U.S. Manufacturing Today Podcast

Episode #7: Crafting the Future - The Plastics Industry's Role in The U.S. Manufacturing Resurgence with James Hartman

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In this episode of U.S. Manufacturing Today, host Matt Horine discusses the vibrant and evolving U.S. plastics industry with James Hartman, President of American Plastics. Hartman shares his journey from growing up in Michigan to acquiring American Plastics, highlighting the opportunities and challenges within the industry. Key topics include the importance of reindustrialization, the potential for growth in the manufacturing sector, and the misconceptions about sourcing and manufacturing in the US. Hartman also emphasizes the critical role of small businesses in the manufacturing ecosystem and the significance of hands-on, fulfilling work in the sector.

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Timestamps

  • 00:00 Introduction to U.S. Manufacturing Today
  • 00:31 Meet James Hartman: President of American Plastics
  • 00:51 James Hartman's Journey In Manufacturing
  • 03:26 Opportunities and Challenges in the Plastics Industry
  • 05:31 The Reindustrialization Movement
  • 05:57 Misconceptions About Manufacturing
  • 13:39 Sourcing and Supply Chain Insights
  • 22:52 Conclusion and Final Thoughts

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Episode Transcript

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Matt Horine: [00:00:00] Welcome back to U.S. Manufacturing Today, sponsored by Veryable. I'm your host, Matt Horine. Thank you for listening and joining us today to talk about a major component of the U.S. manufacturing sector, the plastics industry. The industry is now the sixth largest sector in American manufacturing, employs hundreds of thousands throughout the United States, and is at the forefront of shaping the trade war we're in. It is certainly an industry that has seen its share of outsourcing over the past few decades, especially in raw materials. But there's a very vibrant and healthy plastic scene right here in America, ready to seize the moment.

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Today's guest is James Hartman, president at American Plastics. James has a compelling story about why he jumped into the industry and is ready to provide some valuable insight on the industry and how he's building right here in America. Full disclosure, James and I are both Texas Longhorns, but we'll keep that talk to a minimum.

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James, welcome to U.S. Manufacturing today.

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James Hartman: Thanks Matt. Appreciate you guys having me on.

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Matt Horine: So I wanted to give you the microphone for a little bit and let you tell the audience your story, uh, and how I came to acquire American Plastics and what you're building now.

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James Hartman: I [00:01:00] think the easiest way to start is to go way back. Growing up in a small town in Michigan, really seeing the opportunities, but also the struggles of a manufacturing business. My dad worked most of his career in medical device manufacturing, so I got to see and hear some really cool stories about the things they worked on. Saw his passion for it. But at the same time, growing up in that part of Michigan, we saw a decay of the manufacturing industry around us, the auto industry, obviously being enormous in Michigan, but specifically in our area.

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The paper mill industry had once been quite the industry, and what we saw there was a decay of that industry. So it always was this one-sided Equation for me where I saw the growth and the possibilities, but also what happened when industries died out or were sent overseas. I didn't recognize the impact that made on me until many years later.

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Growing up, I was pretty ready to get outta Michigan and like you said, went down to Austin one weekend in, in Austin, I think would convince anybody to go to Texas. I don't know how [00:02:00] it couldn't, unless maybe you grew up in the area of College Station or Norman, Oklahoma. For me, it was pretty compelling to go down there and I saw a great school, saw a great culture.

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I saw something different, didn't really have a plan going into college, I met some friends from Houston, for example, that came in and said, I'm gonna be a petroleum engineer. I said, of course you are. I never really had a plan. I just, I went with this very broad business degree and really didn't know what I was gonna be doing. I eventually ended up getting a pretty great opportunity outta school at a very large German chemical company, and that was my first exposure to real industry, seeing the specialty chemicals business, seeing plastics. A company I worked at actually is the brand holder of Plexiglass, which is a brand name, and so I got to see that from a surface level marketing sales perspective.

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Ended up moving down to Florida, took another job, working software for a while on on the side. Really started to see the opportunities that existed for entrepreneurs specifically in the acquisition [00:03:00] space. You can just go buy a business and there's a whole industry that's support that you didn't have to be some private equity whiz. You didn't have to have 20 years experience under your belt. You could just do it. I saw that others could do it and I figured that I could do it as well. What really catalyzed me was actually having my first kid. I just was that moment where I looked at myself and said, if you're not gonna do this now, you're never gonna do it. So I quit my job and just went in on it. Now, what I did know because of the jobs I'd had, was that there was a pretty significant set of broad trends taking place within manufacturing, within plastics in general, and one of them being an aging workforce.

