A famous guy once said, “Pay no attention to that man behind the curtain!” But he was a grifter. In fact, going behind the scenes — whether it’s a factory tour or cooking show — can be a valuable experience for both visitors and guides. In this episode, we crash a middle school field trip to the Method soap factory on Chicago’s South Side. We also hear from Basecamp’s CEO Jason Fried on his YouTube series on making design decisions and from the managing partners of Zingerman’s Bakehouse in Ann Arbor, Michigan on why they don’t believe in secrets.
If you leave a comment, be sure to tell us whether you prefer yeast or cake donuts!
Tim Masters describes himself as “just a mattress maker,” but that belies the business acumen he’s gained over decades of building and selling beds. Tim’s store in the Chicago suburbs, Quality Sleep Shop, opened in 1969 and has held its own against the proliferation of private equity-backed mattress corporations and chain stores. As Big Mattress has grown more complex, churning out endless permutations of confusingly named products, Tim has embraced simplicity.
WAILIN WONG: Hi everyone, it’s Wailin. We have some news about The Distance that we’ll share at the end of this episode, so please stick around for that. And here’s today’s show.
Think about some of the most miserable experiences you’ve had as a consumer. You might say air travel, or trying to cancel your cable service. And then there’s mattress shopping. Where I live, in the Chicago area, there seem to be mattress stores on every corner, sometimes across the street from each other, and they’re selling products with long names that make it difficult to comparison shop. Like “Simmons Beautyrest Recharge Signature Select,” which is somehow different from the “Serta iComfort Blue Max Touch 3000.”
TIM MASTERS: They’re showing you beds like two, three thousand dollars and it’s like, what makes that bed cost two or three thousand dollars? I don’t know. I look at ’em and I think, that’s not a two or three thousand dollar bed. And then they walk you down from there, but I think it’s by design that they want you to be a little bit confused, overwhelmed or impressed with this lingo that you don’t even know what it stands for.
WAILIN: That’s Tim Masters, the owner of a store in the Chicago suburbs called Quality Sleep Shop. He’s been a mattress maker for over 25 years, and he’s not a fan of the tactics you see from traditional, corporate mattress manufacturers and stores.
TIM: I wouldn’t want to be in the market to buy a mattress today; I’ll tell you that. I’m keeping it simple, like there’s not that much to it. It’s soft, medium, firm. What’s your price point, is it low, medium or high? We try not to confuse you.
WAILIN: Welcome to The Distance, a podcast about long-running businesses. I’m Wailin Wong. On today’s show, how Tim Masters has fended off the big mattress companies by staying small, simple and honest.
JASON: The Distance is a production of Basecamp. I’m Jason, an iOS designer at Basecamp. Basecamp is the better way to run your business. It’s an app for communicating with people and organizing projects and work. If you’re feeling overwhelmed by email, chat and meetings, give Basecamp a try. Sign up for a 30-day free trial at basecamp.com/thedistance.
TIM: Every year, I buy the best seller of that year and I take them apart and I dissect them, like how was this made, like how far apart are the stitches, what are they doing, how are they securing their cover, what filling material are they using, why is this bed so popular? Is there anything I can make similar or what can I improve on with it? And in 2014, I bought a Tempur-Pedic. I paid $1,630 for this twin size bed but it was a best seller and I’m so excited. I go pick it up and I bring it back to the shop, I’m like, here it is and I get the thing apart and I was so deflated, like it had an nice like one-inch piece of memory foam on top and had three inches of actually really nice quality foam under that, but the supporting foam, the six-inch supporting base, is like a general grade. And I was so, I’m bothered by it because I’m like, why would they have such a good company, you know what I mean? Such a good name, and then fill it with just like average or below average filling material? You’re gonna hurt your brand. And it’s like, I don’t think they get it and I see that a lot with the major brands. It’s like, don’t you get it? It doesn’t have to just look pretty on the outside. It’s got to be the inside of the bed that counts.
WAILIN: So what’s inside a bed? Tim makes both innerspring mattresses and latex ones, and he uses a combination of cotton and foam. Cotton breathes well, lasts a long time and wicks away perspiration. Foam is pressure relieving and more lofty, giving the impression of a thicker mattress. At Tim’s business, all the mattresses are built to order in a suburban factory.
TIM: We’re not a marketing company that has someone else build the beds and ship them out. We have total control over what the customer’s getting and it’s successful for us. We build 400 to 500 beds a month. But that’s a lot for a little company. There’s only six or seven of us that work here full time and it keeps us busy all the time. We do our own maintenance on our equipment, we’re the builders on the beds, we do the packaging, we do local deliveries, so yeah, we’re pretty proud of where we’re at today. We’ve always had like steady, slow growth. We don’t want to have big influxes of business ’cause I worry about production, like I still like to be so hands on with what’s being built, how are things going through.
WAILIN: Tim’s showroom has just a dozen or so models for sale, and they’re named for people: The Scot, after the store’s first employee, or the Leona, after the wife of the man who started the business. Some of these models have been around for decades and they haven’t changed very much.
TIM: We don’t carry products that are real trendy, that we don’t have a lot of experience with, that we don’t know how they’re going to react with customers. But what we do carry and what we produce are mattresses that are really time-tested and well-received.
WAILIN: Tim’s been at this for so long that he’s developed a kind of sixth sense for whether a customer is a side sleeper or stomach sleeper, just by looking at the person.
TIM: A lot of times, we get customers that come in: “I want a firm mattress.” And you look at their body type and you determine, okay, are you a side sleeper? And then I’ll tell them, “I don’t want to build you a firm mattress. I’ll build you something real supportive, but not too hard. Your legs will go numb, your arms will go numb.” I learned that years ago, we would make mattresses and a lot of these older guys come in: “I need a firm bed.” And next thing you know, they’re calling you two weeks after they get the bed, “Can you make it a little softer?” A lot of people, when they ask for a certain product, it’s like, “I’ll show you that, but this is what’s going to be a better fit for you and this is the reason why.” Sometimes, though, I’m not the guy for the customer, like I’ll try, I can always make our beds feel a little firmer, a little softer if the customer wants something a little bit different than what we offer. But there have been times where I tell them, “I’m not the one for ya.” Like it’s—for your needs, and for the softness level that you want, I can’t make that bed because I don’t feel like I can stand behind it the way you want us to make it. Twenty years ago, I kept running myself through the wringer, well I’ll make it firmer, I’ll make it softer, what do you wanna do? I kept changing things and I’m like, it’s not getting any better and I’m getting pretty worn out from this whole thing.
WAILIN: Tim’s store, Quality Sleep Shop, was started in 1969 by a former foam salesman named Robert Brixie, who traded his house for the store’s first building. He and his family lived in an apartment above the shop. Now he lives nearby and still pops in once in a while.
TIM: Mr. Brixie, the original owner, what a great guy. I started with him in 1990 after school. I loved him. He was such a perfectionist. He’s an old Navy guy and just a big man, and he had this big booming voice and he’d always say, “You can’t cheat ‘em! Believe me, these old people would bang down the front door saying give me my money back if you make a mattress that doesn’t hold up!”
WAILIN: Tim had just graduated from high school when he went to work at Quality Sleep Shop.
TIM: One of my sisters actually dated a guy that used to work for Mr. Brixie and I needed a part-time job and he goes, “Go see Mr. Brixie, he’s a good guy to work for.” So I started there and I knew it down to my shoes that this was what I was gonna do, yeah, loved building these beds. The mentoring from Mr. Brixie was great, but I really enjoyed the physical building of the product too. Mr. and Mrs. Brixie lived upstairs and i’d be working in the shop downstairs. We had a showroom in the front of the store, and every day, Leona or Lee, would come down with like pie or hot tea. She’d always make something for ya in the middle of the day. What a nice thing! You’d get to sit down and eat something homemade. Yeah, they really treated you so nice. It was just before the mattress shop on every corner type of environment and we were competing with the Sealys, Stearns and Fosters, and there were some independents. Like there were more independents, but they kept going bankrupt. And I asked Mr. Brixie, the original owner, I’m like, “Mr. Brixie, are you nervous about going out of business?” And he said, “No!” And I’m like, “How can you be so confident?” He goes, “I never cheated. These other mattress companies, if they get short on money, they would start putting in subpar filling materials. I never cheated. If we were low on a certain SKU, whatever that product was, we’d always upgrade it. We never would go down. You always do one better, even if it hurts you a little bit there, it helps you in the long run.” But that’s why he was so confident not to go out of business. So it took out all the guys who weren’t as healthy, but the ones that do a good job stayed.
Mattresses years ago used to have buttons in them. It was called button tufting. We did them inner tufted; we would put rows of buttons on the interior of the bed. A customer, a lady says to me, “How do I know you’re gonna put those buttons in there?” It never crossed my mind not to put a button in, like I couldn’t complete a bed, like if our button tufter would give us trouble, if it was missing one button, it would not get sewn together. When I first started working there, he says, “Never lie to a customer. You never tell anybody anything just because they want to hear it. It’s gotta be the truth.” So when the lady asked about those buttons, I was like, “I don’t know how you would know if the buttons are there are not, but they’re there.”
WAILIN: In 1994, Tim was 24 years old and considering a change.
TIM: And I say to Mr. Brixie, “Mr. Brixie, I gotta get a real job.” And he said, “If you quit, I’m gonna go out of business.” and he goes, “My kids don’t want it; I’m ready to retire. Give me one more year, your same pay rate,” which I was making nine bucks an hour and so I’m like okay. So one more year comes, I’m 25 years old and in September 1st of 1995, I bought the company from Mr. Brixie and I was so scared. I borrowed a third of the money from him, a third of the money from my parents and a third from the bank. And the bank loaned me the money at nine percent interest and Mr. Brixie goes, “I’ll loan you a third at eight percent,” and my mom and dad go, “We’ll do eight percent too.” I remember at the closing at the bank, it was around lunchtime, a little bit after lunch and I go to my dad and my mom, “Wanna get some lunch?” My dad goes, “No, you’ve got a lot of mattresses to make,” so it’s right back to the shop I went. And I never took a day off. All I did was work. I was so scared to fail or not pay anyone back.
WAILIN: Tim moved into the apartment above the shop, where Mr. Brixie had lived, and kept making mattresses the way he’d been taught. But he did make a few changes. He expanded the shop’s delivery radius into the city of Chicago. He made a lot of deliveries himself, and sometimes his girlfriend, Cindy, would tag along. Another big development came along in 2006. By then Tim and Cindy had gotten married and had a daughter, Emily.
