For the past 50 years, Husky Injection Molding Systems Ltd. has gone through huge changes: A snowmobile that wouldn't work led to a tiny Toronto machine shop, which became a fledgling machinery builder that almost went bankrupt.
Today, Husky stands as one of the world's largest plastics machinery manufacturers, with US$815.7 million in 2003 sales. The Bolton, Ontario-based company makes injection molding machines, PET preform molds, hot runners and robots.
The past seven years have been especially frenetic. A restructuring launched in 1997 changed Husky from a specialist in injection molding presses for thin-wall packaging, such as PET preforms, into a broad-line supplier. When Husky went public in late 1998, a company built for the long haul was exposed, every three months, to the scrutiny of stock analysts.
Robert Schad is the one constant. He has become a living legend, a machinery executive who has made millions and given millions away, a man who proselytizes factory automation and supports environmental causes, while steadily reinvesting in the business.
It's his company.
Schad is fit-and-trim at 75. When he talks about a new machine, he sounds like a boy showing off a go-cart he built. He calls designing machinery ``my hobby.''
``I see myself as a machinery person. I'm not a financial person. A financial person can run a company downhill. You need a vision for where you go in the future,'' he said.
Schad has a mystique about him. What makes him tick? You need more than one adjective to describe him: Intense. Energetic. Sincere. He's also a visionary who is passionate about all things Husky.
``His values are to accomplish the highest standards in everything he does,'' said Robert Gillespie, a Husky board member and head of GE Canada, as he called a toast to celebrate Schad's 75th birthday in November in Toronto. He called Schad a ``tough, demanding leader'' who dislikes bureaucracy. ``He's annoyed with people who cut corners and do not tell it the way it is.''
People who have worked for Schad add a few other adjectives: Impulsive. Abrupt. He's a man who demands order and tidiness to the point of - sometimes - exploding into volatility.
He does it his way
Since 1953, Schad has run Husky his way. But now he has started to talk publicly about retirement. Last Nov. 3, at the party in Toronto celebrating both his birthday and the 50th anniversary of Husky, Schad announced that he expects to retire in about three years.
Schad said he has loosened the reins to promote broader-based executive leadership so Husky is a long-lasting institution. ``I ran it like a grocery store,'' he said. ``I knew every little detail. And that change is now coming.''
Becoming a publicly traded company five-plus years ago also encouraged Schad to open things up. ``It helped a lot to make Husky a more professional company,'' he said.
He had already begun meeting with Jim Collins, co-author of the best-selling business book, Built to Last, to help identify Husky's values and develop its mission.
Husky without Schad? Financial analysts are watching closely to see how the company transitions away from Schad's strong-willed entrepreneurial leadership. Patrick Tomalin, who follows Husky for Toronto investment bank Orion Securities, said of succession: ``I think on a medium-term horizon it really is one of the critical issues.''
Husky has said nothing about who will replace Schad as president and chief executive officer. In an interview with Plastics News last fall, Schad declined to give any clues, although he did suggest Husky prefers to promote a leader from within.
``I'd like to walk out of here at some point, without people noticing that I walked out. We're building a stronger and stronger team. We have possible successors in the company, ideally in the company,'' he said.
Schad will keep busy running the Schad Foundation, a charitable organization that supports environmental activism. He also remains majority shareholder of Husky, owning just over 45 percent of the stock (and has controlling interest in another 5 percent), but sells some shares every year to give to charity. ``It's not my biggest concern to control the company,'' he said. ``My biggest concern is to build the company which is lasting.'' But even when he steps aside, Schad always will care deeply about what goes on at Husky, say friends and co-workers. His legacy will continue to be felt from the buildings - where art adorns the walls and windows look out over grounds resplendent with grasses and indigenous bushes - to its core values, which the company lists as:
* Make a contribution.
* Proactive environmental responsibility.
* Passion for excellence.
* Uncompromising honesty.
* Bold goals.
Schad contacted Collins after he read Built to Last seven years ago. He invited Collins to give the keynote speech at his 75th birthday event.
Collins has spent years researching what makes great and long-lasting companies, first as a faculty member of the Stanford University's Graduate School of Business and now at his management research laboratory in Boulder, Colo.
He said a key to Husky's future will be holding fast to those core values, even while encouraging change.
``A great company is built upon an unchanging set of passionately held core values. And these values take precedence over everything, when push comes to shove,'' Collins told the audience of 2,400 Husky employees and guests in Toronto.
From Huskymobile to plastics packaging
Robert Schad has lived that values-driven philosophy. People who worked for him in the early days say that, from the beginning, Husky was what mattered - even more than making money.
``He never did anything for the money. It was just to make the company grow. That was his target,'' said Herb Rees, who worked as a consultant to Husky in 1956 and joined full-time three years later. Rees retired in 1980 as vice president for research and development and engineering.
Henry Hackenspiel said Schad's money-isn't-everything nature was evident right away.
``The one thing with Bob is that he's not just take, take, take. He takes and gives. He likes to make money but he also spends it. He personally is not greedy at all,'' said Hackenspiel, who worked at Husky from 1957 to 1969.
A hands-on management style is another Schad trait that started early.
