Stihl to Consolidate Distribution Centers in Cottage Grove, WI

January 26 -- STIHL Inc. officials announced Monday they will relocate the operations of Mississippi Valley STIHL of Peoria, Ill., and Midwest STIHL Inc., of Hayward, Wis. to establish a new single distribution site in Cottage Grove. The new operation, known as Midwest STIHL, a division of STIHL Inc., will serve customers throughout the mid-northern region of the U.S.

“We are extremely pleased to announce this new distribution location in order to serve our dealers more efficiently in this area of the country,” STIHL President Fred Whyte said. “We are also happy to announce that all employees from both locations will be offered employment and many are looking forward to joining us at the new location.”

STIHL selected Cottage Grove for its access to the Interstate 90 and Interstate 94 corridors, which are main routes for deliveries to STIHL dealers, Whyte said. Streamlined services from the new branch will allow for one-day shipping service to most of the 1,000 dealers in the region.

STIHL distributes its products across the U.S. through a two-tiered system, selling products through a network of independent distributors and company-owned branches. Distributors and branches, in turn, sell products to authorized STIHL servicing dealers nationwide.

Joe Hickey, the current branch manager for Mississippi Valley STIHL, will serve as the branch manager for the new operation. The new Midwest STIHL facility will occupy almost 10 acres and the consolidation of operations will take place over the course of 2015.

“We are looking forward to becoming active members of the village of Cottage Grove community and hope to participate in all the activities the area has to offer,” Hickey said.

For more information on STIHL, visit www.stihlusa.com.

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Stihl in Virginia Beach Receives Recognition From the Association for Manufacturing Excellence

October 23 -- Stihl's Virginia Beach facility will be recognized for lean manufacturing and management processes at the Association for Manufacturing Excellence conference this week in Toronto.

The Association for Manufacturing Excellence's assessment team reviewed the facility's continous improvement system, advanced technology and data systems and automation integration, according to a news release. The company received the Manufacturing Excellence Award because of total-cost thinking for new product and process development and the use of inventory flywheels to balance high service levels and low-cost production linearity goals.

“Fostering a culture of innovation and excellence is fundamental to American manufacturing success, and encouraging employees to embrace automation and rewarding them for their ideas establishes this culture from the ground up," Christian Koestler, vice president of operations for Stihl Inc., said in a statement.

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Stihl Inc. Hosts U.S. Acting Secretary of Commerce

October 3 -- Stihl Inc. hosted Acting Secretary of Commerce Rebecca Blank, who announced a $40 million multi-agency competition, the Make it in America Challenge, to accelerate the trend of insourcing, where companies are bringing jobs back and making additional investments here in America.

The competition, which is being funded by the U.S. Department of Commerce’s Economic Development Administration (EDA) and National Institute of Standards and Technology Manufacturing Extension Partnership (NIST-MEP) and the U.S. Department of Labor’s Employment and Training Administration (ETA), will build upon the administration’s bottom-up approach to strengthening the economy and creating jobs by partnering with state, regional, and local economies.

Stihl Announces Manufacturing Expansion, Job Creation

Acting Secretary Blank pointed out that more and more businesses are choosing to invest, create jobs, and make things here in America, and that the new initiative was designed to promote that trend. “This administration’s top priority is creating American jobs, and through the Make it in America Challenge, we will be supporting business’ efforts to expand here at home. By making competitive investments, the Challenge will help communities across the U.S. accelerate economic growth, attract business investment, and create jobs.”

Virginia Beach-based Stihl Inc., one of several manufacturing facilities in the Stihl Group, is the headquarters for U.S. operations and embodies the American built mentality. The company has steadily increased its investments in America since its founding in 1974. Starting with 50 employees that assembled only one model of chain saw, today, the company employs approximately 2,100 people nationwide, with 1,900 in Virginia Beach, VA, and manufactures more than 270 model variations of chain saws and power tools for sale in the U.S. and around the world. The majority of Stihl products sold in America are also built in America and Stihl Inc. not only exports products to more than 90 countries but produces the majority of Stihl units for the world market.

“While many American companies have chosen to move their operations overseas in pursuit of cheap labor, since 1974 we have chosen instead to reinvest in our technology, our workforce and our infrastructure right here in Virginia Beach. As a result, we have since become the number one selling brand of gasoline-powered handheld outdoor power equipment in America,” said Fred Whyte, president of Stihl Inc., who accompanied Acting Secretary Blank on a partial tour of the more than two million square feet of Stihl manufacturing facilities.

“Some people may say that American manufacturing cannot compete in the world economy. I beg to differ. American innovation, technology, and the American worker are second to none and we are proving it,” said Whyte.

