Chapter 16: Out of the Ashes
Don’t go around saying the world owes you a living; the world owes you nothing; it was here first. - Mark Twain
A few of my colleagues and I were reminiscing the other day about how we overcame the fire that nearly destroyed our company.
Someone brought up the ancient legend of the Phoenix, a mythological bird that lived for 500 years, died in a fire, and then came back stronger, only to do it all over again 500 years later. I don’t like that story. First, I never want to go through a fire again. Second, people forget the Phoenix built its own funeral pyre, and that’s something I have no interest in—ever.
Another person talked about the Thunderbird, which is the Native American version of the Phoenix. In that legend, a powerful spirit takes the form of a bird that waters the earth, beats its wings to cause rolling thunder, and shoots lightning from its beak. I like the idea of a strong creature that helps people, and I loved the Thunderbird car, but I associate lightning with fire. Not for me.
Finally, another colleague offered a thought more in keeping with the spirit of our company: we were not content to sit on our ashes. It was not in our makeup and never would be.
After the fire, we started to get more complex and creative in our designs and engineering, and, consequently, we needed equipment that could help us produce what we had in mind. Let me try to provide a snapshot of some of the technology investments we made during this rebuilding period.
We bought state-of-the-art MIG (metal inert gas) welders to replace our older welders. They were big and more advanced in technology and were twice as expensive as the earlier models, but they greatly improved our productivity and cut costs.
We bought a brake press, which cut metal, and a brake shear, which bent the metal, for a total of $50,000.
We bought our first metal lathe, from John Mahan, which was a well-used piece of equipment that he had discarded from his manufacturing facility. Later, we purchased three Wasino metal lathes.
We bought our first turret punch press, from Warner & Swayze, for about $125,000. It increased our speed and flexibility, eliminated hard tooling, and enabled us to program the setup through a computer. This was revolutionary technology, and the machine was as big as a car, but we had to have it. Later, we bought two more turret punch presses, trade show demos from Wiedemann that cost about $175,000 each. They were even bigger than the prior ones from Warner & Swayze, about the size of pickup trucks.
Then, we bought two Mazak lasers at another $250,000 apiece. They had all the same labor and productivity improvements but also enabled us to cut shapes quickly. By the mid-’90s, we had added seven Trumpf lasers, each bought at a cost of about $500,000.
Painting was another area of technology investment for us. In the early days, back in my parents’ garage, I had started out with a cup gun, which is what auto body repair shops use. I would build the lifts on a fixture that took the place of an actual van, take them to Fritz’s Body Shop for painting, bring the lifts home and disassemble them, wrap the pieces in newspaper, and then ship them off. The buyer on the other end would do the assembly. Over the years, we went back and forth between shipping the lifts assembled and disassembled, and each time it affected how we painted the lifts and even how we built them. In the end, we improved with each change.
In the mid-1970s, we graduated to a $600 airless spray gun system from Graco, which I learned about after watching people from Allis Chalmers paint grain elevators in a leaky, drafty, and freezing-cold building that had been part of the old Studebaker buildings in South Bend, Indiana, before the auto manufacturer closed. I figured if they could make that paint system work in an environment like that, surely it would work for me. For paint, we used a “battleship gray” color of paint purchased from Elpaco Coatings Corporation in Elkhart, Indiana. After the fire, we added “platinum” and “toast” colors.
The airless spray gun system worked well for us until a few years after the fire, when we invested $500,000 in a new powder coating system. Powder coating was relatively new and expensive, and as a result, not many people were using it. However, because the process offered a more durable finish, production flexibility, and environmental friendliness, we wanted to determine whether it might be suitable for us.
To see it in action, we flew to Moundridge, Kansas, where Grasshopper Lawn Mowers had installed the system in 1986. When we arrived, we were picked up in an old pickup truck with flame decals, a gun rack in the window, an engine that roared, and dual exhaust pipes that constantly belched thick black smoke. It definitely provided an interesting contrast to the expensive system we were about to see—while at the same time illustrating how poorly prepared society was in providing accessibility for the disabled. I couldn’t get my Tri-Wheeler on the plane, so I had to use a manual wheelchair, and the three people accompanying me had to hoist me up into the bed of the truck by hand. Without a way to tie my chair down, Jeff Hermanson stuck his foot in between the spokes to keep me from rolling away. It’s a wonder he didn’t lose his foot, or at least some toes, in the process—or, worse yet, me out the back end of the pickup truck.
