Joe Helmsing and his family guide Craftsmen with employees-come-first philosophy CONSIDERING that Joe Helmsing is president of a company that does $36 million in yearly sales, has 190 employees and recently moved into a state-of-the-art, 131,000-sq-ft facility, he is remarkably unpretentious.
He and his wife, Penny, have lived in the same house for 29 years. He flies coach class. He has an appetite for used goods. He drives a three-year-old car. His luxurious boat? A 1982 16' inboard/outboard that he bought in 1993.
And when he pulls his car into the parking lot at Craftsmen Industries Inc in St Charles, Missouri, he is no different than any other employee. There is no space with his name on it. He might as well be "Melissa Smith, accounting."
Beyond his business acumen, his association with Utility Trailer, and his propensity to pour all his financial assets into the company, there is a less tangible reason why Craftsmen is a finalist for Trailer Dealer of the Year: Helmsing truly cares about his employees.
He consciously avoids doing anything that would create the impression that he puts himself above the rank-and-file fray.
"I could have the new Mercedes," he says. "I could have the new everything. But I don't think that's necessary. Probably half of the employees wouldn't begrudge me a new car. But some of them would be upset that I was spending money on a new car at their expense. Most of them know I put money into the building and into tools, and I don't put money into cars. It does make a difference if you're preaching being cost effective and logical, and you don't do it yourself."
Says Penny, "Your employees are your customers. They're your partners. You have no business without them. You want a satisfied employee. I think (Southwest Airlines co-founder and CEO) Herb Kelleher has it right: `Satisfied employees make satisfied customers.' "
Satisfied Employees are Key Joe has read the book, "Nuts! Southwest Airlines' Crazy Recipe for Business and Personal Success." He knows there is a reason why Southwest Airlines has been so successful, capturing the Department of Transportation's "triple crown" as the airline carrier with the most on-time flights, the best baggage handling, and the highest customer satisfaction, and also being named by Fortune magazine as the "No 1 Company to Work For in America."
He knows it has satisfied employees. And he knows that comes from Kelleher, who plays practical jokes on his employees and sings rap music to cheer them up, who once settled a slogan-related legal dispute by arm-wrestling the company's president, and who has been known to skip through an airport in full Elvis regalia.
"He's down-to-earth," Joe says. "He doesn't shy away from putting himself in there. Every Thanksgiving, he's out there, loading luggage. You have to make sure employees know you care. Unless you can talk to every customer yourself, you'd better have happy, satisfied employees, because they're going to be talking to the customers. I admire his style very much."
Penny is one of Craftsmen's satisfied employees. She sells truck bodies and truck equipment. When she mentioned to Joe 13 years ago that she wanted to join the company after having taught nursing, he thought she'd tire of it in three months, maybe a year or two. But she now accounts for "six figures' worth of repair work, six figures' worth of graphics, and a million dollars' worth of truck bodies," according to her husband.
"Someone said a good nurse makes a good salesperson because a nurse's job is to be empathetic to patients," he says. "And if you can't have a nurse who asks questions and listens to what a customer needs, then you should get a school teacher. Well, Penny taught nursing and school and has a masters in teaching."
Penny has paid the price for being the wife of a company president who really cares about his business. He's the first to admit that he hasn't spent enough money on her. Around Christmas five years ago, he bought a new press brake for Craftsmen. She walked in one day and saw a sign attached to the press brake: MERRY CHRISTMAS, PENNY. Since then, it's been a running joke. Buy a printer, put on the sign. Buy a building, put on the sign.
"She takes it pretty well," he says. Then he adds, no pun intended, "I've invested every penny I've made. Just about the time you start getting to where you see yourself being able to get out of debt, you re-invest one more time."
Net Worth Heavily Invested The 53-year-old Helmsing says that almost all of his net worth is tied up in the company: the new 131,000-sq-ft building; a 76,000-sq-ft building that previously served as headquarters and now is dedicated to service; and inventory.
"I continue to invest in Craftsmen because I can see a fair return and I can watch it every day," he says. "We have little debt other than the facility. Some people will go out and spend $50,000 on a car. We look to invest in press brakes, printing equipment, or anything that will have a payback to the company. We have been reinvesting everything for 19 years, and it does not look like it will be changing. If we had not left all the money in the company in the `80s, the bank may have called our note in some of our down years."
The new facility puts Craftsmen at the cutting edge of the business. On a tour through the service area, he comments: "Bet you haven't seen too many shops this neat." And he is not boasting. He is simply speaking the truth.
