Dowding Industries didn't need to witness the collapse of GM and Chrysler before deciding the time was right to exit the automotive sector. For more than a decade, the family-run manufacturer had witnessed the sinking of too many links within the auto supply chain.

As more and more small- and medium-sized manufacturers fell by the wayside, undermined by the narrow margins and inherent inefficiencies of the car business, Dowding saw potential in new areas, such as components for off-road vehicles, rail cars and wind turbines.

Determined to forge ahead into a green future, Dowding borrowed $12 million to build a 38,000-square-foot state-of-the-art facility and furnished it with advanced new machinery to produce the necessary parts to fit a wind turbine. But within months of the grand opening, the Eaton Rapids, Mich.,-based manufacturer was hit by something it could never have foreseen: the worst economic recession in 30 years.

A break press operator at Dowding Industries bends a part that will ultimately go into a wind turbine. Dowding Industries has invested heavily in repositioning itself for the wind industry.

It's a familiar storyline for many small- and medium-sized enterprises (SMEs) that have made the transition to the renewables market in recent years. As demand for wind blades plummeted two years ago, Dowding pieced together business by making parts for satellites, dump trucks and subway cars. Along the way, it had to cut its workforce by nearly half.

"We made that investment and it was an all-out push," says Jeff Metts, president of Dowding Industries. "It's a little scary sometimes, because we're still waiting for the market to get there. Looking back, I probably would have done things differently. But it's all going to work out in the long run."

The contraction of the automotive sector, combined with the promise of an emerging renewable energy market, has inspired a wave of SMEs to make bold, even risky, investments. Some, like Dowding Industries, leveraged their assets to transform themselves for a new industry. Others fell into green quite by accident. Over a dozen companies that spoke to IndustryWeek for this article cited the tantalizing opportunity of the renewable market, but also its inherent uncertainty -- and the impact it has had on their businesses.

Unlike large OEMs, such as GE, Siemens and Vestas, which have vast sums of resources to cultivate a market and wait (sometimes years) for it to flourish, SMEs have more limited means. Surprisingly, that often works to their advantage.

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