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CASE STUDy: SEKELY INDUSTRIES

Sekely Industries, Inc. suffered a flood loss in August 2003. Immediately afterward, the company began removing the water and associated debris from the facility. Temporary repairs were performed by Sekely personnel to restore partial functionality to the manufacturer’s die-cutting equipment.

In January 2004 Continental Machinery received a call to inspect the company’s facility and contents. CMC’s assignment was to determine the cost of both facilities cleaning and permanent equipment repairs necessary to restore the building and business personal property to its pre-loss condition.

Sekely equipment included precision CNC (Computerized Numerical Control) machines and presses used to machine and shape die surfaces in the manufacture of automotive components (e.g. roofs, fenders, etc.). Very tight tolerances are required because such parts are painted and polished and must be perfectly shaped with no imperfections. Continental noted obvious signs of water intrusion on most of the equipment, including reddish brown particulate matter left behind on the floor after the flood water receded. Sekely’s press pit equipment also showed evidence of silt on machine surfaces. It was clear from our inspection that only minimal cleaning and repairs had been completed thus far.

Continental advised Sekely management of the possibility of critical, long-term damage to key equipment if more extensive disassembly, cleaning (e.g., silt and rust removal) and permanent repairs were not completed. As an example, CMC personnel disassembled one FPT machining center. Trapped floodwater was found in the machine’s base.

Continental Machinery was hired to disassemble, inspect, clean and make permanent repairs to Sekely’s equipment. Key components/replacement parts were ordered, received, and installed. As a final part of the restoration process, precision laser alignment and axis compensation measurements were performed on each machine to verify manufacturer recommended tolerances.

Continental provided further assistance with Sekely’s insurance claim in the form of photo documentation, forensic testing, restoration protocols, and equipment loss estimates. Later, in the appraisal process, CMC’s VP of Technical Operations, Jeff Williams, participated on Sekely’s behalf as a witness concerning the company’s flood-damaged equipment.

“Your first evaluation identified damages that neither the insurance company nor the equipment manufacturer had located. These damages were substantiated during disassembly of the machine – and as it turned out, were more extensive than was first thought. Because of your expertise in ways machine tools are affected by disasters, Sekely Industries saved as much as $2 million. The three machines Continental Machinery has restored would have been rendered totally useless in less than two years without your understanding of hidden damage.”

— Jeff Musleve,CFO, Sekely Industries