ITTI Sees Better Prospects Ahead

Oct. 1, 1998
After teetering on the brink of collapse a year ago, International Tank Trailer Inc (ITTI) has rebounded. Future prospects are much brighter for the Strasburg,

After teetering on the brink of collapse a year ago, International Tank Trailer Inc (ITTI) has rebounded. Future prospects are much brighter for the Strasburg, Ohio, cargo tank repair and fabrication company. Still, management continues to look for a buyer. Problems that brought a Department of Transportation citation have been resolved, and customers are returning in significant numbers. A new management team is in place, and the sales staff has been transformed. ITTI is now focused on tank repairs, parts sales, and manufacture of specialized cargo tanks.

"We've completely turned this company around," says Caryl Warner, ITTI chief operating officer. "We are successfully winning customers back one at a time. We're doing that by building rugged cargo tanks that will deliver a long life. In addition, we have some of the industry's best mechanics in our tank repair operation, and they don't cut corners. "We've been able to bring costs under control by implementing a number of changes. Shop managers now play a much greater role in repair estimates, and we added a bid review process. Order entry reports are produced weekly, and costs are checked twice a week."

The changes were prompted by a downward spiral that culminated in 1997 with a $24,804 fine for violations of federal hazardous materials regulations. ITTI had been charged with building tank trailers with overturn protection that didn't meet code. In addition to the fine, the company had to recall and retrofit the DOT406, DOT407, and DOT412 trailers that were out of compliance.

The recall came at the end of a turbulent four-year period. Management mistakes and turmoil chased away customers, and ITTI was losing money. The number of employees dropped from 70 to 30, and the company was in danger of going out of business.

It was a sad state of affairs for the company that was started in 1977 by Ray Molder and Don Rostad. Over a 15-year period, ITTI achieved a reputation as a high-quality tank repair shop. Rostad left shortly after Molder's death in 1991. Molder's widow still owns the company.

The effort to regain ITTI's reputation for quality and integrity started in April 1996 with the arrival of Dave Newsom. He cleaned house, fixing the most severe problems facing the company. Newsom left a year later, and was replaced by Warner.

The changes initiated by Newsom and Warner have made a world of difference. ITTI is aggressively seeking new business. Salesmen have been recruited off the shop floor to give the marketing effort more clout. They handle everything from telemarketing and repair job estimates to sales of new and used tank trailers. Occasionally, they even return to the shop floor to lend a hand.

"We think it's important that each salesman has experience on the shop floor," Warner says. "They understand ITTI's capabilities and can provide more knowledgeable help to our customers. Each salesman has a computer with quote templates based on Excel spreadsheet software."

The computers have helped make the repair estimate process more accurate and professional. Estimates now go through an extensive review by managers in the production, accounting, purchasing, and quality control departments.

"We think it's important for the shop to have input," says Steve Holloway, ITTI sales manager. "In fact, the shop manager's input in the estimating of hours is an important ingredient in our repair quotes. It has eliminated a lot of mistakes and misunderstandings."

The quote review process generally takes no more than a day. Once a formal quote is completed, it is faxed to the customer.

Tank repair work comes in from all over the country. A large percentage of business is generated by customers in Michigan and other nearby states. "We have very competitive labor rates in comparison with some of those states," Holloway says.

Pick-up and delivery service is available. ITTI has two tractors and a lowboy trailer that can be used to transport wrecked tanks. The equipment stays busy.

When tanks arrive at ITTI's seven-acre facility in Strasburg, they are thoroughly inspected. Among other things, the tanks are checked for product residue. Customers are responsible for having tanks cleaned, and no work starts until that is done.

As part of the inspection, the tank internal atmosphere is tested for toxic and explosive vapors. The air tests are repeated periodically while a tank is undergoing repair in the shop.

Repair work is performed in 14 of the 17 bays at the 37,000-square-foot facility. The other three bays are reserved for the tank-building operation. Each bay has a stationary TIG welding machine, and portable MIG machines are available. Pylons separating the bays have 480-volt electric power, compressed air, water, and argon.

Nineteen mechanics currently are employed by ITTI, and the company is gradually boosting employment. "It's difficult to find people with tank repair and tank welding experience," Warner says. "Most of our shop workers are ASME-certified welders, and the average seniority is seven to eight years. We are very selective about the people we hire, because we want jobs done right the first time."

The shop has "R" and "U" stamps, and the mechanics are qualified to work on virtually any type of cargo tank. The shop crew has developed a specialty repairing dry bulk trailers that have major wreck damage.

Barrel and leak repairs and jacket replacement top the list of work done in the shop. By choice, the company doesn't handle MC330/331 pressure vessels or cryogenic tanks. Some minor lining repairs are made in the shop, but major projects and most painting are contracted.

Federally required tank inspections are another key source of business for ITTI. The company even has a mobile unit that will perform inspections at customer locations. The truck serves customers in Ohio, Michigan, western Pennsylvania, and western New York.

In connection with the repair and inspection work, parts sales are growing in importance. ITTI carries a substantial inventory of branded parts for Fort Vale, Sure Seal, Girard, Knappco, Dixon, Zook, Meritor, Solimar, Hutchens Industries, EBW, Hendrickson, PT, Emco Wheaton, CFI, Betts, and Milwaukee. Parts generally are shipped for next-day delivery as long as the order is received before 3 pm.

In addition, various components can be custom-produced in ITTI's fabrication department. "We'll fabricate anything needed for a cargo tank, and we do special projects," Warner says. "Right now we're building and selling a lot of fifthwheel plates."

Fabrication equipment includes a roll that can form up to half-inch plate in widths up to 14 feet long. The shop also has a shear, press brake, and punches.

ITTI lacks its own head-dishing capability, though. Tank heads and baffles are supplied by an outside vendor. "It's not cost-effective for us to have head-dishing machinery," Warner says. "We have a very good supplier that delivers a quality product."

Besides replacement parts, the fabrication department serves the tank-building operation. ITTI built 75 new tank trailers in its best year, but average production is one to two a month.

"We're not a mass producer," Warner says. "It takes us eight to 10 weeks per trailer. "We build only firm customer orders; we don't make anything for stock. Manufacturing stock trailers was a mistake for ITTI in the past."

Larry Botkin, who served as Fruehauf's chief tank engineer for many years, handles the design and engineering duties for ITTI. "He has been with us for about a year and half and is listed as a part-time employee," Warner says. "He is one of the most knowledgeable tank engineers in the industry. We don't even build a non-code tank without his blessing."

While ITTI primarily builds DOT406, DOT407, and DOT412 tanks, the product mix includes non-code and vacuum units. ITTI has manufacturing expertise in aluminum, mild steel, and stainless steel tanks. All of the products are built for long life.

Stainless steel chemical tanks typically are built of 10-gauge material. All parts are made from flat stock. The frame is fabricated from quarter-inch plate, and the upper-coupler plate has three-eighths-inch steel. "We don't skimp just to save a little weight," Warner says.

Most of the manufacturing work is done in the three bays next to the fabrication department. An overhead five-ton crane is used to move materials to and from the fabrication department. Once sections are tacked together, the barrel is placed on a set of electric rollers, and seams are welded automatically.

Tanks sometimes are moved to a repair bay for jacketing and insulation. It all depends on how many new tanks are under construction at the time and how busy the repair crews are. These days, ITTI's shop is busier and busier.