© 2019 Diversified Plastics, Inc. All rights reserved.
Diversified Plastics expands capacity with larger, environmentally controlled, molding room
To meet growing demand, Diversified Plastics, Inc. has enlarged its molding and packaging, environmentally controlled, room by 2,775 square feet (257.81 square meters). The company has also installed a new 250-ton molding machine that accommodates existing molds and increases capacity and flexibility in scheduling. In addition to this controlled environment, Diversified Plastics has two clean rooms and an environmentally controlled assembly room.
“Many of our customers are in the medical device, aerospace and electronics industries,” says Annette Lund, vice president of Diversified Plastics, Inc. “This larger, environmentally controlled molding and packaging area, along with the additional molding machine, increases productivity to meet growing demand from current and new customers.”
Less stringent than a clean room, controlled environments are pressurized, isolated manufacturing spaces with positive airflow as well as temperature and humidity controls. The plastic resin is located outside the room and is piped into the press, keeping dust under control. Employees wear gowns, sterilized shoes and, when required, gloves. Special mats on the floor reduce dirt coming into the room.
CEO Jim Dow, 81 signs off after selling his Diversified Plastics to his beloved employees
StarTribune article, by Neal St. Anthony https://goo.gl/LVhtCd
The Brooklyn Park firm has grown to 80 employees. It became a profitable company with revenue that should top $15 million this year.
Jim Dow, who just retired as a CEO at 81, probably deserves the Florida vacation this month as much as any boss I know.
Dow, who remains chairman of Diversified Plastics, lost his first career in the 1970s, after spending 15 years at the former Buckbee-Mears. His job as European director vanished when the electronics manufacturer pulled out of Europe. Dow, a Minneapolis native, Yale graduate and former Army captain, decided it was time to go to work for himself.
He bought a bankrupt plastics manufacturer and renamed it Diversified Plastics. Dow and his wife soon got used to sweeping the plant and cleaning the bathrooms on weekends, as the fledgling enterprise struggled to get its footing as a specialty manufacturer for the aerospace and medical industries.
“We were up to about 13 employees [during the 1981-82 recession] and business was tough,” Dow recalled. “I gave our people a choice: Cut people or everybody takes salary cuts. Our people said pay cuts and keep the team together. They gave, I gave.
“It’s always been a team. The one thing I guess I’m good at is hiring good people. This is like a second family to me.”
And the plan and all the elbow grease over the years worked.
Diversified Plastics of Brooklyn Park has grown to 80 employees. It became a profitable company with revenue that should top $15 million this year.
And Dow, working with adviser Chartwell Financial and an independent trustee, has completed the several-year sale of the firm to the employees through an Employee Stock Option Plan (ESOP).
Dow remains a non-employee chairman of the board.
There were prospective buyers, private equity firms and industry consolidators who offered more than the unspecified amount Dow got paid.
“Let’s just say I was paid more than $1 million,” Dow offered. “But I couldn’t go out and sell this company for more to people who I knew would not be loyal to the employees. They may have offered a job to all our people, but not necessarily. I could have made more money, but I made enough.
“From an economic point of view, the ESOP wasn’t the best thing for me. The people who appraised the businesses — Chartwell — tend to ‘down value’ the company because they don’t want to be accused by the government of lining the owner’s pockets.”
Dow financed the sale personally over several years and through a loan to the ESOP by Fidelity Bank.
Government tax rules allow an ESOP, which essentially is an employee retirement plan, to buy the company from annual pretax profits that otherwise would have flowed to the previous owner.
ESOPs work best when they are conservatively structured and when companies are growing and profitable.
Employees, including vested former employees, become owners through the ESOP. They cash out at retirement age, or sometimes when they leave the company, if they are vested. The funds can be rolled into an individual retirement account.
ESOPs, and the number of Americans who work for employee-owned companies, are on the rise. with more than 15 million people at 9,600-plus companies, according to the National Center for Employee Ownership.
Advocates say they are one of the best ways for working-to-middle class folks to build wealth through their labor during a period, dating to the 1980s, when wages have been fairly stagnant against inflation.
The sellers tend to get rich more slowly over a longer period of time than cash on the barrel head.