TIM: My daughter Emily was born with severe eczema and all kinds of allergy issues, like, I felt so bad for Em when she was born, like her stomach was so distended and her skin was so dry and cracking all the time. And my wife said, “Why don’t you make her an organic crib mattress?” So I was like, “Yeah no problem,” like I would make organic mattresses every now and again, like onesie twosies. Never thought much about them, but it seemed to make sense for our family. After I made that, I’m like, “Cindy, we’re not the only family with these health issues and we should offer these to our consumers.” We would spend like an hour, hour and a half every night, well more like two or three nights a week, for a year, working on a product line one, and then how do you describe it to the people and how do you put a website together. The rabbit hole gets really deep: Okay, where’s the wool sourced from? What’s the wool washed with? Is it treated with anything? t gets pretty complicated and it was a learning curve for sure on our end. Now, all our distributors, everyone that we work with on our end, I physically visit the plants and make sure that what they say is what they’re doing and I follow each product through.
WAILIN: Tim sold his new line of organic mattresses in his showroom while he and Cindy worked on the website. In 2007, they launched a new brand called My Green Mattress and started shipping nationwide. Like other mattress-in-a-box companies, Tim’s organic mattresses come rolled up and unfurl when they’re unpacked. The crib mattress is called the Emily, after Tim’s daughter, whose eczema eventually cleared up.
TIM: Our philosophy is let’s build a bed that’s really nice, very durable and that’s so approachable on price, like we’re right there with the major brands with their traditional built beds for the organic, so it’s a really good model. How we stay affordable is every morning I’m at the shop, I’m working on equipment, everybody’s doing their part here, we’re all working really hard on building these beds, but then it all goes direct to the consumer. There’s no middleman.
WAILIN: This business model has helped insulate Quality Sleep Shop from the competitive threat of corner mattress stores. Where Tim has ceded some business is in twin and full beds. He thinks a lot more people are shopping at Sam’s Club or Costco for those smaller mattresses. But Tim still sells a lot of queen- and king-sized beds, and he recently hired a director of marketing to lead a bigger push for My Green Mattress. In selling online, Tim has the potential to reach a much broader audience for his organic beds, but it also puts him in competition with the many mattress-in-a-box startups that have raised venture capital and gotten a lot of press.
TIM: I think those companies are great. They simplified it. It’s a memory foam bed, they all seem to be at the $800 price point, not much variation in those mattresses, but I think it fits a need for the millennials, for the people who don’t want to shop. With My Green Mattress, we’ve shipped mattresses since 2007. What do I know about anything really? I’m just a mattress maker, but it always amazes me that someone would buy a mattress online — I wouldn’t be able to do it, but so many people do.
WAILIN: Tim might describe himself as just a mattress maker, but his principles as a business owner have served him well. Keep it simple, never cheat. It’s a quiet but powerful contrast to Big Mattress, which pumps out hundreds of virtually indistinguishable models, all marked up a hefty amount. It’s a good business for the large mattress companies and their private equity investors, but Tim wants no part of it.
TIM: For whatever reason, we’re doing well. Like even the small independent bookstores, like I feel bad for a lot of those bookstores that have gone under. There’s so much knowledge you get from, you know what I mean? Those little places. I’m starting to think of my company as like a microbrewery. You can get some really good beers from someone, you may never have heard of it, but you can’t wait to have another one of those beers, and it’s kind of like our mattresses. You may not have heard of us, but once you try it, you’re like, “That thing is awesome.”
WAILIN: And me, Wailin Wong. Hello. And also good-bye, because this is actually the second-to-last episode of The Distance.
SHAUN: Now this is a super awkward good-bye, like when you say good-bye to someone on the street, but you keep walking the same way.
WAILIN: That’s exactly what this is like.
SHAUN: You’re going to hear us again in two weeks.
WAILIN: You are going to hear us again in two weeks. And we’re working on a new show, so don’t go anywhere. We’re working on a new show, and we’ll bring you more updates in a couple of weeks. Is there anything else we should say?
SHAUN: Yeah, our illustrations are by Nate Otto. And we are a production of Basecamp.
WAILIN: Basecamp is the app for helping small business owners stay in control of projects and reduce email clutter. Try Basecamp free for 30 days at basecamp.com/thedistance.
In 2010, as Worksman Cycles was emerging from the recession and ready to grow again, the maker of heavy-duty cycles saw an exciting opportunity to supply the bikes for New York City’s bike share program. But the city rejected Worksman’s proposal, and that disappointment lay the groundwork for the company to relocate to South Carolina, leaving behind the city it had been in since its founding in 1898.
This is the second part of our story on Worksman Cycles. If you missed the first episode, which explores the company’s history and commitment to keep manufacturing bikes in the U.S., be sure to catch up!
WAILIN WONG: Hi everyone, it’s Wailin. This is the second episode in our two-parter about Worksman Cycles, so you should go back and listen to the previous episode if you haven’t already. It’s about how Worksman found its niche making industrial cycles and kept its manufacturing in the U.S. even as the rest of the American cycle industry moved overseas. And now here’s the second part.
Worksman Cycles was founded in 1898 in New York. Its first factory stood where the original World Trade Center would later be built. The company’s industrial tricycles and bicycles are used in factories worldwide, but they’re also a constant presence on New York city streets as delivery vehicles. The vending division at Worksman invented the stainless steel hot dog cart. It doesn’t get much more New York than that. Wayne Sosin, the company’s president, grew up in Queens. But in 2015, Worksman decided to migrate south.
WAYNE SOSIN: So how does a company that’s been in New York City for 118 years end up in Conway, South Carolina? Now that’s a good question.
WAILIN: Welcome to The Distance, a podcast about long-running businesses. I’m Wailin Wong. On today’s show, how Worksman Cycles’ desire to stay and grow in America meant leaving the only city it’s ever known.
JANICE: The Distance is a production of Basecamp. I’m Janice, a customer support rep at Basecamp. Basecamp is the better way to run your business. It’s an app for communicating with people and organizing projects and work. If you’re feeling overwhelmed by email, chat and meetings, give Basecamp a try. Sign up for a 30-day free trial at basecamp.com/thedistance.
WAILIN: We’re in the company’s factory in Ozone Park, Queens, It’s a century-old building that once made hats, and later birthday candles. Worksman has been there since 1979. At the time I visited, in late March, they were still making some wheels at this factory while they gradually shifted those operations to South Carolina. Here’s Bruce Weinreb, who handles sales and marketing at Worksman.
BRUCE WEINREB: We’re making bikes in such a traditional way that if you walked into this building in 1979, or if it was a bicycle factory, 1940, it would have been very much exactly how we’re doing it today. So you can see we’re lacing wheels by hand.
Truing is when you make a wheel so it doesn’t wobble side to side. Every one of our wheels gets trued by hand. We’re talking many, many thousands of wheels every year.
WAILIN: At the new factory in Conway, South Carolina, the work of making wheels and balancing them is done largely on modern equipment.
WAYNE: The first machine places the spoke into the rim so that the nipple of the spoke gets tightened onto the rim to a certain tolerance, such a good tolerance that it can go through this robot over here and this robot will do the balancing of the wheel robotically, so if you watch, you see the wheel is being measured right now for its true-ness.
Once we have the automated system working, it’s probably about 40 percent more efficient, which is a huge amount, I don’t have to tell you that, but we make so many unusual wheels and we do a lot of small runs that sometimes re-setting up a machine to run 20 wheels, it doesn’t pay. The setup time is so lengthy that by the time you set it up, you could have done it by hand. So we’re doing a combination of old and new.
WAILIN: It’s not like Wayne just decided one day to go shopping for a more modern manufacturing facility and decided on Conway. The story of why Worksman left New York actually starts in Dallas, Texas, in 2010. Wayne was in town for the red carpet launch of that year’s Neiman Marcus Christmas Book, the department store’s annual catalog of over-the-top, outrageously expensive holiday gifts. Worksman had a $4,500 adult tricycle in the catalog that year, featuring fabric by fashion designer Tory Burch. While Wayne was in Dallas, he called aerospace company Lockheed Martin, one of his customers, and asked if he could visit their facility.
WAYNE: They put me on the back of a golf cart—not a tricycle, but the back of a golf cart—and they gave me an official tour that took an hour and a half and they were showing me amazing things, the most modern factory I’d ever been in in my life. And the day I was there, the Kuwaiti airforce was being trained and flying F16s and I was outside watching them do touch and gos. It was amazing. So you go through this incredibly ultra-modern robotic plant and we saw our tricycles all over the place and when I’m done, a naval official is waiting for me. He says, “Are you Mr. Sosin? How’d you like the tour?” I said, “Well, to be honest with you, I wasn’t expecting this kind of VIP treatment. I can’t thank you enough.” He goes, “Well, do you want to know why we gave you that VIP tour, as you call it? We couldn’t run this plant as well as we do without Worksman tricycles.” And that reinvigorated me so because over the years, we’ve always been told oh you know, your technology, it’s so old-fashioned, who’s going to use this? There’s all sorts of modern things. Segway came out, oh they’re gonna cook your clock and you’re not gonna have tricycles anymore. And then I have the most modern facility at the time in the country tell me they can’t run the plant without Worksman tricycles? It just got me so motivated, and that’s one of the reasons that we knew we had to take the next step to grow the company.
WAILIN: By then, 2010, Worksman was coming out of the recession and seeing business pick up again. Wayne felt like the company was bumping up against its production capacity and other constraints in New York.
WAYNE: Taxes are high, getting trucks in and out of our facility was never easy, and we said, “Well, maybe we should be looking at something else one day.” But that’s a very big decision to make. Well, at the same time or shortly thereafter, New York City announced that they were looking for a company to run their bike share program. And we said, “Bingo, this is it.”
WAILIN: Worksman had already supplied the cycles for bike sharing programs in cities like Tulsa, Oklahoma, as well as on college campuses. Bike share was a good fit for Worksman because it makes industrial strength cycles. One of their bicycles can hold up to 500 pounds. Wayne sells bikes to overweight riders who need something stronger than what other companies make, and upgraded tires on Worksman tricycles can roll over metal debris on factory floors without popping.
