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Tower Manufacturer Stainless Sells Fab Plant

After 66 years as a manufacturer of radio towers, Stainless, headquartered in Wales, Penn., has closed its Pine Forge, Penn., fabrication plant.

The reduced demand for tall tower fabrication has forced the company to redirect its efforts away from tall tower manufacturing, according to Gregg Fehrman, president and chief engineer, on the company website. In this economic environment where lean and mean is the new manufacturing model, under-performing assets cannot be retained indefinitely, according to the statement.

Don Doty, founder of Stainless, emphasized that the company will continue to do engineering, detailing, fab and installation, but the fabrication itself will be farmed out. Stainless will continue to offer fabrication services through qualified vendors, as well as retain key personnel from their fabrication division to monitor quality assurance and quality control through these vendors’ facilities.

This move repositions the company so it can remain a significant player in the broadcast tower industry.  Since the initial announcement in mid-September, the company has since auctioned off all of the equipment, tooling and raw materials as well as the physical property itself. This direction is seen as a move for the company to retain the control and accuracy of its manufacturing quality without the overhead of in-house fabrication. It claims that its engineering and construction services divisions remain strong and healthy, and capable of continuing to provide all the services they have previously offered.

According to one industry source, Stainless was virtually the only option for stations that required towers in the 2,000+ foot range height. Such tall towers are mainly deployed in the Midwest, as well as countries where the topography is largely flat. The extreme height is needed to be able to provide adequate coverage over such sprawling landscapes. Unfortunately, much of the build-out throughout this part of the country, and many other developed countries, has been completed.

Broadcast tower manufacturers began to struggle with the conversion to digital television.  Because television is a government-regulated industry, tower makers were subject to the whim of the ebbs and tides, as well as well as the politics, of the transition. For a time it was pretty much a roller-coaster ride that followed the business cycles associated with the DTV transition.

But the death knell of broadcast tower fabrication came shortly after the June 2009 transition, when the FCC proposed reassigning 40 percent of the remaining broadcast TV spectrum to wireless broadband, in anticipation of the upcoming onslaught of data that was predicted to occur as the century turned. Once that was inked, orders for tower modification and new construction began to plummet and then screeched to a halt when the FCC ended up putting a freeze on all new full-power and Class A TV station modification applications.

At that point, Stainless’ number took a 60 percent hit, almost overnight. What sounded the death knell for the fab was that, unlike the previous cycles, there was a lot up in the air. The expected data tsunami had everyone scratching their heads on how to prepare for it and that meant there was a lot of uncertainty as to what was going to happen to what spectrum, where. There was no way for Stainless to know how this would turn out because, in the DTV domain,  there were no solid numbers to determine how many stations would voluntarily relinquish spectrum for the tentative 2014 incentive auction designed to free up licenses for broadband.

Ultimately, what that meant was that there was no way to forecast how many stations would require tower modifications to move to another channel assignment. That was just too much unknown information, and it didn’t make sense to absorb the costs of the fab and keep it open.

In another vein, and on the cellular site, it is estimated that 70 percent of cell sites, going forward, will be of the small cell variety. Small cells have a completely different dynamic, in terms of deployment, than macro or TV/radio towers and do not require behemoth towers. This also does not bode well for Stainless and other large-scale tower manufacturers.

Over the years, Stainless estimates that it has supplied more than 7,500 towers in 100 countries, including around half of those used for broadcasting, in the United States, since it started producing towers in 1947. The fab plant is located in an area with a 300-year history in ironworks, which started with the discovery of iron ore deposits in the mid 1700’s – ah…times they are a-changing…