh.
She came home in late 2009 and what she discovered over the next year was heartbreaking for the family, especially her father.
Nicole “knew nothing” about manufacturing. She worked from the ground up, starting with secretarial work and doing time cards. She learned how to order materials and then started in on accounting, which was easy for her with her financial background.
Her dad taught her how to quote, and the cost analysis of quoting verses the realization of a job. “That's when I started to learn there were some discrepancies at the company.”
The fact that she was naive and wanted to learn ultimately broke open a scandal taking place under their own roof. “The great thing about me not knowing really anything about manufacturing is that I came in asking a lot of questions.” She asked employees the same questions and got a lot of different answers. “It was good coming in with fresh eyes.”
She noticed employees had been working in the shop, yet the product that needed to be shipped out had yet to be produced. There was a lot of scrap and things were missing. A competitor popped up and had been soliciting HM's customers by giving them prices just below what HM was selling the product for.
“Things at that point just didn't make sense.” She hired a private investigator who confirmed her suspicions. The new competitor was her own employees. Every worker in the shop had been secretly producing parts for the new company with HM's materials, machines, prints and customer lists. “The employees in the shop had started a shell company underneath HM. They hid it really well. My dad kind of gave them the keys to the castle.”
As the family rang in the new year in 2011, they started cleaning house.
Kenneth came in early and fired everyone in the warehouse. “My dad was extremely hurt that this had gone on,” Nicole said.
The warehouse was dark, desolate and eerie that day, she said.
The turnaround
Nicole and her father then plowed full force ahead.
“I went into survival mode. I have a lot of pride and ego. I didn't want them to win and get the upper hand. I always feel like good trumps evil,” she said.
The duo pored over financials and discovered sales were only at $80,000 for the year with five months left of capital until bankruptcy. They worked from 5 a.m. to midnight studying manuals to learn the machinery. “Let's give it all we've got,” was the attitude, Nicole said.
Slowly, the father-daughter team got the shop up and running again, hired a new generation of young HM employees and gained new customers. Nicole built a website and LinkedIn site. She jokes that her dad at one point accused her of “playing on the computer” all day. “It's a different generation,” Nicole says.
It took time to build the company up. “It's a journey,” she said, adding that she now has 20 employees and was named CEO and president in early 2017. Her dad saw she was taking the company to a new level.
Nicole, who rides horses in her free time, is passionate about supporting the next generation of manufacturing leaders and works with the TMA Education Foundation and is on the advisory board at McHenry High School. “I've made it my goal to show teens today that the manufacturing industry can be interesting and rewarding.” She says students relate to her because she is young. “I get it,” she says about kids who might not want to go to college. She also promotes women getting into the industry, admitting that when she first started, people might not have taken her seriously. “The proof is in the pudding. People started to see what I did with the company,” she said.
“Nicole Wolter has been a force on the TMA Education Foundation; her enthusiasm, energy and dedication have helped the TMA reach an expanded group of high schools and students,” said TMA President Steve Rauschenberger. “She embodies the next generation of manufacturing leadership — dedicated, willing to share her time and talents and committed to help develop others.”
The company, bursting at the seams, expanded and added new equipment as well as assembly work, full gear boxes and value engineering. “Our goal is to be that one-stop shop,” she said of the company that did close to $3 million in sales this year.
“I love to grow and innovate,” said Nicole, who describes herself as tenacious. The company might have to expand soon to a larger location. Nicole, who lives in Palatine, hopes to stay in the area, but would consider moving the company to Wisconsin if it's financially favorable.
Nicole says her father, 75, serves as COO and her mentor, as she goes to him for advice daily. “I need him. I really feel he is Junior Google when it comes to manufacturing.”
He taught her the ropes. “He taught me not to quit. He gave me that never give up attitude.”
HM Manufacturing
<b>1200 Henri Drive, Wauconda</b>Founder: Kenneth Wolter
President & CEO: Nicole Wolter
Year started: 1979
Industry: Manufacturing
Number of employees: 20
Web site: hmmanufacturing.com
Annual sales: About $3 million
Twitter: @HMManufacturing
LinkedIn: <a href="https://www.linkedin.com/company/h-m-manufacturing">linkedin.com/company/h-m-manufacturing</a>