How do you describe a company that specializes in electromechanical motor repairs but also manufacturers high-voltage field testing equipment for power companies, builds mining equipment for the mining industry and raises rare Fisian horses?
For Tim Hannon, third-generation president of The Hannon Co., each venture makes perfect sense. The common link, he says, is necessity.
Frank Hannon, Tim’s grandfather, founded the Hannon Co. in 1926. At the time, Hannon provided electrical repair services to mostly residential customers. When his son, Tom, took over in 1951, he changed its focus from residential to commercial/industrial.
“We were obviously in a throwaway market,” says Tom, who is now chairman of the board. “The cost factor of manufacturing a new motor became similar to the cost of repairing one.”
While Tom Hannon focused on industrial motor repair work, he also started to expand the company to incorporate equipment he had invented for the mining and electric utilities industries.
“We came from a farming background; we have a firm belief in working hard, using your hands,” says Tim Hannon.
But he also lets us in on another little secret.
“My father calls me a ‘junkyard dog.’ He also calls all our salesmen ‘junkyard dogs.’ That’s because we will go out and find any project there is or any piece of the equipment that’s broken — anything that’s out there — and come back and figure out how to fix it.”
While it was Tim Hannon’s father, Tom, who founded the horse farm and started venturing into areas unrelated to motor repair, it was Tim who turned that junkyard dog attitude into the philosophy that drives the core business.
In 1986, two years after Tom Hannon assumed the presidency of the Canton-based company, he realized the electromechanical motor repair business, which was The Hannon Co.’s bread and butter, needed to offer more than just on-demand repair services.
“We actually went out and told the market what they wanted,” he recalls. “Nineteen eighty-two was a pretty ugly year, especially for the steel industry. Customers came to us and said, ‘You’re a great supplier, you’re a great company, and we want to continue working with you, but you have to figure out how to lower our costs over the next 10 years by 10 percent per year.'”
He knew he couldn’t cut the amount he was charging for repair services, so he began looking for another way to lower his customers’ costs.
“So we said, ‘OK, there’s not a lot of blood left in the turnip when it comes to fixing the motor, but let’s start looking at your process and do some root-cause failure analysis and figure out how we can save you money in that way,” Hannon says.
“We didn’t lower the cost of fixing a 10-horsepower motor. That pretty much stayed the same, but we made it last two years instead of one year.”
The Hannon Co. accomplished that by finding errors in the way its customers were either using or maintaining those motors. Hannon says the motor-repair business’ sales are now three to four times what they were in 1986.
“We call ourselves wanderers and wonderers. We wander through and we wonder why,” Hannon says. “What we’ve decided is that you, as a customer in the market, want to have someone that just doesn’t fix something but also can figure out why it failed. Maybe it’s it in the system and we can re-engineer the system, or we can change the work flow.
“It’s what the market needs, and we have to become what the market demands of us: Looking for the cause of the failure at the root.”
The Hannon Co.’s expansion into root-cause failure analysis has also broadened its market through word-of-mouth referrals. The company has repaired the 100,000-horsepower turbines of the Grand Coulee Dam in Central Washington, and of the Parker and Davis dams, which bring water and power benefits to residents of the lower Colorado River Basin.
“We’re the only family-owned company that has ever rewound those hydrants,” which weigh 800 tons and are more than 50 feet in diameter, Hannon says.
And repair work The Hannon Co. did on a generator on a Coast Guard cutter out of Cleveland brought in eight to 10 more jobs from the Coast Guard, all over the United States.
“Word gets out,” he says.
After several expansions, the company’s Canton plant is now 100,000 square feet and employs 100 people. The Hannon Co. also runs motor repair plants in Zanesville, Painesville and Dover, Ohio, and Menaka, Pa., and employs a total of 160 people.
It’s the people, Tim Hannon says, not the company’s offerings, that bring in the business.
“No one works for me; everybody works with me,” he says. “This company is 80 percent labor and 20 percent material. Without the skills of those people out there, this company is absolutely nothing.”
Everyone is cross-trained to do more than one job.
“A guy that’s a machinist may also be a mechanic. It allows us to be flexible, depending on the work flow that comes in the door. Some days a lot of mechanical problems come in the door; some days, electrical; some days, field service,” Tim Hannon says.
And although the company employs 12 full-time salespeople, Tim Hannon emphasizes that everybody works in sales.
“Anybody in this place is a salesman, even the guys on the floor. They know that it’s good for the company for them to be looking for new work,” he says.
As profit-sharers, Hannon Co. employees have a special stake in the company’s success.
Tom Hannon set up the profit-sharing program in 1948, long before the term even existed.
“That program was one of the greatest things he did,” his son says. “We have a very low turnover rate, and everybody here feels that they’ve actually bought into the company and knows that their livelihood and retirement is based on the profitability of the company, and they’re very concerned about that.
“We don’t have to tell somebody that it’s time for them to leave this company. If there’s a bad apple in the group, the employees tell them they’re not pulling their weight and maybe they want to find some other place to work.”
Tim Hannon says the trust fund, which was converted into a 401(k), today is worth more than the net asset value of the entire corporation, which has grown every year, including this past year. He estimates revenue at $15 million to $20 million but declines to give an exact figure.
As for what the future holds for these junkyard dogs, Tom Hannon says, “We’ll take what we have done and try to duplicate it.”
In other words, anything is possible. How to reach: The Hannon Co., (330) 456-4728