We could go all the way back to the late 1700s if we wanted to trace the history of the fastener industry in the United States. That's when David Wilkinson designed and built a screw cutting lathe that could produce a consistent thread form. His "nut and bolt making machine" was patented in 1798 in response to the growing need for interchangeable fasteners generated by New England's industrial revolution.
Our fastener industry really came of age. though, In the post-World War II era, just a little over 50 years ago, and we have a number of industry veterans who have lived that history and bring a unique perspective to today's fastener business.
Is it more competitive? Is it less attractive as a business venture? Have manufacturer-distributor-end user relationships changed significantly? Has our fastener market shrunk as U.S. manufacturers move their assemblies overseas?
It's amazing that, with all of the major shifts that have taken place in the industry, we still see the sons, daughters, and grandchildren of these veterans enthusiastically picking up the reins with a simple explanation: "The fastener business has been good to our family." It's amazing, too, how many things really have changed in a little over half a century. Some significant fastener products didn't even exist at the beginning of 1950. E.C. "Ned" Crowther, the manufacturers rep who conceived the Sems screw and washer assembly, was still walking the halls of ITW Shakeproof. The Sems patent would be issued in October of that year. His nephew, Richard Crowther, would become CEO of ITW some 40 years later. The thread cutting screw, the Keps� nut and washer assembly, the metal drilling screw, the drywall screw, the drill screw for concrete, and many other fasteners that we take for granted today were not around back then.
There were no computers to give us a running picture of our inventories, our backlogs, or our profitability, either. And there was no Internet to enable us to buy and sell on a global basis. There wasn't that much to buy globally anyway. Japan was the only country making an effort to crack the U.S. fastener market with low prices. The quality of the product they were offering back then and the uncertainty of delivery made it possible for U.S. suppliers to say, "You get what you pay for." Perhaps we became complacent. As other countries have come on the fastener scene, they, too, have started at the beginning of the learning curve. While some still have quality and delivery problems, particularly on high performance fasteners, that learning curve is getting a lot shorter.
But, let's see what a little perspective brings to the mix:
With over 50 years in the industry, lerry Hancock is still at his desk everyday at Mega Metric back in Greer, South Carolina, lerry began his career back in 1955 with Strong, Carlisle & Hammond, a respected mill supply house in Cleveland, Ohio. He started, as most did, in the warehouse, getting a feel for the parts and what they looked like. He moved on to sales and soon became manager of their fastener division. Hancock has been running his own business since he was 30 years old. It was then that he bought the Nut & Bolt House in Greer, South Carolina. He put $10,000 down and financed $30,000. "Today," lerry observed, "I wouldn't consider starting a fastener business with less than a million dollars." Later, he started Metric America, which he eventually sold to Bossard. He went to work for Bossard as part of the deal but after 13 years he wanted to get back to running his own business again. With Virg Lindstrom, founder and president of Lindstrom Metries, Inc. he started Mega Metric in Greer as a subsidiary of Lindstrom. Mega Metric specializes in the large metric bolts and other fasteners (diameters up to M72 and beyond and lengths up to a thousand millimeters). Hancock has guided the operations of Mega Metric for the past 13 years, and it has become the preeminent source for that type of product in the U.S. His nephew, Wayne Hancock, is now Vice President and General Manager.
lerry Hancock acknowledged that relationships were probably closer in the past. Leading fastener makers worked with a select group of authorized distributors and a sense of partnering between manufacturer and marketer developed. As far as customers were concerned, many close ties and friendships evolved. Selling exclusively to distributors, Hancock has tried to sustain that kind of "family" relationship with many of them. For many customers today, though, you know their e-mail addresses rather than their first names. He doesn't feel that competitive conditions are that much different today then they were in the past. It's just a different product mix at a different price level. 'We used to have established prices, distributors normally got 30% off and they protected that margin. Now prices are all over the map. There can be a 40% swing between Europe, Taiwan, and China. The challenge today is determining what you are up against. Computers have helped save the U.S. fastener industry as far as Hancock is concerned. "If we couldn't control our inventories and our costs today-we'd be gone."
After getting out of the navy, Moses Cordova started his first company, Triangle Steel, in 1952. Among other things, they made threaded rod. Later, he started Circle Bolt. He and his wife worked a solid sevenday week "doing everything that needed doing." Cordova laughed when he recalled that they stacked empty boxes on the shelves so that it would appear that they had a big inventory. Today, Cordova Bolt, headquartered in Buena Park, California, which he started in 1975, has over 13 million pounds on the shelves. Inventory is the name of the game at Cordova. Customers run lean these days and expect to get parts when they need them. Cordova delivers. The company also has a branch in Denver. Today, son Matthew runs the Buena Park operation while son Mark is General Manager of the Denver branch. The company is a master distributor of domestic and imported bolts, nuts, screws, rivets, anchors, and metal building fasteners and sells to distributors across the country.