If the trip out to the factory was dicey, what we saw inside was anything but. The company had transitioned from wet paint to powder coating just one year earlier, so the experience was fresh and very useful to us. What’s more, throughout the year, they switched back and forth between painting lawn mowers and garden cultivators, so we could see how flexible and sophisticated the process was. Satisfied with what we had seen, we swallowed hard, placed our order with the salesman, and went back to Winamac. We still use the system today and continually improve it as our needs evolve.
Regarding information technology, prior to the fire, our general manager was a manual accounting person and did everything by hand. I was intrigued by the promise of computing and was eager to see what it could do, so I started using a TRS-80 microcomputer from Radio Shack and then an Apple II, both in the family room at my house, before graduating in 1981 to a Qantel QMRP.
People laugh when I tell them about my TRS-80, but that computer, the most expensive product Radio Shack had ever sold up to that point, was quite a success. Designed to compete against Apple and Commodore, the TRS-80 sold for $599 and included the computer, monitor, keyboard, and cassette storage. As the story goes, after the press conference announcing the computer’s introduction, critics formed a sharp difference of opinion regarding the machine's prospects. The inventors of the TRS-80 said at least 50,000 would be sold; management said the number would be closer to 1,000. Management was quickly proven wrong: in the next five months, they sold 65,000, and by 1981, 250,000. As someone who is comfortable being on the cutting edge of new technology, I loved that computer. Looking back, I especially love the fact that the inventors were proven right and the computer far exceeded management’s estimates. Score one for the underdogs.
After the TRS-80, I moved to the Apple II. Also introduced in 1977, the Apple II was even more successful than the TRS-80, selling approximately 7 million units by 1993, the year it ceased production. Because it was designed for home use, the Apple II was often the first computer anyone had ever seen up close. At $1,298, it was more expensive than its competitors but still affordable for many middle-class families. With built-in BASIC programming, a color monitor, expansion slots, a case, and a keyboard, the Apple II was more user-friendly than the other computers on the market. What made Apple II sales go through the roof was its new spreadsheet program, VisiCalc, which added columns and rows of data, much like Microsoft’s Excel does today. It became a serious business machine as well as a home computer.
Perhaps the best part about my Apple II was that I got it for free. By selling so many Dodge vans, Chrysler gave me coupons and a catalog and said I could take my pick of golf clubs, a boat, a barbeque grill, and other items. Because I didn’t have much use for those things, I got the computer and put it through its paces trying to extract information that would make my company perform more efficiently.
In 1981, after about three years, we outgrew the Apple II and bought a Qantel QMRP, which was a powerful, fully integrated software system popular with manufacturers at the time. While the $40,000 purchase price was a big investment, we got our money's worth before we switched to a client/server configuration in 1999.
Qantel was a relatively young and scrappy company—much like we were—started by a group of former engineers from Singer’s computer division in Hayward, California. IBM was the 800-pound gorilla in the market, but when Qantel’s first product was launched in 1969, Computerworld hailed it as “a computer practically small enough to slip into a suitcase, powerful enough to handle many business applications, and less expensive than a sports car.” The company’s upstart status, and the fact that its reliable, continually updated technology was geared more toward manufacturers, made it a good fit for our company, until we outgrew it as well.
I think it’s important to note that all of these infrastructure investments, from production machinery and painting systems to information technology, were cutting-edge at the time, but they were also complementary. This meant we continued to utilize everything we invested in to meet our demand—in fact, we still do. Nothing is ever really obsolete; we simply use and improve what we have so we can constantly increase our capability and our capacity. As a result, our equipment has long since paid for itself in cost savings and quality.
This brings up another issue, one that all CEOs confront as they plan their operations and one I faced when I considered how to rebuild after the fire. Simply put, in order to have the capabilities needed to properly run your business, how do you decide whether you should build capability yourself, purchase it through investments and acquisitions, or partner with another company that perhaps has part of what you need? The best way I can answer that is to say it’s a strategic question without one right answer. The decision is dependent on a combination of factors, and it changes as each situation evolves. Having said that, I will add this: our overriding philosophy has always been that if we need or want something, we first look to see whether we can make it ourselves.
