Fab at 50
July 9, 2011
OTTO Marks 50 Years of Progress
By KURT BEGALKA kbegalka@shawsuburban.com
CARPENTERSVILLE – What started in the basement of a Park Ridge Home has grown into a multi-million dollar, thriving concern during the past 50 years.
Last month, OTTO Engineering Inc. marked the occasion with tours and celebratory party. A lot has happened since founder Jack Roeser heat-treated parts in his home oven. His company now operates more than 250,000 feet of manufacturing space on opposite banks of the Fox River, with another 100,000 square feet under roof.
Buildings that house its precision switches and communications accessories are connected by more than a bridge. Jack’s son, Tom, became company president in 1987.
OTTO, named after Jack Roeser’s father, engineers and manufactures equipment for commercial and military applications worldwide. Otto’s Communications Division – founded in 1990 – provides such two-way radio accessories as speaker microphones, surveillance kits and headsets employed in public safety, industrial and hospitality industries.
Cass Benitez, audio production manager, estimated that OTTO made between 5,000 and 6,000 different products for an estimated 2,000 customers. “You name the radio and we make the accessories,” Benitez said.
Training Manager Lee Rehm credited vertical integration for helping to grow its customer base, including the addition of a machine shop in 1993. Sales, engineering, responsiveness, innovation and in-house engineering and testing – coupled with rigorous quality control – is helping OTTO succeed in a highly competitive environment. Its repertoire includes “skull mikes” that use the wearer’s head as a resonating chamber, directional microphones for noisy environments, and embedded GPS tracking devices that can be used to pinpoint responders at a fire scene.
It also makes throat microphones and professional surveillance kits used by the Secret Service and the military in its Communications Division. Components are engineered to withstand extreme temperatures, high winds, water and vibration.
“We make hundreds of different designs for different customers,” Rehm said.
Communications now constitutes 46 percent of OTTO sales. Its largest communications customer is Motorola.
Products in its Controls Division include push buttons, toggles, rockers, and control grips for industrial, agriculture, construction and aerospace uses. The lineup still includes the basic snap-action switch Roeser developed in 1961, as well as switches for golf carts, automobiles and military aircraft, including the stealth fighter and the B-1 bomber. The space shuttle alone used 800 OTTO switches, Rehm said. The military and aerospace sectors account for about 20 percent of OTTO’s business.
Jack Roeser of Barrington is chairman/founder of the Family Taxpayers Foundation, and founder/sponsor of the Republican Renaissance PAC. In 1994, he received 26 percent of the primary vote in a losing bid to secure the Republican nomination for governor. Now 87, Roeser remains a staunch advocate for education reform in the state.
Tom Roeser, 59, of Barrington, is a former member of the Barrington 220 school board and Elgin Symphony Orchestra Board of Directors, and a director of the Boys and Girls Club of Dundee Township. He earned a bachelor’s and master’s degrees in mechanical engineering from Purdue University and a master’s degree in business administration from the University of Chicago.
“In 1987, when I started, we had $14 million in sales. This year, we’ll have just $100 million,” Tom Roeser said.
In the past decade alone, business has doubled. Major customers include Caterpillar and John Deere.
Jack Roeser said an employee led him to Carpentersville, after his business outgrew a cramped and leaky building in Morton Grove. In 1968, Roeser bought an abandoned 3,500-square-foot liquor store on Main Street, selling off the inventory, coolers and refrigerators to help pay it off.
It wasn’t much, but he had a vision and a self-confidence honed as a 25-year-old engineer working for pinball kingpin Aircraft Exhibits Supply Co. in Chicago.
Sales reached $850,000 a year by 1974, on the strength of several new products. Bolstered by rising sales to the likes of McDonnel Douglas, Jayel, General Motors, Rockwell and Bendix, and a growing workforce, OTTO expanded next door to 2 E. Main St.
Jack Roeser bought the former home of Star Manufacturing – a 177,000-square-foot abandoned farm implement manufacturer at 2 E. Main St. – for $250,000 in 1979.
The Illinois Iron and Bolt Co., at 10 W. Main St., added another 90,000 square feet. And the most recent renovation of the neighboring Iron & Bolt facility at 11 W. Main St. added 100,000 square feet for office and commercial rental.
Work is under way to restore a 180-foot-tall smoke stack, next to a 10,000-square-foot addition at 10 W. Main St. – made with matching, period brick. “I could fix the infrastructure here because the people were good,” Tom Roeser said. “I could not afford to have Carpentersville become Detroit. With good people in the community and little investment I can make people say: ‘Wow. This is a nice little town again.’”
It is all part of Otto’s commitment to the community, that included restoring a blighted commercial buildings and renovating more than 80 homes through a program called Homes by OTTO. After driving through a local subdivision that was dotted with vacant, decaying homes, Tom Roeser realized he could make a difference by leveraging $29,000 in grants to remodel and refurbish them for sale.
Since April 2008, 20 of these homes have been sold. “My competitors [including Motorola and Honeywell] are way bigger than me,” Tom Roeser said. “I can’t go out in the marketplace and sell items for whatever I want. The answer is that we have a very efficient group of employees whose head is completely in the game. ... I don’t need a trained employee all the time. I need trainable ones, people who are willing to invest in themselves. There is a little expression: The difference between try and triumph is umph.”
Many of company’s 525 employees have been with the company for decades. It is a relationship built on joint problem-solving and a commitment to each other exemplified by in-house profit-sharing and emergency loan programs; by picnics and pride.
“I know everybody in the office by their first name, and about half the people in the factory by their first name. I know their families and their children’s names,” Tom Roeser said. “They call me ‘Tom’ not Mr. Roeser.”
He believes that mutual trust will pay future dividends as OTTO hones communication headsets for soldiers on the battlefield and components for off-road military vehicles, as well working to flesh out foreign markets. Just 15 percent of products are sold off shore.
A former KPMG Peat Marwick LLP’s “High Tech Entrepreneur of the Year” in Illinois and an outstanding University of Illinois alumnus, mechanical engineer Jack Roeser has always placed a premium on innovation. He holds more than 50 patents in electrical, mechanical, machiner and marine products.
“I’m an entrepreneur and an optimist. I really thought it was going to be something grand,” Jack Roeser said of his OTTO experiement.
He was right.
Copyright 2011, Northwest Herald, The (Crystal Lake, IL). All Rights Reserved.