WAYNE: We make heavy duty bikes and that’s what bike share is all about. New York City at the time said they were looking to deploy 50,000 bicycles within 6 years, which would just be an incredible growth opportunity for our company and we really wanted it in the worst way. We went ahead and put the proposal together and immediately, within three weeks, got a letter of rejection, which we did not deserve. But it was a huge, huge turnoff to us. The city we’d been in for 114 years at the time really shunned us. We weren’t shy about telling the press it didn’t happen and that we were treated pretty disrespectfully, in our opinion and I came out with a quote, something to the effect of, “Well, I guess New York City doesn’t appreciate our 60 manufacturing jobs. Maybe one day they’ll lose them.” It was sort of just an idle rant, if you will, but it was from the heart. I was, we were really hurt by this. So anyway, we started getting contacted by some states saying, “Gee, we heard you’re not so happy in New York. We’d love to have Worksman Cycles in Virginia, in Tennessee, in Kentucky.” If you can bring jobs to a state, they would do a lot of things to help you to make that happen. Well, we became very open-minded at this point. We looked within New York City. There was— Real estate was unavailable or unaffordable, I should say. And then you start looking at real estate that’s one-tenth the price in these states. In fact, the state of Kentucky literally offered us a building for a dollar. If we employed x amount of people, we could lease the building for a dollar a year and buy it for a dollar at the end. Myrtle Beach Regional Economic Development called one day and said, “Gee, we’d love to meet with you guys. We think it’s a great place to manufacture product.” And I’d been to Myrtle Beach so many times on golf trips and vacations and just didn’t see that as being a place that had a manufacturing base, but I was certainly open-minded.
WAILIN: Conway, South Carolina is about 15 miles northwest of Myrtle Beach, in the same county. And if Wayne thought he had gotten the VIP treatment at the Lockheed Martin plant in Dallas back in 2010, he really got courted in Myrtle Beach. There was a technical college in the area and local officials said they would help train welders and machinists for Worksman. They offered tax incentives. And real estate costs were a fraction of what they were in New York. Wayne found a building in Conway that used to be a tobacco drying warehouse and a printing facility for a t-shirt company. It had a concrete floor and high ceilings and the right amount of square footage.
WAYNE: And all the city officials for this little company, Worksman Cycles, came to visit me and wanted to meet with me and invited me to see their operations. And it was the warmest feeling that you ever got of people who really wanted you to come even though, to be honest, we’re a small company. We only promised 40-some odd jobs and they made me feel like we were General Motors trying to come down here. That’s how they treated us. When we were able to locate this building, everything else fell into place. Hey, if it means moving out of New York to lower some of your real estate costs and get some tax incentives, you do what you need to do to keep the company going on the right path.
WAILIN: The Worksman factory in New York is just under 100,000 square feet, but that’s split into three stories with the kind of odd corners and columns that come with a 100-year-old building. In Conway, the building is just one story.
WAYNE: Our analysis is you get about 20 percent more space out of the one story building and you save a lot of time in material movement. We spent an awful lot of time moving things in elevators and it’s very wasteful, especially when you’re dealing with steel, which is very heavy, so always the logistics of doing the manufacturing in a three-story building was challenging, to say the least. For all the years I’ve been in the business, we’ve had a three-story building and we’re telling companies around the world, “You should use our tricycles to get around. It’s more efficient than walking.” Well, in a three-story building, it’s not really practical to ride a tricycle, as you can imagine. But here, we use them constantly. We have five tricycles assigned to different people who have mobile tasks. There are Worksman tricycles for the first time in our own factory. We used to tell companies, “If your building’s about 200,000 square feet, you really need a tricycle. If it’s a million square feet, you need lots of tricycles.” But we never realized that in a 100,000-square foot building, you could really use a tricycle in a much smaller space than we ever really had marketed as such because like I said, the five tricycles we have here, we use constantly. When we tell companies now that they should use trikes, we can say it firsthand.
WAILIN: In Conway, Worksman had the ability to design a factory that would address the shortcomings of the New York space and give the company room to grow. In New York, Worksman made its cycles to order because it had neither excess production capacity nor space to put them. In Conway, the company can actually build up an inventory of finished cycles. And the manufacturing processes got an update, with robotic welding equipment and a new powder coat system for painting the cycles. Many of the workers are also new.
WAYNE: We’re up and running for less than a year, well under a year, as far as what you’re seeing now. We’re probably at this capacity only for about 3 months, the capacity you’re seeing now, and virtually everybody here is new. We’ve had to train an entire staff who had never worked in a bicycle factory before because let’s face it, there are no bicycle factories in the U.S., so we had to train everybody from wheel builders to powder coaters. But it’s been great because in a way, everybody who came here started out “Let’s see what you can do.” And now the person running our powder coat system was the person we first hired to unload trucks and he’s doing a marvelous job at that. The young man who’s running our wheel-building equipment, we got him at a vocational school, didn’t know that he’d have this skill level. We just thought he’d be somebody putting tires onto bicycles, and he’s doing a wonderful job of working our most complicated machine. It’s a really eclectic, interesting mix of people, men and women from all over the country. And not everybody’s southern but the ones that are have taught me that the plural of “y’all” is “all y’all,” and they’ve taught me that “a piece down the road” is a lot further than you might think. They’ve taught me where yonder is, it’s somewhere over there. So we have the Southern influence, but it’s actually interesting because I would not say that it’s a very Southern oriented overall staff, it’s probably 50–50.
WAILIN: Worksman gave all of its employees in New York the opportunity to relocate to South Carolina. Several workers did move to Myrtle Beach, although fewer than Wayne hoped. Other Worksman employees found jobs elsewhere or will be leaving as New York cycle manufacturing operations wind down over the next year. Still others were reassigned to Worksman’s vending division, the part of the business that makes stainless steel hot dog carts and outfits food trucks with professional kitchens. That division will stay in the old building in Queens. But most of the facility will be emptied out, and Wayne didn’t just want to leave an abandoned shell.
WAYNE: We had an opportunity to sell off the building and most of the interest we got was from self storage buildings, and they offered a lot of money to buy the building and when I realized that in a building our size, they would employ approximately five people, it was a huge turnoff to me and I didn’t want to be a hypocrite. We didn’t want to be hypocrites.
WAILIN: Wayne found a company that divides old factory buildings into small spaces and rents them to makers of physical stuff.
WAYNE: You have to produce something or you cannot rent from them. I went to visit one of their facilities. It was so cool. You see everything from furniture makers to artists to small welding operations, but every one of these small, let’s say thousand, 2,000-square foot facilities was making something. And I said okay, that’s pretty cool, so actually in our building, there’s going to be more people employed there than we ever employed there and all the people employed there are making something.
WAILIN: Worksman Cycles depends on people making things. A small welding operation in 2,000 square feet isn’t a customer for a Worksman tricycle, but maybe one day it’ll be a big welding operation in a 200,000-square foot factory.
WAYNE: My son went to Lehigh University in Bethlehem, Pennsylvania. Now the last time I’d been in Bethlehem was probably 15 years earlier, when it was the most vibrant steel plant in the country. It was a city within a city and they must have had 200 Worksman Cycles deployed in the facility in Bethlehem and I remember going there, it was just such a cool place to see, molten steel and it was cool. Well, I went back with my son 15 years later to look at the school and I passed this rusted out nothing. Even telling you now, I get tearful because it was so sobering to see that. You could drive for miles by the old Bethlehem steel plant and it was nothing, it was zero. It was rusted-out structures, not a person there, it was horrible, tumbleweed practically growing if they had tumbleweed in Pennsylvania, that’s what it would look like. It was heartbreaking to me. Well, that’s a customer we’re never getting back. Never. You know, it was replaced by a casino and a hotel. It’s not the same. There were 40,000 people at one point who worked in Bethlehem at Bethlehem Steel and all the supporting companies that supported them, all the suppliers, the ripple effect that we’re talking about. We were just a tiny little cog in that, but you know what? That was a good customer for us. We’ll never get it back. If there’s no manufacturing, yeah, we’ll find other places to sell our tricycles or bicycles for bike share. We’ll reach out to consumers, which we hope to become a much bigger part of our business. But the backbone of our business is American manufacturing. And if they’re not manufacturing, we’re not selling bikes.
WAILIN: Worksman’s role as both a manufacturer and a supplier to manufacturers gives it a unique vantage point on the state of American industry. Like other factories, Worksman will be relying more on automation in years to come. That means fewer humans in the plant, and Worksman needs people riding its cycles. These dynamics are constantly in play, and Wayne watches them carefully.
WAYNE: We have to see American factories successful and if that takes more robotics, well, so be it. Robots can’t ride tricycles, but at least there are other people that are working in the plant. So yeah, I don’t think a lot of jobs are ever coming back. I’m realistic enough to know that, but I’d rather take half a pie than none of the pie.
WAILIN: The story of Worksman is about staying and leaving. It’s worked hard to stay in the U.S., even when doing so didn’t seem to make economic sense, but it had to move away from its hometown to make a long-term bet in a new American city. It turns out it is possible to leave New York, even if you’re a century-old company or a guy from Queens who never imagined himself living in the south.
WAYNE: It’s just a whole different feeling that there’s a support system behind you. It’s really more than the incentives—the real estate costs and the cost of living being so reasonable and a nice facility to have and a pleasant place to live, so it all sort of fell into place. So it was never really the written plan to end up in Conway, South Carolina, but I have to tell you, through that whole series of events, I couldn’t be happier with where we ended up. In the last two years, I’ve traveled back and forth to New York 42 times. I wake up in the morning very often, have to open my eyes and remember, am I in South Carolina or New York? But other than that, it’s pretty cool.
WAILIN: The Distance is produced by Shaun Hildner and me, Wailin Wong. Our illustrations are by Nate Otto. You can find us all over the Internet. We are on Twitter—actually, we’re not all over the Internet. That’s not true. Because we’re, like, only on Twitter, and we have a website. You can find us on Twitter at @distancemag, that’s @distancemag, and you can also subscribe to our podcast via Apple Podcasts, Google Play Music, or wherever you get your podcasts. What else am I missing?
WAILIN: Oh yeah, we are a production of Basecamp. The Distance is a production of Basecamp, the app for helping small business owners stay in control of projects and reduce email clutter. Try Basecamp free for 30 days at basecamp.com/thedistance.
Worksman Cycles is the oldest American bicycle manufacturer that still makes its products in the U.S. Founded in New York in 1898, Worksman has outlasted the demise of American cycle manufacturing by focusing on a niche category: heavy duty tricycles that factory workers use for hauling equipment and getting around industrial plants. And Worksman’s president is determined to keep the company in the U.S., even as that commitment has been tested through the years.