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When I first got into the space back in 2015, I think I was told the average age was like 57 at the company I was working at, and that our future really hitched on all of them retiring, that we would get promoted quickly, but that's still applied to the small fabrication [00:04:00] space.

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So that was one of my theories that in an industry full of people retiring, but also a very large industry, like you said, the one of the largest industries in the country. And to be clear, we are a very small player in this space. Hopefully we'll be bigger soon. I saw opportunity in that sense that there was a lot of existing business and a lot of people that wouldn't be working in the industry much longer. So I wanted to capitalize on that and become part of that younger generation, replacing those employees, those owners, those companies, I. So far that's been working out. I've met other business owners. They're at that tail end of their career. They're ready to be done. Some of 'em are still chugging along, but I've also been seeing a new group of young entrepreneurs coming in.

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We're running a small of what I would generalize as fabrication job shop now our goal is to continue to grow into more capabilities, larger orders, and become a really valued partner for other manufacturers in the space who rely on companies like us for parts and components for [00:05:00] their products.

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Matt Horine: Yeah, that's really a compelling story and one of the, the mantras that we see, especially in manufacturing where there's so many people who are in the daily element of the shop floor and who are operating, you can just do things. You can just go after the business that you would like to see you. You can stand up a business that you would like to see, and it's a really strong testament. And you mentioned being a small player and how our manufacturing sector is made up of. Hundreds of thousands of different companies that bring this all together and are pieces of the puzzle.And so every piece counts. And really a lot of what we wanted to talk about today and your founder's journey and why you stepped into it is this reindustrialization moment that we're having in the country. And you know why? Most people I talk to and most people that we see out in the market are so bullish on the future of U.S. manufacturing. It's really a pivotal time. What makes you from the lens of the shop floor, as a business owner, a fairly new business owner, what makes you optimistic about the future of U.S. manufacturing, even as others may not be.

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James Hartman: Yeah, like you said, there are [00:06:00] so many small shops out there that create this ecosystem, and I think that's one of the biggest misconceptions about manufacturing and fabrication, assembly, all of it. I think that's one of the biggest misconceptions among the general public is that only Ford. Tesla and GE have manufacturing plants. And I thought this way as well, if you don't know it, how do you think those components or those parts get to the GE plant? Someone has to make those, and the guy GE contacts, he contacts somebody else to make his parts. So there's this really long chain and eventually some of these parts that are going into spaceships are being made by a guy with a manual lathe. I, I think there's this broad misconception about what the industry is. I've only been in it directly since 2023, somewhat indirectly, since 2020. So I, like you said, I'm still new. I've got a lot to learn. When I struck out, maybe naively, maybe not, who knows, and bought this business. I actually saw an opportunity just to win based upon the ability to [00:07:00] answer an email quickly. I didn't really think I would need to really be worried, frankly, about this whole reindustrialization thing or that it was even going to become a thing.

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The theory was, like I said earlier, on the retirement aspect, but also that I could move quicker, that I could pick up the phone, that I could make a modern website, that I could email faster, that I could quote faster. That still is true. We can definitely still win that way, and we do. It's amazing how many of our customers and potential customers are just desperate for a company to pick up the phone, get them a quote, and get the job done quickly.

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The Reindustrialization aspect has really been something that I've watched take place. It's been happening, I don't wanna say underground, but it's been happening in the back alleys of Twitter for several years. I've watched it pick up steam, and I've been talking to friends, family about almost a concern of mine is that. Shoot, I'm gonna have to really step on the gas because suddenly all these people wanna do this, and there's a lot of interest from venture capitalists in this space now [00:08:00] that there wasn't even two, three years ago Now. It's really exciting to see. It's really exciting to be a part of anybody who's making things. It's not like there's a formal group. You can just do things. And if you want to have a growth oriented mindset and really make this part of your goal, you can do this. You can say, we're re industrializing. So you can make the investment, you can make the bet and become a part of this.

