By Eric Peterson | May 09, 2022
Grand Junction, Colorado / Salt Lake City, Utah
Chairlifts, gondolas, urban transportation, and other ropeway transportation
Few companies make it 130 years, but Leitner-Poma is an exception. Founded in Italy in 1888, the company's products are fixtures on ski slopes worldwide.
After 40 years manufacturing ski lifts for the U.S. market in Grand Junction, however, Leitner-Poma of America encountered a formidable mogul. "Going into the pandemic, we were looking at a record season," says Cole. "Once the pandemic happened, we were much more fortunate than our European parent company, because what we saw here in the States was projects delayed. What they saw in Europe was projects canceled."
That said, the slowdown was severe enough that Cole reduced the company's inventory and even started exploring contract manufacturing for other industries. Instead of setting sales records, 2020 ended up being "a survivable year," he says, followed by a record year in 2021.
Cole forecasts another high-water mark in 2022. "We've transitioned to having more work than we could handle," he says. "We were looking to sub out factory space, and now we just can't hire enough people."
Joining Leitner-Poma in April 2022 after eight years with General Dynamics in Alabama, Orms is helping steer that increased workload as the operation's new director of manufacturing.
After a proposed move to Texas, Orms and his wife decided to "live where they want to live" and connected with the opportunity at Leitner-Poma. "We've always vacationed out all the way to the coast and always stopped in Grand Junction to catch our breath," he says. "We love the town, we love the area, and it's always been a place for us to rest."
Orms' experience with heavy weld assembly and project management dovetailed into the operation's needs. "I'm a process-oriented guy and data-driven," he says. "It was pretty much a marriage at first sight, because I knew if we could get our manufacturing efficiencies where they needed to be and we were looking at expansion opportunities, then we could reach the goals and the level the company wanted to excel."
His top initiatives for his first months on the job include a SAP upgrade, developing more prefabrication processes, implementing and a weekend shift.
"Right now, we are really working very hard at knowing exactly where we're at schedule-wise and producing a schedule that is conducive to a reintroduction to systems and Lean manufacturing," says Orms. "We're trying to create a schedule where our hours are spread out throughout the year as opposed to waiting until the end of season based on the delivery schedule of the customer and our materials schedule."
He adds, "If we're wanting to go to that $200 million-plus range, we're going to have to really lock down our systems, processes, and procedures to be competitive in the market."
About 170 employees are based in Grand Junction, with another 70 now in Salt Lake City. Installation crews add another 60 to 70 employees in the summer.
The company builds a wide range of pre-assemblies at its 100,000-square-foot facility on 14 acres in Grand Junction before shipping them to the customer's site. Capabilities include welding as well as CNC machining and electronics.
When the operation launched in 1981, about 80 percent of components were imported from Europe. That's now down to about 10 percent, with direct-drive motors and ropes coming out of Europe. "Even though we're foreign-owned, we operate very independently and I would say 85 to 90 percent of what we produce comes out of Grand Junction," says Cole.
Materials costs are up 30 percent since early 2021, and the company is passing some of that onto customers. "That's a big, big cost to pass on, but I think it's just the way of the world right now," says Cole. "Even with those cost increases, we're seeing substantial growth in our marketplace."
The big drivers were the titans of the skiing industry: Vail Resorts announced $160 million in new lifts in 2021 as Alterra continued to invest. That meant more lifts than ever for Leitner-Poma and its primary competitor, Doppelmayr.
"This year, the market will be well over $300 million," says Cole. "We hit a point where we stopped taking orders. It was really just to stay ahead of the supply chain and make sure we could deliver on what we sold."
Marquee installations in 2022 include the gondola between Palisades Tahoe and Alpine Meadows in California; a chairlift system at Wasatch Peaks Ranch in Utah; and several new lifts at Vail and Keystone in Colorado.
To accommodate the demand, the company is aiming to build a new Utah facility by early 2024. "We've been working with the State of Utah to build a much broader facility over there," says Cole. "It'll not only supplement Skytrac, our sister company that's over there, it'll give us some more manufacturing capacity."
He notes that the facility could be leveraged by a pair of business units also under the umbrella of Italy-based HTI Group: tracked vehicle maker Prinoth and snowmaking system manufacturer Demaclenko.
"The facility we're looking at in Salt Lake City will be somewhere between 15 and 20 acres. It'll probably be at least 100,000 square feet, about what we have here in Grand Junction."
Both 2021 and 2022 represent record years for Leitner-Poma of America, with a target of $300 million in projects in 2022. The company typically has six to eight projects in a given year; it has about 20 in 2022.
"We're taking orders for '23 and '24," says Cole. "Normally in our market, our sales season goes from November to April or May and we're delivering everything by December. Right now, we have a substantial amount on the books for '23 and we've also got five contracts to sign for '24."
Challenges: "Material pricing and supply chain issues are just crushing everybody," says Cole, citing lead times jumping from eight weeks to 40. "We kind of thought the markets were normalizing and starting to come down, then we saw these huge price increases in March."
Orms notes that the trend throws a wrench into Lean and just-in-time strategies: "From a strategy point of view, you've got to be really ahead now."
Some customers have flinched. "We're seeing small resorts that are backing off and delaying projects, but if we continue to see another 10, 15 percent, the market will just come to a screeching halt."
Another challenge: building the new Salt Lake facility. "We just cannot find land," says Cole. "We're right at the airport right now, and anything in that realm is in the $18 million to $20 million for the land that we're looking for. If we go up to Ogden, that drops down to $3 million to $5 million, but then I run into the dichotomy of how many current employees do I lose if I move to Ogden from our current facility."
Opportunities: A banner market for ski lifts: Cole says 60 new ski lifts will be installed in the U.S. 2022, versus 40 in a normal good year. "Unless we see a huge recession or a huge transition in the market, I think we'll definitely see the ski market definitely continue on through '24 and '25."
"As busy as we are on the ski side, the next big wave for us is going to be urban transportation," he adds. "And those are big, big projects. An average ski project might be in the $5 to $8 million range; an urban project is going to be $100-million plus."
The company is competing for potential projects in Los Angeles and Santa Monica as well as the proposed gondola in Little Cottonwood Canyon. "There's probably another dozen of those projects," says Cole, noting that gondolas are much more cost-effective than bridges. "We play very well on the made-in-America component, as opposed to some of our customers."
Cole also highlights the "entertainment" market: Leitner-Poma built the Big Wheel in Las Vegas, and has automated people movers in the pipeline for zoos and other attractions, including the proposed gondola project at the Argo Mine project in Idaho Springs, Colorado.
Another opportunity on the cutting edge of transportation: The new ConnX is "a combination between an aerial gondola system and an autonomous vehicle," says Cole. The gondola cabin is transferred to an autonomous vehicle after arriving at the station, which then travels on its own route.
Needs: Cole says the company could use about 40 more employees, including welders, machinists, and technicians to fill out a weekend shift. "My bottleneck now is engineering on the front side," he says. "We're doing a partnership right now with Western Colorado Community College to really help with not only our staffing needs, but our training needs."
Orms says storage is another issue: "We've doubled production basically and throughput, and finding the storage to house our units before install, there's some of that we're looking at as well." The company is looking to acquire a property for that need as it leases additional facilities in Grand Junction.