John Galt stepped into one of the toughest jobs in plastics machinery in September, when he became the top executive at Husky Injection Molding Systems Ltd. - replacing the legendary Robert Schad, who retired.
Schad had founded Husky in 1953 and built it into one of the world's largest plastics machinery manufacturers, employing more than 3,000 and generating 2005 sales of US$860 million from injection presses, robots, PET preform molds and hot runners.
While Galt, 46, may be a newcomer as president and chief executive officer, he is a Husky veteran of 20-plus years. He joined Husky in 1985, straight out of Ryerson Polytechnical University in Toronto.
Schad was known for being impulsive and tough, at times showing a volatile temper as he drove Husky forward.
Galt comes across as more low-key and soft-spoken. He paused to think before answering questions, patiently and precisely, during an interview in April with Plastics News' machinery-beat reporter, Bill Bregar, at Husky's headquarters in Bolton.
So John Galt is no Robert Schad when it comes to personality. But Galt, a mechanical engineer, shares Schad's love of machinery and technology. In recent years, Schad tapped Galt to oversee the company's transformation to a platform concept, a key part of moving Husky from its core strength in thin-wall packaging and PET preform machines to a broad-line supplier.
Galt has served as general manager of Husky's North American machinery business, vice president of engineering and, from 2002 to 2005, vice president of operations and chief operating officer.
He takes the reins at a pivotal time for Husky. Although sales showed a solid increase in 2005, the company managed just a $2.1 million profit, down from $18.7 million in 2004.
In an hour-long interview, Galt outlined challenges facing machinery manufacturers, including high resin prices squeezing customers and a global overcapacity of injection press production. The biggest pressure, he said, is coming from processing machines becoming commodities - a trend that forces machinery companies to move even faster to develop new technology.
Husky's new leader also threw out some tidbits about future North American assembly of large-tonnage presses, global sourcing and plans for India.
Through all the changes, Galt pledged that many key aspects of Husky will remain. That includes maintaining Husky's core values: make a contribution, proactive environmental responsibility, passion for excellence, uncompromising honesty and bold goals.
Q. I'm sure you've heard this question a lot: What's it like to replace Bob Schad? You're a different person, obviously.
A. Well, I think it's great. Husky's a great company. I've been here for 21 years because I love it; I tell everybody I meet, and that is absolutely the truth. It's founded on great values. They are my own personal values, so there was great alignment for me.
The company stretched me. It challenged me. It made me, I believe, more successful than I would've been in a lot of other places, just because of that culture. So it's been challenging at times, absolutely. But it's a great place to work. ...
This is a big challenge. Obviously, Robert has a heckuva history in the industry. Quite a legacy. He's one of our industry's pioneers.
So, I don't expect to walk in the first day and know what I'm doing, everywhere. But I guess I bring a slightly different perspective to the job of CEO. And I hope to keep things like innovation and the passion and the entrepreneurial spirit alive.
Q. I know Husky can be a pressure-filled environment. And I think the employees that stay here, and work well in this culture, carry these values and this passion with them. So obviously it's not just you running the entire show.
A. Absolutely not, no. It's a great team. I say that in all honesty. We've got a great group of people, surrounded by great talent. And fortunately, a lot of us complement one another; we're not all great at everything. So yes, there's a strong core group of people at Husky that enjoyed Robert's leadership style, enjoy the values and the culture that we have here today.
Q. How would you describe your management style?
A. I believe in the power of a strong team. I like what Jack Welch says there - surround yourself with people stronger than you are. I don't think there is a person who has all of the skill sets to take a billion-dollar company to a multibillion-dollar company. And so I think you have to complement yourself and surround yourself with great people, great leaders.
It's important that it be a passionate environment. That shouldn't be a yes-man environment - people should have opinions; they should know their subject matter better than anybody else around the table. We'll vet that, as I said, very passionately at times, but, ultimately, I think you've got to drive it from a team.
The culture we have is that we like to win. I love a competition. And I do like to win. So I think one of the things you can find around Husky, as a way to get everyone focused, is to get into a competition with somebody.
