Replacing turbines 
a cozy niche for firm

By Michael E. Kanell

The Atlanta Journal-Constitution

Replacement parts for turbines: It sounds so industrial, so Old Economy, so darned un-Atlantan.

After all, this is an economy centered on services, hooked on housing, linked to logistics, health care and education. Oh and by the way, it’s an economy that has been pounded by a painful recession that has savaged what’s left of manufacturing.

That may be. But Mark Doelling apparently did not get the memo. While his friends went into insurance or commercial real estate, Doelling, 51, followed his father into the foundry and casting business, garnering several decades of experience before founding Dynamic Turbine in 2004. By this year the company had grown to about $6.8 million in shipments and $8.75 million in orders and 21 employees.

“We run two shifts, and I think we are going to add a third,” Doelling said. “We have proven that the reverse engineering works, proven that we can make the parts. Now, we have to grow.”

Despite decades of job loss in the sector to Asia and Mexico, Dynamic Turbine seems to show that there is still a place in America for a capital-intensive business that relies on skilled workers to produce specialized, hard-to-make products and realize healthy profit margins.

$4 billion niche

Turbines may be small or large; they may be aerospace turbines that power jets or gas turbines for earthbound energy needs. The parts inside — the blades that form a spinning ring to push gas or air, the vanes that direct the flow — must be made with care and precision. Blades and vanes last three to five years, and most replacement sales — the “after-market” — are held by big turbine makers: General Electric, Pratt & Whitney, Rolls-Royce and Siemens. But a growing sliver is going to independents such as Dynamic Turbine.

“We go after the mature engine, developed in the ’60s or the ’70s,” Doelling said. “It’s a niche within a niche. But it’s a $4 billion-a-year market, so if we just get a piece of it we are happy.”

A set of blades — 92 in all for many models — is not cheap. But because GE and the other giants have a much higher overhead, it’s a lot more expensive to buy from the company that made the turbine, Doelling said.

“You buy them from GE and you’d spend $250,000, and you come to us, and it’s $150,000 — and our margin is good at $150,000,” Doelling said.

Yet the stakes are higher in turbine parts than in, say, textiles or toys. So a company like Dynamic Turbine can’t compete only on price. Doelling held up a blade, a metal triangle that looks like a tooth from a robotic shark.

“If this fails, the turbine fails,” he said. “So you have to be perfect.”

China wouldn’t do

It has become a cliché, the idea of American manufacturing gone to China. But when Doelling went there searching for a foundry, he came away worried that he’d need to retest all the parts made there.

“I went all through China and couldn’t find a foundry that I felt comfortable with,” he said. “If you have to recertify everything that came in, where are your savings?”

Instead, for his castings, Doelling chose several U.S. foundries and one in Moscow.

Castings from those foundries are shipped to Norcross, where Dynamic Turbine’s machinists and foundry workers grind and reshape and rework them.

Proving perfection is costly. For turbines that will power planes, blades and vanes cannot be sold without approval of the Federal Aviation Administration — an endorsement that doesn’t come until they have had 100 hours of testing.

The parts undergo a range of tests, including X-rays, fluorescent penetrant inspection and hot isostatic pressing. The vanes and blades are measured by special machines such as the comparator. They must be within 0.02 inches of the specification — two-thirds the width of a piece of paper.

It is a slow process: roughly one vane or blade per hour.

Growth in hard times

One reason the field is not crowded with competitors is the cost of getting started. In three years, Dynamic Turbine has invested $2.5 million in the machines that make the products and the machines that test them.

“The only thing limiting us was capital,” Doelling said. “That is where the state of Georgia helped us out.”

As the economy slowed, credit was hard to come by. The spending needed for success was nearly choked off: The company had ordered two machines and needed $1.8 million to complete the purchase.

“The people who were financing our equipment didn’t return our phone calls,” Doelling said. “They were gone — out of business.”

The state helped the company prepare an application to the Small Business Association, which arranged the loan through One Georgia bank. The federal stimulus package allowed the SBA to waive $70,000 worth of fees and also increased the guarantee for the loan to the bank.

“This obviously helped the bank decide to approve us,” Doelling said.

Dynamic Turbine has seen some upsides to recession. Skilled and experienced machinists have been easy to find, for instance. The company has hired several experienced workers from manufacturing operations that could not make it in metro Atlanta, including a Lawrenceville auto parts maker that has gone out of business. And as Dynamic Turbine looks to relocate, it expects to find a good deal on property.

Meanwhile, even if the economy is slow to recover, the company sees itself growing, taking more of the pie, Doelling said.

“The work is there. The margins are high,” he said. “We have to keep making good parts and everything will work out.”

The company has 14,000 square feet of space in Norcross. It needs about 30,000 square feet, Doelling said: Or twice as much as that if he succeeds in buying a foundry that closed in Phoenix and moving it to Atlanta.

There’s about a 50-50 chance that the bid for the Phoenix foundry will succeed, but just the idea is exciting, Doelling said.

“We would be completely integrated,” he said. “That is when you hit the home run.”