Success at Aaon Inc. is reflected in record earnings and peak sales of rooftop heating and cooling units.
Now, the number of workers is also due to increase at the west Tulsa manufacturer, which currently employs nearly 1,000 people. Aaon plans to hire about 1,000 more people over the next 10 years as the company increases manufacturing space and adds production lines, executives said Friday. To accommodate the bigger work force, Aaon's parking lots will more than double in size. The long-term project begins this year with construction of a 150,000-square-foot building for more assembly, testing and unloading room. Construction of the first new building will cost about $5 million, Aaon said, while additional machinery will require spending $50 million. But the rest of the expansion is so multifaceted that Aaon President and CEO Norman Asbjornson cannot put a dollar figure on it yet. Safe to say, it's big. "This is a long-term makeover," Asbjornson said during a tour of the Aaon headquarters at 2425 S. Yukon Ave. "We'll do double and possibly triple in the volume of products made," he added. Aaon was doing all right anyway. The company's sales for 2007 reached an all-time high $262 million, 13 percent higher than 2006's record of $231 million, according to an earnings report released this week. Net income topped $23.15 million in 2007, well above the $17.1 million profit during the previous year. Asbjornson, who has steered Aaon for two decades, is not content to rest on his laurels or glowing earnings reports. The expansion, which was in the planning stages for two years, altogether will add more than 600,000 square feet of manufacturing space and develop more efficient connections between production, engineering and testing. "It doesn't matter what business you're in, you always have to change," Asbjornson said. Aaon works out of two buildings on either side of the 2400 block of South Yukon. The west side will be expanded to add most of the 600,000 square feet in new manufacturing area, an additional 17,500 square feet in office space and 720 more parking spaces. The east side, which is pretty much built out, will reconfigure some manufacturing capacity but mainly change to handle 460 additional parking spots. Aaon will have parking for 1,880 vehicles when it's done. Under the plan, the number of sheet-metal fabricating machines will grow from eight to 20. Current production lines will be updated and eventually tripled from two to six. And while Asbjornson isn't certain how much all of it will cost over the next 10 years, Aaon does not have to worry about how to pay for it. "We're totally debt-free," company marketing manager Sam Neale said. "The expansion will be paid for totally out of cash flow." Worries about a possible or impending recession vary depend on who's talking, but Asbjornson isn't sweating it in the short term. Aaon's growth has been at steady 12 percent annually for the past 20 years. "Some years are none, some years we grow 25 percent," he said. "Long term, we are growing." Aaon's biggest market growth, percentage-wise, has been in its giant rooftop heating and cooling units and water chillers, mainly made in Tulsa. Coil and residential units are made in Longview, Texas, while the company also manufactures some custom products in Canada. The expansion will utilize about 320,000 square feet opening up next door when Anchor Hocking Co., long known as Bartlett-Collins, shuts down this summer. The Sapulpa-based glass manufacturer has been leasing space at Aaon for warehousing. Aaon and Bartlett-Collins maintained their relationship since the late 1990s. Asbjornson will be sorry to see them go, but the company's closing necessitated some long-term thinking on his part. "A lot of people say you just move into that space," he said. "That's not the way I work." Aaon's braintrust -- made up of 12 members working on suggestions from throughout the company -- re-imagined nearly everything about the way the manufacturer does business. They found bigger, more efficient ways of operating the foaming section and sheet-metal works, and the company will tinker with its administrative headquarters on both sides of Yukon Avenue. Some things are still in the planning stages, such as how you feed all these extra employees and allow them to get quickly in and out of the complex during shift changes. Other projects, such as expanding roads that already carry hundreds of trailers daily, will need outside help from public entities. "We don't have answers for all of this," Asbjornson said. But Aaon knows the questions, for now. The company is confident of future growth in heating and cooling new industrial and commercial buildings, while also raising its competitive thermostat in the residential unit and parts markets. "We're in a better position now than we've ever been to continue our growth," Asbjornson said. "We'd better figure how to build on it." Aaon's Tulsa roots date back to 1928. Oilman John Zink started a heating and cooling company to diversify his holdings. The heating and cooling part of the John Zink Co. remained on Peoria Avenue until Asbjornson put together a buyout, renamed it Aaon -- better to get it listed first among stocks -- and moved the complex to Yukon Avenue in the late 1980s. Aaon is listed on the Nasdaq stock exchange.
Rod Walton 581-8457