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So there's, like I said, there's no club. There is a new generation of talent coming in. I've talked to so many guys who have very similar stories to me and worked jobs that they were good at. They felt like something was lacking and for whatever reason. Making stuff scratches the itch. It's hard to explain, but when you actually make a physical good, when you turn a sheet or resin or whatever it is into something else, and you can look at it in your hand, it fulfills something deep within us that can't really be explained.

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It's fun to talk about that with the people that are doing this. And so there's this [00:09:00] energy, there's this excitement that we're all in this together. We're competitors, but we're also relying on each other for work. If I don't have a capability, I can call up somebody else who has a 3D print farm or a bunch of CNC, lathes or so, whatever that capability is, and know that I can count on them because we have a similar goal of growing our companies, of building a manufacturing base in our communities. And giving people the opportunity to have fulfilling careers on the shop floor. There are some severe misconceptions about what the shop floor is like, that people apparently don't want to sweat in a shop anymore, that making things with your hands is unenjoyable. We have several employees who would absolutely despise their jobs if we stuck them in front of a computer all day. They love to make things and I, for some reason, that is difficult for some people to understand, and I really enjoy being around them. They're creative, they're smart. We have people like this all over the [00:10:00] place, desperate for an opportunity to work for a company where they can leverage these skills and the company will not only invest in them, but back into the business so that they can continue to get better at what they do.That's really what I'm trying to do. I think that's what many others are trying to do as part of this movement.

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Whether you are a startup with $50 million in funding from the top VCs, and you're trying to literally change the nature of how manufacturing is done, or you are an operation like ours, that is, I don't have any technological breakthroughs I'm leaning on here. We're running CNC machines and vacuum formers and lasers, so. We're running the existing equipment, but what I'm focused on is investing in this company, investing in the people, providing value for our customers, and really making what we do respected and doing a good job at it. That's what I view the reindustrialization effort as, and I'm bullish on it because of the people that I've described that are taking the rings. So many of these guys are getting started in garages with nothing but maybe a [00:11:00] little 3D printer. If we collectively can be smart about, and when I say we, I mean me and the, these other manufacturers, it's, it's hard.

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Making things is hard. I've learned that firsthand. It's very challenging. But at its core, the premise of building a good manufacturing company is relatively simple. If you have a long enough time horizon because. All it comes down to is buy a machine, have a good ROI on that machine, make money on that machine. Make something valuable that people will pay for. Make your money back, make some profits, and then reinvest that into another machine and then repeat. And if you can do that over and over and have a long enough time horizon. Make good stuff at a good margin. It's really hard not to do a good job. It's really hard not to succeed, but you have to stay focused on smart investments, buying the right machines, going after the right customers, saying no to the bad jobs and reinvesting.It can be easy to look at a big job [00:12:00] that comes through the door and say, cool, now I can go buy my new truck. Those new trucks are costing six figures these days that that could be a really nice machine.

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It's having an ability to be patient and if we can do that and build and compound 10, 15, 20 decades from now, we'll look back at this moment I think and say, that was the beginning of something special and I really hope we can be a part of that.

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Matt Horine: No, that's really well said. And I think the big message of it in the core of the Reindustrialization message is making things. That is what a lot of what we've seen in offshoring and becoming a service economy and all these things that have happened over the course of decades. It took decades to disassemble really the industrial structure of what the economy was made up of prior to, or just before NAFTA until now.

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A lot of people, to your point, have gone on and seen in those back alleys of ex formerly Twitter. They see this word reindustrialization, but truly it's about the long game and having that time horizon, which requires a lot of patience in a modern world. And some [00:13:00] people have said that we've grown two interconnected globally, where those types of things and those types of time horizons just don't make anymore. But it's the core of making things and it's the core of providing good products, and it's the core of the economy where people really rely and depend on it. And you said something else that was so great about the type of worker, we hear all the time about labor shortages or will people go back and work in factories?It's really not about that. It's a lot more about the fulfilling nature of building things, doing things and building something that lasts. And that's what we see.

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There's a lot of dignity in in that type of work. And there's a ton. A fulfillment where we can build and make things ourselves and not rely so much on a global supply chain, which is a great topic I wanted to get to you about.

