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SK Hand Tool's New Owner Commits to U.S.-Made Product Lineup

Sycamore, Ill.—At a time when many U.S. tool manufacturers have moved all or some of their production overseas, the revitalized SK Hand Tool Corp. is committed to its lineup of exclusively American-made tools, said Walt Sedlacek, SK’s director of sales and marketing.

After nearly 90 years in business and a number of different owners over the years, the iconic SK Hand Tools declared bankruptcy in June 2010. Of five bidders, four were in Asia and were interested in purchasing only SK’s customer list and brand, and would have shifted production offshore. But a fifth company, IDEAL Industries, stepped in and has not only kept the company American-owned but has vowed to produce only American-made tools.

Before buying SK, IDEAL had bought two other American tool companies, Sedlacek said. IDEAL, a family-owned company best known for its product category-leading wire nuts used in electrical wiring, bought Western Forge, a Colorado Springs, Colo., manufacturer of forged tools for 32 national U.S. brands, and Pratt-Read, which makes screwdrivers for SK and other brands, he said.

SK’s factory buildings in Ohio and Chicago were not part of the sale, and by January 2011, the company was back to producing tools in its new 130,000-square-foot manufacturing and distribution facility in Sycamore, Ill. and at Western Forge. The company now has nearly 3,000 products in its lineup and is continually revamping it through newer equipment and manufacturing processes, Sedlacek said.

“We’ve brought the majority of the tools back online that the old SK had,” Sedlacek said. “SK had its own forging operation, and another manufacturing operation in Chicago. When IDEAL bought the business, those two plants were older plants with maybe not the latest and greatest technology. So, they bought the assets of the business, but they built a brand-new state-of-the art manufacturing facility in Sycamore using all of the tooling from the old SK and they’re slowly upgrading it.”

One product improvement SK has made, Sedlacek said, is to its sockets, which are now manufactured to have a cleaner hole past the square part where the ratchet or extension attaches to it. The new socket has more strength because less material tears out during the five-step cold-forging process, which is done in Sycamore. That process is the ultimate in strength, Sedlacek said, which is important to be able to produce strong sockets with thin walls to enable easy access in tight spaces.

Tools such as pliers, ratchets, wrenches, punches, and chisels are hot-forged at the Western Forge plant, Sedlacek said, while final assembly on products such as ratchets is done in Sycamore, where the products are also all shipped to the same chrome-plater SK uses to achieve a “motorcycle-quality finish.” Called SuperKrome by the company, the high-polish, jewelry-like finish delivers maximum corrosion resistance, he said.“The tighter crystalline structure resists rust a lot better than traditional chrome,” Sedlacek said. “We do salt-spray accelerated testing with competitive products, and we get up to three times better rust resistance when using SuperKrome, as well as a shinier finish. We like to say it has the ‘bling’ of a Harley.”

The professional automotive technician is still SK’s target end-user, although industrial distribution is growing, too, he said. Because the company is committed to U.S.-made tools, there were a number of Asian-sourced tools within the old SK lineup that were dropped with IDEAL's ownership. The company is starting to add some of those tools to the lineup but in a superior American-made version, he said.

“We’re taking a look at where we differentiate,” he said. “We always want to be the best in class in terms of performance. The high end of the tool range is where SK wants to play. What new innovative tools can we come out with that will be best in class?”

One example of this is ratcheting wrenches, Sedlacek said. The old SK company had ratcheting wrenches, but they were made in China or Taiwan.

“So, we just developed a made-in-USA version which operates totally different than all of the existing ones. That will be the big launch this year,” he said, noting that the new product line is slated to roll out this summer.

The new product line underscores what IDEAL sees as a strategy for a sustainable competitive advantage, Sedlacek said.

“If you’re a company working with manufacturers in Asia, you can get decent quality,” he said. “But as a generalization, tools made in the U.S. are of higher quality. And every year, the cost of labor in China has inched up, the exchange rate goes up, and it’s more and more expensive to ship from Asia. In the next three to five years, the cost advantage of China is going to go away. We’re proud to be made in America, but we also feel the cost advantage of offshore manufacturing is not going to be there.

“Why not invest in U.S. manufacturing now? As other companies close factories and ship production overseas, why don’t we be the one who’s investing and buying those companies so that when manufacturing does come back to the U.S., we’re poised as the tool giant?”

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