‘Made in USA’ gives edge to Denver manufacturer, but doesn’t spare it effects of tariffs

Bringing manufacturing back to the U S is one of the prime reasons behind the Trump administration s tariffs but Hercules Industries is ahead of the match The Denver company s heating ventilation and air conditioning products have been made in America since its start in Roughly of the steel Hercules uses is made in America And as other countries and companies deal with tariffs on steel and aluminum imports Hercules Industries is reaping the benefits of long-term relationships with domestic suppliers The tariffs are causing multiple of the country s smaller manufacturers to worry about the short-term implications of the exchange war So much so that the U S Chamber of Commerce has appealed the administration for an exemption for small businesses that import goods Patrick Newland whose grandfather William Newland started Hercules Industries explained having mostly domestic suppliers gives the company a bit of advantage in the face of tariffs But it doesn t make the company immune to trade-war fallout https www denverpost com colorado-economists-tariffs-manufacturing Since the tariffs we have seen a slow increase in prices We have seen domestic mills raise their prices every month stated Newland the vice president of business expansion While the company is paying more for its steel greater part of which is shipped from the South it is holding off on raising customers prices Newland hopes that will help Hercules pick up more business We re getting more leads because of the tariff increases and uncertainty stated Nicole Thompson marketing director during a tour of the commercial production area As costs rise for other countries people are looking to source materials domestically Thompson announced Don Modesitt the product manager for Hercules Industries noted the company can look out for its customers thanks to a strong inventory and long-term contracts with steel mills that allows it to plan ahead As an American company that promotes American manufacturing and purchases American products as much as we can Hercules does everything we can to be proactive to keep prices as low as we can for our customers and to price them as fairly as we can Modesitt noted We realize it s not just our pain it s also our downstream customers pain added Modesitt who s been in the metals industry since Chloe O Neal adjusts the size of a duct part at Hercules Industries in Denver on Tuesday April The -year-old Hercules Industries is expanding what has consistently been a U S based operation using American-made materials including steel Photo by Hyoung Chang The Denver Post The impacts on those downstream users of steel products will be substantial the U S Chamber of Commerce noted For every worker in steel production the chamber commented in a blog there are about Americans working for manufacturers that use steel Ultimately these tariffs will lead to higher costs for American businesses and consumers and fewer exports for American companies the chamber declared President Donald Trump has revealed Americans might feel pain from higher tariffs but has urged people to hang tough for the jobs and business enhancement he predicts will follow Modesitt also believes the tariffs will ultimately benefit steel manufacturing and other U S industries but not without short-term pain He sees the steel and aluminum tariffs as a way to counter China s practice of subsidizing production allowing Chinese companies to sell at lower prices and undercut other countries If tariffs start to equalize the way in which we work with the global economies then down the road we will definitely be stronger than we are now Modesitt mentioned We will definitely have more American manufacturing here Keith Maskus professor of economics emeritus at the University of Colorado-Boulder doesn t expect the tariffs to generate a great number of jobs or boost manufacturing much Steel and aluminum tariffs were imposed during the first Trump administration in and It s estimated that they possibly generated an additional to jobs in those sectors reported Maskus who was chief economist at the U S State Department in the Obama administration But domestic steel companies raised their prices which increased costs for other industries using steel and aluminum and resulted in the loss of to jobs Maskus stated The tradeoff is a bad one Peter Truong sorts steel rolls at Hercules Industries in Denver on Tuesday April Photo by Hyoung Chang The Denver Post We re here to stay Whatever turmoil tariffs cause in the short or long term Hercules Industries is making commitments to being around for the long haul The company just now held a grand opening for a new -square-foot plant to house its commercial manufacturing of heating ventilation and air conditioning or HVAC products for hotels recreation centers hospitals and other buildings The new commercial building allowed the company to expand its processing operations in another building down the block in northeast Denver When you look at a new building like this and the funding that we put into it it obviously says a huge amount about our confidence in the future we re here to stay and this is a huge stake in what we see in the future in Colorado Andy Newland Hercules Industries president explained in a comment Hercules has factories and centers in six Western states Colorado Wyoming Utah New Mexico Arizona and Texas The company has about employees in Colorado and a total of In what was a family-owned business became an employee-owned business The three Newland brothers who took charge of the company from their father and uncles created an Employee Stock Ownership Plan John Newland is the district manager in the company s northern region Hercules Industries which makes heating ventilation and air conditioning products has been Made in America since its start in Denver in The company processes steel and makes products such as -inch pipes and has the capability of making tiny objects like the mini bicycles shown in the picture Photo by Judith Kohler The Denver Post In the commercial fabrication building Hercules employees take the sheets of various types of steel and fashion them into ducts pipes elbow fixtures that fit into corners of buildings and other parts The largest pipe is inches in diameter A big laser machine that s programmed by people in another part of the building is used to cut various shapes We like to say Draw it We ll make it disclosed Aga Waronska the commercial branch manager We can cut big and thick and we can also cut very small To make her point Waronska pulled out of a drawer two steel bicycles so tiny that it was hard at first to tell what they were Down the street Mike DeRammelaere the manager at the processing center walked past big loops of steel that arrive via rail that leads right up to the building One wrapped coil weighs pounds Depending on the steel s thickness a loop can stretch up to tens of thousands of feet Modesitt reported The coils are fed into machines that flatten and cut the steel into sheets which are taken to the commercial division for fabrication Other steel is slit into various sizes and shipped to another facility in Denver to make products geared toward the residential region Related Articles Denver-area small businesses address ever-changing tariffs uncertainty Colorado and other states sue Trump administration to stop tariff procedures Tariffs could cost the average American household per year Here s how to save for it Denver Water s Gross Dam project violates federal law Letters Worried about current Wall Street turmoil and its effects on your retirement or investments The Denver Post wants to hear from you Hercules also sells smaller coils to other companies that make products but don t have the kind of machinery needed to handle larger sheets of metal DeRammelaere who s been with Hercules for years commented the company averages four deliveries a week from the steel mills We re able to process two full rail cars a day which is about pounds of material he mentioned Steel prices have leveled off DeRammelaere noted Stainless steel and aluminum really shot up during the onset of tariffs But aluminum has become increasingly intricate to procure within the U S DeRammelaere reported A lot of U S companies shut down smelters to years ago The majority of it comes out of Canada Hercules Industries anticipates a busy two years ahead The company projects increases in steel used each of the next two years Get more business news by signing up for our Business sector Now newsletter