Spirit Lake is U.S. Powertrain’s new HQ

Tuesday, September 12, 2017
U.S. Powertrain’s new corporate headquarters in Spirit Lake houses hundreds of thousands of drive train components. The company sells both new and remanufactured components.
Photos by Seth Boyes

For months now, the public has watched and wondered as a large industrial building was constructed across from the Dickinson County Expo Center in Spirit Lake. The building’s dark stone facade is now in place, the street number has been mounted and United States Powertrain is preparing for its Oct. 14 grand opening. The ribbon will be cut at 10:30 a.m. that Saturday. Company president Chris Kabele said plans to relocate the corporate headquarters from its Minnesota location — just a few miles across the state border from Spirit Lake— began in early 2016.

“We owned the property here in town for a few years and we decided we wanted to move to Spirit Lake to upgrade our image a little bit, give us a better presence to the community and also get involved in the community,” Kabele said.

The company has a unique approach to supplying automotive components.

U.S. Powertrain president Chris Kabele gestured toward racks full of components waiting to be remanufactured. The company specializes in restoring drive train components to better-than-factory conditions.

“We sell new and remanufactured (components),” Kabele said. “About half of our business is taking an old unit that’s bad and refurbishing it back to better-than-new condition.”

Spirit Lake City Administrator Gregg Owens said Kabele had approached the city as he explored the particulars of relocating.

“Having a family-oriented business with Spirit Lake roots make the decision to relocate from Minnesota to Iowa and expand at the same time is very exciting news for Spirit Lake,” Owens said.

He said the city discussed possible tax abatements for the new business location and how to extend public utilities to the property, but none of the issues needed to be brought before the Spirit Lake City Council for public consideration. Owens said tax abatements are available to any new industrial or commercial development.

“Now that the project is complete, U.S. Powertrain is expected to apply for tax abatement in the amount of 100 percent over a three-year period,” Owens said.

He said the value of such tax abatements varies, depending on the county’s property assessment after construction is completed.

Owens described the workforce Kabele has brought with him as a motivated and high-quality one. The city administrator said he would not be surprised if the business continued to expand in the near future. Kabele echoed Owens, saying he currently employs 22 workers and seems to be adding between five and eight employees each year.

Luke Kabele and Shane Loredo checked on a rear axle assembly being cleaned and refurbished. Several large pieces of machinery are key to U.S. Powertrain’s process.

The 60,000 square-foot building is divided into areas for warehouse distribution, office space and work areas, where the mechanical magic happens. Kabele and his employees remanufacture automotive components, restoring them to their former factory-fresh glory. Kabele said the cost advantage is a major appeal for the remanufactured components. He estimated a remanufactured component can cost anywhere from 35 to 65 percent less than a newly-made one.

Several large pieces of equipment stand near racks full of hundreds of cores — or components yet to be remanufactured — in the warehouse. Kabele highlighted a particular piece of equipment called the airless shot blaster. He compared the machine to a typical sandblaster, but said the unit uses small stainless steel shot to blast away rust and other buildup. The blaster is large enough to accommodate the rear end of some semi trucks, according to Kabele. He said there are only three units like his in the United States.

Kabele said the facility houses hundreds of thousands of components for cars and trucks as well as industrial and construction equipment. He said a majority of them are part of vehicle drive trains, such as transmissions, transfer cases, differential axles, assemblies and drive shafts. A majority of the company’s customers seek domestic brands, like Chevrolet, Ford and Dodge, but Kabele said his business can meet most any need, including foreign models.

George Walterman applied some elbow grease to a component being refurbished at U.S. Powertrain’s new location in Spirit Lake.

“We just recently got into looking at ATVs,” Kabele said. “Again we specialize in certain areas. We don’t sell all the accessories and stuff that go along with them, but we focus on things, particularly in the ATVs, that we can remanufacture. And that’s one of our specialties, which is transmissions and differentials.”

Kabele said the business is primarily an online or mail-order model, but the company still emphasizes old-fashioned customer contact and business morals.

No other competitor is taking this unique approach to automotive supply, according to Kabele. He said the market is growing fast and being the first to do so sets his business apart. The business already has a wide footprint in the marketplace.

“Our main business is obviously in the United States but, throughout North America, we have a pretty heavy presence and maybe 5 percent as far as overseas,” Kabele said.

Owens said he hopes the successful record U.S. Powertrain brings with it can add to the local economic successes.

“Spirit Lake has seen unprecedented growth the past couple of years and this considerable investment by U.S. Powertrain is another great example of the opportunities that are available in this community and in the Iowa Great Lakes,” Owens said. “The story this business has to offer is something we all should be studying.”

In fact, Kabele plans to share other aspects of his business savvy with the local community.

The remanufacturing company also offers marketing solutions. Kabele said more than 100 companies have taken advantage of U.S. Powertrain's marketing division.

“From our experience marketing, that’s one of the things we’ll probably offer locally here,” he said. “We’ve got a nationwide footprint. We figure we’re pretty good at it and we might be able to offer some of our expertise to some of the local businesses.”

U.S. Powertrain offers help designing and executing marketing strategies, from direct mailing campaigns to email blasts and online marketing tools. Kabele said more than 100 companies use U.S. Powertrain nationwide as a marketing company, and the business owns a publication called Recyclers Power Source that is mailed to automotive businesses throughout the country.

“Susan Travis, our marketing director, is an expert in extracting the best of a business and helping them sell their wares,” Kabele said.

Orders for components can be placed by calling 888-759-0814. The U.S. Powertrain marketing division can be reached by calling 712-336-5614.

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