Things seem to be working at Diversified. It operates a 52,000-square-foot factory with modern equipment that makes components used internationally in machines that create clean water from tainted water, lithium-ion battery packages, dental X-ray machines and NASA’s Juno spacecraft.
“Jim Dow created a safe environment for employees to develop new skills, take risks and learn,” said Annette Lund, who started as a receptionist years ago and is now a vice president. “Jim encouraged me to complete my degree and passed along his technical knowledge. He is a mentor and a friend.”
Dow also has been active with local community and technical colleges and programs that encourage students to pursue manufacturing careers.
“If I had been able to script [my career], I wouldn’t have changed anything,” Dow said last week from Florida. “Even the tough days, when my wife would go in to vacuum and clean bathrooms, or the worrying about making payroll.
“It paid off. I think the world of these people at Diversified.”
Enjoy the vacation, Jim.
Diversified Plastics, Inc. founder, James R. Dow, retires, leaving his imprint on the company’s history
MINNEAPOLIS — After 40 years of leading Diversified Plastics, Inc. to success, James R. Dow retires as president. Succeeded by Kevin G. Hogan in August 2017, Dow will continue to serve as chairman of the board for Diversified Plastics, an award-winning, custom plastic-injection molder of high-precision thermoplastic components.
“As a result of Jim’s exceptional leadership, the company has a firm foundation,” says Hogan. “From this position of strength, Diversified Plastics is advancing with a growth initiative for continued success and prosperity.”
Dow and William J. Cullen founded the company in 1977 with 13 employees and three machines, operating from a 2,500-square-foot facility. Diversified Plastics has grown to include over 75 employees and operates from a 52,000-square-foot facility with state-of-the-art equipment. Diversified Plastics provides exceptionally high-quality parts that meet high-tolerance guidelines. These parts can be found in developing nations creating clean water, in lithium-ion batteries, dental X-ray machines and NASA’s Juno spacecraft instruments. In November 2011, the company was sold to its employees through an employee stock ownership plan (ESOP).
“Since the early days, we have had a family culture at Diversified Plastics,” says Dow. “When planning for retirement, I met with several potential buyers who made good offers. I was concerned that long-term employees would be terminated through consolidation or relocation. I believed that they deserved better. So, the employees became the owners.”
Prior to founding Diversified Plastics at the age of 40, Dow held various positions at an electronics firm for over 13 years. Dow also served in the U.S. Army for four years, achieving the rank of captain. He graduated from Yale University with a Bachelor of Arts major in American studies.
“Jim created a safe environment for employees to develop new skills, take risks and learn,” says Annette Lund, vice president of Diversified Plastics, Inc. “I started working at Diversified Plastics as a receptionist. Jim encouraged me to complete my degree and passed along his technical knowledge. A mentor and a friend, he has truly helped me get to where I am today.”
Dow strongly believes in giving back to the community. Dow and the Diversified Plastics team participate in many charitable activities every year, including providing school tours to educate youth about opportunities in manufacturing. Involved in the Rotary for over 30 years, Dow has served on several boards including DEED, North Hennepin Area Chamber of Commerce, North Hennepin Community College Foundation and others. Dow has also created curriculum for upper-level molding technicians for a local college.
Erik Paulsen visits Diversified Plastics, Inc. as part of a tax reform listening tour to small businesses
MINNEAPOLIS—Congressman Erik Paulsen (MN-03) recently visited Diversified Plastics, Inc., a custom plastic-injection molder of high-precision thermoplastic components, as part of a small-business tax reform listening tour. The objective of the visit was to learn firsthand how tax reform can help Minnesota businesses and families.
“The research and development (R&D) tax credit provides a savings to companies that require tooling for new products,” says Roger Vang, chief
financial officer at Diversified Plastics. “This helps companies be more competitive in the United States, keeping manufacturing business from being sent overseas. In addition, tax credits make additional resources available for businesses to buy more equipment and hire more employees.”
An employee stock ownership plan (ESOP) company, Diversified Plastics offered unique insight on tax reform. Annette Lund, vice president of Diversified Plastics, led Paulsen and others on a tour of the company’s facility where they had an opportunity to speak with employee-owners. A supporter of ESOP companies, the congressman was referred to Diversified Plastics by North Hennepin Area Chamber of Commerce.
