Harken’s Innovation Created International Market for Sailing Gear

Every summer, products made by Harken Yacht Equipment, a Pewaukee-based manufacturer, are on display at Milwaukee’s lakefront. Chances are that most of the sailboats on Lake Michigan, whether they’re from the Milwaukee Sailing Center or a large private yacht, are using at least some of Harken’s products.

Those products are also seen across the globe throughout the year, when the company helps outfit yachts racing in America’s Cup, the Olympics, the Volvo Ocean Race and other elite sailing events.

Harken’s core products, which helped launch the company in the 1960s, are blocks, a system of multiple pulleys, which give sailors a mechanical advantage when raising or lowering sails or performing other functions on a sailboat.

However, the company now makes a wide array of sailing products, including pulleys, ratchets, booms, canvas sails, electronic controls, hydraulics and even sailing gear.

Currently, the company is the largest seller in the world of deck hardware for sailboats, said Bill Goggins, marketing manager.

Harken was started in 1967 when Peter Harken, one of the company’s founders, was a student at the University of Wisconsin-Madison. At the time, Harken was a member of the school’s Hoofers club, an association for students with an interest in the outdoors. He was also commodore of the Hoofers sailing club, and was responsible for maintenance of the club’s sailboats.

At the same time, he was working for a medical supply company to help support himself. The company’s owner allowed him time in his machine shop, where Harken invented the first re-circulating plastic ball bearing block. Previously, blocks did not use ball bearings and had problems with heat and friction, Goggins said.

“That was his first ‘Aha!’ moment,” Goggins said. “In the 1960s, blocks and fittings used to have a lot of friction in the system. Performance of boats was hampered due to that friction. The reduction of friction was a big breakthrough without lubrication, which you can’t have in a water environment.”

The company was started by Peter Harken with his brother Olaf, in Pewaukee. The pair still run the company, although an increasing share of the company’s day-to-day decision making is being done by senior management. Harken’s headquarters are in the same facility the company was started in, although the plant has been expanded many times since.

In the 1968 Summer Olympics, two of the gold medal winners in sailing were using Harken’s blocks. Those gold medals quickly opened the door for international sales.

“We now sell in 48 countries,” Goggins said. “We manufacture here and in Italy.”

Globally, Harken has more than 200 employees. About 135 of them work in the Pewaukee facility.

Harken has contracts with many other manufacturers to build its parts. About 70 percent of the company’s manufacturing is outsourced. About 80 percent of the companies the Pewaukee plant outsources to are in Wisconsin, Goggins said.

The Italian and Pewaukee facilities closely resemble one another, he said. Both facilities do design, and testing of parts, and both manufacture specialty parts that are used in racing environments.

Harken is designing a new, greatly expanded facility in Italy to house its manufacturing, sales and design functions. The company has also invested in smaller facilities in France and England, where it has sales and marketing offices.

The company also makes canvas boat covers and accessories, which are mostly sold to the Midwestern market, in its Pewaukee facility.

Slightly more than half of Harken’s customers are overseas; the rest are in the U.S. Similarly, about half of them are original equipment manufacturers. The other half are dealerships and boat owners, purchasing aftermarket parts.

“We have a healthy distribution for our customer mix,” Goggins said. “We’ve found some of our most successful years are when the economy downturns, where people are fixing up their old boats instead of buying new ones.”

Goggins would not disclose Harken’s annual revenues or specify their growth in recent years. However, he did say that the company has had record revenue growth over the past five years.

The company is planning to hire employees for product development, sales and support this year and in 2007, he said.

However, the company is at a bit of a crossroads in regards to its facility.

“We’ve outgrown this facility,” Goggins said. “We’re looking at a big remodel or building a new facility. That’s a decision that’s yet to be made.”

Peter Harken said the company will stay within the Lake Country region of Waukesha County. However, it is not clear now if the company will be able to stay in the Village of Pewaukee where it was founded.

“The village would love to have us stay here,” Peter Harken said. “We’re trying, but we’re out of space. We’re on about 4.5 acres, and we need about 10. We want to be in at least a 100,000 square foot facility with expansion room.”

The current facility is about 80,000 square feet.

If Harken rebuilt on its current parcel, it could create a 100,000-square-foot building, but there would be no expansion room, Peter Harken said.

“We’re not going to run to China,” he said. “We’re automating as much as we can to produce and grow more. Our heaviest competition has run to China. We’re staying here. We have a saying here that any time we make ourselves more efficient or automated, that machine or process takes the place of 10 Chinese workers.”

Peter Harken said he’s not planning to sell the firm any time soon, largely because of the company’s commitment to its employees.

“They (a buyer) would have to give us and all of our employees an offer we can’t refuse,” Peter Harken said. “We’ve got a tremendous younger management team, and we want it to grow internally while I’m on a beach.”

Eric Decker is a reporter for Small Business Times.

Send news about manufacturing to eric.decker@biztimes.com or by calling him at (414) 277-8181, ext. 144. News can also be sent to Eric Decker, Small Business Times, 1123 N. Water St., Milwaukee, WI 53202.

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