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You had a post on LinkedIn a couple of weeks ago that went, I would call it semi vial. It was a really well researched and spoken post about your sourcing and how you build into those calculations, and somebody as an operator, truly understanding your margin, truly understanding what components go into building things.It talked about supplying from China versus [00:14:00] getting domestic suppliers, and so I wanted to give you the opportunity to talk through, you know, what you found and when you really crunched the numbers and did the math, and what it means to other manufacturers and people who need to maybe explore new avenues in this tariff trade war environment that we're facing.

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James Hartman: What I found is a lot of people have a preconceived opinion and will comment whether or not they read the post. We've been in business, the, the company has been in business for 40 years. And we have always bought from local distributors. The plastics industry, top to bottom. It's a relatively short value chain.There's resin manufacturers, then there are sheet manufacturers, and then there are sheet distributors, and then there's us. We buy sheet sheet rot in two. In Tampa Bay, there are at least six local distributors, different companies, all mostly national. So it's a very competitive market, especially for the commodity plastics, acrylics, a b, S.

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Our vendors are competing over dollars per sheet, so we've always bought domestic that. There's [00:15:00] good companies here that we've worked with, good people that have taken care of us for a long time, that we have great partnerships with. There is, which was probably proven true by that post. There is this misconception that everyone just buys everything from China, that every company is sourcing from abroad.It's not true. Like I've said, we've always bought from domestic companies, but what people didn't read on the post was that I was really just posting a simple cost comparison.

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I wasn't saying I'm reshoring my supply chain. I wasn't saying that suddenly the game has changed For us. I was really just making a post rather to say. Hey, I know you all might think that everyone is super reliant on China, but a lot of us aren't. My, my vendors, I'm sure source from abroad. I, there's domestic manufacturers. Let's just, let's focus on acrylic for example, because that was nature of my post. There are a couple very large companies who make acrylic in the United States and have for decades. It was invented back in, I think like the thirties. There are a ton of foreign companies that make it. It's made in Germany, it's made in India, it's [00:16:00] made in Vietnam, it's made in China, it's made everywhere. It's a commodity.

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So our distributors, of course, they source from abroad, but they source domestically as well. So when we call them to get a price, they're basing their price off their latest batch. What I was posting, or what I posted rather, was just to show the general LinkedIn population that the announcement of tariffs in this moment right now still for my business, hasn't quite yet had a material impact because. One, we're a small company. I'm not buying containers by the dozen. My vendors are, but I'm not. The sheets we buy believe we might buy one at a time. We might buy it a hundred at a time, but the point was to show that once all those costs add up and the time it takes to get a sheeting, it might not make sense in the first place to bring sheet over here.Which half of the comments were people telling me, why did you buy it from China in the first place? And I really just gave up on responding to these. It just was, it got outta [00:17:00] control because I, my point was I wasn't, it was just a cost comparison. And every business owner and every person in purchasing is at one time or another comparing costs of raw materials.

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So that's really all I want to do is to show. That just because China says there sheet costs $26 and my local distributor says it's $45 a sheet. On the surface, that sounds great, but the time it takes to get here, the costs that add up to get it here, the terms you're under it, it just gets to a point where it doesn't make sense to buy from abroad. That is specific to my company. Now, I had some comments on their saying like, you're an outlier, you're, this isn't a representative sample. And I really just wanna say, I don't care about the representative sample. I'm a business owner. I'm worried about my business. I don't care what Joe down the streets issue is. And I can tell you that every single owner of a business out there is in the same position as me. We don't care about the representative sample. We care about our problems today. [00:18:00] I had others say, there's no way your logistics cost can be zero. I said, my supplier is 0.2 miles away and it takes me about 10 minutes to drive the truck there. There's a little bit of gas, but really it's zero. It was just fascinating to be told my numbers were wrong. When I have literal receipts, I. When I have actual quotes in my inbox from these suppliers abroad. So it was a really interesting discussion if we want to call it that, because it really illuminated to me that there, there's just a lot of misconception out there about how businesses like mine run, who we're sourcing from, why we buy, from who we buy, from, what those costs are.One of the most important things for mine is the terms.

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If we were to buy from China, we have to pay them upfront, and then I don't see that material until two months later maybe. And then every stop along the way, I've gotta pay the broker, the freight forwarder warehouse, so I get 200 sheets in here that I've already fronted all this cash for.

