(March 31, 2008) — Smaller plastics processors — those run without a lot of debt — will get respect from customers in these chaotic business times as solid alternatives to “bottom feeders” and big companies all jacked up on leverage.
That was a central message delivered by Bob Janeczko, Ron Kirscht and Tom Duffey. The three plain-spoken Midwesterners traveled to sunny Tampa, Fla., in March, leaving all the snow and ice behind. Even so, their hearts were back up North at their plastics factories — Innovative Injection Technologies Inc. for Janeczko, Donnelly Custom Manufacturing Co. for Kirscht and for Duffey, Plastic Components Inc.
Those companies were honored at the Plastics News Executive Forum for making it to the circle of finalists in our Processor of the Year Award. The award was won by Innovative Injection Technologies, known as i2tech.
On the final day of the forum, March 12, the trio shared their best practices. PN forums feature plenty of speakers touting big-business concepts like mergers and acquisitions, private equity, multiples of EBITDA and China. But this panel got back to basics — passion, focus, enthusiasm and heart.
These three speakers could motivate a Bear Stearns stockholder.
Molders going bankrupt. Debt. The credit crunch. Those things are plaguing the U.S. plastics industry, where too many customers have a “beat 'em up” attitude toward their suppliers, especially in the automotive and appliance industries.
Duffey played the role of customer speaking to molder: “I don't want to drive you into bankruptcy, 'cause that would be too hard on me. I want to drive you right to the edge of bankruptcy.” Edgy chuckles rippled through the audience.
But then they burst into applause when Duffey declared that he thinks the advantage will swing back, and big customers will look for profitable, reliable plastics suppliers.
Management going through a merger or acquisition can get distracted. “You're taking your eye off the ball,” Duffey said.
And how well can big firms compete when they layer on debt? “I think it's like fishing with dynamite, quite frankly,” Duffey said.
Well-run smaller companies enjoy another ace in the hole: a closer relationship with workers. “An emotional connection between a company and its employees” is an important motivator, he said. Employees often view a stable job, where their work and opinions are valued, as a refuge from what can be a turbulent world today.
Kirscht said firms should get employees to understand the human benefits of the end products made from the components they mold, help them see the bigger picture. Work is more than just a paycheck — from the owner to the machine operator, he said.
Janeczko said one of i2tech's biggest strengths is sharing detailed financial information with employees, through profit-sharing goals measured each month and paid out four times a year.
“I want everybody in the factory to be good, smart businessmen,” Janeczko said.
Bregar is a Plastics News senior reporter who manages the Processor of the Year Award.