The Real Difference Between Cheap and Quality | Ep. 88 [David Thuro]

What really happens when manufacturers compete only on price? In this powerful conversation, David Thuro explains why cheap manufacturing often leads to hidden costs, quality failures, and long-term risk. As the leader of Thuro Metal Products, David has spent decades producing mission-critical precision parts for aerospace, defense, automotive, and industrial markets where accuracy, reliability, and traceability are essential. He shares how technology, automation, and process innovation helped transform the company into a trusted supplier for some of the world’s most demanding industries. 

This episode also explores the future of American manufacturing, leadership development, AI-driven operations, and how to create ownership thinking across teams. David discusses how strong supplier relationships are built over decades through transparency, trust, and consistency, while also sharing practical insights on scaling operations, managing workforce transitions, and staying competitive in a global market. Whether you work in manufacturing or want to understand how great companies are built, this episode is packed with real-world wisdom and experience.

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Transcript

Dr. Leeanne Aguilar 0:06

What does it really cost a company when a cheap part fails, delays production, triggers compliance issues, or puts safety at risk? And how do you build a supplier relationship that prevents that in the first place? Welcome to Industry Ignited, the podcast where we spotlight the leaders and builders advancing manufacturing, innovation, and operational excellence across the industrial world. I'm your host, Dr. Leanne Aguilar. And today I'm joined by David Turo, CEO of Turo Metal Products, a fully integrated supplier of precision parts and assemblies serving aerospace, defense, automotive, and industrial equipment markets worldwide. David, welcome to the show.

SPEAKER_00 0:46

Thank you for having me. It's a pleasure to be here.

Dr. Leeanne Aguilar 0:49

Yeah. So, David, tell me about how you got started. I know your parents founded Turo Metal Products in 1965, and then you started actually working in the business at a very young age. And at some point you returned to college and became a plant manager at our at just 22 years old. What did growing up inside a machine shop teach you that no textbook could?

SPEAKER_00 1:11

Wow, that's a big question. So I I think, you know, time management. I think what made my upbringing a little bit different than my peers, if I think about myself and my peers, sort of as a control group. Um I was working and exposed to adults at a pretty young age. And I know if you go to a college setting, yes, your professors are mentors. But for me, I I was always the youngest with many people that were generally 10, 20 years older than me, including the biggest influence of my life was my my parents. And I spent way more time with them than the average person would, not even not at home. You know, I had a lot of friends and stuff, and we were very independent, our generation. But working with them, you know, what I got a perspective was was life could be 10 to 20 years from now, or even 40 years from now, as a young person. And my dad would drill into my head the importance of time. Uh-huh. What can I learn in the beginning that I couldn't learn in a textbook? I could see from being around people that were further along on life's journey, you know, what certain decis what the consequences were of certain decisions, you know? And so I think I became a little bit more mature in my decision making at an earlier age by being around people that were, again, further along on life's journey.

Dr. Leeanne Aguilar 2:30

Yeah. So were you actually working in the machine shops and in the company at a young age? Were you helping?

SPEAKER_00 2:36

Were you, you know? Yeah, by the time I was 14, I would work in the summer full-time. I'd work a 45, 50 hour week. So I, by the time I was fairly young, I could, you know, working a full day wasn't an issue. I took a little bit of an adjustment. By the time I graduated from college and when I and when I was 22, I had four years of full-time experience working in a profession.

Dr. Leeanne Aguilar 2:57

Yeah. Right. And gaining skills and like you said, it having exposure to adults and other professionals, seeing the processes and the procedures and just learning every aspect of the business from the inside out. Now, you've said you love the entrepreneurial nature of this industry. You only get paid after you make the part at an agreed price. And it has time to be, and it has to be right the first time, right? So there's not a lot of room for error here. Don't get paid twice. You don't get paid twice, right, right. What's the moment in your journey when you realize I'm not just a machinist, I'm building a business?

SPEAKER_00 3:30

I would say that the art of running a business, I was exposed to that at a very young age. My parents would come home and talk about finances. I knew numbers bigger than any kid knew as a 15-year-old or a 14-year-old or 13-year-old from hearing the conversation. So it was full immersion. So I think that I never looked at myself as a machinist. You know, I mean, I was being purposefully exposed to every area of the operation. You know, intentionally, specifically by my father, I would be exposed to all areas of the business, never in one place too long. So I became a machinist in my when I was 20 when I was setting up for a brief stint some of the most modern equipment we had. But I was quickly then moved into the operation side and trained people wherever I was to do what I was doing, and then I would move on. So there was never a light bulb that went off. I always thought I would be working for myself, learning how things are quoted, how things are engineered, the design of the tools, the quality aspects of it, you know, the marketing stuff like that. You know, I got a real good, great exposure to that by intention. So it was never that I was going to be a machinist. That was just part of the journey because I need to understand what it is to be a machinist, but I don't have to be, you know, at this point, uh, they're they're way better than me, the guys on the floor. So I don't know. I don't I I can't tell you there was a clear transition. I I knew from the beginning it was about making something for less than it selling something for more than it costs to make.

Dr. Leeanne Aguilar 5:06

Right.

SPEAKER_00 5:06

Yeah, exactly.

Dr. Leeanne Aguilar 5:07

And you had the big picture from the start. So was your dad uh preparing you all along to take over one day? Was that always the end game?

SPEAKER_00 5:14

U Yeah, I believe, you know, I was the last one. And you know, there's a lot of pressure because the hopes were kind of pinned on me. And they they didn't tell me you have to do this, but they said, You don't do this, we're selling this, you know. So Yeah, got it. Okay, all right. So you didn't have the entire pressure on your your back, but it was you know, I loved what we did, and I loved, you know, I loved what I loved the people that, you know, I love the the the people that were working here. They're like family. Yeah. And I love the challenge. I I guess you know, we like challenges, and uh there were always there's always a lot of challenges.

