By Eric Peterson | Aug 18, 2019
Livestock and commodity trailers
Founded: 1951 (split off from Merritt Aluminum Products in 2016)
Industry: Industrial & Equipment
Products: Commodity and livestock trailers
Merritt Trailers is a Colorado company that's been manufacturing for the long haul.
Taylor's grandparents founded Merritt Equipment Co. in 1951 and quickly cemented a reputation as the innovator in trailers for agriculture: It was the first company to make aluminum trailers, double-decker trailers, and livestock trailers with holes punched in the side.
By the end of the 1960s, the company was making a wide range of livestock trailers ("bull haulers") and commodity trailers ("hoppers"). The company relocated from Oregon to Denver in the 1970s and continued manufacturing trailers as well as a wide range of aluminum accessories for truckers. The company continued to set the bar for trailer design from its new headquarters, and opened a second branch for service and sales in Nebraska in 2009.
After back-to-back record years in 2013 and 2014, the company's leaders took a hard look at the company's future and decided that it wasn't about a single company and a single future. "We've never been a family to rest on our laurels," says Taylor. "We said, 'We've been a family business for more than 60 years. Where are we taking it?'"
The answer involved dividing Merritt Equipment Co. into Merritt Trailers and Merritt Aluminum Products. "We've really got two businesses here," says Taylor. "The trailer business that was the original business my grandparents started and the aluminum aftermarket business."
Shoehorning both operations into the same facility made for logistical problems over the years. "On the trailers side, you have the traditional assembly line," says Taylor. Raw materials come in one side and employees turn them into a trailer on the other side.
But aluminum components are made in runs, with constantly changing setups for different products. "Everything is in batches," he says. "We're cells and stations versus an assembly line."
The result? "We had bottlenecks in the facility doing it all in one place."
It follows that Merritt Trailers remained in the company's 200,000-square-foot manufacturing plant in Henderson as Merritt Aluminum Products bought the former Colorado Railcar factory 17 miles northeast in Fort Lupton and moved into the 100,000-square-foot building. "It gave the trailer business a third of its manufacturing space back," says Taylor.
Taylor handled the spinoff as the CEO of Merritt Aluminum Products, then assumed the same role of Merritt Trailers in early 2019. Running both companies is "a juggling act," he says. "It's been really interesting, but it's not without its challenges to spend the appropriate amount of time with each and give both the appropriate amount of focus."
In ag's "weaker environment" of the past four years, he notes, the company has looked to make a wide range of changes and upgrades to buoy it through the next boom and bust. "The great news: It allowed us to drive a high level of focus without the push and pull from the aluminum products business."
Taylor says he's looking at implementing more automation, which is currently "minimal" on the trailer line. "That's part of what we're looking at: Where are the opportunities? Where can we automate on our lines?" The hurdle: "It's a very customizable product and a customizable product doesn't always lend itself to automation."
Not that Merritt Trailers is reinventing its product line: The company is still making functional, durable trailers for the agriculture industry. More than a half-century after the first trailers rolled off of Merritt's assembly lines, the company still services trailers that have been in the field for 40-plus years.
"We weld all of the flooring on the trailer, where some of our competitors use mechanical fasteners," says Taylor, noting that metal-skinned roofs are always used in favor of cheaper composites. "The whole trailer is designed to be exceptionally strong," he says. "If you take care of it and maintain it, it'll last basically forever."
Supplying the ag industry is ultimately about continually making a better product for farmers and ranchers. "It's obviously a very mature market," says Taylor. "We have to figure out how we can win over the very few competitors that we have in that market. We've always done that through innovation."
Challenges: A down market for ag producers. "In the industries we serve, we tend to deal with a fair amount of volatility and ups and downs," says Taylor. "The timing of the split wasn't ideal for the trailer business because the ag industry has been depressed since 2015. . . . The trailer business has contracted a little bit because of the market."
The ongoing engineering challenge is to make increasingly lightweight trailers without sacrificing toughness, says Taylor, noting that most Merritt Trailers are about 500 to 1,000 pounds lighter than competitors' counterparts. "Every pound you can save on the trailer is an extra pound you can haul."
Another headwind: "The whole trade/tariff situation has been tough." When tariffs were put in place in late 2017, "That sucked up all of the capacity for domestic suppliers and put them in the driver's seat."
This year, Merritt Trailers got hit with a 20 percent price increase from a supplier. "Normally, the supplier discussion is a negotiation," says Taylor. "It was a 'take it or leave it' type of thing. . . . That makes it really difficult, especially selling into a weak ag environment."
Opportunities: New, yet-to-be-announced products. "We're always working on things," says a tight-lipped Taylor. Look for new trailer launches in 2020 and 2021. "Merritt Trailers and the Merritt family have been innovating in this space for nearly 70 years, and we continue to innovate in this market."
The company has also been looking to diversify. "We found a little bit of a market for those trailers in the frack-sand business," says Taylor. "It hasn't been quite as dynamic as agriculture."
Does he foresee an ag rebound in the near term? "Who knows? I wish I had a crystal ball." When it does recover, he adds, "We want to be well-positioned to serve the market."
Needs: "Labor would be number one," says Taylor. "We've been really fortunate to have a whole host of people who work their whole career with us," Taylor says. "Unfortunately, time doesn't stop for anybody. We're starting to see this wave of really experienced people looking to retire. . . . Dealing with that loss of institutional knowledge is something we're going to have to work through. I'm an optimist and I think we'll find great people to step into these roles."
The company is looking for welders and machine operators as well as labor for assembly work and materials handling. The company also has a parts and service operation that covers metro Denver in need of technicians and mechanics.
"We definitely have to shift from the sleepy 'post and pray' model to being much more proactive," he says of recruitment strategies. That means outreach at career fairs and local high schools, and an employee referral program.
"More time would be great," he adds. "If I could clone myself, that would be great."