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Lawns, The Quiet Victims of Recession

August 2 -- Cautious consumers often look for places to cut, but one quiet victim of the recession has the opposite problem. Even amid recovery, lawns are often left untended.

“I just thought my money was being wasted,” said Dave Pilon, 42, director of sales at Bouvier Insurance in Connecticut. Mr. Pilon estimated he could save about $300 a year doing lawn treatments himself after he wasn’t impressed by professional services.

“My lawn absolutely ended up becoming a disaster,” he said, describing a yard taken over by crab grass in the past year. Mr. Pilon is signing a contract with another company for lawn seeding and maintenance, but will continue to mow his lawn as he has always done.

Landscapers like K and H Lawn Services said that since the recession, customers have been more conscious about cost and ask more frequently for quotes. Basic mowing for a 3,000 square-foot yard starts at $900 annually, according to Kris Hjort, K and H chief executive officer, but services like fertilizer applications cost extra.

The Virginia-based company maintains 600 residences weekly in the suburbs of Washington D.C. and has grown from 30 staff members in 2010 to 40. Starting last year, business finally started picking up with 7% to 8% growth in services, said Mr. Hjort. “People are coming back to professional lawn services and spending more money,” he said.

Tanya Ash, 46, a homeowner in Dublin, Ohio, switched to professional care two years ago after she decided her time was better spent working as an interior designer instead of mowing, but continued pruning on her own to save money.

“Quite honestly I thought was doing a great job doing it myself until the tree came down,” said Ms. Ash, who lost one of several trees on her quarter-acre yard after a recent storm. Ms. Ash spends $30 a week for mowing, but recently paid $1,000 for tree and shrub maintenance.

Stihl Inc., which manufactures power equipment including grass and hedge trimmers, has benefited from an expanding do-it-yourself crowd looking to take on smaller jobs like pruning and trimming. The company is on track for its third consecutive year of record turf-related sales since 2009. Roger Phelps, Stihl promotional communications manager, said homeowners are spending as much as 550 for professional trimmers instead of cheaper, consumer models.

Homeowners view professional equipment as investments they can pay off after a year or so of use, said Daniel Ariens, president and chief executive officer of Ariens Co., which produces mowers and snow blowers. During the recession, consumer sales jumped with homeowners opting for commercial mowers which cost $4,000 to $10,000 compared to consumer riding models that start at $1,000.

Ariens’ consumer demand has since grown at a slower pace, but commercial sales have continued rising, up 25% this year. “Consumers are slowly coming back to hiring landscape contractors,” said Mr. Ariens.

Landscapers, however, are cautious to reinvest as customers trickle back — repairing existing equipment and holding back on new orders, or purchasing cheaper models than in years past, he said. Ariens’ spare parts business has continued to grow since the recession.

In 2008, Scotts Miracle-Gro Co. saw business for its lawn service dip along with the economy. “As the economy has improved, our lawn service business has improved along with it,” said Jim King, vice president of corporate affairs at Scotts. Homeowners can apply the company’s lawn products themselves or hire Scott’s service, which costs three to four times more and has made modest gains in the last two years with more repeat customers.

Mr. King said Scotts has also remarketed its do-it-yourself fertilizer to reflect homeowners who no longer want “extra-perfect” lawns, but turf that’s “good enough.” Sales of the fertilizer have begun to rebound after years of decline.

“It doesn’t have to be the emerald-green envy of the neighborhood,” he said.

http://www.blogs.wsj.com/economics

New VP of Finance at Stihl

Virginia Beach -- March 20 -- Stihl Inc. has announced that Bjoern Fischer will assume the duties of vice president of finance on May 1, 2012. In addition to overseeing the financial operations of the company, Fischer’s role will also include oversight of the human resources and information services departments.

Fischer, who started with the company March 1, will be replacing Karl Angler who will move to Stihl headquarters in Germany as the executive board member for finance, comptrolling, information systems and services for the Stihl Group worldwide, effective May 1, 2012.

“While we will miss Karl greatly as he moves to his new role with the Stihl Group worldwide, we are quite pleased to welcome Bjoern Fischer to the Stihl family,” said Fred Whyte, president of Stihl Inc. “His experience leading the financial and operational departments for the U.S. division of a German company with a worldwide reach is exactly what Stihl Incorporated needs as we continue to grow.”

Fischer joins Stihl Inc. after a successful career with Siemens that spanned nearly 20 years. During his tenure with Siemens, Fischer worked in Germany, California, Texas and, most recently, in Pennsylvania where he was the executive vice president and chief financial officer for the Water Technologies business unit.

