Shoveling piles of sand and wrestling with a two-ton piece of equipment for eight hours in the summer heat were not what American Todd Sholtis expected to do in Bratislava. Sholtis arrived in Slovakia in 1994 to oversee delivery of the first piece of equipment for his company's new subsidiary, Danube Mold & Die.
"In the U.S., you hire a rigger, an industrial moving and hauling company," he said during a recent visit to Slovakia. Since a rigger couldn't be found in Slovakia, Sholtis and three others moved the machine themselves. He laughs about it now, but confesses that the day involved a lot of "sweating, cursing, and yelling."
Sholtis is Facilities Director for Plastic Molding Technology, Inc., a company based in Seymour, Connecticut, and founded in 1973 by Sholtis's father, Charles E. Sholtis. PMT manufactures custom plastic parts for the automotive, electronic, and medical industries. The company has 85 employees and annual sales of USD 6.5 million. Automotive components are supplied to Ford, Chrysler, G.M., Honda, and Isuzu.
PMT's Bratislava subsidiary was conceived by Charles Sholtis in 1990 after a visit to Czechoslovakia. The Sholtis family's connection to Slovakia goes beyond mere business ties. Charles Sholtis's grandparents immigrated to the United States in the late 1800's from the village of Stratena in Slovakia.
Danube Mold & Die is PMT's first international subsidiary. Danube designs and builds injection molds and manufactures and assembles components for the automotive industry. One component currently made by Danube in Slovakia, a small auto backlighting piece, is shipped to the U.S. and distributed to Ford. In January 1997, Danube plans to begin production of a specially designed cigarette lighter knob that will be sold to G.M. in the U.S. The company expects to produce 1 million of these pieces per year.
Venturing into the wilds of Slovakia is a bold move for PMT. "Many people thought it was a strange thing for such a small company as ours to go international," said Todd Sholtis. "But we did it." Few small U.S. companies have set up operations in Slovakia.
"While the ABC (American Business Center) has not seen other American companies specifically setting up operations in Slovakia for the automotive industry, we believe that there is potential for American companies to do so," said Matthew Erickson, manager of the ABC in Bratislava.
PMT chose Slovakia as the site for its subsidiary because of Slovakia's low labor costs and strategic, central location. "The largest advantage is the labor [costs]," said Todd Sholtis. Danube can deliver a mold to a customer in the U.S. for 35% less than the cost of a mold made in the States.
Danube has three employees, including an engineer, designer, and technician. The company operates out of two rooms at the Slovak Technical University, and is helping the University develop a plastics curriculum. Danube donated training books and videos and allows students to use its machines for training and technical seminars. Eleven students are currently enrolled in the plastics curriculum. "At the end of this, we actually could get employees [from the program]," said Todd Sholtis.
Persistence
Getting Danube established in Bratislava was not easy. "In the beginning, things were very bad," said Todd Sholtis. The company had problems finding Slovak tool shops that deliver high quality molds, but has now found several reliable vendors, one of which is ISO 9002 certified.
Poor communication between the Connecticut office and Danube also created start-up problems, but e-mail now connects the two offices and improves not only written communication but also the transmission of complex mold design drawings.
Finding qualified employees in Slovakia has also been a challenge. Danube spent a year and a half searching for an injection molding designer. Only recently did they find someone with the required skills and expertise. Finding such a designer, even in the U.S., is very difficult, according to Todd Sholtis. "That's why we started an apprenticeship program in the U.S.," he said. PMT was instrumental in getting legislation passed in Connecticut which established an injection molding apprenticeship program.
PMT has set high goals for its Bratislava subsidiary. "My main goal is to have Danube be its own profit center instead of relying on [PMT] for most of its work," said Todd Sholtis. He hopes Danube will employ 20-30 workers in three to four years and have six or seven injection molding machines. Danube's 1996 sales will be approximately USD 300,000, "small peanuts" according to Sholtis, but double what sales were in 1992. "I want to hit one million dollars in two to three years."
Herbert Nubel, an American Peace Corps small business development trainee is helping prepare a business development report for Danube. Nubel thinks Danube's prospects look good. "It's a very entrepreneurial company," he said. "They're careful, and they're taking small steps."
Jeffrey A. Jones is Editor-in-Chief of the Central Europe Automotive Report