Dr. Leeanne Aguilar 5:48

Aaron Powell Yeah, that's for sure. I think in in business in general, especially as an entrepreneur. Yeah. Now you described a major shift in the 1990s. Computing capacity made done-in-one CNC manufacturing more achievable, raw material in, finished part out. How did that technology inflection point change your competitive strategy?

SPEAKER_00 6:08

Well, I'll tell you how it changed for me, first of all. It hooked me into the business. You know, it was so interesting to be involved in that, right? And new technology and being at the ground on the ground floor of rolling that out. It helped us really get to a very profitable place. I'll tell you, how did it change the business strategy? When we were able to start running our shop lights out by the mid-90s, it provided capital for us to grow. So I would say we were always profitable to some extent, but the technology and the automation allowed us to lower substantially the cost to make certain items and go into new markets, and it really affected the bottom line. And we integrate technology, and I spend a lot of time figuring out when is the time to get in. And you don't know, and only in retrospect will you know. I call it the bleeding edge or the leading edge. And you know, there's times we've been on the bleeding edge, and at that point, the technology and what it could do, and and the price point was just right, where if you applied it properly and scaled it a bit, it became easier to make money because you were now taking more and more of the labor equation out. Everyone who's in business knows that the more we can do with the with less human intervention, the more stable the process is and the more predictable the outcome is.

Dr. Leeanne Aguilar 7:30

Yeah. So were you scaling at the same time, like bringing on more customers?

SPEAKER_00 7:34

And it helps to scale. You know, when you can bring on technology and have a fairly quick ROI, more than half of what we earn at the company we reinvest. And so what did the technology shift do? Well, first of all, it got me totally, you know, involved in the business. Because when I started, I said, you know, I want to see if I can make money at this. My dad he made he had a living, you know. There's a difference between earning a living and and and building a life. Uh-huh. And I guess I wanted to aspire more than having a job and and and paying the bills to building something and ultimately then being able to do what I want to do. Which you come back to what I like to do is I like to do this. I like to do other things too.

SPEAKER_02 8:16

Right.

SPEAKER_00 8:16

But creating and implementing technology is something that I love to do, and it's practical. So it's not for the sake of, oh, that's cool. Well, it creates value and it creates possible on value. And um, the technology allowed us to gain more profitability and grow the business.

Dr. Leeanne Aguilar 8:38

Yeah. So looking back, what were the most important leadership lessons you learned as you moved from doing the work yourself to building a company where, as you said, half your time is spent building people?

SPEAKER_00 8:50

So it's it's you know, it's really defining what right looks like, you know, setting, I I always like of late, we say a lot, start with the end in mind. You know, so always know what you want to accomplish. You know, that's where we dream and we think. You know, you know, analyze and and have good thoughts about an understanding of the present state first, and then envision a future, and then involve people in their input and their ownership into moving us from the present state to the future state, you know, change management needs to be there, needs to be a lot of action. You know, we like to build prototypes around here, come up with a concept, keep it simple, do some experimentation, come back. You know, this aerospace standard talks all about plan, do, check, act. I mean, we do that all day long. And we have a database of what worked and what didn't work and experience with certain types of materials, you know, uh codings, uh, you name it. And when we come across a new program that we have most of the art down, but there may be one or two new things we have to develop to make the project a go, figuring out quickly how to test different theories and you know, learn. I mean, I love the art of surprise, right? And sometimes what we think will work gives us a lot of fits and starts, and what we would think never works until we actually attempt to do it works much better than we had planned. So growing is uh is a lot of experimentation, it's a lot of hypothesis and then experimentation, right? And then and then adjusting, and and that's how we learn. And so, you know, that's one of the things I love to do with my team.

Dr. Leeanne Aguilar 10:29

So, for those who aren't familiar with Turometal products, can you explain exactly what what it is you manufacture and your process?

SPEAKER_00 10:37

So we make uh we're experts in what's what's called bar automatic machining. Although we do other things, we have four core technologies in our companies. Three of the four core technologies start with a 12-foot bar of material that goes into a high production type lathe and has multiple axes, and we cut bars that are as small as 332nds or even an eighth of an inch in diameter up to four inches in diameter. We also then have this area called milling where you know the metal is fixtured, it's in plates, it's in it's in strip, and the tools whirl around the parts, you know, so that's milling, but we're experts in turning. We're also very good milling. We started back in the mid-60s, you know, turn is as doing production turning on what's called automatic screw machines. By the 90s, there was the whole evolution from mechanical. You know, things moved in a mechanical way, cams and levers and things like that, to encoders, ball screws, and a control, and you want to move the tool into the part by half a thousandth of an inch. Back in the day, you had a dial and an indicator. You know, now you on the control, you tell it in basically very precise positioning and the ability with CNC machines to make much more complex parts. With the mechanical designs, you had limitations within the mechanics, and you could not have as much complexity, so you had to do then multiple machining or multiple handling operations.

Dr. Leeanne Aguilar 12:06

Right.

SPEAKER_00 12:07

And so CNC liberate, you know, CNC allowed us to do done in one. You know, it it took not every part, even with CNC, do we do for certain reasons, you know, done in one, but mo more and more we took parts that took three and four operations and were able to through the CNC machining with multiple axes, we can machine all sides of the part. Right. You know, on the oldest machines, there was a camshaft, and you had 365 360 degrees of revolution, then the part had to be done. And so you only had so many degrees with code, you know, you could we some some parts could take twenty, thirty minutes to machine. You know, with the memory we have and the and some of our milling machines have, you know, 80 80 tools in them in a mag in a magazine. So we could hypothetically take a super complex. I I don't think we've ever used all 80 tools on one part. What we do is we have multiple jobs set up, you know, we change the fixture and we call it up, and it may use fifty ten, fifteen tools on a part, you know, twenty tools. So you know, that's been that's what we do. I mean, we you know, we've started with the technology available at the time, and then we're always upgrading as it made as as it made sense to invest.

