Baker Instrument builds on strength of product

The little company that could – and did – aptly describes the steady growth of Baker Instrument Co. in Fort Collins.

Relatively small but boasting gargantuan international customers, Baker has infused Fort Collins with a stimulating economic tingle over the past 10 years. The company makes high-voltage testers that are used to test the reliability of generators and electric motors.

“Basically, we make instruments for testing the reliability and quality of the windings,´ said president David Schump, who has been with the privately-held company since 1976. The windings are the coils of wire in which is generated the magnetic field that turns the rotors – in other words, it’s the part of the motor where the oomph is generated to make the moving parts go. The shiny lump of wires you can see inside any small household motor is the windings.

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Schump explained that the No. 1 cause of electrical failures in electric motors is due to weak or damaged insulation in the windings, which can cause shorting. Although Baker offers a wide selection of models, its products fall basically into two categories: portable test sets for the end user, which are used in the field; and fully computer-controlled automated, quality-control test stations that are used by manufacturers of electric motors.

“Our largest model can test motors up to 10,000 horsepower and 13.8 kilovolts,” Schump said. For people whose knowledge of electricity runs the gamut from toasters to flashlights, 13.8 kilovolts is approximately 14,000 volts – quite a jolt. (A D-cell battery is 1.5 volts.)

Baker describes its products as “surge comparison testers,” but a competitor in Monroeville, Pa., said that that isn’t quite accurate.

“They actually make impulse testers,´ said Robert Mlynar, president of PJ Electronics, a 28-year-old family-run business with customers in 33 countries. “We make surge testers; Baker makes impulse testers.”

He said the difference is in the way the test is performed – Baker measures the wave cycle of a voltage spike; PJ measures the pulses resonating between the coil being tested and the test device. Mlynar says the difference is significant in that PJ’s

testers “stress the coil harder and at a faster rate.”

Although Mlynar believes his company produces a superior product, he said that “Baker beats us with their sales force.”

Nevertheless, PJ Electronics’ customers include conglomerates such as General Electric and Westinghouse, plus the largest railroads in the world. PJ Electronics employs five to seven people in Monroeville, Pa.; Baker employs 55 people in Fort Collins, and six in a Nuremberg, Germany, subsidiary formed in 1985 to handle sales and service for Europe. Baker also opened a sales office in Singapore in 1992 and another in Shanghai, China, this year.

Combined sales revenues for 1994 were $7.5 million, and Schump projects revenues of $9 million for 1995. All manufacturing is done in Fort Collins. The company’s customers are in the new-equipment, repair and preventive-maintenance industries. Representative customers in Colorado include Eastman Kodak Co. and Public Service Company of Colorado.

Another customer, Leeson Electric in Grafton, Wis., looked at about seven different test-device manufacturers before deciding on Baker.

“We found that Baker’s instruments did more,´ said manufacturing engineer Dan Underwood. “Baker was about 20 percent more expensive than other companies, but they are way ahead of the game technically.”

Underwood said Baker instruments are totally computerized and perform complex

mathematical calculations automatically. “Of course, our scrap rate is higher – they kick out more defective parts, but it saves us failures in the field,” Underwood said.

He added that he thought Baker “clearly will go far,” in terms of continued growth. Baker’s manufacturing side functions mainly as a precision assembly operation, fitting together purchased components.

“We buy locally in Colorado as much as possible,´ said purchasing manager Kolby Klimek. “Fort Collins supplies most of our sheet metal and some machine-shop work,” she said.

Circuit boards and cases are purchased in Boulder and Denver; some components come from Europe. Baker incorporated in Denver in 1972. In 1978, it was moved to Fort Collins, where it eventually constructed its own digs at 2310 E. Prospect Road

in 1984.

Baker moved into a new building at 4812 McMurry St. in October, increasing its space from 15,000 square feet to 40,000 square feet. The larger space will be used for expanding production and for product development. The company is retaining ownership of the Prospect Road building and is in the process of signing a tenant.

“The move reflects the several good years we’ve been having,” Schump said. “The American industrial economy has done quite well since the 1991Gulf War recession.”

Baker’s overseas customers include almost every major European manufacturer of electronic equipment. In addition, Baker equipment is used worldwide to test utility companies’ electric generators.

With a customer base like that, the Fort Collins company exports almost 40 percent of

everything it manufactures, and 25 percent of that goes to Europe. On the Continent, Germany is Baker’s biggest market.

Brazil also is “a great success story´ said Fernando Pinzon, Baker’s regional manager for Latin America. Because it has a large population that now can afford to buy consumable durable goods, Brazilian manufacturing is on the rise.

Pinzon said that Mexico is almost a tie with Brazil in the hierarchy of Baker’s best Latin American customers, but that the Pacific Rim is the biggest growth market overall. The one country they haven’t been able to penetrate is Japan. For one reason, Japan produces its own surge-test equipment and doesn’t need to buy it externally. Also lagging is Africa, mainly because there is so little mechanical manufacturing there.

“We do have an agent in Johannesburg, though,” Schump said. But he’s encouraged by a possible upturn in the African manufacturing economy. Russia also is problematic.

“We tried to get a foothold in Russia through our German distributor,” Schump said, “but it’s just not safe there.” He said that in his experience, street crime is so bad that if you have more than $10 in your pocket, “they’ll kill you for it.”

Baker’s marketing strategy is somewhat different for the end-user than for the manufacturers, but both plans involve one- on-one sales calls, print advertising in trade journals – “and a lot of trade shows,” Schump said.

“We spend a fortune on Hanover [Germany] every year but you have to be there if you want to be accepted in Europe.”

The biggest and most important electronic trade show in the United States is the Electrical Insulation Conference, which takes place every September in Chicago. The company’s new products “will stay in the field of testing electronics,” Schump said, “but we’re adding new types of instruments for testing efficiency.”

He said a large portion [by some estimates around 40 percent] of all generated electricity is used to run motors.

“As people become more concerned with energy conservation, there is a corresponding concern for greater efficiency in the operation of electric motors,” Schump said, “and we are positioning ourselves to meet that need.”