Jeff Berlin walked away from Hawk Corp. in 2003 where, in eight years with the company — four as president and COO — he grew the company from $20 million in revenue and 120 employees to $220 million and 1,600 employees in 16 plants across the globe.
He participated in 11 acquisitions at Hawk, a manufacturer of friction products, between 1994 and 2000, and saw first-hand how acquiring complimentary companies could be a key driver to a manufacturing company’s growth.
But Berlin didn’t leave Hawk to jump into nanotech, biotech or some other emerging industry. Instead, he stayed old school, creating Chagrin Falls-based Bridge Industries, a holding company that looks to grow by acquiring manufacturers with complimentary engineered products that can benefit from being part of a larger organization and from Berlin’s experience. Bridge made its first acquisition last year, Multi Products Co. of Millersburg, an oil and gas well hardware manufacturer, and is looking for more opportunities.
Berlin is betting his own money that not only is manufacturing not dead in Ohio, it has a solid future.
Smart Business sat down with Berlin to talk about manufacturing in today’s economy.
How do Ohio manufacturers compete against Asian firms?
You have to pick your spots. There are certain industries, if a product is easily made and easily shipped, then that battle is lost. There are a lot of commodities, and they are paying $1 per hour for labor. Face it, you are not going to be able to compete with that.
But the workers are not going to accept $1 a day forever. Look back at Japan and Korea; there’s going to be inflation. At Hawk, we were looking at 15 to 20 percent yearly increases to attract skilled hourly people to the Shanghai region.
If something is made there and shipped all over, then it’s going to be tough to compete, and maybe you are in the wrong niche. The areas that are attractive to me are probably the smaller markets where there is heavy engineering in a product or technology in a product. You want a market that is global, but not huge.
I’m not talking about an automotive-sized market, I’m talking about a size market where they will appreciate your specialty and that you are specialized in your niche. Those are a little harder for China to compete with.
The type of customers we have in our current business, they want a quick turnaround and they demand an intimate knowledge of the oil and gas industry. They can’t get that product and service from China.
It’s not just quantity vs. quality. You can still do a quantity-type product line, but for the people doing it, you can’t isolate yourself here in North America and only look at customers here in North America and think you’ll be fine. You’ll be competing with people from all over the world, so you might as well go out and compete with them on their own turf.
People have to be willing to invest and extend themselves out to Europe and South America so they are on an equal footing; then it’s possible to compete. Look at all the Asian plants that are coming here, whether it’s in appliances or autos. It’s a global market. You can still make quantity products if you take advantage of what’s out there.
You may want to make parts there and ship them here. You may want to make parts there and keep them there. You have to look at it as a global equation.
As the leader of a manufacturing company, how do you get the worker on the shop floor to buy into your vision for the firm?
People have different approaches, but for me, it’s one word: communication. It means making them feel like it’s not a big mystery as to how the business is being run. You have to make them aware of what the customers need and make them feel like they are a part of solving customer problems.
I think that’s where there is often a gap. They are there and think, OK, this is an 8-to-5 job, and I work on this machine and make this bolt, and that’s what the company is to me. If you say, you know what, here’s the customer, and they have a rep in here today, and introduce them and say this is what they make, these are their issues with the market, and if you mess up one of their bolts, then they’ll lose their customer and we’ll lose them, then that will help them understand.
It will make them understand that we’ll be a lot busier and the opportunities will go up significantly if we make it on time and continue to be cost-effective and do more with less.
Usually, a lot of ideas for improvement can come from the plant floor directly, especially when you sit down with problems and start brainstorming solutions. Rarely do solutions come from some office or some brainstorming MBA.
What is the idea behind Bridge Industries?
My 12 years with Hawk really molded the core around my background, and it’s really the model applied at Bridge. At Hawk, we went at growth internally by hiring the right people.
But I also had the tools for the acquisition portion of it to grow externally. We did 11 acquisitions in eight years. Those two things (internal and external growth) put together took growth from $20 million to $220 million in that period.
Bridge was an opportunity for me to step back (from Hawk) and really do it on my own. I felt the first thing was to establish a business model similar to Hawk but different. It’s different in that I started with nothing. If you don’t have a patent or something to start up with, you have to go buy something.
It’s not that easy to get done when you set out to do it. The deals don’t just come to you, you have to really go out and search for them. I was looking for engineered components that were metal, plastic or polymers and were going into niche markets that are not automotive but more like aerospace or agriculture – markets that have specialties in them.
How have your experiences at Hawk helped you at Bridge?
Even though Hawk is a public company, it’s made up of a small family of entrepreneurial businesses. Most of them were acquired, and I learned how to develop a relationship with entrepreneurs in the companies and not completely upset the apple cart and throw a culture shock at them.
At the same time, we are saving the company, we can’t do it overnight. You have to accept the fact that there is no system for quality, that they are inefficient with their inventory or you don’t like the way they do some other things.
It’s their culture, and you have to slowly adapt.
That usually comes from personnel changes, but there doesn’t have to be a dramatic changeout. It could come from adding people — maybe you find the right person to come on board that really changes the culture of the company.
How to reach: Bridge Industries, www.bridgeind.com or (440) 247-1672
