John (Chip) Keough, Applied Process

We are very pleased to have this interview with Chip Keough of Applied Process in the USA. Chip tells us about the history of Atmosphere Furnace Company, Applied Process, the advantages of the ADI process and about how it can be applied to gearing.

“About Applied Process Inc. My father, Bob Keough, started Atmosphere Furnace Company in 1962 with a couple of his brothers.  Business was slack, so with a couple other partners he started a commercial heat treat called Controlled Atmosphere Processing on Idaho Street in Detroit.  In 1962 there was a heat treat on every corner in Detroit, so he needed a niche….the niche he picked was Austempering of 1050 steel clips and clamps. Between CAPCO and AFC they developed the first continuous atmosphere-to-salt furnace which greatly reduced the cost of Austempering steel clips and clamps. Both companies leaned on each other and grew slowly and steadily. Along the way, Bob bought out his partners at both AFC and CAPCO and AFC relocated to Troy, Michigan

Bill joined the business in the late 1960’s and set about working on the systems.  He was an early integrator of computerized process and financial tracking systems.  He focused on job-based pricing and greatly improved the economic performance of the heat treat.  An oil fire destroyed CAPCO in 1968 and that was the last time the Keough family employed oil in any of our plants. Out of the ashes, in 1968 AFC developed the first mesh-belt atmosphere-to-salt furnace that allowed CAPCO to hand load complex, stamped and four-slide parts.  In 1972 AFC developed an atmosphere-to-salt pusher furnace that was a whole ‘nother learning experience, later to be deployed, for a time in the Wixom location (where AFC had relocated to in 1973).

In 1978 a small R&D effort was established in the back room at AFC to investigate increasing the quench severity of salt baths and experimenting with a small atmosphere-to-air-to-salt batch furnace.  Initial work was done on Austempered Ductile Iron.  The recession of the early 1980’s slowed the developmental work to a crawl.  Meanwhile, orders were cancelled at AFC leading Bob and the crew to modify an unwanted batch furnace into the first UBQA Batch Atmosphere to Salt furnace.

After graduating with engineering degrees at Michigan, I had gone off and made gray iron blocks and heads for GM at the Pontiac Foundry and then was Principal Process Engineer in the Directionally Solidified and Single Crystal Casting Group at TRW’s Turbine Components Division plant in Minerva, OH.  I had the metalcasting bug.

In 1983 Bob and Bill realized that there might be something to this Austempered Ductile Iron but they didn’t know anything about castings…..so my phone rang in Ohio.  They pitched me coming to work with them and I said no.  I was enjoying my role making superalloy turbine blades for jet engines.  But the courtship continued until I said yes and I joined the family business in 1984.

Meanwhile, Austemper Inc. was started in 1984 (across town in Fraser, Michigan), growing the same austempered clip and clamp market with mesh belt austemper furnaces.

We incorporated Applied Process Inc. with Bill as Chairman and me as President.  The journey of both the UBQA furnace and Austempered Ductile Iron began in earnest.  We moved AP out of the back room at AFC in Wixom and into the Livonia, Michigan location.  We capitalized heavily to grow the UBQA type work and, although we were making money month to month, Applied Process still had a negative net worth.  I was VP of CAPCO and would work mornings there in Detroit and afternoons at AP in Livonia.  Clips and clamps in the morning; ADI castings in the afternoon……for 8 years.

They say that running a family business is 50% business and 50% running, and that was the case at Atmosphere Group. My brother and I were, essentially, 50-50 partners.  When you are 50-50 partners you either agree on everything or do nothing.  It’s tough.  So, in 1993 I proposed to spin Applied Process out of Atmosphere Group.  So, I sold Bill my shares in Atmosphere Group and cast off with the dingy, Applied Process.