Dr. Leeanne Aguilar 13:28

Yeah. And I know you serve two distinct markets. You have a higher volume, lower mix, automotive and industrial, and then also the higher mix, lower volume, aerospace and defense. How do you balance those two worlds operationally without compromising quality or delivery? This is where we've arrived.

SPEAKER_00 13:45

Contract review is different on the aerospace and defense side. You know it's probably for an aerospace and defense customer because the purchase order is about 20 pages long. All the terms and conditions, and where in in in more of the industrial side or automotive side, even it's much simpler, you know. So the machining is pretty much similar. I can't tell you the machining is dramatically different. That's not really where things uh differ, but it's really on the contract review side as well as on uh at the end, you know, we have created uh different contract review departments and different even sales teams. It's even the pricing is completely different between them. There's more um there's more administrative uh cost in the aerospace and defense. So the people that are doing the estimating, they're from that discipline, from that field. Right. People doing the contract review have to have much more training. Then the people that do the final quality assurance as well as final touch, final packing, final shipping, they have to have a higher level of training. There's a higher emphasis on documentation, certifications. The product, of course, in every aspect, whether whatever the market is, has to work. But in the aerospace and defense side, part of the validation is through the the documentation that we create from the reports and from the certifications. There's also on the aerospace and defense market often more what we call OSP, outside processing, which is post-machining. There's also often more treat special treatment of the raw materials. So the purchasing vendor management is is much more of a cost, right? Or skill, whatever term we want to use, that you need to have to work in the aerospace and defense market. We're automotive and industrial. We do some outside processing, training, but it seems as if from the administrative side, there's a lot less. So when we contract review has to be thought of totally different, as well as final inspection certification, and even even how we pack, you know the parts are usually more expensive. So the care and handling and even the the sensitivity to any kind of surface blemishes when something goes into an airplane, into a jet engine. Right. There's a much there's a higher aesthetic even than uh something that may feed a farm animal.

Dr. Leeanne Aguilar 16:12

You know? That makes sense. Now you've carved out a niche where quality is non-negotiable. The first part is right, and the last part is right, like we were talking about. There's no room for error here. What systems, disciplines, and culture practices make that level of repeatability possible over decades-long product life cycles?

SPEAKER_00 16:31

So what one thing that helps us to do that, achieve that, is we started right make we started in the birth of the company, or 10 years within the birth of the company. We started making tube fittings for military aircraft that was metal-to-metal seals. So that customer, I remember as a kid, I remember as a as a as a as a 12-year-old, 10-year-old, my parents talking about rejections from air equipment resistiflex. You know, we still deal on that product to this day. And having a customer that was so demanding, you know, set the bar in the tone. Now, the thing that the thing the thing that I admired most about my father and what he built, he never gave up. You know, he was relentless in pursuing, you know, the solution. And in the 70s and 80s, it was very common for, you know, they would chip out these connectors, these nuts, these bodies, and they'd all come back. And we would hand to burr them. And that's still in our DNA. I mean, you know, how we're we're so good at making clean, really clean parts with no burrs. I mean, back in the 70s and 80s, a lot of our peers, they were maybe maybe were making plumbing parts. I mean, he he jumped right into the you know, to the most challenging. We were making everything out of titanium. So, you know, he always started with the greatest challenge. He didn't start here and then it wasn't, you know, this continuous improvement thing. Right away, we're making these tube fittings for the Air Force in high volume. Right. I mean, he tells me the story. I wasn't there, it was probably 19 you know, 72 when he cut, you know, he got the first order from for these parts in the Never Machine Titanium. But he was a toolmaker, a machine builder. He knew whatever it was, he would figure it out. He remembers watching the drill go into the part, and the drill was literally disintegrated.

Dr. Leeanne Aguilar 18:30

Oh my goodness, I was gonna say it's metal.

SPEAKER_00 18:34

And and and some people, you know, for him, and I love that about it. That was game on. Yeah, uh, this is this is gonna be a challenge. You need a stronger drill bit. You know how he figured out exactly how to how to how to sharpen the drills, the web of the drill, the type of drill. He he says it's game on, you know. So he loved the challenge. He started right out of the gate with the most what was probably one of the most demanding, you know, jobs you could try and make in production. Yeah. Demanding applications out of a very demanding material. So he set the bar high. So that's that still permeates. I mean, by the early 80s, we were making a lot of you know things for fuel and fuel systems, fuel injection was was growing and the defense was up and down with budgets, right? So then we went into other really mission critical uh type of components where you know they had the most stringent standards on the on the workmanship, the part workmanship. So we've been doing it for 50 years, 60 years, and there was a lot of okay, you know, get it out, and it was pretty good, but not good enough. And so we got our homework back a lot in the beginning and hung in there and didn't give up and throw in the towel and say, you know, we can't do this, and figured out the tooling, the gauging, the processing, and it's that's still that that that DNA is still part of who we are today. Keep bringing on the challenges, huh?

Dr. Leeanne Aguilar 20:05

Right.

unknown 20:06

Yeah.

Dr. Leeanne Aguilar 20:07

So Turo also helps customers reduce risk and cost tied to hazardous materials, especially lead, by recommending lead-free alternatives for steel, aluminum, and brass and verifying composition with XRF. What are the most common hidden compliance surprises you see customers face and how do you help them avoid them?