Helmsing considered buying an existing facility, but he couldn't find one that could accommodate 53' trailers or that fit his formula of "seven acres of parking for every acre of building."
He bought the 23-acre spread south of Interstate 370 before any of the surrounding land had been developed. The price was right, given that it wasn't as attractive for other purposes because electrical lines go through the property and a pipeline is underneath the parking lot.
The result is a building with a two-story facade for office space and a service area with over 70 bays that can accommodate vehicles 24' high. There are five paint booths (two at 65', one each at 50', 45', and 35'), two 1/4"x10' shears, three press brakes, two iron workers, two large four-color printers (52" wide & 16' wide), and three 48" cutters for graphics and decals.
Craftmen's philosophy for years has been to diversify its operations. So it does not simply service equipment along with selling trailers and parts. Graphics and painting are key elements of the package. Craftsmen entered the graphics business 15 years ago and was among the first to use computerized formats. The graphics department has grown to include 10 full-time installers.
Its 16' printing press is capable of printing the one-piece banners and graphics that are put on vinyl and stretched over the sides of trailers. Its four-color printer, 52" wide, was used for an exhibit for a History Channel trailer. The image is printed on paper and then transferred to the appropriate material - a vinyl banner, vinyl stick-on decal, floor graphics, or the one-way, see-through material used on buses. Craftsmen still has the 13" machine it purchased 15 years ago, but now that machine is the slowest one they have - 25% as fast as the newer machines.
In the installation area of the main manufacturing building, Craftsmen can work on five 53' trailers end to end in the 300' wide building. As Helmsing walks through, he shows a trailer with a damaged back end. His technicians are trying to digitally match the pattern on paper with the original decals they produced years ago.
In terms of pure revenue, the service department dwarfs graphics and painting. But Helmsing's commitment to staying on the cutting edge clearly has spearheaded the company's growth from $8.4 million in sales and 70 employees in 1994 to where it is today. How important is the diversification? Although the outlook for new trailer sales is not bullish, Craftsmen's revenue for the first four months of this year was 53% ahead of the same period in 1999.
"Because we could do the shop work, we got the business," he says. "When people come to you, you've got a tight deadline and if you job everything out, somebody lets you down and you're in trouble.
"Craftsmen can't compete with an assembly line of Morgan, Trailmobile or Utility, or any manufacturer.
So we ask, `Where can we fit into the value chain? Where can we add something that makes us a value to the end user?' We also want to be considered the one-stop shop. We've had customers send units more than 300 miles because they felt our painting value was worth it."
Says Penny, "We're all selling the same thing, so you have to differentiate yourself in some way. The fact that we're a Utility dealer means the quality is already there. It's a quality, recognized piece of equipment in our industry. People will buy a Utility trailer because it's Utility. But you have to add value to the customer."
Specialty Trailer for Coca-Cola If you've seen Coca-Cola's Christmas commercials, then you have seen the work of Craftsmen. At least one of its trailers has appeared in several commercials over the past three years. Each trailer has 9,000 lights on each side, powered by a 30-kw generator.
As Helmsing conducts a plant tour, he points out another ambitious project: a display trailer with double popouts - a side wall raises hydraulically, then folds out as a wall pushes out. He calls it "Project 626" - even his employees don't know for whom it's designed.
On top of that work, Craftsmen also employs three full-time employees in the wood department, which features a CNC router. "If somebody tells me they need 20 cabinets in four weeks, I'll go outside," Helmsing says, "but I need to have the ability to make one or two specials on one- or two-day lead times to meet our customer requirements."
Joe Helmsing takes the value-added philosophy seriously. His service department is open until midnight Monday through Thursday, which he says makes Craftsmen unique in the St Louis area.
He says it's a combination of trying to keep his customers and employees happy. For his customers, it means that if they drop a truck off late in the afternoon or they need a part that Craftsmen can't immediately find, they can come back the next morning and drive off. For the employees, it means their shift ends at 7 pm Friday, so they have both weekend nights off. They work four long days and a short one on Friday, which gives them time to handle personal business.
"Although they're working night shift, a lot of them think, `That's OK, I'm off early Friday," Helmsing says. "It's a perk they love. They don't want to give that up."
Employees Reap the Benefits The list of perks is long and impressive:
- If the company turns a profit, all employees - in the shop, office, and management - receive a monthly bonus that is paid on a sliding scale based on profits. Midway through this year, Craftsmen was paying out over $70,000 a month.
