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Vernay on path of growth

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Operating any kind of manufacturing business in today’s global market is a challenge, according to Ed Urquhart, president and CEO of Vernay Laboratories. But with a committed force of long-time employees who care a great deal about the well being of the company, Vernay is poised to widen the markets for its small rubber parts, which are used in nearly every automobile and appliance in the world.

“There’s probably not a day that goes by that every person on the planet doesn’t come into contact with a part that was manufactured by Vernay,” Urquhart said in an interview last week at the company’s official headquarters on East South College Street. “Vernay and the other Yellow Springs companies put this little place on the map…and that’s something the Yellow Springs community can be proud of — that tradition and that heritage.”

Urquhart came to Vernay in September 2009, replacing former CEO Tom Allen, who had overseen a decade of tough times for the company, Urquhart said. Vernay suffered two financial blows from the 2001 information technology market crash and the 2008 economic recession, between which the company incurred costs needed to settle a lawsuit and engage in remediation efforts related to chemical contamination at the site of the former Dayton Street facility. According to Urquhart, all three situations put a strain on the company’s financial obligation to manage its pension assets.

“The financial hardship was huge in terms of the size of this company — it was serious enough to make the survival of the company precarious,” he said.

But the company did not cave. After a gradual downturn including the relocation of the local manufacturing operation to Georgia in 2004 and a 10 percent loss in 2009, this past year Vernay saw a 35 percent overall increase in sales, which led the company to increase its manufacturing employees by about 10 percent. That growth was largely a result both of Vernay’s ability to develop products based on highly specialized needs and of the dedication and commitment of its employees, Urquhart said.

“I’m proud of that, and it’s a result of the employees of this company working very hard and not giving up,” he said. “The success of this company comes from the people who work here.”

Vernay’s American market grew by about 30 percent last year, which included, for instance, a sanitary hand cleaning dispenser that Lysol asked the company to develop. Vernay also benefited from stricter fuel emission regulations that produced a demand for a new valve to reduce emissions in automobile engines. And in recent years Vernay has seen growth in both the automotive and medical industries in China, which fueled the need for a new plant, which opened three months ago in Suzhou, just outside Shanghai.

Vernay’s growth hasn’t changed dramatically the work of the 20 finance, HR and materials research and development employees currently located in Yellow Springs, the company’s legal headquarters. Vernay employs a total of 550 people, many of whom work in two manufacturing facilities in Griffin and Milledgeville, Ga., and four others in Holland, Italy, Israel and Suzhou, China. Vernay also has sales offices in France, Brazil, Japan and Shanghai, and another engineering office in Singapore. And 10 administrative and sales employees work with Urquhart in an office in Atlanta, where he and his family live.

Urquhart is trained as a materials engineer and worked for a small metal parts manufacturing company in Germany before stepping in to lead Vernay. He spends a small amount of time in Yellow Springs each quarter to visit headquarters and attend shareholder meetings. While he has no plans to leave Atlanta, neither does he aim to move the office currently situated in Yellow Springs.

“The engineering is something that will stay here indefinitely,” Urquhart said. “A global company doesn’t benefit by moving its employees elsewhere.”

But the company does aim to expand its presence geographically, and Urquhart said that the goal is to have an engineering and manufacturing presence in each continent to better serve customers in different parts of the world. Partly because of the need to widen its geographic reach, the sense of community that Vernay’s founder Sergius Vernet used to build his company has changed. The nature of the manufacturing world itself has changed, according to Urquhart, who said that his primary focus is to provide good, stable jobs and to make the company stable for its shareholders and employees.

“It’s not easy being a successful manufacturing business today — if you don’t continuously improve and reinvent yourself as a manufacturing company, you will not survive in the Western world,” he said.

But Vernay has survived. The company began in 1946, a decade after renown Antioch College President Arthur Morgan lured its founder, inventor Sergius Vernet, from Philadelphia to the college and gave him space in the basement of the Science Building for his laboratory, in which he invented a new thermostat, called the Vernatherm. Now, Vernay Laboratories claims over 10,000 materials in its database, designs thousands of different parts and manufactures millions of parts per day, nearly all of which has been custom engineered based on individual customers’ needs. The maneuverability to develop its own chemicals, engineer its own products and then produce the elastomer valves, seals and gaskets found in everything from cars and ink jet printers to lawn mowers, washing machines and coffee makers, has enabled Vernay to stay in business.

The environmental cleanup at the Dayton Street site is still ongoing, and the company is waiting for a response from the U.S. Environmental Protection Agency on the final remediation measures to be imposed. The company has budgeted for the remediation action and is again in a growth pattern and able to move forward, Urquhart said.

Despite its challenges, Vernay has maintained its ability to keep rebounding, an attribute Urquhart is especially proud of.

“Today, Vernay is a healthy company… [it’s] a gem of a company, and I’m happy to be part of it,” he said.

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