Lou-Rich is a vertically integrated, employee-owned, ISO-certified contract manufacturer based in Albert Lea, Minnesota. In business for over half a century, this company offers fabrication and welding, machining solutions, painting and finishing, assembly, complex manufacturing, engineering, and design for manufacturability.
“We want to do as much value-add to a product as possible. We go after high-level assemblies, high-level weldments, things like that,” says General Manager Lee Gulbrandson. Being a one-stop shop that offers multiple services “is definitely a core strength,” he adds.
The company maintains a 275,000-square-foot facility and a 55,000-square-foot facility in Albert Lea, plus a 75,000-square-foot plant in its original hometown of Hayward, Minnesota.
Healthcare, which accounts for 25 of Lou-Rich’s business, is one of the main markets served, with agriculture making up 20 percent of business, highway safety 10 percent, and food processing equipment 15 percent. Industrial equipment and other markets make up the rest of the company’s work. Customers range from small local businesses to major manufacturers such as GE HealthCare, John Deere, and ice machine maker Scotsman.
Lou-Rich’s fabrication and welding department utilizes CAD software, tube lasers, fiber-optic lasers, brake presses, and robotic and manual welding systems on everything from light-gauge sheet metal to heavy-plate stainless steel. Parts are machined a variety of ways on one of the 50 CNC machines. Those machines include horizontal and vertical mills, lathes, and Swiss turning centers, while three application booths are used for painting and finishing. Assembly is performed by work cells custom-arrayed for each project, while the engineering department boasts over 20 engineers and support staff.
Given that the company founders were tool and die makers, “One of our core competencies today is tooling design and build. We do all our own tool design—all of our CNC workholding, welding fixtures, robotic welding fixtures, and assembly fixtures. All of that is designed and built in-house. We have a team of designers here, then we have a fully staffed and outfitted tool department that takes those designs and completes them to the specific drawings,” Gulbrandson explains. “From a customer standpoint, we like to be involved on the front-end as much as possible. We can help with design for manufacturing.”
Reinvestment is a top priority, and each year the company purchases millions of dollars’ worth of capital equipment. Recent purchases include robotic welding systems and automation solutions.
This cutting-edge technology and equipment are complemented by innovative manufacturing processes and an intense focus on quality. Lou-Rich has embraced lean manufacturing and continuous improvement strategies to improve efficiency, productivity, and the bottom line. The firm has ISO 9001:2015 certification and adheres to the Production Part Approval Process (PPAP) for its customers, a rigorous quality assurance system for auto part suppliers. Lou-Rich also follows guidelines set by REACH, a European program for the registration, evaluation, authorization, and restriction of chemicals, and the Restriction of Hazardous Substances (RoHS), an initiative to regulate hazardous substances in electronic and electrical equipment.
The company performs routine gage calibrations and internal inspections, monitors critical to quality (CTQs) dimensions—CTQs can include physical characteristics such as width, weight, length, performance metrics, or other factors—and is third-party audited on a regular basis.
Certainly, Lou-Rich has come a very long way from its exceedingly humble origins. Louis Larson and Richard Ackland, the firm’s founders, were working as tool and die makers in Iowa in the early 1970s, when they had a sudden revelation. “They saw the owners of these tool and die shops driving around in Cadillacs, and they said, ‘Hey, we want to do that too,’” recalls Gulbrandson.
In 1972, Louis Larson and Richard Ackland moved with their families to Hayward, Minnesota and set up a small firm which they named after themselves. While the initial focus was on tool and die work, the pair took on just about any job that came their way to earn their keep, from repairing farm equipment to welding and other tasks. Over the years, their repertoire grew to include tooling and fixture work, followed by production, stamping, and machining. The customer base and workforce likewise expanded, and the company continued exploring new markets and taking on higher-level parts. As a result, painting and finishing services were added.
In the 1990s, Lou-Rich introduced an employee stock ownership plan (ESOP), a program that enables workers to acquire shares in the company. At present, it is 100 percent employee-owned.
Gulbrandson believes this ownership status is good for everyone involved. “We like to think that our customer experience feels different than most businesses or manufacturers because everybody here, from the people making the parts or designing the fixtures or working with the engineering teams, all have ownership with the company and want to do a good job for the customers.”
The ESOP is administered by a holding company called Innovance. Corporate acquisitions made by Lou-Rich have also been placed under Innovance auspices. “Our growth initiatives have been to grow our companies organically and internally, but also acquire other businesses that we can bring in to fit our employee ownership model and grow the overall portfolio that way,” explains Gulbrandson.
There are currently five firms within the Innovance fold: Lou-Rich, ALMCO (which specializes in industrial deburring, tumbling, and polishing equipment and industrial parts washers for the aerospace, automotive, fabricated metal products, weapons, job shops, and industrial equipment markets), Mass Finishing Inc. (MFI), maker of deburring and polishing machines, and Panels Plus, which designs and manufactures panelizing equipment for making wall panels and floor cassettes.
Earlier this year, Jorgensen Conveyor and Filtration Solutions, which manufacturers conveyors, coolant filtration systems, material handling equipment, and chip processing equipment to serve the machine tool, metal working, and other industries, was acquired and became part of the Innovance family. Innovance companies have been transformed into employee-owned entities.
Lou-Rich currently has 312 employees, down slightly from a year and a half ago when staff numbers were around 330. “We kind of exploded through COVID. We had some tremendous growth. Then, we got to a more realistic level,” Gulbrandson shares.
The company’s medical and food-related business soared during the pandemic, and demand for new ice-making machines resulted in a corresponding demand for components. The company was happy to supply the latter, and the extra revenue enabled it to temporarily expand its personnel.
In 2022, Lou-Rich won the Minneapolis/St. Paul Business Journal Manufacturer of the Year Award, in the large company category. This honor reflects the strong growth the firm experienced at the peak of the COVID crisis, says Gulbrandson. But, while business was good, Lou-Rich was also careful to protect its workers from the impacts of COVID. Support staff were allowed to work at home, employees were separated in offices, and the company generally did “anything to promote a healthy work environment,” he recalls.
Now that COVID has hopefully peaked and personnel levels are leveling out, the company can reflect on its workforce. In general, leadership seeks new hires “with a good work ethic and a desire to learn… from there, we can train them,” says Gulbrandson. “Our vision statement is to be the best employee-owned contract manufacturer in North America. We are very employee-focused, very family-focused. We want to create a healthy work-life balance for our employee-owners.”
As part of its efforts to create a healthy balance, Lou-Rich maintains a fund to assist employees who fall on hard times. For example, if “their house was taken out by a tornado, we can help them through that period of hardship,” says Gulbrandson, citing an ever-present weather hazard in the Midwest.
The company prefers to promote from within and maintains close ties with local high schools and technical colleges. It offers apprenticeship programs that allow students to continue their studies while working, and the company encourages its workers to learn from each other and moves people up the ranks if they show an aptitude and interest in technical jobs such as CNC programming.
Going forward, Lou-Rich wants to grow its automated welding and machining services as part of an overall emphasis on automation solutions. “We will be looking at expanding our automation and machining platforms in the form of pallet transfer and part handling. We are looking to how we can complement our skilled employee-owners out there with some simple forms of automation to help them with their workloads,” explains Gulbrandson.
Lou-Rich wants to diversify its business and continue expanding. “We are currently onboarding new customers with new projects,” he says. And the company also has big ambitions for the future; while today Lou-Rich is “a $75 million company,” he says, “five years from now, we hope to be over $100 million.”
