When German parts maker Gedia awarded Armo Tool a project to develop a stamping die for a sealing support for a new BMW, the London, Ontario-based company showed why its business has tripled since 2009. Armo's engineers took less than two days to refine the design, shaving off production time and saving Gedia and BMW thousands of dollars.

Whether it's helping its automotive customers make a single component for an existing tool or machine or designing and building a complete system, it's this engineering skill that sets Armo apart, making it a supplier of choice for Tier 1s that include Magna, Dana and Martinrea.

"Our business strategy is deliberate," says Armo's president Ben Whitney. "We get into a client's plant, do a good job on the first project and advance to larger and larger projects until we attract the attention of the corporate office. From there, we win business in their plants all over the world."

A technician programs a CNC machine.
A technician programs a CNC machine.

Skilled workers with a 'can-do' attitude

A worker lines up an aerial cam for an automotive heat shield die.
A worker lines up an aerial cam for an automotive heat shield die.

Armo's hiring strategy is just as tactical. The company needs smart, hands-on tool and die makers and mechanical technicians who can solve problems by coming up with ingenious solutions, and it gets them by offering co-ops — work-study programs — to local high school students.

"The co-ops are typically four months long, which is enough time for us to evaluate a student's intelligence, work ethic and interest," says Whitney. "If we like what we see, we offer the student a four-year apprenticeship. He or she goes to college at night and works during the day."

It's been very successful for Armo. Employee turnover is less than 5 per cent, job satisfaction is high – and business is booming.

"What I'm selling is smart, skilled labour and we have a talent pool here that the southern U.S. and Mexico just doesn't have."

Easy market access via Ontario's auto corridor

While talent is the number one reason Armo likes being in Ontario, Armo's London location along the province's bustling auto corridor also offers the company quick access to both suppliers and customers in the US $20 trillion+ NAFTA trilateral trade bloc, where goods and services move freely.

That's important for Armo because while it has customers in Europe and Asia, it's the U.S. and Mexico where business is growing fastest. In fact, nearly 50 per cent of Armo's sales originate from there, and with lots of untapped opportunity in both countries, "We're interested in product diversity in the markets we're already in," says Whitney.

To attract more of that business, Armo recently added 10,000 square feet to its plant and invested in an 800 ton stamping press, a sure sign the company is ready to take on larger and more complex projects.

This new 800 ton stamping press lets Armo build, test and refine larger dies.
This new 800 ton stamping press lets Armo build, test and refine larger dies.

R&D tax incentives a boon for innovators

Because Armo is in the business of providing innovative solutions, the company is always conducting "order-based" R&D — and that makes Ontario the best place to be. The province offers one of the most generous R&D tax incentive programs anywhere. When combined with federal R&D programs, Ontario's R&D tax incentives reduce the after-tax cost of every $100 in R&D spending to between $37 and $61, depending on the size of the manufacturer.

That's a powerful advantage for a company like Armo which has built its reputation on being a supplier of innovative solutions.

Exceptional R&D tax credits, together with smart, skilled workers and a location that is a springboard to the largest free trade area — and richest market in the world — means Armo has no plans to move from London, Ontario.

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