This is the first of a two-parter about Worksman. The next episode will be out in two weeks, so make sure you’re subscribed to The Distance via Apple Podcasts (nee iTunes Podcasts) or the podcatcher of your choice so you don’t miss it!
WAILIN WONG: There are times when a name seems like destiny. Like Thomas Crapper, a famous English plumber from the 19th century, or Usain Bolt, the Olympic sprinter from Jamaica. These names are called aptonyms, and here’s another real-life example, from Queens, New York.
WAYNE SOSIN: The name Worksman is a family name, even though people think we named it because we make work bikes. It’s really a family name.
This is our mover industrial trike. This is the kind of tricycle that you will see in factories like Ford Motor or Michelin Tire, any large, large facility, these are a staple for getting people around. Our industrial trikes and bikes have to be strong. If you’re riding around General Motors carrying a 200-pound tool box on our tricycle, it’s gotta be durable and heavy duty.
Is there a stigma about riding a tricycle? Do you look like grandma? Well, first you can see that a tricycle like this one, that doesn’t look like Grandma’s trike. So in a factory, I think that stigma is going away. It used to be really a negative point that people say I’m not riding that. They want to ride a golf cart or “I’d rather walk than ride a tricycle.” But it’s become more mainstream. So the stigma seems to be disappearing, but it’s been a long uphill battle.
WAILIN: That’s Wayne Sosin, the president of Worksman Cycles, a company that’s faced quite a few uphill battles since it was founded in 1898. It’s the oldest American bicycle manufacturer that’s still making bikes in the U.S. Welcome to The Distance, a podcast about long-running businesses. I’m Wailin Wong. We’re going to bring you the story of Worksman Cycles in two parts. On today’s show, how Worksman, a company with deep roots in New York, committed both to a niche product and to the lonely challenge of making that product in America.
TARA: The Distance is a production of Basecamp. I’m Tara, a designer at Basecamp. Basecamp is the better way to run your business. It’s an app for communicating with people and organizing projects and work. If you’re feeling overwhelmed by email, chat and meetings, give Basecamp a try. Sign up for a 30-day free trial at basecamp.com/thedistance.
BRUCE WEINREB: The original industrial trike was designed to take the place of horse drawn wagons ’cause horses were expensive to buy, expensive to maintain, and they left unwanted byproducts. Today, we’re replacing powered carts because they’re expensive to buy, expensive to maintain, and leave unwanted byproducts, so it really is circular but the answer is identical — it’s a bicycle, it’s a tricycle.
WAILIN: That’s Bruce Weinreb, who handles sales and marketing for Worksman Cycles. When the company was started in 1898, opening a factory in Manhattan where the original World Trade Center would later be built, the idea was that the three-wheeled cycle was superior to a horse and wagon. Today, the company’s core business is making tricycles for factory workers to haul equipment and get around large plants. If there’s a golf cart being used somewhere, Worksman wants to replace it with a tricycle.
BRUCE: You can imagine a factory that’s building 747s. McDonnell Douglas has a factory outside of Dallas that’s two miles long, a building. So obviously, it would take you a half an hour to walk from one end to the other.
WAILIN: Wayne’s family is also from Queens and was friendly with the Worksmans. In the 1970s, at the behest of his father, who had spotted a Worksman folding bike in a store and wanted to get one for Wayne’s mother, he visited the factory. By then, Worksman had moved from Manhattan to Greenpoint, Brooklyn.
WAYNE: They seemed to have a nice little business over there and they said, “You know, we’re really good at making these bikes. We’re really bad at selling them, and we understand you’re working in sales, you have a good education. Maybe you want to sell bikes?”
WAILIN: But that’s not what Wayne wanted to do. He already had a job he liked in sales for Memorex, the consumer electronics company, and he was going to business school at night.
WAYNE: At the time, I was very young, I was in my 20s, early 20s and I thought I’m gonna be the next big star at Memorex Corporation. They were Fortune 500 company and they were based out in California, and I’d never even been to California. I really wanted to get in their marketing department because I was studying my MBA in marketing and I thought there was a nice little fit there, so for a year every month I typed a report and sent it to the marketing manager at Memorex of my ideas of things that we can do. And I really worked hard at it to try to make a name for myself in the company.
WAILIN: Shortly after his visit to Worksman, Wayne flew out to California for a business trip. It looked like it was going to be his big break.
WAYNE: I’m going to meet the people in top management and I’d just gotten married and I told my wife, I said, “Get ready because I think we’re gonna end up moving to California because when they meet me, this is all gonna happen.” Anyway, I went to this meeting in California and the marketing manager did not even know my name, had never read one of my reports, and there were probably 75 people like me doing the same job I was throughout the country and I really left there kind of down in the dumps and realizing that this wasn’t as easy as I thought it would be, to make a name for myself. And I really thought I had good ideas. And I came back and I started thinking about Worksman Cycles and I said, “Gee, if a big company doesn’t even know who I am, maybe a little company, I could put my ideas to work.” I decided to accept the position at Worksman Cycles and walk away from the Fortune 500 company, and I think most people I know thought I was crazy, but I didn’t. I liked what the company was making, I loved the idea of, you know, tricycles being used in factories. I saw opportunities to take it to the consumer, that there were products that can go to a consumer market, and I saw the fact that they were really willing to give a very young person a lot of rope to work with in terms of ideas.
WAILIN: It wouldn’t be the last time Wayne made a decision that caused others around him to scratch their heads. But his move to Worksman set his career in a new, promising direction. He headed up sales and became a part owner of the company in 1987 alongside the founder’s granddaughter and her husband. And he had early success with his idea to push into the consumer market.
WAYNE: We started making adult recreation tricycles. As a matter of fact, at the time, we were able to get into the Sears catalog and that was a big deal, and so the business was growing, slowly but surely at a very conservative path.
WAILIN: As the company grew through the 1980s, Wayne learned of a factory in Brooklyn that made children’s bicycles, which would be a new market for Worksman. The plant was available to lease and had updated equipment like an automated paint system and robotic welding. Wayne jumped at the opportunity.
WAYNE: We started a brand called Spiral USA and these bicycles were 12 inch, 16 inch and 20 inch children’s bicycles. We’d get into the mass business and it was very exciting because all of a sudden, companies like JC Penney and Sears and Montgomery Ward were really interested in who we were and taking meetings with us. And it was exciting; you’re seeing the buyer from Sears and Roebuck, the biggest bike seller in the world at the time, and they’re interested in what you have. Toys R Us, Child World, we met with all of them.
WAILIN: But after the initial excitement wore off, Wayne got worried. Children’s bikes were a commodity and the big retail chains were interested only in getting the lowest price possible. During a business trip to Chicago, one of Wayne’s sales reps told him a story.
WAYNE: He said, I used to be in the plush business and I was a rep, and I used to rep plush for three factories to all the big guys, and we sold a lot of stuffed animals. I made a comfortable living and I had a good life. And one day, one of the factories told me they were looking to retire and they thought I’d be a good fit to buy the factory and be the whole nine yards: Make it, sell it, box it, ship it, you know, have a real company. It became so tempting I decided to do it. And he goes, to the whole world I was this big shot. I was out there, selling product to Sears and trade shows with big booths and I was this big deal. But my wife knew better. I’d come home at night crying, knowing that I was in financial problems, why did I do this, this is more than I can take on. I was making a good living as a rep. What did I need this responsibility for? He said, I sort of feel, Wayne, that that’s what you’re doing with children’s bikes. Do what you’re good at. You don’t have to be the biggest. And that was a really good piece of advice that I got. I knew in his heart he was right. We closed down the children’s bikes factory and got back to what we’re good at, making industrial grade bikes and trikes, making niche products for consumers. It was one of those things where we had to come to the realization that we’re in a market that’s never going to become huge. We understand that. We’re not gonna become the next Apple or IBM. We’re just Worksman Cycles and in our own little world, we do a great job and we have a great reputation, so we don’t have to be the next great thing.
WAILIN: Here was what Worksman was good at: industrial cycles and certain kinds of consumer cycles, like sturdy two-wheel cruisers for adults and tricycles for riders with balance issues. And there was a third niche category, one that linked Worksman with New York and American food history. Here’s Bruce Weinreb.
BRUCE: In the 1930s, a new ice cream company called Good Humor had an idea that they would sell ice cream from tricycles with an insulated cabinet so they went to Schwinn and they said could you make this? And they said no, not really, but there’s a company in New York that can.
WAILIN: At the time, Worksman was still being run by its founder, Morris Worksman.
BRUCE: And he had a very heavy Russian accent and he was a little—he was a little uneasy in communicating with corporate types, so he brought in his young son, who was in high school, but he put him in a suit and said, “This is my vice president.” And they asked for a lot of tricycles, way more than they could make and the son, who was Irving Worksman, was smart enough not to translate it correctly for his father and he said, “No problem, no problem, just give us the contract and we’ll get it done.” and the father was like, don’t worry about it, and they did and that became an iconic American product, the Good Humor ice cream tricycle.
WAILIN: Worksman made the Good Humor carts for several decades, starting in the 1930s. That primed the company for an important expansion in the 1990s. One of Worksman’s customers was a local company called Admar, another long-running business with deep roots in New York.
WAYNE: Back in the day, they were the original stainless steel hot dog cart manufacturer. Virtually every cart you saw in the street in New York in the 50s and 60s was made by that company. And that company is owned by the Beller family. Mr. Beller, the father, senior Beller, he was looking to retire and his son Jack was taking it over and it was a challenging business and then we were talking more and more with Jack and we decided to buy out that company and bring that in. So we expanded our business by getting into that end of the business in the 1990s, so it kind of made us a more well rounded company and also didn’t put all our eggs in one basket, so we’re not just in the bicycle business.
WAILIN: Unlike Worksman’s foray into kids bikes, food vending carts turned out to be a good business. Buying Admar in 1996 put Worksman in a position, years later, to take advantage of New York’s burgeoning food truck scene.
BRUCE: Still to this day, the guy who comes in just to buy a hot dog cart, is usually a newly arrived immigrant. But he knows how to cook and he has the food from his nation. It used to be hot dogs. Now you go on the streets and you see literally every ethnicity selling from carts and the food, the best food, absolutely the best food. The food truck people come in here and they have a 50-page business plan and they’re Columbia MBAs and they have investors and backing and it’s a totally different type of person.