SPEAKER_00 20:26

Yeah, so lead lead has been, it's interesting, lead has died down a bit, but lead became a really important thing, especially as we were exporting a product to Europe and making, you know, there was an evolution. Like I told you with titanium, we had to figure out how to lead was has been added for years to make the chip formation and machining much more favorable to the problem we have when we cut metal, we do subtractive manufacturing is we have to remove metal. And the easier the metal flows away from the part, the the more tool life we get, and and the more consistency we get in the machining process. So you know, lead came out of our materials in the last 20 years. Uh like I told you, we figured out a machine titanium. And I remember a few times we would go with some no-let versions of material we've been making. We'd put a batch in the machine, the first batch would arrive, and all the tools would break, and then we would go back. We make the tools in-house, we would, you know, we're experts at making cutting tools, and we would have to test and adjust the geometry. So that's what we do. So hidden compliance, you know, was led, right? We've had we've had a few issues. We've had to buy an XRF so we could actually check coatings and stuff because of Prop 65 requirements in California. Some of our parts are used by consumers. So, you know, hidden compliance today, you know, beyond REACH and Rojas and stuff like that, we're required to know what's in our materials, even though we don't choose the materials. You know, we're we're designed to print company. I don't think I mentioned that. Our customers give us exactly what they want. Want. Even under our quality standard, we don't have design authority. We do a lot of DFM and help them as they design, but they own the design. They own the material. We have to make it exactly to their specification. So to that point, we have to often give them advice and they do require, you know, there's now I think 258 substances of very high concern. And, you know, for us, lead is in machining is the most common substance of very high concern. So we have to disclose to them, you know, in the coatings and stuff like that. So for us, the hidden hidden compliance was substances of very high concern. And then needing to know and tell them, even in the materials they spec'd, yeah, that that it has a a certain amount of lead that's beyond one-tenth of one percent. That's usually the threshold. Okay. So in the last five years, it's mostly been substances of very high concern that depending on your product mix, you know, being aware of what may be in the product, although it's not illegal. Yeah. It's more the disclosure, you know.

Dr. Leeanne Aguilar 23:10

Got it. Yeah. And you mentioned you're known for DFM, which is the design for manufacturability, consultations that result in launches under budget and ahead of schedule. What's an example of a DFM conversation that changed everything? Cost, timeline, manufacturability, or quality?

SPEAKER_00 23:31

You know, we try and give customers, one of the one of the customers we do a lot of DFM with reverse engineers components for the fuel injector aftermarket. So, you know, the OEM doesn't give them the specs. And so we work with them a lot, and we've helped them eliminate the need to grind to certain uh features. Machining has gotten more and more precise, and the tooling's gotten better and better. We're achieving much tighter tolerances and much smoother finishes. So, in very precise components and machining, often back in the day, there was a lot more grinding. You would machine it oversized, you would heat, you would even sometimes then surface treat it, and then you would put it through a grinding machine. Every part had to be loaded. So I think in the last five years, with more than one customer, we've been able to look at their process and say, okay, I see that's the final requirements. Because sometimes they do give us not, you know, uh, they let us see everything. They let us see maybe sub-drawings or not quite complete drawings, and then here's the final drawing, and we say, okay, that you want us to make a blank. That's the final size and finish on this surface that we know you press gets pressed into something. We can tell by the notes. We can machine that. You know, we don't have to grind, oh, really? You can machine it. Yeah, we can machine it. Oh, well, okay, so we'll run a thousand pieces and then they'll check it. We'll check in our lab, they'll check in their lab. Oh, yeah, you know, it has the same roundness, meets the requirements of the ground part, and they eliminate a whole operation. So, yes, when we can eliminate through advances in machining and technology, yes, we can eliminate not only more machining ops, but we can also eliminate secondary processing. And again, the most common example that I've seen of ri of late is grinding. Eliminating the need to grind surfaces because we've advanced our capability and we've we're able to even machine to lesser tolerance or or tighter tolerances and smoother finishes.

Dr. Leeanne Aguilar 25:35

Okay. So it's like you're you're brought the drawings, you've brought the parts, it's already designed, but then you're able to go in and consult on how to actually manufacture it and what the best process is for saving time and costs. And like you said, if they if it's a grinding or if it's just the uming happens inside the part, grinding happens outside.

SPEAKER_00 25:55

On the outside, honing or the grinding. Saving uh uh, you know, uh these these these abrasives, they both use abrasives. That's the commonality. You you know, see with machining being able to get to the same level of quality that an abrasive surface, where they have very low rates of metal removal, but achieve very smooth finishes doing that with a machining process saves handling, saves cost.

Dr. Leeanne Aguilar 26:17

Okay. Now you said something that's incredibly relevant in these times. Done right and on time always wins over done cheap in the long run. How do you help OEMs and procurement teams quantify the real cost of cheap?

SPEAKER_00 26:31

That's really difficult. They often have to learn the hard way. You know, I wish we had PowerPoints. So we have to be patient. You know, you we have to stay by you know, you have to be true to yourself. You have to you don't we never sell ourselves cheap. Yeah. Knowing that some will get it and some won't get it. And some would much rather ignore the true cost of ownership or the total cost of ownership and focus on I got a great deal. Oh yeah. I got I got a great deal, like buying this cheap, right? And then they come back and then you do it the right way. Yes, it happens all the time.

unknown 27:12

Yes.

SPEAKER_00 27:13

So you stay by, you know, you stay by your mantra. We don't overcharge. You're right. We make a reasonable profit. Um I'm not, you know, I'm not we have a long-term perspective, but yeah, we we will we we will work hard not to to say no. It's not just about having an order, it's about doing it. We can't do it right for the price. We're not gonna, you know, back in the day, years and years ago, sometimes we would try and fit into the price by trying to go faster. You you can't you have to do it right. You have to try and rush or cut any corners.

