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Automation Machinery Makers Helping Firms Compete

July 31, 1988|JOHN O'DELL | Times Staff Writer

Dieter Kuntz's eyes sparkle as he talks about his creations. "Making a big machine is fun," says the master toolmaker, his German accent thinned by 32 years in Orange County.

"It is like a birth, this bringing of something from nothing. The high you get when it's up and running is unbelievable."

For more than a year now, Kuntz has been on an almost continuous high, and there are no signs that he will have to come down anytime soon.

Kuntz, founder of Kuntz Mfg. Co. Inc. in Santa Ana, designs and builds automated specialty assembly machines. And automation is enjoying a boom in several industries that Kuntz serves--particularly medical products and electronics.

The boom is being felt across the country, automation specialists say, but nowhere are manufacturers turning to automated production with any more fervor than in Orange County, where automation for many companies has become a matter of survival.

The county is a hotbed of small and medium-size high-technology firms, most of them either still developing their first products or just beginning to produce and market.

Labor Supply Scarce

And their need to price competitively with products that are made with lower labor costs overseas while providing the high level of quality demanded by customers provides a powerful argument for automation.

Further, the county's extremely low unemployment rate, high housing costs and congested traffic situation add to the pressures that are driving the automation binge.

Many manufacturers no longer feel assured that a manual production line will work in Orange County.

They complain that they cannot find enough people who are willing to labor for assembly workers' wages. A paycheck of $250 to $400 a week, less taxes, simply isn't sufficient to cover both housing and groceries in much of the county.

And while $6 to $10 an hour is all most companies can afford to pay assembly workers and remain competitive, it no longer compensates a commuting worker for the two hours or more a day it takes to drive in from Riverside or Los Angeles.

"We made the decision to automate in order to survive and be competitive," said Mike Varner, president of ICU Medical Inc. of Mission Viejo.

"For us, the essence of automation is that low-paid assembly workers are hard to find in Orange County, and they are in such demand that they can pick and choose the kinds of jobs they will take. There is a lot of turnover, and that costs a company money."

Last summer, when ICU opened a new plant in Mission Viejo to begin manufacturing specialized intravenous needles and blood-collection systems designed to protect health-care workers against infectious diseases, the company decided to add 10 workers to its payroll.

It had to go through agencies that supplied temporary employees just to get enough assembly workers to try out. "Even then it took us two weeks," Varner said. "People just wouldn't show up."

It is a dramatic change from just a year or two ago, when automated production equipment salesmen often couldn't get through to a potential client's engineering department.

"Half the time, I'd get turned down by the receptionist," said Roger Kuntz, a vice president and marketing specialist at Kuntz Mfg.

"They'd hear 'automation' and immediately think we were out to replace all the people that worked there. They'd tell us that no one was in or that the company didn't believe in automation and never put us through to the production engineer."

Very Little Advertising

But those days are disappearing.

Kuntz says business at his company, which designs and manufactures one-of-a-kind specialty production machines, is at its highest level ever and promises to continue growing--despite the company's low profile. The first advertising the 14-year-old firm ever did was in a regional trade magazine less than nine months ago. "It's all been done with word-of-mouth so far," said Kuntz.

The company has 15 employees--including all four members of the Kuntz family--and has grown to become one of the largest of a small cadre of West Coast automation machine builders.

A nearby competitor, 16-year-old Charles Wyle Engineering in Torrance, does about the same volume of business--about $5 million a year--over a wider swath of the country.

Founder Charles Wyle agrees with Kuntz that business has never been better. "Since last October," he said, "the number of requests for quotations (from potential clients) is up about 200%. . . . We are being inundated."

Wyle said industry in the United States "has been beaten (by foreign producers) because of the emphasis on immediate results rather than in investing for the future. . . . But we are seeing some of our larger clients realizing this and bringing back work from abroad to do it here automatically, not only to save on labor but to produce uniform, high-quality products."

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