Generac Power Systems Inc.
S45 W29290 Hwy 59, Waukesha
Industry: Backup power generators for the residential, contractor, commercial and institutional markets
Employees: 1,500
Backup power generation systems are everywhere, but very few people ever think about them. Hospitals, data centers, grocery and retail stores, government buildings and many other large commercial and institutional centers rely on generators to provide electricity when and if the electrical grid is disrupted.
Since 1959, Waukesha-based Generac Power Systems Inc. has been making backup power generators. Today, it produces generators for the residential and commercial markets. Its smallest generators are mounted on wheels and are usually stored in customers’ garages. Its largest commercial units are capable of generating up to nine megawatts and can power hospitals, data centers or water purification plants.
Generac makes commercial generators that run on diesel fuel or natural gas. The company is the largest seller of natural gas powered generators in North America, and many of those generators are purchased by telecommunications companies to provide backup power for cellular towers.
“There are 220,000 wireless towers in the United States, and that number is growing every day,” said Aaron Jagdfleld, president and chief executive officer of Generac. “All of the wireless carriers use (generators). In the last six months we’ve seen that market recover nicely and we’re bullish on its 2011 trajectory.”
Natural gas generators are favored by telecommunications companies because of higher maintenance costs associated with diesel generators, Jagdfeld said. Diesel fuel needs to be filtered every 12 months, and natural gas can simply be piped to a generator. Diesel fuel and emissions have also been subject to rising emissions and permitting standards.
“As diesel costs go up, natural gas does not have as much to do with authorization or the treatment of emissions,” Jagdfeld said.
Generac has continued to make permanently installed residential generators, but it exited the portable generator market in 1998 when it sold its portable products division. The company re-entered the portable generator market in 2008 when its non-compete agreement expired.
The decision to re-enter the portable generator market has paid off. Generac’s sales into the residential markets have helped buffer it from the drop-off in commercial and institutional construction. It has also helped Generac grow sales of its permanently installed residential generators.
“We got back into portables to control our message about portable power, and so we can tell the customer about permanently installed home generators,” Jagdfeld said. “(Sales in those markets) have helped make up for some of the stresses on the commercial and industrial side.”
Generac, which became a publicly traded company in March of 2010, has about 1 million square feet of manufacturing, design and office space in its production facilities in Waukesha, Eagle and Whitewater. It currently has about 1,500 employees.
Over the last nine months, Generac has increased its engineers on staff by 20 percent, Jagdfeld said. The company now has about 120 engineers, and it will increase its engineering staff by another 10 to 20 percent in the next six to 12 months.
“We’ve picked them up from other engine companies like Harley-Davidson, Buell and others,” he said. “These are great people with great skill sets. We’re trying to take this company to the next level.”
Generac’s increased engineering department has been put to work on new products the company plans to bring to market. This spring, the company will introduce a new pressure washer that will be sold in big box home improvement stores.
Over the next few years, Generac will unveil additional products that fit in with its traditional core offerings, Jagdfeld said.
“We’re looking at other tool-related categories that are generator adjacencies,” he said.
Generac’s growing engineering department is also helping the company to bring some production to its Whitewater facility that is currently done by Chinese suppliers. This spring, the company will build a “multi-million dollar” highly automated alternator production line there, Jagdfeld said.
“There will be some new jobs,” he said. “And more importantly, this will give us the ability to fulfill (our need for alternators) with lean manufacturing, just-in-time delivery and a higher degree of flexibility, reacting to what is going on with demand.”