Dr. Leeanne Aguilar 27:46

Yeah.

SPEAKER_00 27:46

And that's what people try and do. Try and fit everyone's got to make a profit, but people that try and fit the process into the price instead of saying, well, this is the right process, and it's as lean as it's gonna get with the technology we have. Right. You know, we're not wasteful, but that's the process. And and you know, we can't skip steps. And and if you we we there are customers that they'd have they'll they'll they'll take 20% less, pay 20% less, and have three percent, five percent fallout and and 100% check every part themselves. It's they're fine with that. And if that's what they want, we don't want to be their customer. We're not gonna we're not gonna ship three to five percent out.

Dr. Leeanne Aguilar 28:26

It would it's not who we are. But they're still paying for it somewhere, so it might not be the dollars up front, but like you said, it's costing them time. It's costing them parts and and there's fallout, like you said.

SPEAKER_00 28:38

So check every part 100%. And there's risk. Yeah, and risk. Uh-huh. 100% inspection is not 100% accurate. I've done plenty of 100% inspection in my life. And it's they have studies on on that. So, yes, there's a risk in in product failure in the field and loss of reputation. But look, they have to discover that themselves.

Dr. Leeanne Aguilar 29:00

Yeah. Wow. I know. And you're right. Sometimes they have to learn the hard way and then and then they come back. But when they come back, then they get it. And then they're the best customers ever, right?

SPEAKER_02 29:11

Agree.

Dr. Leeanne Aguilar 29:12

Because they know better and they're not gonna do it the hard way again.

SPEAKER_00 29:16

Yeah.

Dr. Leeanne Aguilar 29:16

Yeah. Yeah. So, David, you work with mission critical parts, fuel systems, hydraulics, aircraft components, where traceability and material integrity are essential. What does full transparency look like in your world? And what should buyers demand from any supplier in this space?

SPEAKER_00 29:34

So, I mean, full transparency, I mean, obviously they they look at the cert package, right? We when they look at our, we do what's called a even for aerospace customers, there's the pre-production approval process. So the risk is so high for any of us to make a mistake and overlook something that we often, although we don't design, we take a customer's tabulated drawing, which may have 10 different part numbers on it, and we'll break it down to the parts we're making, if we're not making them all into our drawings so people don't have to interpret whether it's the machinist or the person doing the inspection in process or final of what is required. So when we launch a program, they have our they even know our cycle times. We have to do run-out rates. You know, an automotive, you shut a line down and the cost is tens and tens and tens and tens of thousands of dollars per hour that someone has to pay. Right. And it could be us. So we are very transparent. The last thing we want to do is is our R IP, you know, we don't give them our tool designs. Our IP is our tool designs. You know, our tooling, the way we design the tooling, you know, that's that's our secret sauce, that's our IP, how we lay out the tooling. We don't necessarily tell them how we sequence it, but they know the they have access to the operation prints we use, our inspection reports, all our certifications, um, our cycle times to not just make sure we can make the part to print, but that we have the capacity. In some of our contracts, we have to maintain certain extra capacity. We welcome our customers. Used to be back in the day, you would throw ta you would throw that we didn't do it, but you didn't want to show them what you were doing. Right.

unknown 31:11

Yeah.

SPEAKER_00 31:11

And in I love 2026 in a way, because it's so competitive that our customers were allowed to walk their floor, look at everything they're doing. They come in, we welcome them. You only learn by opening up. Yeah. You know, interesting.

Dr. Leeanne Aguilar 31:27

And that's just a recent change?

SPEAKER_00 31:29

I'd say in the last 10, 15, 15 years, we've been very transparent. I think we were pretty progressive with wanting to partner with companies, and the only way you can have a true partnership is to actually know each other's vulnerabilities and strengths.

Dr. Leeanne Aguilar 31:46

Right. That is true.

SPEAKER_00 31:47

And so it I think we always were a little bit ahead of the curve, but they may take that and use it against us. I mean, there used to be that, I don't know, bit of paranoia. But I mean, look, the internet has made everybody I mean, people are rack people are way too open.

Dr. Leeanne Aguilar 32:00

Right. Right. Yeah. It's leveled the playing field and a lot, and I think AI even more so now, right? So it's like Yeah, yeah. And so transparency really is the only way to go because they're gonna find out anyway. So you might as well just tell them. And then there's that level of trust that you built because they're, you know, you're being open with them. So it's you know, might as well.

SPEAKER_00 32:19

Yeah, I mean, with sharing information is as an ought to need no basis, you know, but you're gonna start making a critical part. You know, you want to go visit them, you want to see exactly how they're receiving it, inspecting it, the exact application.

unknown 32:33

Yeah.

SPEAKER_00 32:34

You welcome that. I mean, one of the things with any any one of the things I've learned, and sometimes we haven't done this because we were shipping a product to you know Poland, go visit anytime you have any type of substantial program. Go, you have to go and crawl all over it and see how they're consuming it and using it and talk to the people that are and get lessons learned. I mean, with full transparency, anytime we get a project or a program, we want to ask you lessons learned. We want access to their their database for rejections.

Dr. Leeanne Aguilar 33:08

Absolutely. I mean, but that makes you better, and that helps uh I mean, them in the long run too, so you can modify your processes or correct.

SPEAKER_00 33:17

So it's called lessons learned. So uh what what is honesty? It's sharing experience.

Dr. Leeanne Aguilar 33:22

Yeah. Now you mentioned offshore competition exists mainly in low-quality, non-mission critical commodity work. What's your view on how American precision manufacturers win today? And where do we truly compete and where should we stop trying?