When asked about what had changed the most over the years, Cordova laughed and said, "Well, back then, square head bolts were considered high tech." He did feel we had lost something in not having the personal relationships with suppliers and customers, which were once an integral part of the business. As far as the competitive environment is concerned, he doesn't think it is that much different. Years ago, he explained, there were six or seven screw manufacturers right in the Los Angeles area. Everyone was scrambling for the business. They are not here now but the imports are. "The business is different," he explained, "but it is still decent. For those who know what they are doing and find their niche, margins can be better than ever."
Bob Lehman, at Pacific Warehouse Sales in Santa Fe Springs, California, is another 50-year fastener veteran still actively involved in his business. Lehman started Pacific Warehouse as a stocking manufacturers representative and wholesale distributor. He has had a long tradition of selling only to distributors and today the company sells a broad line of fasteners in seven states through 1500 distributors.
Lehman actually started his career in the eastern part of the country, graduating from Northeastern University in Boston and then interning with the All Stainless Company in 1956. He moved from there to Albany Products, where he discovered a major asset for his future career-his wife loyce "Bonnie" Lehman. In 1961 he became President of Bell Fasteners, Paramus, New Jersey, and for sixteen years strengthened the company's relations with its distributor network and was actively working with the National Fastener Distributor Association and the Metropolitan Fastener Distributor Association. The move to California came in 1977 and, after working for a short time with a local fastener distributor and a few fastener suppliers, Bob Lehman started Pacific Warehouse Sales. In the early days, Bob Lehman sold personally across California, Nevada, Arizona, New Mexico, Utah, and Colorado while his wife Joyce was running the business with the help of a warehouse employee. During this period, Bob found the time to help start the Western Fastener Distributor Association. Today, with the help of three daughters who have joined the management team, Pacific Warehouse has a total of 19 employees with five outside salespeople that include Bob and daughter Kelly Lehman. Daughter Deb Lehman-Kanne, who started with the company in 1985, is now President of the company, daughter Kelly runs the outside sales force, and daughter Tracy is Operations Manager. They all had to earn their stripes, whether it was loading trucks after hours or working on invoices on weekends. Product lines include Nucor, Textron� Camcar, Spiral�, G.L. Huyett, Crescent Manufacturing, Fall River Manufacturing, Metric and Multistandard Components, Devcon/Permatex�, and many others.
Lehman feels that he and his family have managed to maintain close relations with many of their suppliers and distributor accounts. Competition may be a little tougher today. Domestic stainless sources are limited, mainly to Star Stainless. There are only about "2-�" importers anymore. There is a Fastenal store every 15 miles or so and now Grainger is increasing their fastener offering as well. Computerization makes it possible to manage the business more efficiently and, according to Lehman, "the fastener industry is always challenging, but it is still a good place to be."
Dick Silver married Mary Barnhill back in 1962 and married into the fastener business in the process. He, his wife, and her brothers continue to run Barnhill Bolt, Albuquerque, New Mexico. Mother, Bobbie Barnhill, is not quite as active in the business as she once was. Dick Silver started out in the warehouse making boxes and then moved to fastener buying and fastener selling. The company supplies a complete range of fasteners for the construction, military, and aerospace industries in the Southwest. The company also has a successful national and international trade thanks to a user-friendly website that has been operating for several years. When asked about the decline in personal relationships over the years, Silver observed that they have kept pretty close to many of their customers in the region. He did comment that the walk-in business they used to enjoy has pretty well stopped because of the Fastenal stores in the area.
Inventory, Silver explained, is essential to meeting customer needs in the Southwest. Everyone runs lean these days and they expect to get parts off the shelf from their suppliers. That's where Barnhill excels. Silver does feel that it is a much more competitive environment today. Import price levels attract a share of the business. The tremendous growth in the Albuquerque area brings more competition with it. Intel's big operation represents a lot of potential and is having a major impact. Barnhill recently opened a branch operation in Rio Rancho, which is just across the river from Albuquerque. They are building a "whole town over there" to accommodate the people coming in. Obviously, construction fasteners are in demand. Barnhill's new computer program is just coming online and it will give them more internal control. According to Silver, "Business may be more challenging, but it's still a good business."