Within less than a year I had scouted out the Oshkosh location for our growing ADI business and AP Westshore Inc. was born. We established Australian and English technical licensees.  By 1999 we were bursting at the seams in Livonia and Oshkosh and set up AP Southridge in Kentucky.  We grew by about 15% per year for a decade and adding AP Suzhou in China.  Then came the Great Recession and we had to stick a fork in Kentucky, selling the property and storing the equipment.  The unexpectedly rapid business snap back in 2010 compelled us to repurpose the Kentucky equipment to the Livonia and Oshkosh plants, but not fast enough. By 2012 I sold AP Suzhou to my partners, Andy Chen and David Chang.  Austemper Suzhou became a technical licensee of AP.

In the interim AP had added HighTemp in Pune, India as a technical licensee to Grow the Pie for ADI in a whole other part of the world.

Meanwhile Bob and I had designed 10-ton UBQA line on McDonalds napkins and I built a second shop in Oshkosh to house the new Monster Parts Division of Applied Process.  The AFC-Holcroft built, Monster furnace came on line in 2012 and we got back on track with our customers while creating a whole new market for larger, bulkier, austempered steel and iron components.

AP’s Austempered Ductile Iron (ADI), Austempered Steel, Carbo-Austempered™ Steel, and Carbidic ADI continued to grow.  The team of professionals that we developed at AP won on every front.  Nearly 30 years to the day from the incorporation of Applied Process we sold the company to High Street Capital, a Chicago equity company.  One of the most enjoyable things was paying “thank you” bonuses to every employee.  We maintained a minority position in AP and were able to fund the Keough Family Foundation, our family charitable foundation.  I continue in my role as a Director of Applied Process and have a consulting role in its continuing growth.

AP’s new CEO, Harold Karp, and his crack team, many of whom have been with AP for decades, and an equal number of newer talent, continue to grow and improve the company.  AP is a family of world-class Austemper shops, but what they really do is help their customers replace one material/process combination with a better, faster, cheaper one.  AP does not sell on price, but on value.  I am very proud of AP and delight in its continued growth.  Stay tuned for more!

Looking back, I sure didn’t know if spinning AP off of Atmosphere Group was going to work, but I knew that being brothers and partners is tougher than being just partners.  Bill and I have enjoyed a great relationship, as brothers.  Now, with Bill having sold AFC Holcroft to Aichelin, we look back and agree that the spinoff of AP in 1993 was a great success, for AP, for Atmosphere Group and for our family.  We’re sure Bob is smiling about how everything turned out.

 About Austempered Ductile Iron

ADI is three times stronger than the best forged aluminum and has only 2.5 times the density.  Therefore, a properly engineered and manufactured ADI part can replace an aluminum part at equal or lesser mass.  Go figure, cast iron as a WEIGHT SAVINGS over aluminum.

The microstructure in ADI (acicular ferrite and carbon stabilized austenite) is thermally stable to absolute zero, but when a high normal force is applied it can locally transform to martensite in a nest of ferrite.  This “strain transformation” makes ADI respond very nicely to grinding or shot peening.  In conventional steel, shot peening my increase the allowable bending fatigue by, perhaps, 20%.  Shot peening ADI can result in a 70% increase in bending fatigue strength.

Further, the austenite and the graphite nodules (10% of the structure) can damp noise (hence Quiet Gear Company). The graphite also makes ductile iron less dense than steel….8%-10% less dense.  Therefore, if you make an ADI part to the exact shape and size of a steel part, it will weigh 8-10% less.

Ductile iron is relatively inexpensive and can be cast to near net shape, minimizing machining.

If one is having contact fatigue (pitting) failures in carburized and hardened gears, ADI is NOT going to improve their situation.  ADI can have better bending fatigue strength than carburized and hardened steel gears.  ADI is consistently more impact resistant than carburized and hardened steel.

ADI’s growth during austempering is very consistent and predictable and you will never EVER crack a part when austempering it.  You can machine a ductile iron gear to a given dimension, allowing for unwind during austempering, and it will grow into spec every time.

ADI makes low cost, lightweight, quiet gears.  Do I think there’s a future for ADI gears?  You betcha.”