Klein Tools making investments in Mansfield

Betty Dillard bdillard@bizpress.net

Business is heating up at Klein Tools in Mansfield. Based in Lincolnshire, Ill., the maker of high-quality hand tools for electricians and the construction industry is increasing its investment in the local economy with the opening on April 10 of a second manufacturing plant, located at 501 Easy Drive in Mansfield. The new building, a 60,000-square-foot heat-treating facility on a 100-acre parcel, expands Klein’s manufacturing headquarters in Mansfield as well as the capabilities of its advanced manufacturing technology center, a 125,000-square-foot facility on Heritage Parkway that opened in August 2011. By centralizing facilities, Klein can develop business strategies that will produce operational and system efficiencies and support the company’s commitment to remain a U.S.-based employer and manufacturer of American-made products, according to Thomas R. Klein, president of Klein Tools. The company’s tools have always been made in the United States, and keeping that tradition is as important now as it was when the company was founded almost 160 years ago, Klein said.

“Our roots are in America,” he said. “We are very proud of that and will continue to focus on making Made in America tools as we continue to grow our company. The opening of our new heat-treating facility will help us keep up with product demand, streamline operations to stay competitive and provide American jobs in advanced manufacturing.” German emigrant and blacksmith Mathias Klein, Tom Klein’s great-great-grandfather, founded the company in 1857 when he forged the first known U.S.-made pliers in Chicago. Today, Klein Tools Inc. is owned and operated by Mathias Klein’s descendants to the sixth generation. Tom and his cousin Mathias A. Klein III, who serves as chairman, are members of the fifth generation. Today, Klein Tools is the only major tool manufacturer worldwide focused on electrical and utility applications. The company designs, develops and manufactures more than 3,800 kinds of premium-quality tools, including more than 165 types of pliers, in eight plants in Arkansas, Illinois, Iowa, Michigan, New York and Texas. Klein Tools chose Mansfield as its manufacturing hub in part because of incentives from the Texas Enterprise Fund, which was created by Gov. Rick Perry to entice businesses to relocate to Texas. Klein said his family looked at numerous factors and other states before settling on Texas. “We had to narrow down to which state is the best,” he said. “We wanted to be close to a major airport and Dallas/Fort Worth Airport satisfied that. We wanted to be in a right-to-work state and one with low taxation. We also looked for business friendliness. We’re very happy with our decision to move here. The city of Mansfield has been great to work with.” The company received a $2.8 million Texas Enterprise Fund grant and an economic incentive package approved by the Mansfield City Council that includes $500,000 grants each year for 12 years. Both the state and city grants depend on performance-based benchmarks Klein Tools is required to meet.

Klein said the company has met all of its targets, including buying at least $6 million worth of equipment and creating jobs. Overall, the company employs 1,200 people, with 200 jobs in Mansfield. According to the city of Mansfield, Klein Tools’ net economic impact to the city is estimated to be more than $7.6 million during the first 10 years, with a $4.5 billion statewide economic impact. “Klein Tools has proven to be a great community partner to Mansfield with the opening of their second plant,” said Scott Welmaker, the city’s director of economic development. “It’s encouraging to see a company find ways to keep good manufacturing jobs here at home.”

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Double digit growth The $7 billion hand-tool manufacturing industry has experienced a strong recovery from the economic recession, according to market research company IBISWorld. The industry is expected to grow by 1.6 percent during 2014. Klein Tools rode out the recession and has been growing at double-digit rates for the last four years, Klein said. “That’s the good news story for us, especially when you consider our tools are designed for electricians and the construction industry, which hasn’t been doing all that great in the last four years,” he said. “We’re having another great year. We’re up double digit despite the weather that’s affected much of the country. The economy in Texas is very good, too, especially here in Fort Worth and Dallas. We’re really going to be up as business speeds up with our new facility.” The company began its global expansion in 1972 with the establishment of a Mexican subsidiary, Herramientas Klein, S.A. De C.V. In 2010, Mumme Tools in Australia became a sister company of Klein Tools. Mumme, which is also a family-owned company, produces forged hand tools in South Australia and is Australia’s leading mining tool manufacturer. Last year, Klein Tools acquired Civitella & Cia Ltda, a privately held family-owned tool and equipment manufacturer in Brazil. “We’ve gained distribution in Australia and Brazil, two very big markets for us,” Klein said. “But we’re really concentrating on manufacturing and expanding our product lines.” The company’s domestic expansion includes the 2005 purchase of KalFact Plastics, a plastics molding company in Michigan, which was renamed Klein Plastics. Heritage Cutlery of Bolivar, N.Y., was acquired by Klein in 2007 and began operating under the name Klein Cutlery LLC.

Also in 2010, Klein acquired 50 percent equity position in UEi Test Instruments, which makes portable testing and measurement products for heating, ventilation, air conditioning and refrigeration customers. To meet the demands for more multi-function tools, the company recently released a new sleeker line of electrician’s insulated tools that provide 1000V protection and introduced the All-Purpose Pliers, a more durable wire-stripping tool that also functions as long-nose pliers. Both lines are selling beyond the company’s expectations, Klein said. “Customers keep asking us to consolidate tools. One tool that does four different functions is more cost efficient and doesn’t weigh down your tool belt,” he said. “It’s things like that that are helping us outperform other companies.” Klein Tools will be expanding again in June. The company will break ground on a 175,000-square-foot facility adjacent to its new heat-treating building. Completion is expected in June 2015. Plans are to consolidate Klein Plastics in Michigan and the metalworking plant in Lincolnshire. The relocation is expected to add 200 more jobs to Mansfield. “We’re bringing more manufacturing here and creating more jobs,” Klein said. “We’re very excited about it. The continued investment in our plants, people and products will help us continue our long tradition of making American-made tools that are consistently the top tool of choice among electricians.”

Klein Tools at a Glance History: Founded in 1857 by Mathias Klein, the company is owned and operated by his descendants to the sixth generation. It is the only major tool manufacturer worldwide focused on electrical and utility applications. Headquarters: Corporate, Lincolnshire, Ill.; Manufacturing, Mansfield Facilities: Eight plants in six states – Arkansas, Illinois (2), Iowa, Michigan, New York and Texas (2) Employees: 1,200 Products: More than 3,800 tools, including more than 165 types of pliers