Wayne Golden has been with Star Stainless Screw Company, Totowa, New Jersey, for 35 years. As is typical with a family owned business, he worked in the warehouse while in high school and, after his education was complete, he moved to sales and then administration. As the name implies, the company works in stainless steels, silicon bronze, monel, and nickelcopper 400 materials. Star offers carriage bolts, hex lag screws, tapping screws, drywall screws, wood screws, brass and stainless machine screw nuts, monel hex nuts, plus flat washers and lock washers. Golden indicates that they have worked hard to retain strong personal relationships with both suppliers and customers over the years. While the fastener business is more competitive now, computerization helps control the cost picture and the Internet is becoming a significant selling tool. Overall, the opportunity to make a profit remains pretty much the same.
With 57 years in the fastener business, Dick Kerr may be our senior veteran still actively guiding his company. He's not just a fastener industry veteran; he's a veteran of World War II and has seen our industry come of age. After getting out of the service he worked briefly for National Screw Company. He then went to college and, when he got out, joined his father, who had started Kerr Lakeside in Euclid, Ohio. Initially, the company did all kinds of machining. Then it began making set screws, socket cap screws, and stripper bolts.
As far as Kerr is concerned, the growth of imports in the post war years has had a major impact on the fastener industry. The company's answer to that has been to deliver superior parts and deliver them faster. Sometimes, he observed, the competition really cooperates by delivering poor parts, delivering parts late and, sometimes, both. The industry is more competitive now. Prices used to be firm. You knew where they were. Now you don't. Computers have been a big help in running an efficient operation, though. Part inventories and shipments were on punched cards years ago. It took a number of people a week or more to get meaningful figures on inventory levels and overall activity. Years ago, you sold it, made it, shipped it, and hoped you got paid. You could respond quickly to swings in demand to protect your cash flow. Today, government regulations have complicated the way businesses must be run. We have lost a lot of our flexibility as far as Dick Kerr is concerned.
We could almost say Don Broehm was born in the fastener business. In 1946 he was delivering parts after school for his father's company, Mid-State Bolt and Nut, in Columbus, Ohio. Fasteners were in extremely short supply immediately after the war and as soon as they came in it was important to get them out to the customers. After a "break" for the Korean War, Don joined the company full time in 1953. His father was out selling, his sister did the bookkeeping and clerical work, and Don did "everything else." Broehm feels that a major change that has occurred among fastener distributors is a more efficient approach to inventories, Years ago, distributors felt that for every type of screw they offered they had to stock a complete range of parts: all the conventional diameters, lengths, and heads. A more efficient approach has evolved today; an approach he calls "system selling." You stock what the customer is using and often add springs, clips, or other hardware items to provide a complete system package. Broehm feels that the competitive environment may be a little different today but it's about the same intensity. Profit opportunities exist as much today as in the past. He pointed out that customers expect more today. More sophisticated equipment is producing more sophisticated fasteners. Tight tolerances are required and customers expect suppliers to provide 100% quality. As a result, he has seen that in some product areas where imports accounted for as much as 60% of the market, they now account for 30%. He does feel that we have lost the personal touch in our relations with both suppliers and customers. "Today, you rarely even talk to a human voice." As far as Don Broehm is concerned, it's taken a lot of the fun out of the business. "Several of our suppliers and customers became close family friends over the years," he said. "I miss that."
Don Broehm still drops by the office occasionally, but Mid-State is now in its third generation of management. Don's nephew, Brad Wilson, is President of the company, and Don's son, Dave, is Executive Vice President. Still another case where the fastener industry has been good for the family and the family has been good for the fastener industry.
When this second and third generation of industry leaders have been in the business for 40 or 50 years, I wonder how these "good old days" will look to them?
[Sidebar]
THERE WAS NO INTERNET TO ENABLE US TO BUY AND SELL ON A GLOBAL BASIS. THERE WASN'T THAT MUCH TO BUY GLOBALLY ANYWAY. JAPAN WAS THE ONLY COUNTRY MAKING AN EFFORT TO CRACK THE U.S. FASTENER MARKET WITH LOW PRICES.
[Author Affiliation]
CHARLES F. JACOBS
Charles F. Jacobs is the owner of Product News Service, a company that specializes in the development and writing of technical and promotional material in the industrial marketplace. He has over twenty years of direct experience in fastener sales and marketing, sixteen of those spent with ITW Shakeproof where he held such positions as market research manager, product manager and national sales manager. He was also assistant to the president at Universal Screw Company and vice president, marketing for Joliet Wrought Washer Company.
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