Videos from the visit are available on the Diversified Plastics, Inc. website at www.divplast.com.
CXX Media Coverage of Rep. Paulsen’s Visit to Diversified Plastics
CXX Media Coverage of Rep. Paulsen’s Visit to Diversified Plastics
Congressman Erik Paulsen Visits Diversified Plastics, Inc.
Congressman Erik Paulsen visits with Roger Vang, CFO of Diversified Plastics, Inc. to discuss tax reform and what it means to businesses in the United States. Paulsen and Vang also discussed the advantages of Diversified Plastics employee owners through their employee stock ownership plan (ESOP) program.
Diversified Plastics, Inc. Featured in Brooklyn Park Video
Diversified Plastics, Inc. Featured in Brooklyn Park Video. Diversified Plastics is Part of the Brooklyn Park Business Community. #MakeItHere
Diversified Plastics, Inc. wins Best In Class – Mid-size company of the 2017 Minnesota Manufacturing Awards
MINNEAPOLIS—Diversified Plastics, Inc., a custom plastic-injection molder of high-precision thermoplastic components, was recognized as the winner of the Best In Class – Mid-size category for the 2017 Minnesota Manufacturing Awards. Finalists and award recipients were announced at a ceremony on September 28, 2017.
“As this is our 40th year in business, it’s an honor to be acknowledged with this award among other outstanding Minnesota-based manufacturing companies,” says Annette Lund, vice president of Diversified Plastics, Inc. “Our exceptional employees are one reason that Diversified Plastics is sought by medical device, aerospace, filtration and other companies to provide superior molding services and quality thermoplastic components.”
Diversified Plastics has over 75 employees, including seven of the original team of 13. An employee stock-ownership plan (ESOP) company, Diversified Plastics excels with difficult projects and works with customers providing design assistance, prototypes, intricate molding and cleanroom assembly. Diversified Plastics keeps up with technology by upgrading machines with more energy-efficient equipment and robotics that offer greater productivity and better control of the molding process.
Precision thermoplastic parts manufactured by Diversified Plastics, Inc. can be found in NASA’s Juno Probe instruments, medical devices, lithium-ion batteries, dental X-ray machines, and many other applications. The company and its employees are committed to giving back to the community and being good stewards of the planet.
Minnesota manufacturers account for 322,000 jobs and 16 percent of Minnesota’s GDP. Each year, Minnesota Business magazine recognizes the outstanding achievements of the manufacturing industry and its leaders. Nominations for the 2017 Minnesota Manufacturing Awards were collected over a two-month period and reviewed by an external panel of judges consisting of industry experts. Other award recipients include Uponor for Best In Class Large company and HydraFlex for Best New Product Design.
Diversified Plastics, Inc. appoints Kevin G. Hogan as CEO
MINNEAPOLIS—Diversified Plastics, Inc., a custom plastic-injection molder of high-precision thermoplastic components, has announced the appointment of Kevin G. Hogan as chief executive officer (CEO). Hogan succeeds James Dow, founder and previous CEO of Diversified Plastics. Retiring in October 2017, Dow will continue to serve as chairman of the board. The company was sold to the employees in 2011 through an employee stock ownership plan (ESOP).
During Hogan’s three and a half decades of experience, he developed an outstanding track record of driving revenue growth, returning businesses to profitability, establishing strategic partnerships, and integrating acquired companies. Prior to Diversified Plastics, Hogan held the position of growth catalyst with Vuelta Management, an interim management and consulting services company in Saint Paul, Minn. He also served as president at Stylmark, a leading manufacturer of architectural products and an ESOP company, in Fridley, Minn. Additionally, he has held executive positions in a variety of public and private companies. Hogan received his undergraduate degree from Hamline University, Saint Paul, Minn., and his Master of Business Administration (MBA) degree from the University of Minnesota’s Carlson School of Management, Minneapolis.
“We are pleased that Kevin has stepped into this role,” says Annette Lund, vice president of Diversified Plastics, Inc. “Having worked at an ESOP previously, Kevin is an excellent fit with our corporate culture of collaboration, trust and integrity. His experience with manufacturing and strategic planning will be instrumental in our company’s growth initiative.”