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May 17, 2016 02:00 AM

From burlaps sacks in 1889 to plastic packaging today

Steve Toloken
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    Jessica Jordan

    Fredman Bag Co. in Milwaukee is serious about family ownership — it's in its fifth generation of family control, dating back to 1889.

    But President Tim Fredman says it's possible his family's more than 125-year run may end and he could be the last Fredman leading the flexible plastic packaging company.

    “It's a decision I will have to wrestle with over the next few years,” he said. “That is a possible tipping point that the company has not experienced, as it has always been run by a Fredman.”

    The company was founded in 1889 by Tim's great-great-grandfather Abraham Fredman, trading and reselling used burlap sacks to the feed mills of Southeastern Wisconsin.

    It evolved into manufacturing textile bags, and then in the early 1970s, seeing the growth of plastics, started making PE bags and flexible packaging. Today that's the main business, operated from a factory on Milwaukee's northwest side.

    But the Fredman legacy may now end, as it's not clear if any of Tim's four children, who range in age from 19 to 28, will join the business.

    Tim, who is 54, has worked at the company for 26 years, the last 15 as president after taking over from his dad, Tim Sr.

    He thinks he has another eight to 10 years before retiring, time to make a decision and leave a few years to transition.

    The four children are all either working successfully as engineers or studying engineering in college, and it's not clear if any will take the reins of the 65-person company, Fredman said.

    “For success, we run it as a business, with family being secondary,” he said. “It's probably too small to support the families of four children, if all were to join. If only some join, then there is the potential issue of perception of value received by those involved.

    “It's more important for me to have a happy family long-term,” Fredman said.

    He said he's instituted a rule for his children — they must first work outside the company for three to five years if they want to join Fredman Bag, to develop other skills and get some understanding of being an employee, as Tim said he did early in his engineering career.

    “Also, if they can't be a positive contributor for someone else, we probably don't need them on our staff,” he said.

    Another factor weighing on Fredman's thinking is that the business environment is tougher. While he didn't explicitly link that to succession decisions, he noted there's probably less room than in the past for family members who cannot perform.

    “There is not as much wiggle room as there was even half a generation ago,” Fredman said. “Customers have become more demanding. Almost universally, companies are focused on production efficiency.”

    Fredman said the family is definitely proud the company's been around 127 years, and has a place in local history.

    The company gets phone calls periodically from antique buyers who come across old Fredman Bag promotional giveaways like rulers with the company logo, and want to know something of the history.

    As well, old Fredman sacks from the 1920s get mentioned in present-day Milwaukee newspaper articles because they're being used as historical decoration pieces in local homes.

    A relatively clear family line has helped Fredman Bag last through five generations, and ownership numbers have been small.

    “One of the things that's helped us out is the family tree has been pretty linear,” he said.

    He said he's been through the company records, including Fredman board meeting minutes dating back to 1914 and the presidency of great grand uncle Max (Tim's great-grandfather's brother), and can't find any evidence of serious debate that another Fredman would not take over.

    But he admits he can't know for sure. Until his father, every previous generation of Fredmans worked until they died. Tim Sr. was the first to retire, creating a different scenario for transition for the company, both managerially and financially.

    Tim Jr. said he hopes to do the same.

    So even with a 127-year history, the company may be moving through uncharted waters deciding if there will be a sixth generation of Fredmans in the executive office.

    The company has been run conservatively, he said, and as a private firm hasn't needed to chase sales for the sake of reporting higher sales. The company can have what Fredman calls his “headache-to-profit ratio” when evaluating business.

    It's very nice to be part of a family business that's more than 125 years old, he said. But Fredman said the company still needs to perform at a high level.

    “It's obviously something that we are extremely proud of, and people say ‘You must be doing something right,'” Fredman said. “But sometimes I think people confuse longevity with potential for future success.”

    Read an overview of family-owned businesses and find links to other profiles.

     
     
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