Welding company wins back contracts from Chinese suppliers

A 52-year-old family-owned Farmingdale welding company that was “failing” after the owner died in the early 1990s is having a resurgence as it wins back contracts from Chinese suppliers and adds state-of-the-art equipment, executives said.

Steven DeLalio, president and owner of EB Industries LLC and son of former owner George DeLalio, said he has been able to compete with lower cost Far Eastern suppliers by investing in automation and cutting-edge equipment.

“What are you competing against in China?” he asked. “It’s labor.”

DeLalio said the company faced “a rough period” in 1993, a period of declining U.S. defense spending and the year his father died. Revenue stood at about $1.5 million.

That was when Steven DeLalio, trained as a software engineer with a bachelor’s from Hofstra University and a master’s from Rensselaer Polytechnic Institute, joined the company.

Early in his tenure, he won contracts to manufacture hollow stainless steel balls used to roll cargo in civilian and military aircraft.

“This was a low-margin job, but we needed the cash flow,” he said.

DeLalio said that by 2000, the company was welding about a half-million of those balls a year with a selling price of about $1.5 million.

Then China entered the market and over 15 years began picking off EB Industries’ customers.

In 2013, EB Industries lost a contract to supply the hollow balls to United Technologies Corp., based in Farmington, Connecticut, said John DeLalio, Steven DeLalio’s cousin and director of business development at the Farmingdale company.

By 2014, the business had dried up entirely.

“China got pretty good at it,” Steven DeLalio acknowledged. “I’ve seen their balls. They’re not bad. I had to figure out how to compete with them somewhat on price.”

These days, he said, the company’s automated processes give it the capacity to churn out a million ball bearings a year welded with an advanced electron-beam method.

In October, the 38-employee Long Island company won a contract with a California aerospace company — which had been using Chinese suppliers — to weld 96,000 of the 1-inch diameter ball bearings in 2017 and 2018. The contract is worth about $275,000. John DeLalio said the company is pursuing contracts with other buyers of the ball bearings, including United Technologies.

UTC did not respond to a request for comment.

Earlier this year, EB Industries won a contract to manufacture 26,000 fuel pump covers for outboard motors per year from a U.S. manufacturer of fuel pumps that had filed for bankruptcy in 2015 and moved its production facilities to Mexico.

Steven DeLalio said his company is continuing to invest in capital equipment.

“Now we’re purchasing a new, state-of-the-art electron-beam welding machine that will cost $600,000,” he said. “We’re going for higher levels of quality.”

About three-quarters of the company’s revenue comes from the defense and aerospace industry, including work on drone systems such as the Predator, made by General Atomics Aeronautical Systems Inc., and the Terminal High Altitude Area Defense, a Lockheed Martin Aeronautics Co. system designed to shoot down short-, medium- and intermediate-range missiles.

The recent contracts and others have fueled EB Industries’ growth from $3 million in revenue in 2013 to about $5.6 million now.

EB Industries in 2014 received subsidized electricity under the state Power Authority’s Recharge NY program in exchange for a commitment to protect jobs.

“People say aerospace is leaving Long Island,” John DeLalio said. “It’s not. We’re growing 20 percent a year.”

By Ken Schachter

kenneth.schachter@newsday.comkschach

Ken Schachter covers corporate news, including technology and aerospace, and other business topics for Newsday. He has also worked at The Miami Herald and The Jerusalem Post.