5-year plan: Evolving
Husky was going strong. Still, Schad worried that Husky's role as the preform press kingpin was under threat, as other machinery makers began crowding in. That set up 1997 - a major year of strategic change.
Schad kicked off a five-year restructuring plan that featured a dramatic goal: transform Husky from a specialist in thin-wall packaging and PET preforms into a much broader supplier of general-purpose machines. Expanding its line also would give Husky better economies of scale but at a significant, short-term cost - $500 million over the next five years.
Central to the new Husky is the Hylectric, a hybrid injection press that combines hydraulic and electric power. Husky also signaled its intent to remain the preform leader, rolling out its high-output Index press with a revolving block of molds.
Husky made another big change in 1997, announcing it would build an addition in Bolton to bring the manufacturing of machine parts and subassemblies in-house.
Shortly after NPE 1997, Schad lobbed another bombshell: He would take Husky public. On Nov. 9, 1998, Husky stock began trading on the Toronto and Montreal stock exchanges.
Schad has called the initial public offering part of his succession plan. He has no children currently active in the business; a son, Mark, did work at Husky for awhile but now runs his own machine shop. ``I had no intention to build a family company,'' the elder Schad said.
The IPO also generated what Schad called ``in-between financing'' for the five-year diversification.
Going public exposed the company to some criticism. At first, stock analysts showered praise on Husky. Because of the PET connection, they made favorable comparisons to Groupe Sidel, the French blow molding machinery maker that was a darling of the Paris Stock Exchange. Prospects for beer in PET got analysts' heads spinning.
The honeymoon didn't last long. Husky's net profit margin was 6 percent in the IPO year of 1998. It fell to 2.1 percent in 1999 and 1.3 percent in 2000. A big part of the reason was Schad's continued insistence on spending huge sums on capital expansion - well above $100 million a year in 1998 and 1999. Analysts criticized projects of which Schad was proud, such as the firm's $28 million Detroit Technical Center. A giant, 8,800-ton injection press is great, they said. But where was the payback?
Schad stubbornly insisted that Husky would keep making long-term investments. Even when the plastics machinery market collapsed in mid-2000, Husky kept on spending.
The company lost money in 2001 and 2002, before rebounding to post a profit of $47.3 million in fiscal 2003, which ended last July 31. Officials credited the five-year plan.
Schad the craftsman, the builder, still butts heads with Toronto's Bay Street. ``Analysts have a very short-term focus. This is why you see a lot of these companies, with short-term focus, they last so long and then they go down,'' he said.
Analysts also touched a nerve by questioning why his wife, Elizabeth Schad, serves on Husky's board of directors. Schad still bristles at the subject, pointing out she has solid financial credentials as former vice president of mergers and acquisitions with Chase Manhattan Bank. ``And she's important. If anything happens to me, she understands everything very well. And she's very bright. So it's in the interest of Husky to have her on the board,'' he said.
Schad's environmental activism also has opened him up to controversy, especially his lobbying to end Ontario's spring bear hunt. He also threatened to quit the Canadian Manufacturers & Exporters Association unless it changed its opposition to the Kyoto Protocol on global warming.
And what is a public company doing, giving 5 percent of its pretax profit to charity? Husky has continued to do that even after its IPO. Part of that program also awards bonuses to employees if they do things to help the environment or their local communities, like walk to work, buy energy-efficient appliances or coach a soccer team.
Robert the green
One of his newest projects is called Earth Rangers, a program that teaches schoolchildren about wildlife and environmental responsibility. The Schad Foundation is moving out of Husky and into the new $20 million Earth Rangers Centre, housed at the Kortright Centre for Conservation, north of Toronto. The headquarters will be one of the world's most energy-efficient buildings, with radiant heating and cooling, solar panels to generate hot water, and skylights to reduce the need for lights.
Husky buildings, too, tread lightly on the earth. Last year, its Buffalo parts distribution center became the largest industrial customer east of the Mississippi River to buy all its electricity from wind power.
Schad said he got interested in the environment about 25 years ago. He served on the board of the World Wildlife Fund in the early 1980s.
``There came a point in my life when you hit the wall and you say, am I doing the right thing? I have to do something for society. Not just for myself. Not just building a company. I want to do more. I was not satisfied.''
Was it a midlife crisis? ``Let's just say I hit the wall,'' he said. And he came to the conclusion that the environment is society's most important issue.
