Kenosha, Wisconsin — People are keeping their vehicles longer these days, boosting the demand for car repairs. This trend benefits Snap-on, a company renowned for manufacturing high-end tools for auto mechanics for over a century. CEO Nick Pinchuk states, “Vehicle repair is one of the great businesses. Everybody’s got to get their vehicles repaired. The garages are humming.” By focusing on mechanics, Snap-on maintains steady growth and profitability, even as U.S. manufacturers face numerous challenges.
Recently, Austan Goolsbee, the president of the Chicago Federal Reserve Bank, visited Snap-on headquarters in Kenosha to explore the company’s approach. Goolsbee remarked, “It’s interesting to see. Customization is why they get paid a premium and how they still manufacture in America.” Snap-on produces 85,000 different tools, each designed to solve specific problems for repairing cars, airplanes, or even rocket ships.
Our philosophy is to be at the point of work, observing it, and figuring out what are the most sticky tasks.
Pinchuk explained that they use these observations to develop tools that simplify tasks for mechanics. Although Snap-on tools are pricey, they offer time-saving advantages that allow mechanics to perform more repairs.
Snap-on relies on a vast network of franchisees who visit neighborhood mechanics weekly in custom company vans. Observations made during these visits help identify potential new tools. Franchisees also provide finance options for purchasing tools. The company manufactures 80% of its tools domestically, which mitigates risks related to tariffs.
Snap-on’s 15 U.S. factories demonstrate significant flexibility, often modifying models several times daily to produce a wide range of tools. This flexibility contrasts with other companies that prioritize volume over variety. Pinchuk highlights the importance of specialization in Snap-on’s profitability.
The company consciously avoids marketing to DIY consumers. Pinchuk emphasizes, “If there’s a rule in Snap-on that’s irrevocable, it’s that Thou Shalt Not Sell to Do-It-Yourself people.” This strategy preserves the brand’s prestige. Mechanics often start using Snap-on tools during their training and maintain brand loyalty throughout their careers. Some even store their remains in personal Snap-on toolboxes as a testament to the brand’s significance.
For Goolsbee, who oversees a Fed district with the nation’s highest concentration of manufacturing, Snap-on is an example of how domestic manufacturers can flourish through specialization. “They scratch a very, very specific itch,” he noted. “It’s fun to see. This is where productivity growth comes from.”