WAILIN: As the mobile food scene’s evolved from ice cream and hot dog carts to fancy trucks, Worksman has also adapted. It can take a van and build a professional kitchen inside, everything from freezers to grills to deep fryers. And the expertise in making vending carts and food trucks translates into other kinds of mobile businesses.
BRUCE: We also just did a truck that’s a rolling barber shop, and what he wanted to do is have a huge picture window on the side so people could see, and it’s brilliant because he’ll go to a busy spot by a subway in the Bronx and he’ll park his truck at 5:30 and people line up to get haircuts.
WAILIN: The new vending division added diversity to a portfolio that was under threat from global economic forces. Chinese-made bicycles entered the U.S. and brands like Schwinn, Huffy, Murray and Roadmaster couldn’t compete with the cheaper imports. During the 80s and 90s, these iconic American bicycle makers packed up and moved to China. Their suppliers relocated overseas too. In Worksman’s factory in Ozone Park, Queens, where it’s been since 1979, you’ll see a bicycle on display that serves as a reminder of what the domestic industry once was.
BRUCE: We were cleaning up a few years ago and we found these two boxes, three boxes that were buried. And it was new, unused bikes from 1984 and so we decided to keep one. You see there are things here…the famous Hunt Wilde finger grips, they have little grooves for your fingers. The Bendix brake, Bendix Company, so it’s kind of a little museum of things that are no longer available so we decided we’re not gonna sell it, we’re just gonna put it on display.
WAYNE: We had made a decision and it was a hard decision that we believed in making bikes in America. We believed in our workforce, we believed that you could still do it here. We were in a niche market, so it wasn’t a high volume market. We didn’t want our fate controlled in China. And as a result, we made a very difficult and at the time questionable decision that the whole industry kind of laughed at us, and we just said no, we’re staying here, and we’re gonna make it happen here. Well, we did do that, but we had to really expand our import at that point. Otherwise, we’re out of business.
WAILIN: Worksman had a few advantages. Unlike other American cycle companies making commodity products at mass scale, Worksman had found success and sustainability in making a specialty product at a lower volume. But they couldn’t buy all of their components domestically.
WAYNE: The supply chain strategic decisions were difficult. You had to go to Asia to get things. You had no choice. At a certain point, Japan became a real powerhouse in bicycle manufacturing and components. Mr. Worksman, shortly after World War II, started traveling abroad to look for better bicycle parts than he could find in the U.S.
WAILIN: That’s Irving Worksman, the son of the founder.
WAYNE: And he forged a very dear friendship like brothers with a Japanese agent. Now if you think about that, following World War II, and now we’re talking we’re only in the 1960s, so there was not a lot of time separating these events. We were importing certain products pretty early in the game, which helped us down the road because we forged really good relationships in Asia and let’s face it, once the U.S. closed its manufacturing, we needed those relationships.
We do try to support as much domestic as we can, so things like our handlebars, our seat posts we make. Our solid tires are made in the United States. Our cabinets, our platforms are all made here. The frames are welded here. But the tires, the rims, the spokes, the chain, and seats, they’re imported but we hope one day if the American industry does come back, that so will the suppliers that make the product.
WAILIN: Worksman’s stake in the health of American manufacturing goes beyond just bicycles or bicycle parts.
WAYNE: Look, here’s the truth. If there’s no manufacturing in America, we’re out of business. Who are our customers? They’re manufacturers. One of the reasons we didn’t go to China like everybody else is we hoped, and I think it’s come to be true, that the factories that were still here using our tricycles would appreciate the fact that they’re made in America as opposed to being imported from China like every one one of our competitors does, so we felt that that was important. And we’d be hypocritical because we’re counting on the fact that the automotive industry, the steel industry is strong in the U.S. Because the stronger they are, the bigger their factories are. The bigger their factories are, the more tricycles they need. It’s the ripple effect if you’ve ever seen it.
WAILIN: For the last 40 plus years, since Wayne joined Worksman, he’s taken the necessary steps to ensure the company’s growth and stability. He pushed into consumer cycles, got out of making kids bikes and become the supplier of the food cart, a staple of New York life. And in 2015, he made one of his biggest moves yet to secure the future of a company that’s been in New York since its founding in 1898.
WAYNE: So here we are, um, at the Worksman Cycles company in South Carolina.
WAILIN: Worksman moved to a town called Conway in South Carolina, 650 miles away from Queens. On the next episode of The Distance, you’ll hear about the event that drove a wedge between Worksman and its hometown, and what the new factory means for the company’s future. That’s coming up in two weeks.
The Distance is produced by Shaun Hildner and me, Wailin Wong. Our illustrations are by Nate Otto. Make sure you are subscribed to The Distance on Apple Podcasts, Google Play Music, or wherever you get your podcasts, so that you don’t miss the second part of our story on Worksman Cycles. And special thanks to listener Jared Chadwick for suggesting Worksman as a subject for The Distance. If you know of a business we should cover on the show, email me at firstname.lastname@example.org or tweet at me @distancemag, that’s @distancemag. The Distance is a production of Basecamp, the app for helping small business owners stay in control of projects and reduce email clutter. Try Basecamp free for 30 days at basecamp.com/thedistance.
Every year in the weeks leading up to Easter, the four-person staff at Danish Maid Butter Co. starts counting sheep. The Chicago company has made lamb-shaped butter for more than 50 years, moving from wooden molds dropped in cans of ice water to a more modern process. There are other parts of Danish Maid’s business that are larger and growing faster, but the two siblings that run the company remain committed to the butter lambs as an important link to both their family legacy and current generations of customers.
After putting this episode to bed yesterday, I headed off to my first-ever Passover Seder at a friend’s home and was surprised to find a Danish Maid butter lamb on the table. The host explained that his family buys one every year for Passover because they’re fun and this is the only time you can get them. As I spread the butter on matzoh, I wondered whether Danish Maid’s founder ever imagined how the culinary tradition he helped mass produce would take on a unique life outside of the Christian Easter table. Let me know if you have any Danish Maid butter lamb sightings this week!
WAILIN WONG: Every year, for as long as he can remember, Brian Kozack has spent Easter at his aunt and uncle’s house for a late lunch. Brian is my coworker’s husband and he grew up in a southwest suburb of Chicago. His family’s Easter lunch is a big celebration.
BRIAN KOZACK: We’d have three or four different tables because we couldn’t fit everybody at one large table. My family’s kind of large. My cousin—I’m older than her by one day—and it was always an intense fight between me and her to see who got to chop the lamb’s head off.
WAILIN: The lamb Brian’s talking about is a symbol of Jesus — and it’s made of butter. In the Chicago area, lamb-shaped butter is an Easter tradition with Eastern European roots, although the exact origins are kind of vague. The butter lambs are placed in Easter baskets and served at the table.
BRIAN: There were these delicious rolls. My grandma actually still makes them. They’re called monkey bread and we’d throw the butter lamb on there and it was fantastic. It tasted like creamier than normal butters, I don’t know why. It’s super easy to spread. It tasted delicious, it’s kind of that lighter, fluffier butter.
WAILIN: Welcome to The Distance, a podcast about long-running businesses. I’m Wailin Wong. This week on the show, the story of the small Chicago company behind those butter lambs and the emotional connection it’s formed with generations of customers.
JIM: The Distance is a production of Basecamp. I’m Jim, a support programmer at Basecamp. Basecamp is the better way to run your business. It’s an app for communicating with people, organizing projects and work. If you’re feeling overwhelmed by email, chat and meetings, give Basecamp a try. Sign up for a 30-day free trial at basecamp.com/thedistance.
[SOUND OF BUTTER LAMB MACHINE]
WAILIN: If you’ve ever had a storebought butter lamb in the Chicago area, it was probably made on this machine. It squirts butter into a lamb-shaped mold that advances down a conveyor belt. The lambs are three ounces apiece and shaped to look like they’re sitting down with their legs tucked under them.
SUSAN WAGNER: My name is Susan Wagner. I am the office manager at Danish Maid Butter Company here in Chicago. Our mom actually owns the business. My brother Matt and I run it, day-to-day operations. Butter lambs…I always tell people, “They’re my babies.” From the time we start calling people and setting up the prices until the very last lamb is on the truck, to me I’m like, “Ahh. Another season is done.”
[SOUND OF MACHINE]
WAILIN: This is the other big piece of equipment at Danish Maid. It fills little plastic cups with whipped butter, six at a time. These cups actually represent the biggest part of Danish Maid’s business and are found at diners and breakfast restaurants across the country. The founder of Danish Maid, a man named Sievert Kramme, is credited with inventing the whipped butter cup. Here’s Matt Wagner, Susan’s brother and the plant manager.
MATT WAGNER: It was finding a way to have butter spread further by adding air into it and it makes it more spreadable and almost getting more for your money. Any other round cups you see out there are always margarine or a butter blend, which is butter blended with margarine.
SUSAN: Obviously there was never margarine in our house, so I didn’t know what it was, and then when I’d go to other people’s houses and they would have it and they’d call it butter and I’d be like, “That’s definitely not butter.”
WAILIN: Sievert Kramme founded Danish Maid in 1959, but he had been making the butter lambs since the 1940s under a different name. The company doesn’t make its own butter. It buys it, through a broker, from other manufacturers across the country. What Danish Maid does is take the butter, which comes in 25-kilogram boxes, cut it up and spin the pieces around in a machine until it gets to the right whipped texture. To make the lambs, the whipped butter is injected in clamshell molds and then frozen before getting shipped to grocery stores across the Midwest and more recently, into the northeastern U.S.
SUSAN: Where we haven’t hit the market yet is pretty much the south. There are several that call us from Phoenix, Arizona area because a lot of people have retired out that way and the grocers there realize, “Hey, I’ve got a niche market here.”
WAILIN: Danish Maid is a small company. For most of the year, there’s just four people working there: Susan, Matt and two other employees. An additional half dozen workers come in to help make the butter lambs, but Danish Maid doesn’t have delivery trucks or dedicated salespeople. It relies on distributors to get their products into supermarkets. And when people in states like Arkansas and California can’t find the butter lambs at their local grocery stores, they call the number listed on the Danish Maid website. Susan’s the one who answers the phone.
SUSAN: I had somebody call and they had to have them, and they paid the shipping from here to California for five or six individual lambs. I said the shipping’s gonna cost more. “I don’t care, I have to have it.” We’ll go looking for a box somewhere and ship it out to them. We probably do more than what it’s worth, but if it means that somebody’s gonna get the Easter butter lamb and maybe hound their grocer to start getting it, to us it’s worth it.
