Last year, when JET Equipment and Tools acquired Powermatic from its recently bankrupt parent company, there was a collective sigh of relief in the woodworking community. Powermatic was an old and trusted name that represented very high quality power tools for the professional and semiprofessional woodworker. Even though it was a profitable company, it could easily have been pushed to extinction by its parent company’s financial woes.
Revitalizing Powermatic was the shared goal that made this acquisition so successful. Bob Skummer, CEO of JET, told us, “Powermatic has got a great name and a great reputation out there. It’s suffered the past couple of years because of the difficulties of the parent corporation. We want to revitalize it, to provide the wherewithal, the resources and the motivation to bring it back to the prestige it once had.”
And according to George Delaney, president of Powermatic, the acquisition by JET has helped go a long way toward the revitalization he envisioned. “When we were first acquired by JET, we had three or four real priority items. We wanted to revitalize Powermatic: to get production back up to the proper levels, to reduce our backlogs, to improve deliveries and to put some more emphasis on increasing our incoming business. And we’ve done all of those things,” says George. In fact, as a result of the acquisition, Powermatic has been able to increase its productivity levels by adding a second shift to its production schedule.
Now, says George, his company can deliver a Model 66 table saw (one of its most popular tools) in just one week. Most other tool orders ? except the customized tools ? can be filled in a week or two. Other strengths that JET brings to the table are its distribution and service. When Powermatic was struggling with its previous owner, the distribution network for its products suffered. According to Bob, as of January 1, 2000, the entire JET sales force became a group sales network that includes products from JET, Powermatic and Performax (another tool company recently acquired by JET). George says, “We’re working hard now at restoring distributor confidence in Powermatic because they had to ride with us through a fairly tough period.”
Letting the Market Decide
The joint effect of these two companies in the woodworking community is complementary. Where Powermatic tools are aimed at the higher-end amateurs and professionals, JET’s tools are targeted at the advanced woodworking hobbyist and semiprofessional.
The only possible source of competition between the two companies is in Powermatic’s Artisan line of tools because it’s also aimed at the hobbyist market. “That’s the area where there is a little bit of overlap when you put the two product lines together,” says George. Bob, however, doesn’t seem concerned. “We’re going to let the market decide which way that wants to go,” he says. “There are people who are going to buy the Powermatic because of the strong reputation. There are also people who buy JET because of what we’ve been able to accomplish in the last few years in terms of quality and reliability and product offering.”
In the final analysis, JET rescued a profitable company with a good name and a great reputation for quality tools. For its part, JET gets to extend its brand and broaden its reach into new markets. George puts it best when he says, “I think most of the woodworking community is very happy to see Powermatic back on its feet.”