SPEAKER_00 33:37

Yeah, so I mean, for us, we we've decided, you know, not to chase price. And some of our peers that are not mission that aren't mission critical, they partnered with people in China because the market doesn't require the the market's price focused more than it is, you know, quality first. So I can't even tell you, you know, anecdotally, I don't we haven't purchased product from China, right? I hear anecdotally we we quoted some check valves, and this is where I heard, you know, three to five percent fallout's okay. But your price, which we thought was uh every time we've quoted to people that were buying offshore, we were usually the most competitive stateside. But there seems to be offshore they have raw material like I don't know if it's subsidized, how they buy steel, you know, at 50 to 60 percent less than what we pay for it, sometimes a hundred percent less. Wow. So, you know, I can't compete with that. I mean, back in the mid at the height of the insanity, back in the mid-2000s, we were often asked to quote product that was that the material here costs less than what they wanted, costs more than what they wanted to pay for. You know, there was a dollar of material and they wanted to pay 80 cents. Like zero margin, like negative market margin. You know, they were like, you don't you don't want you want to lose this million dollars of business? Yeah, I do want to lose.

Dr. Leeanne Aguilar 34:58

Yeah, right.

SPEAKER_00 35:01

You know, and and it was back in the it was really wild back in the in the you know, like 20 years ago. I mean it's it's tamed itself quite a bit. We were like, we're gonna have to make things, you know, now that fly. And and we when we you know we said no, the work went away, and and when we we had to invest into much more robust quality management systems, you know, and and New York State helped us with that, and I called it higher ground management. This kept mean meaning we had to go to a different level of product and market. Right. And realizing that immediately, and not even attempting to try and swim in that, that's just untenable. Yeah. And and so not of late. Of late, you know, it's it's it's stabilized, but there was such a I think there was such high subsidies 20 years ago. And there's still a lot of subsidies, I think, that some of these uh called well-cost regions are are doing. And we're we're we're we're a market economy. And I think that I'm a free market, I'm a believer in the free market.

Dr. Leeanne Aguilar 36:05

Yeah, but I mean competing on price or low price, it's in in the long term, I don't think it's ever a winning deal. I mean, it's it's not for anybody, really, even the customers, because then it the corners are cut and and uh quality declines and you know.

SPEAKER_00 36:21

So through partnerships, like getting back to the last discussion, you have to we have to cut out all the waste. And so why is transparency important? Because we can see where there's maybe waste, where we can help eliminate waste. You know, so defects are waste, you know, additional travel is waste, overprocessing is waste. Right. Um having a line stop because you don't have product can put you out of business and create so we'll fight, you know, tooth and nail with you to to l eliminate waste, but it's not a commodity. So the cost is lower, and and they learn if we fight waste together through transparency and through understanding what waste looks like. Right. Then that's saving cost. So a lot a lot of people understand lean concepts. What I just went over is the eight forms of waste. The eighth form is unproductive people, making sure our people are are productive, and and that's through training, cross-training.

Dr. Leeanne Aguilar 37:20

Yeah. Now you've built long-term relationships, some spanning over 40 years, where customers treat you like part of their own company. What do you believe creates that kind of loyalty and how do you protect it as markets change?

SPEAKER_00 37:34

Yeah, that's that's a great question. So one of the things that's interesting about what we do is the longevity of the mechanical designs. If you would come and visit, we had a shop tour yesterday, we had a customer here with us for eight hours. And um, I always say the thing that's most that impresses me the most is the longevity of these mechanical designs, parts that we've been making for 40, 50 years. So they are like our children. You know, every time I go to a trade show, and what we we bring our product, yeah, because there's a story behind every part, and some have some really interesting stories, right? So the continuity of the part, and some parts at one point were made in five processes, and now they're made in one, right? And we become an expert, and that they're they're their their product actually becomes our family. One of our longest customers has been owned by seven different companies. Wow. And and there's a whole process every time a company sought bought and sold that we have to go through when we're dealing with new buyers on educating them, but we become really an asset because we're the one thing that's constant, right? So America is big on MA, right? Yeah, the product is the stable thing, you know, and following where it goes, we've become much better, I'd say, in the last 25 years of the internet's help, LinkedIn's help, of following where the product goes and then knocking on the door and saying, Hey, we we we've made that for 20 years. We know it really well. Can could we quote that? You know, oh really? Yeah, oh, you know, they they have so much going on and they find a friend who understands. We've been taking care of the children for all these years, you know, and we love the children. They're like we would we would give our lives for these children, you know. We'd like to keep keep raising these children for you, you know, and in a metaphor, that's you know that's how that's how we do that.

Dr. Leeanne Aguilar 39:31

I haven't heard that. I hadn't heard that like your product is you becomes part of your family, their product becomes part of your demand cycles in some in most ways way better than them.

SPEAKER_00 39:41

We're we're starting to use tools based on rate of change to know if if their demand's accelerating or decelerating, because the the holy grail now is not always always right, but always when you need it.

SPEAKER_02 39:53

Right?

SPEAKER_00 39:53

Almost like a retail mentality for someone making a custom part for somebody to somebody's design. So that's how you really make them sticky.

Dr. Leeanne Aguilar 40:02

Yeah.

SPEAKER_00 40:03

When it's always right, and they're like, we we don't even know, but every time we need it, sometimes it's you seem to have it, and we can't just make things and never sell them. We'll go, well, yeah, that would be uh so it it has to be done with a in a very systematic way.

Dr. Leeanne Aguilar 40:18

Yeah. Got it. Now, David, succession is a topic most leaders avoid until it's urgent. Your dad stepped aside and you took ownership, and now your 23-year-old son is joining after earning a supply chain degree and choosing the National Guard for a challenge in growth. What does a healthy transition actually look like? Tell me about that as far as succession.

