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How generational leadership and 140 CNCs power Cox Manufacturing

Manufacturing is rich with generational stories, no more so than in Houston, where we’ve reported on standouts like Minco and invited generational leaders like Nubia Perez of Gretna Machine to help guide the GHMA. 

Generations also sustain San Antonio standout and GHMA member-company Cox Manufacturing.

CEO Bill Cox is the third family member to lead the company – his mother Lillian guided operations when William Cox Sr., who founded Cox Manufacturing in the 1950’s, passed away. Today, Bill is passing the torch to his son William after years of sustained success. 

So much so that today, Cox’s sprawling factory in north San Antonio is too small. “We've crammed more machines in here,” Cox laughs. “We're up to 134 primary machines now. And we're running three shifts, six and a half days a week. My son is really pushing to figure out how to squeeze even more utilization out of it. Honestly, it's the skilled techs as much as anything. Extra space, extra machines does make it easier to do things. But we need more (skilled techs),” he says. Cox has been investing in “later technology, multi-spindle CAM machines, built in Switzerland – with six more coming in.” Along with more room: Construction bids for a comprehensive building expansion were due the day we spoke. 

But if generational leadership is common to Gulf operators, so too is an inevitable reckoning with oil and gas. “In 1982, half my workforce had nothing to do,” Cox told me in a 2022 interview. “It was a pretty hard lesson at a young age not to be reliant on one customer, or — even worse — the oil industry.”

I asked Cox about the company’s industry mix today. “Yes, it’s a good healthy mix. We do medical device work, some electronics work. The electrical-connector sector is strong. We’re also involved with data centers. So aerospace, electronic connectors, and data-center cooling systems, those are ones that are really strong for us today,” Cox says. 

“There are other opportunities out there,” he continues, “because frankly in our industry there's a lot of peers that have been operated by baby boomers that maybe don't have a succession plan, or maybe they get acquired by private equity that messes them up. So we've picked up more than one customer where they had a long-term supplier they were happy with, but have grown unhappy. My son just completed a ‘net promoter’ score (a measure of customer satisfaction). You're probably familiar with these: 21 customers, and our net promoter score was 95. Something as basic as taking care of customers has always been a high priority — and today it’s still the best way we gain grand,” Cox says. 

I come back to Cox’s new equipment – or as Cox corrects me, its “refurbished machines. It's kind of ironic. They have a CNC control on them. When we're importing them, there was a debate whether we should call them CNCs or not. They have a CNC control, but it just controls the camshaft and the spindle speed. But they're very high speed, very precise. Making parts in two seconds is not unusual on those, for very high volume jobs,” he explains. 

Cox’s investments are opening new doors. “We're using those machines for some older, legacy work, so to speak – for example they’re great with automotive. But there's also components related to fiber-optic connectors, driven by the data centers. And there’s defense work that's very high volume that (the machines) are right for,” he says. “Any time we can invest in a platform that serves multiple markets, that's where we get a green light. We’re also phasing out  some of our older machines in markets we're transitioning away from,” Cox adds.

Every manufacturer is on a technology journey of their own; they’re in transition, of sorts. I ask more about Cox’s current path. “Well, we've always been a company that poured energy into our technology side. We actually have a patent on some of our software,” he says.  “Our big priority this quarter, though, is replacing our old ERP system, parts of which are homegrown, something we had done a couple of decades ago. We did a broad assessment of options out there and we landed on Global Shop Solutions out of Houston. We’re plugging in their software and integrating our proprietary piece — something that will also position us to get CMMC level two compliant, which is a high priority for us for the defense market.” 

More opportunity – in a sandbox that for Cox, is already global in scope. “I'm optimistic with everything going on in South Texas, in Central Texas: tech coming out of Boston, some big companies moving into the San Antonio area, Toyota is expanding, Caterpillar. But we still ship most of our stuff outside of Texas. We ship to California, every week. We ship back East as well. We ship into Connecticut. And we have a good customer in Ireland,” Cox says with a smile. 

Two things seem especially satisfying to Bill Cox as he manages a succession plan and contemplates the future. Five years ago, he and I agreed a US manufacturing comeback still hung in the balance. That’s changed. “It’s definitely refreshing to contrast that to my whole career where everyone was scrambling to chase low-cost Asian prices. I fought that — and the erosion of American manufacturing,” he says. “Now people are committed to make it here and they're biased to getting their components, their supply chain, to be regional, to be US-based, and it's refreshing.”

