Making it in the U.S.A: HRE Performance Wheels

Name: HRE Performance Wheels, Inc Founded: 1978 Location: Vista, Calif. CEO: Chris Luhnow President: Alan Peltier Manufacturing: Vista, Calif. Employees: 40 HRE Perfomance Wheels manufactures built-to-order forged wheels for ultra-high end sports, luxury and race cars. Prices for a set of four wheels range from $5,000 to $10,000. The company sources raw forgings from Aluminum Precision Products in Orange County and all design, engineering, CNC machining and finishes are done in-house in Vista, CA. Company president Alan Peltier shares his story:

Q: What factors did you consider when deciding to manufacture domestically? A: Control over the quality. Cost is always a concern since it is much higher here in the U.S., but for us, the quality has to be the overriding factor. At our price point, we have to align ourselves with the best, and in our case it means doing most of the work ourselves directly here in Vista, Calif. Most suppliers are used to only hearing about cost, which makes it difficult for us to push them to raise their standards; if we want to provide the highest quality in the quickest amount of time, we have to do the work ourselves.

Q: How has domestic manufacturing influenced your organization? A: It has allowed HRE to become the premier brand in the world. We're not the biggest, but it allows us to focus on producing the best wheels possible without having to compromise with the typical high volume overseas suppliers that aren't used to the strict standards and quality expectations we require. It also makes us unique because there are very few competitors in the U.S. that actually do their own manufacturing. This sets us apart domestically and is a powerful pull for our customers internationally as well.

Q: What is one of the biggest challenges to growth as your company moves forward? A: Competition: both domestic and overseas. Our business is hugely competitive; we have to continually push ourselves to improve the product and service. We're always resetting the bar and defining the clear differences and value of HRE products and not settling. Our competition does too good a job of marketing their products as being the same as HRE, when, in reality, they've compromised at every level (cheaper material, lower quality machining, lower quality components, inferior design/engineering, etc.) and are usually not much more than a sales and marketing entity sourcing everything from overseas or a local job shop. For us, we're trying to take it a step further at every level and that attention to the details is what sets us apart. We need to make sure that is clear to everyone. Q: What is the biggest challenge to maintaining manufacturing in America? A: Cost. It isn't cheap to do business here. Health-care costs, for example, are huge for us as we aren't comfortable providing the bare minimum for our team. We invest a lot in ensuring we get the best of the best on the team, so we can't compromise on benefits. That ends up being an expensive undertaking, but for us it is simply a necessity.

Q: Where is there opportunity in the market for your products? A: Everywhere. As we grow in size and recognition, the opportunities come to us. International markets are huge for us--our sales into international markets has almost doubled this year. Private-label opportunities are also continuing to force us to expand. As more and more potential partners realize our capabilities and our level of flexibility, they're drawn to us knowing they can trust us to deliver a product they can believe in without requiring huge investments on their part. We're also always looking to expand our own HRE product mix by going even further up market (hard to believe) and down market... but without compromising our brand or quality level.

Q: What is your company doing to promote domestic manufacturing? A: Since almost everything we do is in-house, the most direct way we can promote domestic manufacturing is to grow our business. In 2010 we added almost another million dollars in capital equipment (CNC machines) to support our growing volume and we're investing in more and more tooling for new products. We're pretty confident that puts us in a unique position in our industry given the macroeconomic situation.