Usually they’ll ask a lot of questions, like, “Well, do I need to give you my credit card number?” I’m like, “We don’t take credit cards, I’ll just send you an invoice.” “Oh, you trust me?” I’m like well, yeah, whatever. We keep it pretty simple here. I don’t think you can call a big company and just say, “Hey, I just want two of your—whatever it is you make. Can you just mail it to me and I’ll pay you later?”
WAILIN: Everyone is hands on at Danish Maid, whether it’s Susan shipping individual butter lambs to a person in California or her brother Matt repairing equipment that dates back to the 1960s. Both Matt and Susan, who are the youngest of four siblings, grew up watching their father Raymond fixing machines and working on the line. Raymond grew up in Remington, Indiana. His father managed a nearby plant that manufactured milk powder, and he worked at different dairies in central Indiana after high school. It was at one of these jobs where he heard about Danish Maid.
SUSAN: Someone there said was big talk of a guy opening one up in Chicago. My dad had just been married and so he and my mom came up to this area, and he started working here in the late 60s and he moved up pretty quickly. He was running the place for the guy that was semi-retired and moved to Florida and he just always bugged my dad, you know, “When are you gonna buy this place,” right? And finally in the late 80s, he and my mom bought it.
I never was like, “Oh, my dad owns this butter factory,” you know, because I knew right away my friends would think oh you know, he’s just sitting in an office or whatever. Sometimes I’d bring my friends in here and they always said at the end of the day, “Oh, I never saw your dad sit down.” Well yeah, he’s working and he was always out there right alongside ’em working and never stopped, never sat down.
MATT: If something broke down, he always taught us that if you can, you don’t go and call somebody to always have to come out and fix something. A lot of things you learn to do yourselves, and I remember him telling me Danish Maid had kind of gotten the reputation that from other companies that if you can’t get it to work, send it to Danish Maid, they’ll figure it out. That’s how we came about with the butter cups. That machine was actually meant to package creamer cups and they wanted us to you know try to tinker around with it and see if we can’t try to fill something else. And my dad and the original owner, they played around with it until they could get it to run right.
SUSAN: I think his ability to fix stuff, you know, made it so that this could stay going because like Matt said, if you’re always calling someone to come fix stuff, your money starts disappearing pretty quickly.
WAILIN: The founder of Danish Maid, Sievert Kramme, said he was the first person to mass produce the Easter butter lambs, which people would often make at home by carving sticks of butter or using wooden molds. At Danish Maid, workers used to make the lambs with wooden molds too. The molds were held shut with rubber bands and dropped into a large milk can filled with ice water. Once the lambs were set, the final touch was two peppercorns for the eyes and a ribbon around the neck. The process moved to a machine in the 1970s, and the peppercorns and ribbon went away. That’s shortly before Mary Diaz started working at Danish Maid.
MARY DIAZ: There used to be more people, I think about 11 of us, either 11 or 10, but there was a line of girls. Somebody had to sit in the middle of the machine where the butter would come out and watch it, make sure, you had to squeeze it, and then somebody else you had to put a sticker on it and then you had to pack it in the box.
WAILIN: Mary worked at Danish Maid for 30 years. She watched Susan and Matt grow up and take over daily operations at the company. And she retired three years ago, kind of.
MARY: They were all nice to me, you know, every one of them, so I didn’t mind going back or help out, you know, ‘cause I told her if you ever need help, give me a call, I’ll be there. I go back every year. But next year I don’t know because my granddaughter’s having another grandbaby. Who knows, I’ll probably go back anyhow.
WAILIN: This year, Susan and Matt expect to ship out 4,000 cases of butter lambs. That’s 144,000 lambs. But the number’s been declining, from 7,000 cases several years ago. One major blow came at the end of 2013, when a large supermarket chain closed all 72 of its Chicago-area stores.
SUSAN: So to be down to 4,000, that’s a huge drop and of course every year, we think okay, who else can we hit? It seems like whenever we get somebody new, it’s like somebody else disappears. In the grand scheme of things, When it comes down to it, a lot of your bigger companies that would be distributing for you, you know it’s all about: Is it worth it to them to distribute our product? Because if they’re delivering it to a store that doesn’t get anything else from them, then they’re losing money because they’re just delivering our lambs. Two cases of lambs didn’t pay for the shipment. That’s always been our biggest obstacle, is just the initial getting into a store. We’re such a small company compared with all your big-name brands, that they already have their way into the store. They just have to make a product and shoot it in there. For us, it’s you know we have to claw our way in and hope for the best.
WAILIN: Easter butter lambs are a niche product for sure, but Danish Maid still faces competition from some other companies, including one business in Buffalo, New York that’s been making the lambs for nearly as long.
SUSAN: A lot of times we get people that say, “You know, we’ll go with the other company because it’s cheaper.” And other companies know that: “Hey, if we knock a few cents off this we may lose here, but it doesn’t matter because we own all this other stuff.” But for us, it’s like, this is our baby, this is what we make and, you know, it hits us hard when people say, “Oh, that’s too expensive.” That’s what you get when it’s a small business and a lot of it and it’s all hands on and it’s a family owned business. It is getting harder for smaller businesses to survive.
WAILIN: The biggest seller in Danish Maid’s product line is not its lambs but its cups of whipped butter, which can be found at restaurants as far south as Texas and Florida. Sales of the restaurant cups have been going up. That might seem like the obvious opportunity to grow the business, but the Wagners have been deliberate about staying small enough so they can keep supplying their local customers. Matt says their father once turned down a big fast food chain that wanted to buy the restaurant cups.
MATT: In order to fulfill that, that would have had to have been our sole business for the cups. He didn’t want to leave all the other little distributors that we’d been already selling to and he said, “Thanks but no thanks”. ’Cause a lot of times, you only sign contracts maybe one or two years, and when that’s up, you’ve left all your other customers behind and then the new guy might say, “Well no, we’re gonna go with somebody else,” and then you’re left with nothing.
SUSAN: We’ve had airlines ask us to give them bids for our butter cups and we give them a bid, but we always tell them, “We’re not gonna come in cheaper. If you’re looking for the cheapest avenue, it’s not us.” And they might say, “This is a huge opportunity.” But it’s like well, if we fill your orders, we can’t fill anybody else’s orders. And it’s not what we’re about. We don’t want to leave behind the imprint that we have on Chicago with our product. Sure, we’d be in every airplane, but I feel like it’s very important to our customers that keep carrying our product and it’s important to us.
WAILIN: And if Danish Maid was going to go all in on their cups of whipped butter, that growth might come at the expense of the Easter butter lambs. And it’s important to the Wagners to keep the lamb tradition going.
SUSAN: You know, our restaurant cups are in restaurants all over, but this is our only shot at being in a store. So if I watch every lamb and I see every lamb go by and I feel confident that all right, that’s a quality product, it’s gonna be in a store and this is our name and it’s the only time someone in Connecticut or Maine is gonna see our name, I want it to be a good product.
WAILIN: Danish Maid’s long history with the butter lambs is also why Susan, year after year, will put a few in a box with an ice pack and send them off to Chicago transplants in far-flung states, trusting that the check will show up in the mail eventually.
SUSAN: They just send us a check. Over the years, we almost always with those orders we’ll get a note, like “Thank you, it made my family so happy.” And I think sometimes the reward is just the thank-you note that they send.
The Distance is produced by Shaun Hildner and me, Wailin Wong. Our illustrations are by Nate Otto. You can find us on Twitter @distancemag, that’s @distancemag; on iTunes, where we would love it if you left us a rating or review, or at thedistance.com, where you can listen to all our stories and sign up for our newsletter. The Distance is a production of Basecamp, the app for helping small business owners stay in control of projects and reduce email clutter. Try Basecamp free for 30 days at basecamp.com/thedistance.
Otto Wiegel founded Wiegel Tool Works the day before the bombing of Pearl Harbor in 1941. This year, his three grandchildren mark the manufacturing company’s 75th anniversary. The family business, which specializes in precision metal stamping, has survived succession issues and dislocations in the global economy to become somewhat of a rare species: A midwestern American manufacturer in growth mode.
(Sound of machinery)
WAILIN WONG: This is the sound of heavy metal. Or more specifically, heavy metal stampers. They’re massive presses clocking in at 200 tons, 400 tons and 450 tons. The largest machine, the 450-ton press, mostly makes a specific copper part that goes into car transmissions. The finished piece fits in your hand, but the machine that makes it is so big it’s rooted five feet underground in a pit that took 38 cement trucks to fill.
RYAN WIEGEL: The reason why we got the 450 is because of the bed size. We never need the tonnage. We might go to a 150 to 200 to 250 tons on a 450-ton press. That’s not much at all. We needed the bed size. The complexity of the tools was required to produce a part, it’ll fit in the size of your hand, but in order to produce the part, you need multiple stages and once you put those multiple stages, you’re gonna need that bed length in order to produce the part.
WAILIN: That’s Ryan Wiegel, who along with his brother and sister own Wiegel Tool Works. Their grandfather, a German immigrant, founded the company on December 6th, 1941, a day before the bombing of Pearl Harbor. That uncertain beginning was the first of many events that would threaten the existence of Wiegel Tool Works over the next 75 years, including family succession issues and the most recent recession. Here’s Erica Wiegel.
ERICA WIEGEL: We wanted to get in the recession and get out of it with all our employees. We wanted them to maintain their households, their payments, their cars, their bills and just because the economy was suffering and we were suffering, we wanted to make sure that we came out as well as they did too.
WAILIN: Welcome to The Distance, a podcast about long-running businesses. I’m Wailin Wong. On today’s show, how the Wiegels’ strict financial discipline helped them pursue their vision of what American manufacturing looks like in a post-recession economy. The Distance is a production of Basecamp. Basecamp is the better way to run your business. It’s an app for communicating with people and organizing projects and work. If you’re feeling overwhelmed by email, chat and meetings, give Basecamp a try. Sign up for a 30-day free trial at basecamp.com/thedistance.
Wiegel Tool Works is based in Wood Dale, Illinois and specializes in precision metal stamping. You can think of metal stamping like punching a shape out of a piece of paper. But instead of paper, the Wiegels use ribbons of copper or brass that are wound on flat spools the size of wagon wheels. And the end result isn’t a simple flat shape like a circle or a heart, but a piece with a complex topography of holes and ridges and peaks. These metal pieces go into things like automobiles, exhaust fans and kitchen appliances. Here’s Aaron Wiegel.