A case in point is our hydraulic cylinders, which we manufacture at our plant in Winamac. We build them ourselves for a number of reasons. First and foremost, we know that because of their unique circumstances, our disabled customers need to feel—beyond a shadow of a doubt—they can trust our products to be reliable, long-lasting, and completely safe. Every company should strive for those attributes in their products, but with us it’s especially so. If a lift or a ramp on one of our vehicles doesn’t work, wears out, or is unstable, our customers may have a harder time finding help. If our products are unreliable, our customers are stuck or, worse, in danger. Because I am in a chair and rely on lifts and ramps myself, I happen to have firsthand knowledge of why this is so important. That’s why our cylinders, as part of the “special sauce” of our company, are important enough for us to build ourselves.
Second, building our own cylinders makes economic sense. Because we’re out in the middle of a cornfield, we don’t have job shops nearby that we can easily call on to do manufacturing for us. Because we don’t buy parts in large enough quantities to achieve economies of scale from some distant manufacturer, purchasing our cylinders elsewhere is cost-prohibitive. By buying the raw materials and making the parts ourselves, we can reduce our manufacturing and procurement costs and pass the value onto our customers.
Finally, making our own cylinders gives us a competitive advantage. We’ve seen too many companies get in trouble because they use parts that are cheaply made. They may be good enough for snowplows or farm machinery, but they do not provide the quality we demand for our products to help customers feel safe and secure. In contrast, we strive to produce the same kind of ultraprecision equipment used in airplanes, which have no room for error. We are unique in this regard because not only were we the first lift manufacturer to make our own hydraulic cylinders, starting in 1983, but also, to this day, we’re the only one.1
Did we invest in all of this sophisticated production equipment, painting systems, and information technology and then discover that these things enabled us to manufacture ultra-precision products? Or were we already making great products but needed to have an infrastructure that could keep pace with our vision? Of course, the answers are yes to both. Our infrastructure was and is a constantly evolving environment that balances capability with demand. Out of that environment grows new infrastructure needs and also new advances in engineering and design. They feed each other, which was exactly the case when we switched from a one-at-a-time manufacturing process to an assembly line in the mid-1980s.
As we rebuilt and demand continued to soar, we constantly had to figure out how to satisfy that demand within the space that we occupied. Because the business next door to us was only six feet away from our back door, we were running out of floor space. As a result, we had to look for ways to reduce the space it took to do things while still keeping up with the volume that was needed.
We hired some consultants to help us think through our situation, but at the end of the process, they had to admit that our experience had given us a unique insight into how we should do things. By not trying to force some costly and complicated system on us, they gave us some priceless advice: we should always remember that we know more about our customers’ mobility needs than anyone else, and because of that knowledge, we should have faith that our instincts would lead us to make the right choices.
Were those consultants shirking their duties because they could not provide us with an adequate solution? Quite the opposite—they were acknowledging something we needed to believe ourselves: we had become a grown-up company poised for future even more remarkable than its past, and that was saying something.
I’d like to make one final note about resiliency, and it’s of a personal nature. Sometimes in life, even though we work hard to make a success of something, we come up short. Such was the case with my marriage to my high school sweetheart.
After many years of struggling, I made the hardest decision of my life, to end my marriage to Linda. Some years later, she passed away from a massive heart attack and left me as the sole parent of our five children.
After my divorce, I was very apprehensive about becoming involved in another relationship, but then I met Melody. She lived in a nearby town and had been widowed for several years.
The story of how we got together is interesting. Melody was an interior decorator and was trying to find a model airplane propeller for a project she was hired to complete. A relative of hers suggested she call me to see whether I could help her out, because I’ve always been a model plane enthusiast.
As we got to know each other, we discovered we had a lot in common. She came with me to a Colts football game, and not only did the Colts win that day but so did I. A few years later, we were married.
Like the Indianapolis Colts, who later won the Super Bowl in 2006, I was making a comeback both at work and at home.
Continue Reading Rise Above:
Rise Above: Prologue
Chapter 1: Dirt Farmer's Son
Chapter 2: As Heroes Go
Chapter 3: Barriers and Bridges
Chapter 4: The World as a Classroom
Chapter 5: Moon Shots
Chapter 6: Adventures in Machine Making
Chapter 7: Changing Times
Chapter 8: Of Mentors and Men
Chapter 9: Neither Rain Nor Snow
Chapter 10: Sparks Fly
Chapter 11: Crazy Good Times
Chapter 12: Moment of Truth
Chapter 13: Ready, Willing, and Able
Chapter 14: Pioneer Spirit
Chapter 15: The Fire
Chapter 16: Out of the Ashes
Chapter 17: Back to School
Chapter 18: It's a Small World
Chapter 19: Let's Make a Dealer
Chapter 20: Inventing the Future
Rise Above: Epilogue