Minnesota Wire & Cable Co. has evolved to grow [Pioneer Press, St. Paul, Minn.]
(Saint Paul Pioneer Press (MN) Via Acquire Media NewsEdge) Dec. 07--When the president needs to charge his BlackBerry on Air Force One, he plugs it into a port manufactured by St. Paul-based Minnesota Wire.
Like the company's thousands of other products, these specialized ports are designed at the company's Energy Park headquarters and manufactured at its Eau Claire, Wis., plant. And they stem from an ongoing government contracting relationship that has enabled the company to flourish in the private sector as well.
CEO Paul Wagner's father, Fred Wagner, founded Minnesota Wire & Cable Co. after spending four years selling electronics components to Twin Cities technology companies.
"I'm a born salesman," Fred Wagner said. "I'm still selling all the time. It drives my wife crazy."
under the name Wagner Consultants, Fred Wagner began selling electronics components -- manufactured primarily on the coasts -- to the likes of Control Data and 3M in the Twin Cities. He spent 80 percent of his time on the road.
Tired of the travel and the uncertainty that comes with selling other people's products, Wagner decided in 1972 to sell Wagner Consultants and get into manufacturing.
He bought a cable extruder -- a piece of machinery that forms raw metals into wire -- from a company in Texas and set up shop in Edina. He used the connections he had made during his time in sales to build a customer base.
At first, he was one of few players in this relatively young industry. But others soon crowded the market, forcing a shift in strategy.
"Basically, we were going broke," Paul Wagner said. "We were making computer cables and they were (becoming) pretty common."
It didn't take long for Fred Wagner to recognize that his company needed to specialize. He picked medical technology, which by the early 1970s had developed into a Twin Cities industrial cluster.
Minnesota Wire's annual sales rose from $296,000 in 1979 to $3.7 million a decade later.
Paul -- and several of his siblings -- had joined the company by then in various capacities. Paul Wagner took over as CEO in 2000, besting siblings who also were vying for the title.
"There was a little bit of a wrestling match with that," Paul Wagner said. "It was a pretty small company, though. It wasn't like I was inheriting IBM or something."
He bought out his father's share of the business in the early 2000s.
In late 2002, Paul Wagner got a phone call that again would change the direction of the company. He was painting his house one Saturday when he took a call from the Pentagon.
U.S. Army Lt. Col. Scott Crizer explained that he was in charge of producing a wearable computer system for soldiers that would aid them in combat -- called the Land Warrior. The project was 14 months behind and Crizer was desperate.
Crizer had seen Minnesota Wire's name on paperwork from a project it had worked on for Honeywell.
Wagner and his brother Eric flew to Washington the next week to get the scope of the project. They determined the coiled cables that connected the system's various components needed to be overhauled.
They spent the next few weeks hunkered down with a handful of their employees in a trailer outside their St. Paul headquarters.
After working continuously for 552 hours, they produced a redesigned layout for the Land Warrior's cable system -- replacing its original cables with some designed to stretch.
This first foray into defense work was a revelation for Paul Wagner: He could use the technology he developed on the government's dime to augment his own products for the medical device industry.
"So, you come up with these cables that stretch for soldiers," he explained. "Then, you flip it and say, 'Well, who else is out there that wants wearable computers?' "
While these defense contracts are feast-or-famine, the company's work for medical device manufacturers is more stable.
About 20 percent of the company's business is now defense work, while about 70 percent is for medical device clients. The rest is a combination of industrial and commercial manufacturing. Annual revenue is approaching $30 million.
But once again, the company is beginning to feel competitive pressure.
Most of the company's competition comes from overseas, primarily China, which Wagner acknowledges is formidable. "These aren't sweatshops," Wagner said.
"These are good manufacturers, aggressive entrepreneurs with a lot of capital."
To stay ahead of his Chinese competition, Wagner has to be quick to deliver his innovations. "This is a race to the market," Wagner said. "I've got some patents, but they're not completed. I can't wait for them. I can't hold my cards."
To this end, the company's St. Paul headquarters is outfitted with all the equipment needed to turn out a new prototype, rather than outsourcing this work to another manufacturer.
The two technologies from which they're seeing the most growth lately are the stretchy cables they developed for the Land Warrior system and cables made with carbon nanotubes instead of metal.
Carbon nanotubes are microscopic structures that form a powdery black substance -- at a cost of $75,000 per pint. When spun into a fine thread, these have properties that make them ideally suited for use in wire. Not only does this thread conduct electrical current, it also is much stronger than its metal counterparts.
But the bulk of the 140 million feet of cable Minnesota Wire turns out each year is basic cable -- albeit custom made for medical device companies.
And though this is his primary revenue driver, it's his connection with the military that Wagner prizes. He even founded an organization -- the Defense Alliance -- a regional professional network that connects the defense industry. It now has 550 member companies.
These relationships continue to pay off. It was his connection with the defense industry that landed his company the contract to manufacture the BlackBerry charging ports on Air Force One.
The products his company manufactured for Air Force One use advanced "shielding" technology to protect the devices against electromagnetic waves from nuclear blasts.
Industry speculation, Wagner said, is that the federal government is planning to refit more of its communications equipment with the same protection. And Wagner is hoping Minnesota Wire's experience with this technology will give the company an edge.
"That would be very fruitful for us, because we're already doing it," Wagner said. "We've got the secret sauce."
Nick Woltman can be reached at 651-228-5189. Follow him on Twitter at @nickwoltman.
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