AARON WIEGEL: We’re certainly not a commodity. I mean, stamping right-angle brackets is just not in our DNA over here. We have very, very sophisticated tools. We do take on the tough projects and because of that, we’re not labeled as a commodity and that’s why they’re forced to come to a very select few, you know, vendors that can do what we do.
WAILIN: When Aaron and Ryan’s grandfather, Otto Wiegel, started the company, it was a tool and die maker. It made tools for metal stamping but didn’t do any stamping itself. In 1968, Otto suffered a stroke while his only child, Martin, was serving in Vietnam with the U.S. Navy. Martin was honorably discharged so he could return home and help run the family business. During the 42 years Martin was in charge, Wiegel Tool Works started stamping. It continued making tools, but just for its own stamping jobs.
RYAN: The stamping was where all the money was, so when our accountant joined up with my father back in ‘94, he says, “Marty, you gotta stop building tools for the outside and you’ve gotta focus on stamping,” and from that day forward, we’ve been having a big push for that. Had we not done that today, we would never be the size and potentially would not be in business today because it’s a very, very competitive business.
WAILIN: Otto Wiegel died before any of his grandchildren were born. But his presence loomed large at the factory where the three Wiegel kids played laser tag, rode a dirt bike around the parking lot, sorted metal washers and eventually got to learn how the business worked. They understood from early on how they and the company depended on each other for their well-being. Here’s Erica Wiegel.
ERICA: It would be our birthday time and my dad would ask us, “You know, you’re gonna be 16, do you want a brand new Mustang fully loaded, whatever you want? Or do you want a Green Bruderer machine?” And we decided that we wanted the Bruderer ’cause that machine would make us better, make us money, and it could employ more people and just expand our business.
WAILIN: This emphasis on financial discipline pervaded much of the Wiegels’ upbringing. Martin’s favorite phrase is “cash is king.”
ERICA: We also went on vacations where my dad would give us a certain amount of money for lunchtime and whether we wanted to spend it all on the first day of vacation or let it drag out for the whole seven days, it was our choice, but it was also a way of learning money management.
WAILIN: Otto Wiegel died in 1973. By that time, Martin was running the company, but his mother, Otto’s widow, retained ultimate financial control. When she passed away in 1993, her death set off a chain of events that tested the company’s survival.
RYAN: My dad was really strapped financially. He could not um purchase capital equipment and once ultimately my grandmother passed away and he inherited this money, it was a challenge for him because the transfer did not go well. And because of it, we really struggled for quite a few years.
WAILIN: Ryan is talking about the estate tax, which is a tax on property that transfers from a deceased person to their heirs. The federal estate tax is a contentious political issue, with its opponents calling it the death tax because of how it can debilitate small businesses and farms. Here’s Aaron.
AARON: It is a job and company killer. That second generation taking over is already at a major disadvantage because they have to come up with 55% of what they’re inheriting, which in our line of work, I mean, to pay off 55% of the equity that we just inherited, it’s all tied up in, in capital equipment and buildings and it’s not liquid in cash. So to come up with that money is very difficult and it sets you back for years.
ERICA: The most important thing is that my dad looks at everybody here as their family, their extended family, and if my family was not able to pay off the death taxes, my dad would have to look at 35 people in the face and tell them that they don’t have a job anymore. Now that we’re 170 people, we wouldn’t have the face to tell 170 people because of a death tax, that we can’t support your job anymore.
RYAN: That’s why my father started planning really as soon as my grandmother died and he did not want to have that burden on us, the third generation.
WAILIN: When Martin Wiegel started doing his succession and financial planning, Aaron was only in eighth grade and it was too early to know whether he or one of his siblings would take over the company. But things quickly fell into place. Aaron and Erica studied engineering at the same college, while Ryan spent a high school summer working for an equipment dealer and studied communications. They all wanted to join the family business. In 2010, each of the three siblings became part owners of Wiegel Tool Works. Aaron is the president, Ryan is project coordinator, and Erica sits on the board while running a different metal stamping company that she bought with her own money in 2015.
AARON: Splitting this company between one owner to three owners, which most historical companies when that happens, it usually becomes a disaster because it’s a three-headed monster and if you don’t have the checks and balances and the hierarchy, it could really uh blow up in your face.
ERICA: We grew into this our whole life, so when we did transfer and take over the company, it was nothing new for us. The only thing was it was new for the employees. They didn’t even know that we were owners until months later, we said, “Oh by the way, we are the new owners,” and that’s how well the transition went.
WAILIN: The difficult thing during that period wasn’t managing the transition from Martin to his three children. It was making sure that Wiegel Tool Works could get through the recession. The company’s fortunes were closely tied to those of American car companies, which ended up needing a federal bailout.
AARON: My dad’s been by our side the entire time including today. He doesn’t work full time, but he comes in and does a lot of advising for us. Had he not been there during that time, we would not be sitting here talking right now. Some of the decision making that went on during that time period, I would never have made those calls and would have had the strength to do it because I just thought it was too extreme in some cases, but he certainly made the right decisions to cut things where they needed to be cut and just survive because if you waited a day, it might have been a day too late. It was just survival mode.
WAILIN: The advantage that Wiegel Tool Works had was that it was debt free, and it had a reputation of paying suppliers on time and hitting its production deadlines for customers. So the thinking was that as long as the company could stay afloat, it would outlast competitors with weaker balance sheets and larger debt burdens. But the atmosphere was still uncertain and terrifying. So the Wiegels took an extra step. They printed out their bank statements and brought them to meetings with customers.
AARON: They weren’t allowed to take them, but they were allowed to review them. We were showing that we were a debt-free company, that we were stable and also we had a succession plan already written in place and all lined up, which we executed the following year. They wanted assurance because it was a very, very scary time. I remember running the business and at the same time, when I had time left over, I went on the floor and ran machines. I was running around with forklifts. I mean, you did what you had to do to survive. So you know, visiting customers and seeing the look and scare on their faces that we’re gonna try to award you this business, yet we don’t even know if we’re gonna be open tomorrow, is a very scary uh thought.
WAILIN: I asked Aaron when he felt like the business and the economy had turned a corner. He had an instant response down to the month.
AARON: It was October 2009 (laughs). The government came out with the Cash for Clunkers uh law and that spurred a lot of new purchases of cars when they submitted their old cars, so we were heavily involved with in the American automotive world, the GMs, the Fords, the Chryslers.
WAILIN: Wiegel Tool Works still makes a lot of parts for the automotive industry, but in the last 16 to 17 months, it’s been diversifying into other sectors like LED lighting and construction. Another major priority for the short term is diversifying geographically, which for the Wiegels means opening a second plant in Mexico.
AARON: When my grandfather was running the business, I mean, everything was real local. Today’s markets are real global. We’re supplying parts directly to Japan, to Europe, to Mexico. Um, currently, 45 percent of our products are shipped to Mexico and now we’re seeing a lot of pressure to expand to these areas so that our customers have our capabilities and our production right in their backyard. Customers today just simply do not want to pay for the logistics. They don’t wanna have um waste in their lines, meaning everything has to be lean, so if you are shipping from the United States to Mexico, let’s just say, that’s a five to 10 day transit that is running the clock and taking up their liquid um money, so they want to be right next door. They want to be producing parts at that time and not have a lot of inventory, to keep their money in the bank, I guess. It’s a risk, but a risk that we have to take, given that the global competition and the global customers we’re dealing with today, I mean, my grandfather and my dad’s customers just don’t exist anymore and all those guys were all in the city of Chicago or in the general area. That’s just not the way it’s played anymore.
WAILIN: The nature of the company’s work has changed dramatically too. There’s more automation and robots and real-time monitoring. One stamper has two high-res cameras that inspect parts and ejects defective ones with a blast of air. Aaron says he wants more people to understand how American manufacturing, or at least his corner of it, has evolved into a high-tech and forward-thinking industry.
AARON: If I wasn’t in this industry, I don’t know how I’d even begin to describe what manufacturing would be outside of what I’ve seen in movies. That’s one of the reasons why we’re trying to promote manufacturing as much as possible and try to get rid of that stigmatism that lurks over us, that it’s just a dirty oily grungy type of environment where, you know, you could lose a hand at any moment. You know, you’re not getting oily, you’re not getting dirty, you’re almost at a computer all day long programming these machines to do a lot of this stuff.
WAILIN: Aaron always has to be looking ahead, whether it’s toward a big equipment purchase, opening a Mexican factory or training new generations of tool and die makers. Regardless of what’s next, he wants to be around to make those decisions and protect the family legacy.
AARON: There’s not a day that goes by I don’t get calls or I don’t get a letter from somebody saying that there’s some big overseas company or something local that that wants to acquire you. Now, have we looked at some of these deals? Sure, I mean some of the stuff that we looked at, it’s tough to turn it down but at the same time, we have a legacy here and we’ve got a longstanding tradition and no deal would ever be made unless it’s in the best interest of the family and the company. We’ve got a long rich history and we’ve got a growth trend that’s been currently happening and at this point, uh, there’s really no need to do that unless, uh, it’s going to enhance the overall business—which we would still be involved in.
WAILIN: The Distance is produced by Shaun Hildner and me, Wailin Wong. Our illustrations are by Nate Otto. Thanks to ErikBison and whydoineedanickname1234567890 for your five-star reviews on iTunes. If you’d like to have your amusingly long user name read on the air, head on over to iTunes and leave us a review. The Distance is a production of Basecamp, the app for helping small business owners stay in control of projects and reduce email clutter. Try Basecamp free for 30 days at basecamp.com/thedistance.
LION’s products can mean the difference between life and death for the customers of this family-owned company, which makes protective clothing and training equipment for firefighters. From its origins in 1898 as a horse-and-wagon operation selling clothing to farmers in Dayton, Ohio, LION turns out everything from Teflon suits worn by medical personnel transporting Ebola patients to mini metropolises spanning 20 acres that can be set on fire to train fire departments. Fun fact: LION also makes the gear worn by the actors on the NBC show “Chicago Fire.”
LION’s business brings together complex logistics, creative thinking and the ability to manage high-pressure situations — not unlike the customers it serves.
