The following was overheard at Haas Automation Inc., Oxnard, Calif., recently: "Make machine tools in China? . . . And miss the bargain rates on all the empty cargo containers returning to China?"

Behind that quip is a lot more than the company's policy of making everything at its Oxnard, Calif., headquarters. While manufacturing is local, customers are global. Its business model is built on management's intimate involvement with product, process and technology -- enough to establish and grow a global leadership position via customer value and even enough to be emulated by (gasp) some Japanese manufacturers! (The company refers to its relentless pursuit of excellence as "The Haas Way.") Gene Haas, president and owner, readily admits that he didn't set out to become a machine tool manufacturer -- much less a global leader.

Gene Haas

It's almost as if he were inspired by a message from an old Warner & Swasey corporate ad campaign. In the decades before its demise in 1992, that Cleveland-based machine tool maker's ads emphasized fundamental values. In 1944 an ad promoted America over competing nations and warned of the dangers inherent from a lack of individual initiative. Titled "Let (George) Washington Do It," it reads, in part: "If one thing more than any other has made America great, has given us the highest standard of living in the world, it is the grand American custom of 'paddling your own canoe.' It is that manly habit that has led millions of Americans to launch their own businesses, creating millions of better jobs for others."

In the early 1980s, Gene Haas was already "paddling his own canoe" by operating a machine shop called Pro-Turn Engineering in Sun Valley, Calif. It was basically him and a couple of machine operators who ran production parts for the aerospace industry. They specialized in machining parts that many other shops turned away because of their complexity. Satisfying those customers rapidly led to new ones via the following series of defining events:

• The founding of Haas Automation Inc. in 1983.
• The debut of the first Haas CNC machining center at IMTS in 1988.
• The building, sales and shipment of 10,000 machine tools in one year (2005), a record increase of more than 22% over 2004 and more than 200% over 2003.
• The milestone shipment of the company's 50,000th machine tool in 2005. The CNC machine, a SL-20APL turning center with an automatic parts loader was sold to Western Saw, an Oxnard, Calif., neighbor that now has five Haas machines.

How did Pro-Turn Engineering, a job shop, become the global leader, by unit volume, of CNC machine tools?

In the 1980s one of the jobs Gene Haas and his machine operators were running required indexing a part with a manual 5C collet head, which was time consuming and labor intensive. Gene thought there had to be a better way to run the job, so he began developing the first fully programmable automatic 5C collet indexer. He became his own customer.

Haas growth and plant expansion are driven by innovation -- as with the unique Haas Office Mill. It's small enough to fit through an office door and light enough for most freight elevators. Customer Matt McCormick is shown setting up a unit at the University of Southern California's Doherty Retina Institute.

The mechanical aspects of the Haas 5C were pretty straightforward, incorporating a stepper motor as the driving mechanism and a manual 5C head modified to accommodate a worm and gear housing. But deciding how to drive the motor and control motion was another story.

At times, Gene entertained the idea of using someone else's control, but costs were too high. So he called his old school buddy Kurt Zierhut, who happened to be an electrical engineer, and together they came up with the first version of what is still called "the black box" -- the Haas rotary control. (Zierhut later designed the Haas CNC controls and currently serves as director of electrical engineering.)

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