Q. Do you mean, trying to compete with another company for a customer?
A. On a job, in a market, in a technology. I think we flourish in that environment. It's fun. And work has to be fun. So, passionate ... I know I have a lot to learn. I know very little of what I will ultimately have someday. And I take great pleasure out of that process.
Q. The impression - at least held by the outside world and the press - was that Schad kind-of ran everything. But as Husky went public in 1998, he started making comments about spreading out the decision-making process. Can you describe this evolution?
A. Well I think two things happened. One of them is that, as Robert's mentioned many times, he realized that while we were a technology leader and we were a very profitable private company, we had a fairly small base on which to grow. We served our markets and served them well, but we didn't have a competitive platform; we didn't have a competitive cost base; we weren't operationally where we needed to be. And we needed to change.
He assigned people within the company different tasks to go about and start to look at what it would take to develop the rest of the company.
Q. Companies founded by a strong individual often face the challenge that one person can't run the entire thing.
A. There's the realization that you have to establish the next level of base foundation for the next level of growth. And Robert recognized that early. He made an investment in that. That's probably the biggest part of it is, just that investment in driving the development in areas of the company we were not focused on.
Q. Husky has undergone major changes in the past decade or so, kicking off its move into broader markets in 1997 and going public in 1998. The common-platform concept, based on the Hylectric press platform. The two-platen Quadloc. Magnesium molding machines. PET preform machines, the Index and HyPET. What role did you play?
A. Well, as you know, Husky's primarily been built on marketing and innovation. Robert Schad is a very dynamic individual. What we realized is that we had to focus on improving our operational performance, which really was, for most of our history, an afterthought. And so I was assigned the job of looking at our operations and understanding what it would take to bring them world-class. And part of that was the development of the concept of the platform, so we would have a world platform for our technologies - robust, reliable, energy efficient. Highly standardized. Reproducible around the globe, and a foundation for the market-specific technologies.
Before, without the foundation, it was difficult to coordinate those activities and also ensure an efficient supply chain. When I say efficient, I mean cost-effective, reliable, and fast and easy to produce.
Q. Your entire career has been with Husky. When did you join the company as a young engineer?
A. It was in that year after my graduation that I joined Husky.
Q. Forgive me for asking a personal question. You used to be married to Schad's daughter, Lili Schad. That marriage ended and you both are remarried. But for a time, you were Schad's son-in-law.
A. Well I don't want to talk about it too much. But we met while we were both here, and spent some time together, which was wonderful. And then decided to go our separate ways.
Q. I have asked Schad about the topic of family members in the business before, and he's not really into passing the company on to the family. A story in the Toronto Globe and Mail quotes both Lili and her father saying that, if you were Schad's son-in-law, you probably would not have gotten the CEO job - or even still be employed by the company.
So the point is, you didn't meet her and then learn about Husky. You met her after you got to Husky.
A. Absolutely. I came to Husky. I got a job. I started, and we bumped into each other.
Q. Now we'll move on to some financial questions. Husky made money last year, but just barely. And your sales have held up well, but profit has declined in 2004 and 2005. We know that machinery is a tough business. What is a respectable profit margin, in today's environment?
A. A respectable profit margin is, I guess, one that allows you to have a good return to your shareholders. Allows you to reward your people. And allows you to invest for the future.
Q. You're not going to give out any numbers, are you?
A. I think it's very difficult to say what the number should be. We've given some guidance in our quarterly calls about the number target-range that we'd like to look for. But I think in general, it's about building that lasting company. One of the reasons I'm attracted to this job is I know the industry's in a difficult time right now. There's a lot of volatility.
There's a lot of commoditization, and it isn't just within injection molding. It's within the world. I mean, the combination of the global competition, the emerging markets and the speed at which technology's been developing within our industry and within others. Mass marketers. All of that has combined for driving rapid commoditization.
Q. It's interesting that even a company like Husky that prides itself on very high-output technology faces this problem. Is that disturbing?
A. I think all industries will face, in these markets that we enjoy today worldwide, more rapid commoditization of technologies than we've seen historically. The ability to differentiate yourself through innovation, through technology, the time you get to reward yourself from that investment is going to be shorter.