Husky's concern for the environment, like its strongly held corporate values, helps attract high-quality employees, he said. Of course, organic meals in the cafeteria, attractive, energy-efficient buildings, an on-site fitness center and a day-care facility help, as well - and they maximize workers' energy while on the job.
Husky's cafeteria food is famous in culinary circles. The menu posted on the bulletin board lists the percentage of fat, percentage of carbohydrates and percentage of protein for each item. In Bolton, meals are flagged if they have salt content beyond the recommendation of the Canadian Diabetes Association.
Schad's interest in proper eating and health stems from his roots in Germany. His mother was a naturopathic doctor.
A strong leader ... just stand back
The food, landscaping and other perks get lots of media attention. Less publicized is Husky's reputation as a demanding place to work - and the fact that Schad can be an intense taskmaster.
Husky had fewer than 10 employees when Harry Hackenspiel joined in 1957 as a machinist. What was it like working for Schad? ``Relatively tough, but relatively fair. If you did your work, you were OK.''
From the beginning, Schad was obsessed about keeping things neat and organized. ``He always wanted order,'' Hackenspiel recalled. ``I was foreman in 1958 and I had these tables with a box for each job, and I had the drawings laying below. And even though I had them straight, he would always shift them a bit and make them straighter.''
Schad is known for empowering employees, but his imposing presence also can stifle workers, said Anne Cool, Husky's former director of human resources.
In 1992, Cool was a systems analyst attending her first employee council meeting with Schad in Bolton. Discussion turned to performance reviews. Cool asked if supervisors got training on how to do the reviews. No, Schad replied, they did not, but he vowed to fix it. Soon he named Cool - a computer person - to become the new human resource director.
Cool said Schad is skilled at picking people for a job, regardless of their background. ``He would spot talent. He'd get it wrong a few times, but I would say he got it right most of the time,'' she said.
She knew nothing about HR, but Husky sent her to school.
``I loved it. It was a wonderful learning opportunity.'' The problem was, she said, Schad didn't let her use the new skills. She and two HR colleagues recommended a new performance-review form. ``He told me, `If you change the performance review form, the last person who did that doesn't work here anymore,' '' Cool recounted.
Schad's sometimes-explosive personality also wore her down. ``I can remember the very first time he screamed at me,'' Cool said. She was in the HR job for five months, and a help-wanted ad got in the paper with a few errors. Someone telephoned Schad and told him how bad the ad looked. ``He hit a spark and Robert went up one side of me and down the other,'' she said.
She was upset. ``The next morning, I had three or four people in my office saying, `Don't quit, don't take it personally. It happens to the best of us.' That's probably what got me through it.''
Cool, who left the company in 1998, has no regrets about working for Schad. ``He's a wonderful person. The issue for me is, I didn't want to be that controlled,'' she said. ``If it doesn't fit Robert's view, you are not doing it.'' Today Cool is vice president of HR at Algonquin Automotive Inc., which makes automotive aftermarket products in Huntsville, Ontario.
Schad acknowledges he sometimes has a volatile temper. He calls it ``one of my weaknesses.'' At 75, has he mellowed a bit? ``I think so. But I'm not quiet and patient. I'm still driving.''
And plenty of people thrive at Husky. ``We have thick skin, too, and that's what allows us to all have fun here,'' said Jeff MacDonald, vice president of marketing, with a chuckle.
In January, Husky got some independent recognition as a good place to work, when Report on Business Magazine named it one of the 50 Best Employers in Canada. Seventy percent of the score came from a detailed employee questionnaire.
Hewitt Associates, a human resources consulting firm, also surveyed the leadership team, then calculated how closely employees' and leaders' goals are aligned, and whether actual practices reinforce the vision.
Vision and culture are Husky strong points. In his speech on Schad's 75th birthday, Collins talked about employees, about getting ``the right people on the bus.''
``Because in the end, the world is going to change. Your Huskymobile might fail. You might have a liquidity crisis. You might need to go into new markets. The only sustainable, photocopyable advantage you have is your people and your culture. Nobody can copy that. Nobody can take that,'' Collins said.
As for Schad, he continues to think far into the future, even past the new China technical center. The last five-year plan is history.
``We can now say we made the transition,'' he said. ``We have succeeded with our product line. We have succeeded with our transformation. Our culture has become a much more professional company than before, five years ago. No comparison.''
Husky, he likes to say, has moved from a Ferrari to a Toyota. But what happens next year? In five years? Twenty years?
Schad's mind keeps turning. ``We still have a lot of work to do. But we can now start looking at where do we go next,'' he said.