Yet nothing beats watching young people rise to the occasion. “My oldest son joined the business a little over six years ago. And he's really surprised me at how much he's learned about business and about our manufacturing operations. Long story short, I named him president in March,” Cox says. “He's stepped into the chief operating officer role, too, with key functions reporting to him. We've been struggling where sales would go up a few percentage points every year, making money but not setting any records. William has put a lot of energy and strategy behind it — and sales are up 18% and profits more than double. Just doing a lot of the right things,” he says proudly.

“My youngest son also joined the business full time this last year. And he, you know, since the time he was just a little kid, he said he was going to join the business. And, you know, going back to science fair projects that he did when he was in elementary school, he was doing things related to manufacturing. And so it's a delight to have him on the team. Over the years, he's worked in different departments. And, now the two brothers work very closely together — the youngest does estimating and is always looking at new projects, then ways to save money on old projects.” 

William Cox Sr. would be proud of what his family has accomplished. Texas manufacturing certainly is. 

Bart Taylor is president of the Greater Houston Manufacturing Association. Reach him at [email protected]. 

Texas Injection Molding’s rollup reality: ‘a good time for buyers and sellers’

By Bart Taylor

Jeff Applegate and team have built Houston-based Texas Injection Molding into a regional industrial powerhouse, along the way co-founding the Greater Houston Manufacturers Association in 2013. Recently, Applegate steered TIM into an acquisition by Blackford Capital, where he now leads a rollup strategy to “build a platform of injection molding companies in high-growth regions and high-growth industries.”

There’s good reason for optimism. “June will be our best month ever,” Applegate tells me. 

As with other Houston manufacturers, TIM is tapping into sector diversification in the Gulf. “Oil and gas is about 30% of our revenues, and it’s ‘steady to up’. Medical is pretty steady for us, and we've had a little spike in some HVAC work, maybe just an anomaly with a customer. But nonetheless, we've seen a nice uptick in some of our HVAC markets,” adding, “the construction market right now is good. So we're doing a lot for home building, apartment building, a lot of ventilation as I mentioned, and building components. The consumer market is also fairly steady." 

Steady is one word. Opportunistic is another. And the manufacturing consortium that Applegate envisions seems well-positioned to tap growing demand across multiple industries. 

“The goal is to build a platform of injection molding companies in high-growth regions and high-growth industries. And so much of that is going to be in the southeast and southwest United States. You see that in energy, in medical, in data centers and even automotive in the southeast,” Applegate says. 

All good, with the obvious qualifiers: how’s the market for injection molders? And are company owners in a mood to sell?

“We're a buyer in the market now, and I think it’s a pretty good time to be a buyer. That said, I think the sellers also feel good. In some cases they might be willing to take a little bit less – maybe trying to get out while the getting is good, not hold their hands too long and then find out that the economy doesn't hold together like they hoped or thought it would,” Applegate says. “You don’t want to sell in down year; somebody once told me, ‘nobody wants to catch a falling star.’ But a company's trailing 12 months is how many of the companies we’re talking to value their business, and most people's trailing 12 months is pretty solid.”

Yet distractions continue to weigh on the economy, and I ask if uncertainty is working to keep valuations suppressed. “It may be one of those times where it’s both a good time to be a buyer and a good time to be a seller,” he responded.

The same might be said for the universe of available companies: certainly not lacking, but not overly flush. Meaning a lot of money continues to pursue limited opportunities. “I've visited lots of companies all over the southeast – and many in the west. We don't want to be in California, necessarily; we’d prefer the Phoenix area and then sell into the California market. Today, there are a number of opportunities in California, but not in Phoenix. And the businesses may not be able to move,” he says. “Our business is pretty regionally focused — regional proximity to customers is important. Our customer relationships are important.”

I mentioned recent data from the Dallas Federal Reserve Bank (more detail here) that pointed to an uptick in sentiment, a slowdown in industrial output but gains in wages and productivity. Applegate tracks: he’s optimistic, but cautious about what’s ahead. “If there's anything, I think it's what you see across the whole economy. The future is so unpredictable. You know, you could have a crisis that nobody can really predict that can affect the whole economy. And we're seeing that our customers are not willing, in many cases, to make commitments too far out.”

Applegate’s growing customer base should provide insights into how the market evolves. We’ll circle back in later editions.

Bart Taylor is president of the Greater Houston Manufacturers Association. Reach him at [email protected].