VIRGINIA BEACH --
October 13 -- When power-tool maker Stihl was casting for a site for its U.S.
headquarters 40 years ago, the choice came down to Hampton Roads, Connecticut
and Arkansas.
The German manufacturer decided on this region because of
its access to the port and supply of ex-military members, said Nikolas Stihl,
grandson of the company's founder, who made his annual visit with other company
executives to the Virginia Beach plant last week.
The Stihls have no regrets.
The 150-acre complex off Lynnhaven Parkway is
among the city's biggest employers, with about 1,950 workers. It turns out 50
percent of the power tools that Stihl sells worldwide. And it plans to keep
making more.
Stihl expects another record year for sales,
with an even larger increase than last year's.
Sales rose more than 6 percent in 2013, both
domestically and internationally, said Nikolas Stihl and Fred Whyte, president
of Stihl Inc., the U.S. division based at the Beach. Worldwide, sales topped
$3.3 billion. The company does not provide dollar totals for the United States.
This year, they said, the increase should
reach 8 percent. And that, Whyte said, is without a major hurricane, which
boosts business with its massive cleanups.
In an hourlong interview at the Cavalier Golf
and Yacht Club, Whyte and Stihl - the chairman of the supervisory board of the
parent company, Stihl Holding AG and Co. KG - also spoke about the challenge of
finding skilled labor in the United States, the brief interlude when Whyte was
Stihl's boss and why the company has steered clear of lawn mowers.
The company's distribution strategy, they
said, has laid the groundwork for its success: You won't find a Stihl chain saw
in a big-box store. They can be bought only at independent dealers - the United
States has 8,500 - who also repair the tools.
Stihl, 54, quoted his grandfather, Andreas,
who founded the company in 1926: "A chain saw is only as good as its
service." Or as Whyte said of the customers who rely on Stihl's products:
"If their tools aren't working, they're not making money."
That philosophy partly explains why Stihl
isn't in the lawn mower business in the United States and won't enter it.
The dealer system operates on the assumption
of fast repairs, Stihl said, and that would be harder to achieve with mowers.
In addition, Whyte said, big-box stores
already have 80 percent of U.S. lawn mower sales. And the assembly system for
lawn mowers, which Whyte said relies on multiple suppliers, wouldn't jibe with
the approach at Stihl, which manufactures most of the parts for its tools.
When asked the biggest disadvantages of
operating in the United States, Stihl started with the tax level. Next: The
difficulty of finding skilled labor. "The quality of the school system in
the United States has decreased a lot," Stihl said.
Whyte pointed to Germany's more rigorous
program for training trades people. "You don't just get into a pickup
truck, put a sign up and decide to become a maintenance technician," he
said.
During the recent recession, Stihl benefited
from the downturn in the auto industry, Whyte said. "We recruited
significantly... into the Rust Belt and were able to pirate a lot of strong
people out there."
Stihl occupies 2.2 million square feet in
Virginia Beach. The company does not disclose the number of products
manufactured, but Whyte said the plant makes more grass trimmers than any other
product. Stihl's other items include brush cutters, hedge trimmers and handheld
and backpack blowers.
In terms of sales dollars, 60 percent of the
items made in Virginia Beach stay in the United States. The remaining 40
percent is distributed among about 95 other countries.
The plant has 141 robots, performing such
tasks as inserting screws and loading pallets. That number will only grow,
Stihl said: Any worker whose job becomes obsolete will be shifted to a new one.
Nikolas Stihl, who received a doctorate in
mechanical engineering, worked in Virginia Beach for seven months in the early
'90s as a product manager. His boss was Fred Whyte, who had taken over in 1992.
"I'm glad I approved his expense
reports," Whyte joked.
Stihl described Whyte as a talented manager
who is "good at recognizing the strength of his people and letting them
play to their strengths." Whyte said, "We just hit it off extremely
well. The two of us were instrumental in getting a new chain saw model we
needed for the market."
It's still not clear how much longer Stihl
will be Whyte's boss.
Whyte had planned to retire last year, but
he's still in charge in Virginia Beach, and Stihl said there's no firm date for
a transition.
"Mr. Whyte has been instrumental for the
success of the company since 1992," Stihl said. "You've seen the
growth yourself. It's not easy to replace someone in such a position. We have
to be very careful in doing that."
Whyte, 67, said: "I still enjoy what I
do every day." But he added that he looked forward one day to "taking
care of my personal life, like getting better so I can beat my wife in
golf."
Philip Walzer The Virginian- Pilot www.hamptonroads.com
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