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Now I've gotta work on it and then hopefully my [00:19:00] customer actually pays me on time. Compare that to buying locally where you're with a rep you've bought from the same rep for 10 years, you're on net 30 terms. And if you call them with a big order and say, Hey, it would really help me out if you could do net 45 or net 60 on this. And they go, we trust you. Cool. Go for it. You're good. You're approved. That's just not something you get from abroad. And again, maybe larger companies do. Maybe if I bought 20 containers of this stuff, I would, but I don't. I'm a small business and like we said at the beginning, what is it, 98% of manufacturing are businesses like mine or something like that.

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When I am putting this out there and being told I'm not representative of the sample, actually I am because many manufacturers are small businesses with fewer than 50 employees. It goes back to that misconception that U.S. manufacturing, you have to have a million square feet and spend $10 million on robots to apparently be a legitimate manufacturer.

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We have a massive educational gap, a knowledge gap, and a perception gap that we can't gatekeep. We [00:20:00] can't get mad at somebody 'cause they don't know. Like you said, we've become the service economy. We've become a software & financial services country. We export a lot of services. Like we're really good at that. But we can't then fault the majority of our professional population for not knowing what it's like to work in a shop because that's all we've grown up in. So we can't gatekeep it. We can't put 'em down because they don't understand what it's like to walk a shop floor or understand the workings of the payment terms or the importance of getting paid up front.If you can work that one outta your customers, good luck.

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But the issues that I've been talking about, we have to be open to educating and open to bringing people into this industry without making them feel. Behind or insignificant because they don't know what we're talking about. I walked into a plastics business without knowing anything about how these things are made. Nothing. Total bet on myself, and I've learned because I had to, frankly, anyone can do it. I really believe that, but we have to be open to letting people in and working with them and educating them [00:21:00] because we have this industry full of people nearing retirement age, and the only way we're going to stand this industry up and truly re industrialize if we is, if we can convince others to jump in, give them business.

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Frankly, we need orders. We need to grow and we need to sell. But we have to be willing to work with them as they come into this industry and as people evaluate it as a potential career choice and say, maybe I don't want to go make PowerPoints all day. It's okay to wanna do something else. And there's no shame in doing that. If you are more fulfilled walking a shop floor, but you feel it's not as prestigious, then there's some soul searching that one would have to do. I can tell you I, I've been more fulfilled since doing this work than I was beforehand, and I've been extremely surprised at the energy that results and what you can get done in a day.It all goes back to that core issue of how do we not change people's minds, but how do we inform our country, frankly, of what it's like to work in these businesses and that it's not [00:22:00] this 19, or not even 19, 1890s child labor, sweatshop vision that everyone has of these plants way back in the day.

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No, it's actually quite professional. What you'll find is that there are a lot of people already in this space who are more than happy to teach you what to do and get you to where you want to be. So there, there's just so many aspects to this misconception that I want to fix. I really believe that the way to do that is just to show people and do it.I'm out here trying to run a business. It's hard, and I think that by posting more to LinkedIn to X to wherever there's an audience, one, maybe I'll gain some customers. But two, we can bit by bit change how this industry is viewed for the better, so that this effort to re industrialize our country gains even more momentum than it already has.

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Matt Horine: It's really great perspective. James, where can our listeners find out more about American plastics and more about your business?

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James Hartman: So I'm on LinkedIn. [00:23:00] My name James Hartman, I'm also on X. And then our website's, Americanplasticsupply.com. We're a small business that wants to be a bigger business, and I hope that this podcast leads to one person saying that they want to do this themselves or wants to strike out for a job in manufacturing then, you know, I'd say this, it was a success because there is just so much value in doing this work for our communities, our families, our country. And if we do it well, we'll win. We'll win as a country and we'll win as individuals. It can be lucrative. There are just so many opportunities in this space right now that it's almost intimidating to figure out where to start because there is just so much potential. So I would really encourage anyone to to dive in and just start somewhere.

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Matt Horine: Awesome. Thank you for coming on the show, James, and sharing your valuable insights about the industry and plastics and how you can just do things To stay ahead of the curve and to help plan your strategy, please check out our www.veryableops.com and under the resources section titled Trump 2.0, where you [00:24:00] can see the framework around upcoming policies and how it will impact you. If you're on socials, we just launched our X account, formerly Twitter. And you can also find us on LinkedIn and Instagram. And if you're enjoying the podcast, please feel free to leave us a rating and don't forget to subscribe. Thank you again for joining us and learning more about how you can make your way.