The 40,000-Foot View
A bird's-eye perspective by Dale Buss, founder & executive director of The Flyover Coalition
Milwaukee Tool Creates New Legacy of Modern Industrial Success
Hipsters sitting in an apartment in Silicon Valley or on the wharf in Boston can code a new restaurant-reservation app or pixelize a new video game with knockoff characters from Game of Thrones. But it takes someone who knows their way around a power tool to geofence a concrete rotary hammer or to automate a factory-floor process for making a sewer cleaner.
And it’s the latter kind of people for whom Milwaukee Tool is searching, as the fast-growing company continues to expand its R&D capabilities and manufacturing footprint in Flyover Country, mostly in Wisconsin and now in Chicago. Indeed, the Milwaukee-based outfit has emerged as a pioneering example of how a legacy
manufacturing company in America's
heartland can effectively re-engineer itself for success in the new era of industrial electrification and and digitization.
There are 98 years of legacy behind Milwaukee Tool, which historically produced lines of power tools for skilled tradespeople, including the iconic Sawzall reciprocating saw. Company wares are strapped to the tool belts or waiting at the ready for hundreds of thousands of tradespeople around the world and, increasingly, are found on the garage workbenches of like numbers of American do-it-yourself consumers.
The company has been growing at the rate of 20% or more a year, for a decade, under the leadership of Steve Richman, who became group president of Milwaukee Tool in 2007. Yes, there’s the matter of Chinese ownership of the company — Hong-Kong based Techtronic Industries bought Milwaukee Tool from Sweden’s Atlas Copco AB in 2004 — and facilities elsewhere, but the bulk of the company’s capital investment, manufacturing, product development and hiring has been occurring at its several facilities in Wisconsin. They include a new downtown-Milwaukee headquarters that is under construction.
A systems key to Milwaukee Tool’s recent success in gaining market share and sales from competing giants such as Hilti and 3M has been becoming a “solutions” company rather than just a power-tool company.
“We became an ‘outside-in’ company,” Richman told me, “by understanding who our users are. We have armies of people — marketers, engineers and designers — who are out on job sites globally, understanding the pain points of users and understanding how we can help them drive productivity and safety on the job.”
Meanwhile, a crucial technology advantage for Milwaukee Tool has been its pioneering work with lithium-ion technology for batteries, which enabled the company to develop conveniently cordless power tools with all the punch of corded and gas-powered varieties. Meanwhile, competitors seemed satisfied with less-robust nickel-cadmium batteries.
“It allowed us and our talented engineering teams to understand all aspects of battery technology way earlier than any in our competitive space,” Richman said. “That gave us a clear competitive advantage.” Indeed, today, lithium-ion batteries are behind the revolutions in everything from electric cars to smartphones.
Bringing AI To Tool Making
And lately, Milwaukee Tool has invested heavily in artificial intelligence, machine learning and Internet of Things technology and devices that have helped the company and its products better meet the needs of its target tradespeople and their employers, as well as boosted the company’s automation of its factories.
All of this is why Milwaukee Tool is augmenting its beefed-up technical hiring in Wisconsin with the decision to invest $14 million to renovate 70,000 square feet in the recently restored, historic Old Main Post Office in downtown Chicago. The nine-story building is a century old and sat vacant for two decades until a developer pumped nearly $1 billion into restoring, replacing, replicating and cleaning significant architectural features and readying the 2.8-million-square-foot limestone structure to accept new tenants.
Milwaukee Tool, whose initial goal is to staff its space there with up to 250 people, will be sharing the building with Uber, Walgreen’s and others. And to do so, the company will be drawing upon not only its proven history and strong recent track record of growth but also the unique place it hopes to carve out in its own second city.
“Electrical engineers are the foundation of our product today, so we’re trying to recruit the best electrical engineers, mechanical engineers, and software and firmware developers to drive product development in a holistic way,” Richman explained. “The Chicago office is our first spoke, and there are a lot of people there who are either employed by other companies or who are graduating. There aren’t a lot of companies in the Chicago market that do the type of work we do.”
Counting on the Ecosystem
To tap into the labor pool he hopes is available in metro Chicago, Richman also is counting heavily on candidates created by higher education in the Upper Midwest. “Look at the universities surrounding that area from Missouri to Indiana, through Illinois and Ohio,” he said. “We think we can attract people who want to live and work in that downtown environment. Chicago is a great addition to Milwaukee” and the company’s headquarters in suburban Brookfield, Wisconsin.
And as office markets including downtown Chicago continue their post-pandemic resurgence, Richman believes the time is right to dial the clock back to 2019, in a sense, and offer his targeted recruits a cool space to work — together.
“We’ve put this in the best of locations in the Old Post Office,” he said. “Why? From a community and train standpoint, and it’s a location that’s built out to be beautiful.” Milwaukee Tool is helping with its own amenities including an attached gym, a rooftop bar, and pickleball and basketball courts. “Not even a quarter of the space is filled yet, but there’s no reason we couldn’t go to 500 or even 750 people like in Brookfield.”
Typical of how the success of legacy manufacturers in Flyover Country produces positive knock-on effects in concentric circles around them, and reinforces ecosystems for the future, Milwaukee Tool is strengthening a big part of the region these days, girding us for the years ahead of competing with other regions of the United States and with the world.