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A Look Back at the History of Team 1 Plastics

As part of the year-long celebration of its 30th anniversary, Team 1 Plastics, a plastic injection molding company for the transportation industry, is highlighting different milestones in its history through a series of articles. This month’s article features the long-standing partnership of Team 1 Plastics, the City of Albion, Michigan, and the Albion Economic Development Corporation.

In 1987, Craig Carrel, Gary Grigowski, and Jim Capo had a great idea for a company. Capo had discovered that there was a shortage of quality plastic parts suppliers in the U.S. that could meet the expectations of the Japanese automotive suppliers setting up new manufacturing facilities in the Midwest — and in particular — in Battle Creek, Michigan.

The three plastics engineers knew what they wanted to manufacturer and sell. Now, they just needed money and a location for the business. They began to hunt for both.

They decided that the location of the business should be within an hour drive from Battle Creek. They visited several available buildings, but as Carrel said, “When we were looking for vacant buildings, we noticed that most were large (in excess of 20,000 square feet). We would be paying for a lot of vacant space.”

As they began to raise capital, it quickly became evident that banks were not lending money to unproven, start-up companies. Carrel explained, “As we developed our business plan, we started to solicit funds from banks. We quickly realized that banks do not lend money to start-ups with only a business plan and no financial history. We had begun raising our start-up cash from our own savings and soliciting family and friends, and we had obtained financing for our two Toshiba molding machines from their leasing company, but we still needed some working capital.”

The solution to both problems presented itself one day when Grigowksi and Capo stumbled on to the Albion Industrial Park. They spotted the Industrial Park sign in their rear view mirror as they were driving out of the city limits. Turning the car around, they soon discovered that the City’s Economic Development Corporation (EDC) had a Business Incubator with space to rent and loan funds available for new business start-ups.

Carrel said that the Incubator had “the perfect amount of space for our start-up – 5,000 square feet. This was key since we had only two machines and no work when we started leasing space in September 1987. It wasn’t too big, but had ample space that we could use for expansion in the future. In addition, the Incubator leased us a single office, and we were able to rent the conference room, copier, fax machine, and fork lift when we used them.”

And, the Albion EDC had a Revolving Loan Fund (RLF). Carrel said, “Once we submitted our business plan to the EDC, they approved it quickly and the final financial piece of $70,000 for our start-up funding was in place.” The terms of the loan were very favorable to Team 1. Carrel explained, “The payment structure was based upon our cash flow needs and back loaded. It had a very low interest rate (at that time) of 3.0%, and the loan was subordinate to our other loans as we expanded.”

Team 1 Plastics sputtered and hobbled along for many months as customer relationships were being formed and cemented. With just $2000 left in the bank, Team 1 Plastics finally made its first profit, and soon afterward, began to experience accelerated growth.

As business grew, the space in the Business Incubator began to get crowded as more presses and Team Members were added. It wasn’t long before the trio realized that it was time for the company to have its own space. The City of Albion and the EDC helped the company once again.

Team 1 Plastics purchased a lot in the Albion Industrial Park, down the road from the Incubator, for just $1.00 per acre. Carrel said that the City chose to “sell the land at minimal cost knowing that the taxes assessed on the company’s property and machinery would benefit the City in the long run. After 30 years of paying these taxes,” he said, “it has worked out very well for both parties.” And the City of Albion has also supported Team 1 financially with tax incentives. “We have received 12-year tax abatements on all of our major expansions and equipment purchases.”

The Albion EDC’s revolving loan fund has continued to support Team 1 Plastics throughout its 30-year history, during times of growth and expansions as well as recessions. “It has helped us bridge our financing needs during these times,” said Carrel, “and helped us get additional traditional financing from banks because of the loans’ subordination.”

Not only supporting Team 1 financially, the EDC has helped the company with other business issues. “They have been a great resource to help us with city, state, and federal issues and have helped us navigate them successfully. It has truly been a stellar partnership between Team 1, Albion EDC and the city of Albion,” Carrel said. “They had the Business Incubator and revolving loan fund – which were critical to our start-up success – and have supported all of our requests since. In exchange, Team 1 Plastics has tried to be a ‘Positive Community Member,’ employing 70 team members and giving back to make Albion a better place to live and work.”