Jeff Hagmeier had just received the keys to his newly acquired company, Quad City Engineering (QCE), in March 2020 when COVID-19 totally changed the playing field for the new entrepreneur and the longtime tool & die machine shop.
Now some 18 months later, Hagmeier said with the strong start in the first half of 2021 “it’s trending like it’s going to be a record year. I had a plan, and honestly, I think I expedited my plan because of COVID. I thought it would be two years before I would be where I am today. It’s been a long tough road but I feel it’s paying off.”
Hagmeier, an Army veteran with nearly three decades of manufacturing experience, had earned a reputation as a turnaround specialist -- working as a plant manager at various factories across a handful of states. After months of researching nearly a dozen businesses for sale around the country, he and his wife Julie bought out one of the Quad Cities’ oldest tool & die shops. Now as QCE’s new owner, he finally would be able to shape and mold his own business. “I finalized the purchase of the business March 3 and two weeks later, COVID slowed us down but we remained open due to our agriculture-related business.”
The shutdown, ordered by the State of Illinois in response to COVID-19, left Hagmeier faced with a dilemma. Having worked much of his career in the plastics industry, Hagmeier had listened as successful CEOs talked about the two ways to approach a downturn. “One is hunker down, lay off people and don’t spend money until you make it through the storm,” he said. “But the better way, is to invest in your company to get through the storm. It’s contrary to what you think you should do.”
Investing in the future
“But when the storm is over, there will be a lot of companies that won’t make it through,” Hagmeier explained. When the economic situations rebound, he said those who are ready to strike “will get a lot of business” from all those displaced customers who go looking for new companies to fill their orders.
That approach guided Hagmeier through a tough first five months as his company invested in new equipment and technology, improved processes and upgraded his facility. Along the way he forged new relationships with the Quad Cities Chamber and some of its economic development partners including the Illinois Manufacturing Excellence Center (IMEC) and Revitalize and Develop East Moline (REDEEM).
“It was about August 2020 when things started to turnaround,” said Hagmeier, whose wife Julie is his partner and handles the accounting and human resources side of the business. “Because we’d made the investments in the first six months, they started to pay off.”
Among his investments and improvements:
- $500,000 invested in new equipment and infrastructure improvements including three CNC lathes, two mills, a small lathe, a forklift and a truck.
- QCE also hired a firm to develop a new customer-friendly website, which led to “five new robust customers (in July) right off the website,” Hagmeier said.
- Hired Winsor Consulting Group, a third-party IT company he met through a Chamber function, to develop a new secure, state-of-the-art IT system and to handle the company’s IT needs going forward.
- Partnered with IMEC to receive training and pursue a quality certification. The ISO certification training was funded, in part, through the Chamber’s U.S. Department of Defense supply chain grant, aimed at increasing the growth and competitive posture of area defense suppliers.
- IMEC also connected QCE to other resources to improve its business, including computerized systems for its sales and human resources departments and e-documentation for its Production Part Approval Process (PPAP).
- This summer, QCE acquired a precision metal shop, Taylor Design Inc., in Roscoe, Ill., (north of Rockford) and has rebranded it QCE – Roscoe.
IMEC and Chamber support
“Jeff Hagmeier bought his business pre-COVID and the whole world went down - everything went down - and he thrived,” said Jeff Allspaugh, IMEC’s Regional Manager, whose team of experts assisted QCE staff in becoming ISO 9001:2015 compliant this summer. “We were able to help them build a quality program to be ready for (ISO) certification.”
Allspaugh said the IMEC team engaged a local equality consulting firm to assist QCE “in documenting their processes, building their systems and digitizing it so that all they do would be in alignment with certification.”
“Jeff spent hundreds of thousands of dollars in new equipment and systems, prepping his business for growth,” Allspaugh said. “In a world when everyone is just trying to hang on, it’s nice to have a success story.”
Through a partnership between the Quad Cities Chamber and IMEC (and its Iowa counterpart Center for Industrial Research and Service), area manufacturers receive assistance in addressing problems and finding solutions to help them grow in size, sales and profitability.
“This dynamic relationship provides our companies with resources to cutting edge technology, training and information to drive productivity and to be more competitive,” Allspaugh said.
After acquiring QCE, Hagmeier first connected with Chamber, whose staff provided connections to an extensive network of financial assistance programs including the Illinois Enterprise Zone, EDGE, Advance Illinois and other resources, said Jenelle Wolber, the Chamber’s Director, Business & Economic Growth. “We made a lot of introductions to Jeff and various partners,” she said, adding that COVID “put a halt” to him pursuing any of the financial programs.
Wolber said some of the reporting requirements and just the scope of programs became overwhelming to Hagmeier as he dealt with keeping his business going through COVID. “We really open a lot of doors for members,” she said, adding that not all the assistance leads to a company taking advantage of the resources.
Veteran and highly-skilled workforce, 7 employees added to date
But Hagmeier was focused on positioning his business for future growth as well as diversifying QCE’s traditional agricultural equipment customer base to also include the construction equipment, steel, firearms and elevators/escalators manufacturing industries. In the first 18 months, he has added seven new employees to East Moline for a 21-person workforce. His goal is to grow it to 25-30 over the next year.
The couple, who are QCE’s 12th ownership group, inherited a veteran and highly skilled workforce including three employees who each have 40+ years with the company. “Our plant manager Ton Rokis has 47 years here. He ended up with a renewed energy because I have energy to solicit business and capture customers,” said Hagmeier, who also handles QCE’s sales and marketing.
The Taylor Design acquisition, Hagmeier said, brought new capabilities to both operations. “They’re sharing work and clients. There’s a lot of synergies to helping each other out.”
