HIBBING — With new building specs on one desk, plastic over the office’s windows and the occasional buzz of large machinery echoing in the adjacent warehouse, the sibling leaders of L&M Radiator can’t escape moment of construction these days.
“I come around a corner and am instantly reminded that this is a construction zone,” said Laura Chisholm Ekholm, executive vice president. “The work hasn’t changed — other than having to pick out colors — but I look and think ‘oh my gosh, what have we done.’ I’m also careful not to dart out in the parking lot, in fear I may get run over by a truck. It is chaos central out there.”
While the company has expanded to several other countries — Mexico, Australia and Chile — over its six-plus decades of success, its latest focus is getting bigger and better here.
L&M Radiator, which designs, manufactures and distributes cooling products for heavy equipment, is adding 100,000 square feet of manufacturing and office space to its headquarters at 1414 E. 37th St. in Hibbing.
The expansion will allow the 61-year-old company to consolidate its operations and manage its forecasted growth for the next several years. Hibbing contractor Max Gray is managing the $25 million project.
President Dan Chisholm explained that they are currently occupying and manufacturing out of several buildings, both on their property as well as leasing 20,000 square feet of a building a few blocks away.
“It’s very inefficient,” he said. “We want to be under one roof. It’d be much more efficient and reduce our overall costs of manufacturing. It’ll mean savings for us.”
Welding is being done in one building. They’re renting a warehouse for storage. Operations are scattered.
“We want things to come in the door as raw materials and leave those doors as finished goods,” said Chisholm.
They broke ground in October and aim to get a certificate of occupancy for production on July 9.
The expansion was also prompted as a means to avoid a foreseeable issue. That discussion began at a managers meeting in March 2017.
“We saw an uptick in business,” explained Chisholm. “In the mining industry we began to see more orders from our OEM (original equipment manufacturing) customers. The oil and gas industry typically follows the same cycle as mining.”
The company has a manufacturing plant in Yankton, S.D., which has a paint line capable of doing specialized jobs.
“The oil and gas industry is particular at this time about what type of paint finish they want on their products because of where they are on the vehicle,” said Chisholm. “It’s part of the overall appearance, so they want a quality paint finish. So if that industry ramps up the way mining has, we would experience a bottleneck in our painting system in Yankton.”
Couple that with having one of its largest OEM customers near the plant, Chisholm said it only made sense to put a new paint line in Hibbing to help prevent any bottlenecking.
“We knew the footprint for the painting line was at least 5,000 to 6,000 square feet, so if we did that, we figured we might as well suck the lemon and build a facility large enough to put everything under one roof,” he added.
This phase of growth comes “after four years of tough sledding” that included shutting down two plants. Today, L&M has 260 workers in Hibbing and 504 worldwide, and expects to again reach $100 million in sales this fiscal year.
“It just makes sense to do this now,” said Chisholm. “We are not spread out by choice. Our driving force has always been to meet our customers’ demand quickly, and we had no time for shenanigans. So when we saw an uptick (in business), it was easier to rent space than to take the time to build.”
Today they are building out of necessity.
“We had looked at expanding in the past, but for whatever reason, it hadn’t worked out,” said Chisholm. “… Now we need the extra capacity and abilities here. With this new building, we should be good about managing our forecasted growth for the next several years.”
It’s about gaining efficiencies and retaining jobs more than creating jobs, he added. However, the company is in a hiring mode.
“It’s a big project. The true tipping point was the need for the added paint line to have flexibility.” said Chisholm, noting there’s not much rhyme or reason in determining what product gets built where. “If it’s quicker in Yankton, we do it there or vice versa. For the most part, both plants are capable of making all of our product lines. The goal is to have all our plants capable of manufacturing all of our product lines.”
Work on the expansion got underway in October, and a quickly took shape as the pre-built walls were put up before snowfall. The large manufacturing facility quickly dwarfed the existing building, which had been added on to a few times.
“Our primary goal is production,” said Ekholm. “We need more space for that.”
Construction over the months has resulted in traffic detours and has led to some employees carpooling to and from work.
L&M Radiator’s neighbors have been understanding and good to work with, said Ekholm. So have others, such as the City of Hibbing, Hibbing Public Utilities and others who’ve had a hand in the process.
“The employees have been great,” she added. “It’s been a team effort on all levels. They’ve really stepped up to the plate. A big kudos to all our guys here.”
Chisholm concurred, noting the harsh winter conditions they worked in. They had to move between buildings, often dealing with the elements.
And all of this has been done while still working three shifts, noted Chisholm. Manufacturing has been at full capacity.
“We are still getting product out the door,” he said
Ekholm added, “Like I said, ‘insanity central.’
The public is also supportive, even if they haven’t heard too much from the street yet.
“I think a lot of people are happy about the project, and some have thanked us for expanding in Hibbing,” he added. “We choose to do it here. When we looked at it all, it just made sense to do it here.”
Designed by DSGW Architects of Virginia, the new construction totals 102,728 square feet, which is an addition to the company’s existing 37,831 square foot building.