“The opportunity to work for a company with such an excellent worldwide reputation came at the perfect time, both professionally and personally,” said Fischer, who is married with two daughters, aged 11 and six. “Not only does this position allow me to utilize my experiences working in Germany and in the U.S., along with my interest in the operational side of business, but also gives my family the occasion to settle in one place.”

Fischer, a native of Rustenburg, South Africa, graduated from the University of Cape Town with a bachelor’s degree in commerce.

Stihl to Expand Virginia Beach Site, Hire 52 New Workers

VIRGINIA BEACH – December 13 -- Power tool manufacturer Stihl Inc. plans to spend $10.3 million to build an expansion at its U.S. headquarters and hire 52 new workers, city officials are set to announce today.

The expansion would allow the German company to double its manufacturing capacity for "blow-molded" plastic products, such as tubes used for blowers and fuel tanks.

"Our Virginia Beach workforce has proven its ability to meet the demands of our customers, both here and overseas," said Peter Mueller, the company's executive vice president, in a news release. "Because of the manufacturing-friendly environment in Virginia Beach, we are able to compete domestically and globally, ultimately allowing us to continue to expand our operations here."

Mueller and Stihl's national president, Fred Whyte, were in Germany on Monday, attending meetings at Stihl's worldwide headquarters, spokesman Terry Kelley said.

Stihl last month began construction of the more than 53,000-square-foot addition to its accessories building off International Parkway, said Lorraine Wagner, director of manufacturing. The existing building produces accessories such as cutting heads for trimmers.

The addition is expected to be completed by the middle of next year, Wagner said.

Stihl will spend approximately $4.9 million to build the facility on land now used for parking, $4.6 million on machinery and $800,000 for other equipment, city officials said.

The company, which already employs nearly 1,900 workers at the site, will begin hiring new workers in the first half of next year, Wagner said. The new workers will earn an average salary of $45,000 a year, city officials said.

The Virginia Beach plant produces more tools than any other Stihl plant in the world.

The privately held company does not publicize how many tools it produces. But Whyte has said sales of U.S.-made equipment, which is marketed worldwide, top $1 billion annually.

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Sell Through Local Stores, Stihl Exec Says

March 23 -- With a quiet wit and plenty of stories and statistics, Fred Whyte, president of Stihl Inc., invited business students at Montana State University Billings Wednesday to ignore conventional business advice.

Rather than focusing on a single key skill and hiring everything else out, Whyte advised students to:

Stay vertically integrated, build and sell your own products.

Offer service and promote safety.

Plan long term.

And his biggest heresy: Sell your products through locally owned stores. Spurn the big-box retailers.

Stihl, a global company that leads U.S. sales of hand-held, gas-powered outdoor tools, can support those claims. 

Based in a suburb of Stuttgart, Germany, Stihl remains privately owned, carries no bank debt and does business in 160 countries. Retailers selling the 240 models, including chain saws and weed trimmers, must be locally owned and push training, safety and service.

“We do not sell to anyone who doesn’t offer service,” Whyte said.

Stihl manufactured 1 million products in 1997, and last fall made 40 million units. Twenty-five laser-controlled robots carry raw materials to the assembly line at the massive Virginia Beach, Va., plant.

Through numerous color print ads per year, the company brags that customers can’t buy a Stihl chain saw at a big-box store.

Selling through the giant retailers can begin a vicious cycle, Whyte said. The mega-companies keep cutting your price. So you are forced to cut quality, eventually losing your profit margin and possibly your reputation for making a good product, he said. “Walmart has made us all much better retailers,” Whyte said.

But even Walmart, with $405 billion in yearly sales, has its problems. Walmart stores in business a year or longer have suffered seven consecutive quarters of declining sales, he said.

Levi’s jeans, designed during the California Gold Rush days, had 60 U.S. plants until it started selling through Walmart, Whyte said. The demand for lower and lower prices and the unanticipated refusal of younger people to buy their jeans at Walmart eventually forced Levi’s to close all 60 U.S. manufacturing plants, he said.

Stihl had enjoyed 17 back-to-back years of record sales until 2009 when the recession cut revenues 8 percent. Sales returned to record levels last year, and this year is looking pretty good, he said. U.S sales run $1.1 billion per year.

Whyte gave five executive-in-residence lectures at the Montana State University Billings College of Business and is visiting seven local retailers, including Billings Hardware and the Ace Hardware stores. The Stihl story was featured in a 2010 book co-authored by Tim Wilkinson, interim dean for the MSU Billings Business College: “The Distribution Trap: Keeping Your Innovations from Becoming Commodities.”

The pair apparently hit it off, convincing Whyte to make a rare college appearance.

“What I like about Stihl is they care about quality and they care about people and they work through a small family business,” Wilkinson said.

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