SPEAKER_00 40:42

Yeah, so he's gonna have look, the company's gonna be a different company 10 years from now. If it's not a different company, we're not doing something right. So, what's a healthy transition look like? Look, over time, he's gonna have to make decisions and he's gonna have to bear the benefits or the consequences of his decisions. And allowing him to have space to fail within reason without putting us out of business is important. I was allowed to have a leeway, right? And um more and more autonomy and decision making and helping. I always think about this the hardest thing I struggle with is what should never change and what must change. And keep asking those questions to my son. So I think drilling that into his head, son, there's certain things that should never change about this company.

Dr. Leeanne Aguilar 41:25

What are examples? Examples of things that should never change.

SPEAKER_00 41:28

Well, the the the absolute commitment to the customers and any business, right? Always being customer-centric, right? Taking care of your people. Right? That'll pay dividends, right? Innovating. What we do is we have to innovate, right? So we make we don't innovate in product design, but we innovate in process implementation.

Dr. Leeanne Aguilar 41:50

Yeah.

SPEAKER_00 41:51

So, you know, sitting them down, and probably he'll probably hear that again day one. You know, he's gotta probably hear it day, day, day, day 10, day 20, day 100, you know, that look, day one, if you don't like challenges and you don't like implementing new ways of doing things and exploring new and new ideas, but making sure that the culture of always right, it's gotta support that, you know, and it's gotta I would tell them this on you know, in the coming years, we you have to simplify things. The great engineers, they simplify the process, not complicate it. Yeah. The government, you know, I I I I try to stay away from dealing directly with them because there's a lot of bureaucracy, although a lot of our parts are procured indirectly by the government. You know, they constantly add layers and layers. And, you know, how can you simplify it? Or to my daughter who hopefully joins it. How can you how can you make things easier and and clearer and easier for everybody to understand? As the parts become more complex, you have to simplify the process, you know, and not make it more complex. Just because you've added another step, does that step add value? Does the customer care about it? So it's it's not complicated, but it requires a lot of thought, intentionality, and ownership.

SPEAKER_02 43:09

Yeah.

SPEAKER_00 43:10

You know, and and how do you transfer that to them? And hopefully, you know, it's not gonna work. We'll find out in a year. Are you passionate about this? Are you passionate about this innovation, this ongoing quest we have to do it to simplify what we do and to and to have better outcomes for our customers? Right. So from 100% quality to always when you need it, and there's gonna be another thing they demand. I don't know what that is.

SPEAKER_02 43:33

Yeah, yeah.

SPEAKER_00 43:34

But right now in the aerospace space, if you can always do it right and always have it to them when they need it, always on time, you turn a lot of heads.

Dr. Leeanne Aguilar 43:42

Mm-hmm. Yeah. And and so as far as you know, uh the change that is good, you know, things that should change, what would those be?

SPEAKER_00 43:51

So the technology, we came from a very machine centric background. Like well, as we were giving the tour yesterday, you know, for for a long time, we were really moving the need. needle with again investing into the best equipment, right? And now it's it's actually how we manage and and sh and share information and empower our our our our our our coworkers. We're really focusing on the whole production management process. I think we can get about 10 to 15% more cost out of our cost of goods or or or more ROI on the facility, whatever end you look at it. But it's through we have to train and teach the people doing the work with all the automation we have to think like we think. The guy making the product on the floor has to have the same access to information that I have. And so through data through what we're doing with data and it comes to AI we're we're using AI quite a bit to simplify things for the dashboards people need to look at. So our mission is that everybody in the organization always knows what the most next most important thing is they should be working on at every level. Yeah. We've built up a good capacity of equipment our equipment is we've done over the last five 10 years a pretty good capital investment into ops doing what's called planned obsolescence we used to hang on to equipment a little longer and we're good on that. But in the next couple of years it's with the change over in the workforce of a lot of people retiring. And then my son very important I mean he's going to have to help us bring in we've already brought in I call next gen okay the next gen crew the the the men and women in their you know late 20s or mid 30s some of them have been in with us already 10 15 years they're going to become our senior managers in the next five to ten years. Right. And integrating him with that group you know they want to they don't want to be told what to do you know lead this command and control as opposed to lead and inspire. You know this generation's smart right and and they have the ability to learn and use technology. Yeah right and they can collaborate. We're good too I mean we're not that we're bad but part of the older generation wants to be told what to do. Right. Yeah a few of them like like tell me what to do and I'll go do it. And it's like no let's lay out the objective and give you the the tools and the information and you tell us what you need.

Dr. Leeanne Aguilar 46:22

Yeah. Then they then they become complete owners of of the process you know yeah well I think the younger generation have grown up with access to these resources and tools they know how to use them. They used to going it out and finding the information on their own where older generations didn't necessarily have all of the information at their fingertips like we do now. And so we didn't have they didn't have the knowledge or tools how to use the newer tools that we have now.

SPEAKER_00 46:47

And so it's I think intimidating in a way you know as well we're desiloing you know the last five years we've been really desiloing a lot of the you know used to have like centralized planning for these four core departments. Uh-huh and move moving that is close to where the product's being made is is it's not easy. You know you need a different mindset. Now with automation used to be when I started if your arm wasn't moving you weren't making a part now with all the automation you've taken a lot a lot of the drudgery out and now they can be more involved in the planning and and the organization of their workspaces. Right.

Dr. Leeanne Aguilar 47:24

Yeah now for owners whose children don't want the business or who haven't identified a successor what's your advice to prevent the business from becoming unsellable or overly owner dependent or stuck in the key person trap?