``He never asked anybody to do something that he wouldn't tackle himself, Hackenspiel said. Schad was a serious man who worked long hours. He expected employees to show the same dedication.
Schad recalled that he was ``an impatient young man'' in 1951 when he emigrated from Germany to Canada at age 23.
A native of Karlsruhe, he finished two years in engineering college when he decided to join a wave of people leaving Germany after World War II. ``I personally didn't enjoy studying and I wanted to see something,'' he said. He borrowed $25 from an uncle. His grandmother handed him a letter from Albert Einstein, whom she knew, vouching for his character. The framed letter hangs near his desk.
Once in Toronto, he got a job as a toolmaker. He enrolled in night school at the University of Toronto but once again he grew restless. ``I was terribly bored and I didn't like it, and then I dropped out,'' said Schad, who still speaks with a German accent.
He took a job at Volkswagen of Canada, working with industrial engines. He met some people who were interested in building snowmobiles, and in 1953 he created the Huskymobile named after the cold-weather Husky dog. Only one problem: It worked only on asphalt.
Schad kept the name for his small machine shop, which was tucked in back of an Esso gas station. Husky built molds, dies and fixtures. In the early 1960s, Schad began selling Battenfeld injection presses from Germany. ``The speed of those machines in those days was way below what the molds could run. So I decided, I think I can build a machine that will run that fast,'' he said.
Husky built an electrically driven injection molding machine with a toggle operated by a crank for clamping. It came out in 1961.
The company had only one customer, which placed a large order. Husky was flying high! But after shipping half the machines, the customer canceled.
``We had no customers, we had no marketing. We had nothing. ... So we were stuck with 10 or 12 new machines. We were in a little shop,'' he recalled.
Schad contacted creditors to explain. If Husky went bankrupt they would get nothing. ``They didn't believe that we would make it,'' Schad said. ``But they figured, might as well, there's a young guy trying. Then I went out and marketed the machine, found certain customers, mainly in the Chicago area, and within a year or so, I paid everything back.''
Hackenspiel said Schad was an effective salesman. ``If there was no work, he'd run out with his Chrysler and would come back with a trunk-full of work. He always said he could sell a refrigerator to an Eskimo.''
Getting through tough times was good experience. A dozen years later, Husky survived the Arab oil embargo in 1973-74, when its net worth slipped to minus $2 million and many molders were unable to buy resin. Schad said another problem was that Husky moved too slowly into higher-cavitation molds.
From the first days, Husky focused on packaging. Meeting that sector's demands earned Husky a reputation as a supplier of technologically advanced equipment.
Its first molds were for polystyrene vending cups for coffee. To make the thin-wall cups, Husky built very precise molding presses with fast injection speeds - and what was to become another Husky strength, automation.
``Early in the '60s, we got into complete systems,'' Schad said. ``Because the problem was, we were making these cups and they're coming out of the machine every two seconds.'' The early presses molded one cup at a time; then Husky engineers added a second cavity. ``So you've got these cups coming out of the machine, and the problem was what do you do?''
Husky developed special equipment that unscrambled the cups and lined them up in a row. ``We built lots of those machines. One year we actually shipped 100 of them,'' Schad said.
A specialty was born. Human hands simply were not fast enough to deal with the massive output of cottage cheese containers, yogurt cups and plastic cutlery. Husky helped its customers design their factories from the ground up - expertise that Husky strongly promotes today, around the world.
One black-and-white photograph on display in Bolton shows a giant molding room in 1968, with dozens of machines and just one employee. Trade magazine ads show a dynamic-looking Robert Schad repeating his mantra: ``Automate or die!''
One important customer was Landis Plastics Inc. of Chicago Ridge, Ill. When Husky was still young, the company ran a press popping out coffee can lids at a National Plastics Exposition. The machine mesmerized Landis Plastics co-founder Richard Landis. He bought four on the spot.
Husky grew right along with the booming plastic packaging market in the 1960s and 1970s, moving to larger quarters, then in 1969, opening a plant in Bolton. Then came something truly explosive, as PET soda bottles came out in the late 1970s. Husky was perfectly positioned to catch the PET wave.
Schad said Husky already was selling some machines in Europe and Japan in the 1960s, but adding PET preform machines really took the company global. Husky sold machines and molds to big international players like Coca-Cola Co. and Pepsi-Cola Co.
By 2002, Husky claimed a 55 percent market share of all preform presses, and a whopping 76 percent share of high-volume machines to make preforms for soft drinks, water and other mass-market beverages. Thanks largely to its dominance in PET, Husky now has 41 offices and 19 technical centers to support customers in more than 100 countries. The company runs four manufacturing locations - in Bolton; Dudelange, Luxembourg; Milton, Vt.; and a new $20 million Asian headquarters in Shanghai, China. The latter facility started making hot runners in November and will add injection press assembly in the future.
Schad took the full-systems approach a step further in 1993, when Husky opened its Advanced Manufacturing Center in Bolton. AMC acts as a model injection molding factory.
``We run it here, then we ship you product for so many months. Once you're satisfied, then we ship you the equipment,'' he said. Husky and its customers also test new molding technologies and train employees.