WAILIN: It’s a Monday morning and 65 Chicago Fire Department candidates are gathered at the city’s fire academy for a crucial part of their training. A few months ago, these men and women were measured for what’s called their turnout gear — their protective coats and pants. Today, they’re trying everything on under the watchful eye of academy instructors.
INSTRUCTOR: You’re gonna wear it up to 10 years before you get a new set, okay? So if something is not right, you’re not being prickly about it right now. We need to know if something is not right. Don’t hesitate to say something. Everybody understand that?
GROUP: Yes sir.
INSTRUCTOR: Trust me, we won’t always be as friendly in the next couple weeks, right? This is the day we need this stuff done right…
WAILIN: The candidates are making sure their names are spelled correctly on the backs of their coats, that their suspenders are the right length and they have enough coverage when they bend over or get down on all fours.
INSTRUCTOR: What I’m looking for is nothing that is too tight or that I’m absolutely swimming in. It’s going to be big. Think about it—unfortunately, a fact of the job is you are going to gain weight. Right? On this job. My point is that a little play room is fine in there because you’re gonna wear a sweatshirt, it’s gonna be 40 below sometimes and you’re not gonna be in a little thin t-shirt, so a little room inside that coat is fine. You just don’t want to swim in it, please.
WAILIN: There’s someone else on hand for the sizing exercise. Mike Kucharski is a representative from LION, the company that manufactured the gear for these firefighter candidates.
MIKE: This is the first time they’ve ever put this stuff on. Some of these guys, this is even kind of new to them, wearing this stuff, so we’re now just gonna check it out, see how it fits, make sure everything’s right, that they can move and do their work with this garments on.
WAILIN: Outfitting fire departments across the country is a big responsibility, and LION’s been doing it for almost a half century, using protective materials first developed for the Apollo space program. The company itself dates back to 1898, when its founder started selling clothing to farmers from a horse-pulled wagon. Today, the great grandson of that itinerant salesman runs a global company that provides firefighting gear, training equipment and logistical support for first responders and the US military. Find out how LION went from farmers to firefighters on this episode of The Distance, a podcast about long-running businesses. I’m Wailin Wong. The Distance is a production of Basecamp. The brand new Basecamp 3 is everything any team needs to stay on the same page about whatever they’re working on. Tasks, spur of the moment conversations with coworkers, status updates, reports, documents and files all share one home. And now your first basecamp is completely free forever. Sign up at basecamp.com/thedistance.
STEVE: This is a picture of Version 1.0 of LION. This is my great grandfather right here, standing next to one of his customers in front of a horse and buggy with Dayton Department Store on it.
WAILIN: That’s Steve Schwartz, the CEO of LION. We’re in a conference room at LION’s headquarters in Dayton, Ohio that’s filled with mementoes from the company’s history. The artifacts show LION’s evolution from a horse and wagon operation originally called Dayton Department Store to a bricks and mortar clothing retailer in downtown Dayton to a business specializing in uniforms for service station workers.
STEVE: This is a framed set of catalogs from really I would call Version 2 of LION, which is when my grandfather went into the corporate apparel business and we were selling uniforms to service station attendants. So you see, this is back I think in 1941, he was selling a shirt and trousers for the huge price of three dollars and 95 cents.
WAILIN: Most of the service station uniforms came in blue, and LION’s salespeople started noticing that a lot of firefighters also wore blue uniforms. That epiphany got the company into the fire business, initially making what’s called station wear, or the shirts and pants that firefighters wear when they’re not out responding to a call. Today, LION’s customers include the fire departments in cities like Chicago, Honolulu, Phoenix and Toronto. It also makes the gear you see on the NBC show “Chicago Fire.” The manufacturing process is very complex. Even something that seems simple, like an exterior coat pocket, can be customized thousands of ways at LION’s factories in southeastern Kentucky.
STEVE: We have probably over 10 thousand different types of pockets. We make pockets for putting your hands in to stay warm. We make pockets to store your mask, for holding your radio, so there’s just a really infinite number of potential shapes and sizes that we can make. So we’re really in the mass customization business to that extent, and that is something that makes us more valuable to our customers, which is good, but it adds a lot of complexity to the manufacturing process. The average order size for us, even though we’re making tens of thousands of these a year, the average order size is, I think, between four and six sets of gear.
WAILIN: There are 30,000 fire departments in the US and most of them have 75 people or fewer, so each order is small and different from the next. But all of LION’s products undergo the same rigorous testing. Threads have to stay intact up to 536 degrees Fahrenheit before melting. Helmets, boots, zippers and snaps have to withstand 500 degree heat for five minutes without dripping or igniting. LION uses materials like Kevlar and Nomex, which were developed for spacesuits worn by astronauts in the Apollo program. In the case of its CBRN suits — that’s chemical, biological, radiological and nuclear — LION is just one of two companies licensed to use a particular kind of Teflon. In 2014, US medical personnel transporting Ebola patients wore LION suits. The company doesn’t make Kevlar or Teflon, so it’s somewhat reliant on its suppliers to keep coming up with technological improvements. That motivates LION to actively seek out the best stuff for its gear.
STEVE: A lot of materials in our products are materials that were developed for other purposes beside firefighting that we have found and have adapted to firefighting. We are the only company in our industry that uses a flame-resistant closed-cell foam for padding that does several things. First, it obviously cushions your knees and elbows because it’s foam. Number two, it doesn’t absorb water in the process like open-cell foam would or just fabric would. And so that was something we found that was being used for aircraft insulation.
WAILIN: There’s a kind of tension in what LION does. It’s constantly looking for the newest and best materials, but it also has to sell that technology to customers who are historically resistant to change.
STEVE: The fire service and first responder business, because they are inherently in a business where conservatism is important, take a long time to adopt new technology, but we really feel like our collection of products with the technology we offer are very, very unique.
WAILIN: This challenge and opportunity are also present in LION’s newest and fastest-growing line of business, which is making firefighting training equipment, called props. One example is a tray of water that’s ignited by propane and equipped with sensors that react to water being sprayed on them. LION can build things like a car or a stove around the tray to simulate real-life fires. Another prop is a portable panel, about the size of a small flat-screen TV, that lights up with digital flames and is linked to a smoke generator. The fake fire can be put out with an extinguisher outfitted with a laser pointer or a weighted hose with a digital nozzle.
STEVE: A firefighter can walk into a room and with our smoke generator in operation in conjunction with this panel, see a fire in a room full of smoke. But the fire’s actually a digital fire, and using microprocessor controls, we can actually have the fire spread to multiple panels, so we can have the fire sort of engulf a whole room and have the appropriate smoke go with it.
Here’s the fire extinguisher. It’s got a pin in it, just like a normal fire extinguisher. And then the instructor would push the button to start and here we have a fire, so I’m gonna pull the pin out…Tells me it took 10.9 seconds to extinguish the fire.
WAILIN: The digital props allow firefighters to safely train in environments that are more controlled and reduce their exposure to carcinogens, while only making small sacrifices on the realism side. And the props can be placed within larger and more complex scenarios. Steve shows me a photo of a 20-acre training facility in the Netherlands made up of realistic concrete structures.
STEVE: I call this Disneyland for firefighters. And so we actually create sort of mini cities that have lots of different buildings and structures. The picture you see here, for instance, has a small sort of small petrochemical complex with tanks and piping. We have a rail car simulation where the rail car’s leaking or a flange could catch on fire. We have a ship simulation where we have an engine fire inside the ship. To the far left, you can barely see it there, we have an underground parking garage. We can have the flames go up the wall and over the wall. We can create what’s known as a flash over effect, which is very very dangerous for firefighters. Essentially the air becomes so hot that the air itself kind of explodes.
WAILIN: LION has built these mini cities in places like Shanghai and Melbourne. It doesn’t have any facilities in the U.S., although it’s hoping to. In contrast, LION’s firefighting gear business is heavily concentrated in the U.S. because it’s had some difficulties expanding that division overseas. Steve likes to be diversified, both in terms of geographic markets and the company’s suppliers. LION has also branched out beyond manufacturing, into software that helps the U.S. Marine Corps track equipment for individual soldiers.
STEVE: We’re managing $2.5 billion every day of Marine Corps equipment through a software system that keeps track by individual soldier what they have been issued, and when they return it, and when they return it, what condition it’s in. And that includes everything from body armor to helmets to canteens to backpacks, sleeping bags—and we won that contract.
WAILIN: Part of LION’s contract involves running 20 facilities around the world where Marines shop for what they need.
STEVE: They literally take a grocery shopping cart and they go through the aisles of our grocery store and they, as I say, squeeze the Charmin to see which of the products they want. And this used helmet looks like this and do I want that, and this flak jacket, is that good enough, and they come back to our station with their grocery cart full of products and then they actually sign on a credit card signature pad, I have taken these items out and I’m financially responsible for them and will return them.
WAILIN: LION doesn’t make any of the Marine Corps gear even though it has expertise in making protective clothing for fire departments. Steve believes that when it comes to the military world, he can compete more effectively and make a better profit by tackling the logistical end, rather than the manufacturing side.
STEVE: That’s always a surprise to people because again, they think of us as a manufacturing company, but since I’ve been CEO I’ve always felt that we shouldn’t limit ourselves to the idea that we have to make everything to be successful.
WAILIN: Steve became CEO in 2006, taking over the position from his uncle on his mother’s side. He had joined LION after business school and worked his way through different roles, from client services to factory operations to sales. He’s cognizant that the products his company makes can mean the difference between life and death, or life and severe injury, for his customers. And taking another step back, he sees firefighters as playing an important role in the economic well-being of towns and cities. LION is working with an NGO to collect used gear for fire departments with fewer resources. There’s a financial motivation behind the program, since LION hopes the recipients of the used gear will eventually become buyers of new equipment. But there’s a social responsibility component too.
STEVE: We figure in our industry there’s probably about a million and a half cubic feet of gear that’s going into a landfill or dumpster that we think much of which could be reused in a country for a fire service either that’s developing or wants to start. What I’m really passionate about is the idea that a fire department is really kind of part of the social safety net of a community. You can’t really have economic development if you’re worried that your building or your business is going to burn down.
WAILIN: And it all comes back to outfitting individual firefighters, like the 65 Chicago Fire Department recruits trying on their turnout gear for the first time. If Steve has his way, LION will be providing their uniforms for their entire career.
INSTRUCTOR: Everybody okay there? So hey, arms up again, move around, feel how it feels in the shoulder. Bend over like I was talking about ’cause I want to see the coverage with your coat on. Perfect, perfect, good, good…