New owners learn to lead through a pandemic at Hoffer Plastics

An employee of South Elgin, Ill.-based Hoffer Plastics Corp. left work early with a toothache one day in the spring and sadly never returned.

She apparently got infected with COVID-19 going to one of her doctor appointments, and she ended up hospitalized in an intensive care unit for treatment. The woman seemed to be getting better and was sent to rehabilitation, but then something else went wrong.

"It's unclear to us, but the next day she was gone," said Alex Hoffer, chief revenue officer for the injection molder of plastic parts for packaging, such as baby food pouch closures, as well as parts for the automotive, appliances and consumer industrial markets.

The effects of the pandemic have hit hard at the family-owned business, which was founded in 1953 and just handed over to the third generation of owners on Jan. 1.

The company employs about 350 people who work three shifts at a 360,000-square-foot plant in a Chicago suburb.

The business was doing well and preparing to launch a new product at Interpak in Düsseldorf, Germany, in May. With an estimated $90 million in sales, Hoffer ranks 83rd among North American injection molders, according to Plastics News' ranking.

Then, the pandemic struck. One employee died. Another Hoffer worker lost a loved one to the disease. The mother-in-law of an employee of 10 years contracted COVID-19. Then he did, too, about a week later, and so did his wife and son.

The Hoffer employee was placed on an ECMO machine for heart and lung life support while his wife and son received similar treatment in the same intensive care unit. A GoFundMe campaign raised $18,000 for their medical bills. The worker was in various hospitals for 72 days, but all four family members survived.

In the meantime, other Hoffer employees were taking time off to care for sick loved ones or they were simply afraid to go to work. Staffing became a challenge at the company, which had been deemed an essential business because of its customers.

In the last five months, the owners and their teams have mourned deaths, filled 40 openings, hired a chaplain, implemented pay cuts, restored pay and tried to follow two principles: Keep people employed and keep people healthy.

"To lead a business through that, I'm not completely whole yet," Hoffer said in a Zoom conference. "…This is really difficult."

Hoffer spoke to plastics industry executives during MAPP's virtual Benchmarking and Best Practices Conference. He could address many facets of the pandemic from experience. On July 4, he woke up with body aches.

"I had been coaching my son's baseball team," Hoffer said. "That's the one area where I let my guard down a little bit. It wouldn't be 2020 if I didn't have to pay for it, now would it?"

Hoffer got infected. After all he and the company have been through, he is urging industry leaders to take stock of their lives and the lives of those around them.

"Think about how you can exhibit more humanity in your place of employment. What does this experience make possible for you as a leader?" he asked. "I would contend it makes it possible for your leadership to emerge, for people on your team to be valued, for you to become the kind of person that is worth following."

When he got sick, Hoffer, 39, said he felt minor symptoms at first, but over the next couple days the body aches intensified. He described them as moderate to pretty extreme. He says he was tested for COVID-19 and got the results five or six days later.

"When I felt the worst, lo and behold, I got a negative result," Hoffer said.

His doctor urged him to get tested again. Then, respiratory symptoms kicked in eight or nine days later, but he said they were never serious.

"That was kind of weird from what I had read," Hoffer said.

The results from the second test came back positive, and Hoffer isolated himself from family, friends and colleagues.

"The interesting thing was the majority of those two weeks I felt kind of back to normal," Hoffer said. "As I said a couple times, welcome to 2020."

The year started out with promise. Hoffer and his sisters, Chief Financial Officer Gretchen Farb and Chief Culture Officer Charlotte Canning, took over a stable business with a product launch in the works.

"We were projecting about 8-10 percent growth prior to COVID. Obviously we aren't going to achieve that now," Hoffer said. In April, "things turned south," he explained.

"Like many of our businesses, we had to make tough calls. We could see orders were dropping and challenging situations were on the horizon," Hoffer said.

To guide their decisions, the owners settled on two principles.

"Our rally cry through this has been: We're going to keep as many people employed and as many people healthy as possible," Hoffer said.

Still, workers quit for health reasons and to seek "rich unemployment benefits," he added.

To control spending, the trio of new owners agreed they would go first with pay cuts. They reduced their salaries by 20 percent. Some executive team members then voluntarily took a 10 percent pay cut.

"Later in April, we said let's see if we get volunteers," Hoffer said. "We had 60 some volunteers, both salaried and hourly."

The owners plan to repay everyone when the business improves.

"It was just really a cash flow mechanism at the time. But I've got to be honest, in the midst of the challenging times that we're in, that was a moment for us," Hoffer said.

Mandatory pay cuts were implemented for a short time, then pay was restored first for the hourly workers, then salaried, followed by the executive team and owners.

The company also hired a bilingual corporate chaplain. He started in May, on the same day an employee died of a heart attack. The chaplain offered grief support to workers as they learned about this tragedy.

"We discovered the need on our floor is greater than it has ever been," Hoffer said. "That investment has been one of the best. The pastor or chaplain isn't here to proselytize faith or anything like that. They're here to care. They're here to support, and that includes me."

As the pandemic continues to takes its toll on health, mental well-being, finances, society and politics, Hoffer urges plastics industry executives to lead in a calm, collected manner and keep in mind that most everyone is facing challenges at work and home.

"This experience has been novel. It's the novel coronavirus. Novel means its changing," Hoffer said. "What we knew on March 13 is different than what we know today. It's serious. Perhaps the word of the year, it's unprecedented. Some would say it's irrational. It's erratic.

"From a business sense, it's definitely cash-sensitive," he continued. "Some would say it's science-based. Others would say it's fear-based. Regardless of where you stand on those two, it definitely has brought with it extreme stress. And if you think things are stressful in the office, it has increased family stress to higher levels as well."