Thermacore focuses its work on technology development, contract engineering and batch manufacturing.

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Not many companies experience the roller coaster ride of starting out as a small, independent firm, getting acquired by a large corporation and acting as a division before returning to the indie lifestyle.

However, Thermacore Inc. – for better or worse – has enjoyed the highs and lows of those business styles. Now that the company is back to operating on its own, President and CEO Jerome Toth realizes the secret to Thermacore’s success was missing during its days as a division of a multinational firm.

“In a large corporation, it is very easy to forget that we’re working for the customer because there is usually a chain of events or handoffs to get something done,” Toth says. “In a large organization, you institute standardization in trying to manage control. “In a small business, I’ve got a bunch of entrepreneurs that need to be empowered to tear down the walls in terms of organizational structure and in terms of inhibition. We make people feel empowered.”

Thermacore was started in 1970 building on work done by RCA in the late 1960s as RCA explored the commercialization of heat pipes. Eventually, RCA elected not to pursue the technology, so the engineering managers asked if they could spin off to go after the business. RCA agreed and Thermacore was created.

Originally started in the founder’s garage, the company did small contract engineering projects through its first 10 years. In 1983, the U.S. government launched the Small Business Innovative Research (SBIR) program.

Thermacore was very successful in the first year of the SBIR program, winning five of six proposals submitted. This allowed the company to expand, and Toth joined the company in 1983. Soon after, Thermacore moved into manufacturing, and the company earned its big break when Intel introduced the Pentium processor.

The computer giant had problems keeping the processors cool while in operation, but Thermacore designed and manufactured a heat pipe that would distribute the heat away from the processor. Intel liked the design and recommended Thermacore as one of three manufacturers to supply the product to Intel’s customers who were buying its chips.

“We went from an R&D company to a volume manufacturer of heat pipes, from making thousands in a month, to thousands a week for one CPU application,” Toth says. “The company grew exponentially through the late 1990s as we applied this to laptop computers, servers and anything that required advanced heat transfer technology.”

In 2001, Modine Manufacturing purchased Thermacore and its focus moved from technology to volume manufacturing. However, the boom didn’t last as long as Modine had expected, and Thermacore was for sale again in late 2006; Toth led a management buyout that closed in May 2008.

Today, Thermacore has a manufacturing plant and headquarters in Lancaster, Pa., and a plant in Ashington, United Kingdom. Its core competency has returned to technology development, contract engineering and batch manufacturing. The company’s markets include aerospace, avionics, communications, computers, energy conversion, government, universities, industrial, medical, military, power semi-conductor, test equipment, transportation and automotive and LED applications.

Thermacore’s operations include machining centers, sintering furnaces, vacuum brazing ovens, manual and robotic welding, customized assembly equipment and customized thermal test stations for 100 percent final thermal validation testing. “We’re taking technology and moving it from an R&D environment and applying it to customers’ problems,” Toth says. “We figure out how to use technology to enable a piece of equipment. It will work better, faster and outperform what someone else will do. We get every ounce of performance vs. a commodity solution. Customers value that capability.”

Cultural Shift Although Thermacore has returned to its core competencies, it is still grappling with the fundamental shift involved in breaking off from a huge corporation and moving from the high-volume commodity markets to the smaller but more challenging advanced solutions market. One issue is finding the right opportunities within its niche. “We are technology guys who are good at solving challenges,” Toth says. “For those looking for the best solution out there, talk to us and let us worry about designing and building it. If the challenge fits our capabilities, let’s see if there is something we can do.”

However, that is not so simple, Toth admits, because Thermacore’s capabilities are best suited for the project level. This means the company’s engineers must talk to its clients’ engineers to make sure they’re there to introduce Thermacore solutions before a customer’s design has been completed.

“Typically, [management] will get in the trenches with the engineers because it is important to get as much exposure as we can to issues customers are facing so we can see where we fit in to be a better partner,” Toth says. “The more people we have talking to customers and potential customers – the more feet we have on the street – the more successful we’re going to be.”

Thermacore is already known for its cooling solutions. Toth explains customers say the company’s products work better than anything from the competition. “This is a direct result of how we work with our customers, directly partnering at the front-end of the processes with our engineers,” Toth says. “We’re building the prototype and are in the first round of the process. We’re all part of a team, and it has worked very well for us.”

The Right Attitude Thermacore boasts low turnover rates, which include Toth’s 26-year run with the company as well as Engineering Vice President Nelson Gernert’s 26 years. The average employee tenure is between seven and 10 years, according to Toth. But when it comes to hiring new employees, Toth says he looks for individuals who are self-starters and like to work with a project through completion.

“What we look for are people that take a project and run with it to give the customers what they want,” Toth says. “They don’t need to be handed a solution. They know there are 10 different ways to do something, but they want the best way to do it.”

These traits will be increasingly important as Thermacore continues to expand its capabilities into new technologies. Toth says Thermacore is already a strong two-phase heat transfer engineering and manufacturing firm, but the company hopes to expand that scope.

“We’ve been successful tapping into new markets, so we’re looking for that differentiation,” he says. “Other technologies are just as exciting, so we’ve branched off in learning and developing capabilities, like on the liquid cooling side. We have an array of technologies that we’ve put around a high-tech company focused on thermal products that strengthens our story and makes us more valuable to our customers.”