- The 10-year-old 401(k) plan features a company contribution of 6% of an employee's gross earnings. Helmsing says 85% of employees put additional money into the plan.
- Incentives for management and shop workers have averaged 15% over the past two years.
- When employees work a shift of 10 hours or more, the company buys dinner. Breakfast is furnished each Saturday.
- Each employee receives a Christmas gift, and mechanics get a $250 tool bonus.
"We have a very low turnover of employees," Helmsing says.
TEC Meetings a Gold Mine Helmsing stokes his appetite for good management at monthly meetings of The Executive Committee (TEC), a 6,000-member international organization. Each meeting includes 14 owners from unrelated industries in the St Louis area and features a professional speaker who deals with everything from accounts receivable to sales to retirement plans to motivation. The meetings challenge the owners with theory, but they give an even heavier dose of hands-on practicality. In nine years, Helmsing has missed just one meeting.
"In watching these companies over the years, they all have up years and they all have a down year or two," Helmsing says. "You just have to manage yourself intelligently through the up years - don't get too cocky - because the down cycle comes to everybody. You have to be prepared to survive a down cycle until you figure out a way to get back up.
"Any business is not that dramatically different in two basic principles: be good to your employees and be a good businessperson. That has really helped me to understand and let go. I used to have my finger on everything. I used to want to know everything. As big as we've gotten, I don't know everything. Now I find my day is more of, `What is the problem?' And I work with the people on the problems of the particular week, as opposed to getting involved in every sale."
As the company has grown, Helmsing has realized that maintaining a family atmosphere is more difficult, even though his wife and two sons - Mark, 26, parts and service, and Lou, 28, sales manager of trailer sales - are prominent parts of it. But Helmsing has consciously tried to avoid burdening the employees with bureaucratic anchors. Craftsmen doesn't even have an employee manual, though some are pushing for it. His door is open. He wants them to know they have a voice in the company's direction.
And it's working.
"We don't have an assembly line," he says. "We have to have productive people. We can't afford to have someone going around inspecting every weld."
Building a Boon to Hiring He says that the new building - in addition to boosting the parts sales more than he imagined because of a larger and more visually striking retail display - has made it easier to hire quality employees. It was much tougher when Craftsmen was located in a "tough neighborhood" in downtown St Louis. So now, prospective employees come to a modern facility, observe the environment, learn that Craftsmen was named St Charles Employer of the Year for 1999, and they come away thinking it's the place for them.
"The pool of qualified employees has dried up," Penny says, "so you have to figure out a way to train people and you have to be willing to make adjustments. Your greatest resource is the employee. Without them, you have nothing."
The road Helmsing has taken to this point has not necessarily been conventional.
He received his BA from St Louis University in psychology. That has allowed him to approach the business from the angle of human behavior, and he later earned his MBA with an accounting major.
Helmsing started his career with Southwest Truck Body, working as the head of purchasing for its military division. Deregulation and the trucking recession in 1981 forced the company to close its repair division, but Helmsing saw potential in a pool of 10 skilled employees. So he took those 10 and started his own company, choosing the name Craftsmen because he didn't want it to be construed as "trailers only."
With a labor force of just 10, he bought the 36,000-sq-ft Trailmobile facility with an SBA loan and became Trailmobile's dealer in St Louis, doing repairs and manufacturing specialty trailers for utility companies in the area.
During the `80s, the company had good and bad years. By the late `80s, graphics were adding profits. In the early `90s, sales and profits increased steadily, and the 1994 move to a larger facility in the suburbs created a new energy.
Pleased with Utility Affiliation Since then, the other jolt of energy has come from Craftsmen's affiliation with Utility in 1997.
"Utility has created an enthusiasm in my sons and in the entire company for selling new trailers," Helmsing says. "They have made it fun to sell again in this competitive industry and shown us that we can make a good return by selling new equipment.
"We feel that Utility has demonstrated the highest ethics of all the trailer manufacturers in our industry. They are committed to partner with their dealer network. Their business practices support the network."
Helmsing feels that Utility nominated his company for Trailer Dealer of the Year because of their expansion and the dramatically rising sales volume. He feels it would be an honor to be recognized by the industry as the top trailer dealer.
"There would probably be a few other opportunities come our way," Helmsing says. "Other manufacturers would realize that there could be something they could make that we could add value to and resell it, because we're always looking for opportunities to do something different."
But even if the award goes to one of the other three finalists, life at Craftsmen won't change. The employees come first.