SPEAKER_00 47:38

Aaron Ross Powell Yeah you know so I mean the goal with any company is any one person doesn't show up tomorrow including me and nobody misses them.

Dr. Leeanne Aguilar 47:47

Right yeah right that's the goal.

SPEAKER_00 47:51

That's the holy grail you've arrived but it it takes a lot of care and love for the company to to continue but to do that because you know some people want to create job protection and some owners do too. You know and you know that's the that's the end like I said that's the end right we're not quite there yet I mean when you have 10 people and one person doesn't show up it's 10% of your workforce. When you have 20 it's five percent yeah when you have 50 people you know it's uh two percent right is that right when it's a hundred people it's all it's one percent. Now not not every percent has the same influence. You know hopefully I'm working mostly on the future right so to the owner that wants to you know wants to sell you have to scale to the point where you don't matter where you have you know standard work where you have a built a management team you know and we're not there yet. Like if I if I disappear tomorrow you know I would you know I would tell my family you should probably look to sell because my son's not ready and I have a pretty good management team but I still do a lot of it. And I hope in the next three years we can get to that point. We're about 80% there but not quite there. Yeah I want this business to go on if I'm not here and and hopefully by the time I'm 60 I'm you know 54 and I'll be 55 soon. No, I can go away for a month my dad used to do that. He founded a company in Texas you know when I came on and and it was healthy you know he had his own thing. Yeah it was I didn't mention that before but you know we founded a company in 1989. I I started working full time in 1993 graduated from college that year and he would go there for like two weeks at a time I remember the first year he'd be like yeah I'm gonna go away for two weeks you know and you got to do that like the owner you don't know what you have you know one of the tips is when you hire people go leave for a week or two and see what the place looks like when you come back.

Dr. Leeanne Aguilar 49:51

When you come back and then you know where you need to to find out if you have the right people.

SPEAKER_00 49:56

Exactly know where you need to fill in the gaps and and or train up that's a tip to me like with my son coming you know I plan to do some you know be more active with our National Trade Association by design. Yeah. So you know I we can have conversations for you know 20 minutes a day if you want you know I'm always uh reachable by phone but you know leave and let them figure it out yeah no some good advice there.

Dr. Leeanne Aguilar 50:23

Now finally you've talked about aligning incentives creating a vested interest through structures like profit sharing ESOP models or other ownership pathways. In your experience what's the simplest way to start building true ownership thinking across a leadership team?

SPEAKER_00 50:39

Yeah that's a great that's a great question and there's a lot of different answers but I guess it's owning it's you know look first of all in our in our in our field our best employees they take personal ownership regardless but there is a difference when they share in in in the gains right or they share in the wins right even financially I've even seen my when my dad made me an owner I thought like an owner so you know we're still working on that we we have a 401k plan and that the the contribution has it has something to do each year. The level of contribution has to do with the level of our profit from the prior year.

Dr. Leeanne Aguilar 51:17

Okay.

SPEAKER_00 51:18

So you know that's one thing we do the people in the office are incentivized. One of the most important things we do is we bring on new people new technology and new product and so we have people that are given a a uh you know a percentage for the first two years of the new product we bring on. Beyond the sales staff the people that are getting equal weight are the people that are the lead engineers on the project. So the sales staff the people that are designing and bringing on and and and and responsible for process implementation checking they're actually given as a group the same level of incentive as the sales team's getting because in our space we're not selling out of a catalog where we imported from China. Right. So we've had to incentivize the people as much who actually create the process and implement the process as the sales team. The sales team's happy to share some of their commission because they know without the people that actually make the product nobody gets paid because all commissions are based on when we get paid. Right that yeah very true. So we've taken you know a you know a four or five percent commission and divided it up and now it's a bigger pie you know it instead of a smaller pie and there's more ownership. I look forward to working with our our finance manager who we're now focusing some of his responsibilities away from some of the administrative finance to the operational finance. And as I talk to my son and get his advice telling him you know how can we gamify things? You know younger people you engage people from gamifying things I mean that's that's a new word that we're talking about you know in the process and also giving them some incentives whether it's recognition right recognition is for some people a big motivator.

Dr. Leeanne Aguilar 53:07

Yeah.

SPEAKER_00 53:08

It's not just money it's it's what what we're trying to do is everyone has a scoreboard like playing a sport they know if they're and it's not arbitrary it's it's based on the algorithm right it's not oh I like you you know you're doing great you know no it's based on did we win or lose? If the score is two to one and we have the one and they have the two we lost. If the other way around we won. So which teams are winning gamifying giving people some financial incentives giving them recognition and giving them ownership and how they how they how the work is done in their area.

Dr. Leeanne Aguilar 53:45

Right. So they have a stake in the game and they also are motivated to um make it make a contribution and because they are part of part of the team I mean really you know in the broad sense as well. Yeah yeah well David thank you so much for joining me today this was a powerful conversation great and yeah I really enjoyed that for those who want to learn more and to reach out how can they do so?

SPEAKER_00 54:12

So www.toro metal dot com about us you know uh sales at toro metal.com uh if there's uh an inquiry but come come check us out come look at our products on the website we have you know about us as our company history we're getting some great recognition lately and awards from you know large OEMs like BAE systems parker aerospace and um we're keep trying to keep it keep it keep new content on the site not not enough as as you guys do in in what you in your field but you know there's a lot of new things happening and hopefully we we share our wins you know with people out there because if you really focus and you have continuity in what you do you'll succeed at whatever your endeavors are.

Dr. Leeanne Aguilar 54:56

Yeah I love that that's yeah good advice good perspective. Well thank you again David and for those listening if you enjoyed this episode please subscribe to Industry Ignited and tune in to the next one. Until then stay curious stay bold and keep igniting industry