The Little Engineering Company that Couldn't

Yeoman Engineering was a well-run company that treated its customers like gold. But sometimes bad things happen to good companies.

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Yeoman Engineering was a well-run business that treated its customers like gold. But sometimes bad things happen to good companies

If you were in the market for plastic injection molds and had the chance to create your ideal supplier, you might conjure up Yeoman Engineering. At least you would if you valued lavish service, first-rate products, and cutting-edge technology. You might also try to re-create Yeoman's assiduous management: from the CEO's insistence on the absolute efficiency of her pin-neat shop floor to her appreciation for the niceties, like dried flowers in the bathroom. "It had a reputation as the top tool shop in town," says Mark Bailey, a design engineer at Yeoman, who grew up across the street from the company, in Huntington, Ind.

Had a reputation.

Shari Yeoman sits at her desk on a winter's day, pale afternoon sunlight filtering through the blinds. Her coffee table is littered with wine bottles and T-shirts, corporate giveaways that she collected in sunnier times and now wants simply to unload. The lobby is empty; the shop out back as still as a tomb. "Our company is 40 years old this month," muses the business's former CEO. "One day, everything you work for for 40 years just goes away."

For Yeoman, that day came two months earlier, in October, when 300 tool-and-die-shop owners -- some from as far away as California -- swarmed through Yeoman Engineering, scribbling notes and jabbing calculator keys as they prepared to bid on her equipment. That same day Yeoman's banker, formerly generous with credit but now suddenly sweaty-palmed, cornered her in her office seeking a lien on the building. "He told me, 'We want your building as collateral because we don't think you'll get that much for the equipment," she recalls. (In fact, Yeoman's equipment fetched $900,000, twice what the banker had estimated.)

Yeoman Engineering fell victim to circumstances both financially devastating and, for its owner, personally wounding. Founded in 1959 by Yeoman's father-in-law, Jerry, the company made molds for thousands of identical plastic parts, chiefly for the auto industry. In 1996, Yeoman's major customer made what she considered an insultingly low offer for her business. The CEO balked; the customer started making its own molds in-house. Yeoman's sales fell off a cliff, dropping from a high of $3.5 million in 1995 to less than $1 million last year.

The demise of Yeoman Engineering knocked the breath out of a lot of people, especially the many customers who admired it. "I was floored when I heard she was going out of business," says Randy Heffner, president of Auspro, a maker of screw-machine parts in Elkhart, Ind. "Shari is very, very knowledgeable about her business," he says. He then shifts to the past tense. "She knew the product, she knew the people she dealt with, and she was not afraid to take chances."

"They pulled our fat out of the fire on more than one occasion," says Don Sanderson, manufacturing manager of Autojectors, which makes injection-molding machinery. On one such occasion Autojectors had bought a flawed mold from another supplier, resulting in the production of faulty medical parts and an incipient multimillion-dollar lawsuit. Yeoman fixed the mold and saved Autojectors from a costly day in court.

Perhaps Yeoman Engineering was just too good, suggests Frank Smith of Alcom Canada, a maker of molded coils and Yeoman's customer since 1985. "Maybe Yeoman's products didn't wear out as fast as her competitors'. Maybe we just didn't have enough business for them," he says, seeming almost to blame himself. "They deliver excellent quality. I wouldn't buy a tool from anybody else." Now, of course, he'll have to.

The demise of Yeoman Engineering is not due to a single cause. Matters beyond the CEO's control, such as the brutal economics of the auto industry and the migration of manufacturing to cheaper climes, helped doom the company. And Shari Yeoman made a fatal mistake: she became captive to one very large and very satisfied customer, which kept her little company so loaded down with work that it never had the time or inclination to seek out new markets.

She admits now that she was too trusting, too nave. "I always gave really great service to my customers," says Yeoman, one of those seek-to-please people who sometimes bend over backward so far it breaks their spines. "Some of the other shops in town just said I was nuts."

Shari Yeoman is a cheerful and irrepressible ("I'm real mouthy") woman who has endured her share of travails. Abandoned by her first husband at the age of 24, she held down three jobs to support herself and a young son. In 1975 she met and married Ed Yeoman, and for the next 13 years she remained at home raising their three children while her husband worked alongside his father at the family business. Then one morning 12 years ago, Ed stepped into the shower and suffered a massive heart attack. He was 37 years old.

At the funeral, Yeoman was surprised when Larry Denbo, the general manager of Wabash Technologies, Yeoman's major customer, took her aside. "Shari," he told her, "I know this is not the right time, but I want you to think about taking over the business."

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