“The vision was to seamlessly wrap the new addition around the current facility while maintaining current operations,” explained Architect and Principal Erik C. Wedge. “The project added and renovated the current facility to optimize total production consolidating multiple building sites into one campus.”
“Studies have shown that exposure to natural light and pleasant work environments have increased mental alertness, productivity and psychological well-being,” noted Wedge. “Solar tubes will be placed in the existing offices without windows to improve the quality of the space.”
Likely to be the most eye-catching will be the “tower” of offices, which will have a unique, modern look.
“A copper color pallet both inside and outside of the building was selected based upon the color of the radiators they produce,” said Wedge. “The final product will be a state-of-the-art, energy-efficient manufacturing facility constructed out of durable materials with a premium on employee safety.”
Chisholm and Ekholm spoke to the details, such as better tool bays and community areas in the production areas.
“We looked at the ergonomics, too,” said Ekholm. “Our flow will be set up so much better than it has been before. Our folks in the shop will notice it.”
Some of the design of the Yankton plant was also taken into consideration and incorporated.
“There really will be more efficiencies and conveniences,” she added.
Once complete, moving in will be done in phases as areas, such as the employees’ lunch room and locker rooms, are still ahead.
“We’ll have to move people around — from one area to another to be renovated and then moved back,” said Ekholm. “There has been — and will be — lots of moving parts, but our contractor is on top of things and has been amazing.”
Chisholm also gave a nod to Max Gray Construction.
“They have under promised and over delivered,” he affirmed.
Well mover 80 percent of the project has been done by local companies, and over 90 percent by Minnesota companies, they said.
The plan is to tear down the old Drill Co building to make way for more parking, meanwhile, the existing L&M building up near the highway will be repurposed. Currently housing the R&D department, that location will become the human resource department and training center.
The investment is estimated at $25 million — a figure that includes the purchase of some equipment, including a $800,000 new paint line, bridge and job cranes and demolition.
Funding sources include company dollars, the Hibbing Economic Development Authority (HEDA), a construction and equipment loan from a local bank, tax abatement from the city and county and Minnesota Department of Employment and Economic Development (DEED), among others.
“There will be a lot of changes, and the atmosphere here and environment will be better,” said Ekholm. “We’re hoping it will entice people, make them want to work here.”
She also pointed out the new building’s copper facade, which presents a modern, sharp look.
“We like to fly under the radar — not too high and not too low,” said Chisholm. “But this will change that. We’ll finally look how a headquarters should look.”
Mining accounts for about 80 percent of L&M Raditor’s business these days.
“We live the blessing and the curse of the mining industry,” said Chisholm. “We’ve looked over the years to diversify into other markets and industries. We have, but nothing is going to have the impact of mining and oil and gas … unless we get into the government game, and we’re not about to do that.”
Chisholm explained that the company’s growth in oil and gas has been limited based the work predominantly with land-based companies, not so much in the offshore market.
“We service offshore, but not too much manufacturing,” he said. “It’s because we sell to the end-user. That’s long been our strategy — sell to someone who’s using the equipment, and when they have a problem, we solve that problem. … We got into the OEM business because of our success in the aftermarket.”
Less than 2 percent of L&M Radiator’s business is local.
“We want the mining industry here to be strong, but if it were to close here, it would not have a direct impact on us being here,” said Chisholm.
The design concept of the Mesabi radiator originated during World War II desert tank warfare when it was discovered British tanks could be disabled with a single bullet hole through the radiator.
In response, the British developed a radiator that featured individual cooling tubes held in radiator headers by individual rubber seals. The seals allowed damaged tubes to be replaced in the field, often without removing radiators from the tanks.
After the war, L&M Radiator acquired the rights to the concept and began making the radiators in Minnesota. The company had been founded in Hibbing in 1957 by George Langer (L) and Clay Murray (M). Murry’s son-in law, Alex Chisholm, joined L&M Radiator in 1961.
The late Alex Chisholm was father of Dan and Laura.
“Our dad recognized that when he first started serving the mining industry on the Iron Range, he realized there were other mines in North America,” said Chisholm. “Like we say, ‘he bought a Rand Mcnally (map) and he was gone.’”
Alex went on to call on other mines in North America and Canada, generating sales as he did.
“And it grew from there,” said Chisholm. “He realized then he could work around the world.”
And while the company has attained world-wide success, this Hibbing expansion is a main focus.
“It is a big building, and it is exciting, but the frustrating thing is that it we’ll fill it right up,” said Chisholm. “If we forgot to put something in the design, we’ll struggle with where to put it.”
He said it’s been interesting hearing about the project chaos and progress through the eyes of those who live and breathe it daily, as well as those retirees who’ve returned to take a peek.
“It’s fun to be doing this in Hibbing,” said Ekholm. “This will be huge for our employees. I think we’re going to see more benefits than we’re aware of or can think of right now. I think we’ll see a lot more positives than anticipated.”
There will also be an added pressure. But the Chisholm siblings and crew are up to the task of keeping the L&M Radiator legacy going.
“I think dad would be very proud,” said Chisholm. “He’d have a compliment in one hand and a backhanded response in the other. He’d ask, ‘now what ya going to do to keep it filled?”