VIRGINIA BEACH – September 18 -- Fred Whyte mostly listened as the top two sales execs went through the numbers at the monthly meeting.
By and large, they reported positive news.
Sales of Stihl Inc. power tools to dealers were up 1 percent in July compared with July 2010 and 6 percent for the year to date.
Whyte, Stihl’s president, took it in with soft-spoken satisfaction, interjecting a few questions and comments.
When the presentation hit rougher patches, his demeanor didn’t shift.
Trimmer sales were down 10 percent for the month. Inventory was piling up. “Why are we still building so many trimmers?”
The others couldn’t say.
Whyte remained genial. No raised voice or fiery ultimatum. But the message was clear: Find out what’s going on with the trimmers, and slow production.
Whyte, who will turn 65 on Nov. 1, recently celebrated his 40th anniversary working for the German-based power-tool manufacturer. January will mark his 20th as head of the U.S. division, based in Virginia Beach.
Under his tenure, Stihl has reported record sales almost every year. Whyte expects the same this year and next.
“To see an executive like Fred Whyte in this position for 20 years is really a rarity in any industry, not just power equipment,” said Dan Shell, managing editor of Power Equipment Trade, a monthly magazine.
Shell said his decaffeinated style is key to his success: “He motivates people to do better on their own to meet a goal as opposed to being in fear of not meeting a goal.”
Peter Burton, vice president of sales, said: “The company is in a successful cycle right now. When it wasn’t, there was no beating of chests. It was a supportive environment: What’s the issue, what’s the recommendation for addressing it and in what time can it be completed?”
Not that Whyte doesn’t throw his weight. “I drive the HR department crazy,” he said, seeking clemency for a worker who faces discipline for, say, lateness. “You have to put yourself in other people’s shoes. You have to take a stand, but you also have to show a bit of flexibility.”
Workers call him “Fred.”
“He treats everybody like an individual, whether they’re high or low on the totem pole,” said Tammy Rogers, a receiving clerk from Moyock, N.C., who’s been with Stihl since 1998. “When people are treated with respect, it makes them want to work hard for you.”
Whyte followed his father, a Stihl manager, into the business and took a couple of round trips during his career.
He was working as national sales manager in Virginia Beach when, at the precocious age of 34, he was dispatched to his native Canada in 1981 to lead Stihl’s operation there.
Eleven years later, he returned to Virginia Beach, charged with righting the U.S. headquarters, then suffering from lagging sales.
Whyte’s family moved to the United States when he was 8. He grew up in Bellevue, Wash., majored in history at Seattle University and went on to graduate school at the University of Iowa.
He had no intention of working for Stihl, but his father told him about an opening for a regional manager.
He stayed with the family of the man who interviewed him in New Jersey and was impressed. “They treated me just like a son,” he recalled.
Whyte was offered the job, with a $1,000-a-month salary and a company car. He took it.
He began the job, based in Little Rock, Ark., on Sept. 7, 1971.
“I learned a lot about our customers and products,” Whyte said. “No one could ever look at me and say, ‘He didn’t pay his dues.’ ”
In 1976 he got a call: Can you be in Virginia Beach tomorrow? Whyte was named U.S. product manager for saw chains, guide bars and accessories.
He saw it as a good career move and relished the chance to live near the ocean again. The call five years later to take over the Canadian operation startled Whyte. “I didn’t know my ass from center field,” he said. “It’s a fine line between confidence and arrogance. I was somewhere in the middle.”
But he loved challenges and knew Stihl put out “a great product.”
Within the decade, product sales increased fivefold in Canada, Whyte said, and Stihl became the top-selling brand in the country.
Returning to take over the U.S. headquarters in 1992 “was very, very difficult,” Whyte recalled. “The company had lost money. It was not a pleasant situation.”
On top of that, infighting had diverted the energy of executives, and some dealers and customers felt left out in the cold. Stihl had fired his predecessor and three of five U.S. vice presidents.
“I knew it could not be business-as-usual,” Whyte said. “I was sent there to fix the situation.”
But he did it in his low-key way. He assured Stihl’s two remaining vice presidents they were part of the solution. He met with “employees and customers to convince them that there was a definite vision for Stihl’s success in the U.S. market.” Stihl started advertising its cheaper models more heavily to offset the impression that it sold expensive tools exclusively for professionals.
In his first year, Stihl reported record sales in the United States. And for every year through 2008, the company topped its previous total. Privately held, Stihl doesn’t release dollar sums. But Whyte said sales of U.S.-made equipment, which is marketed worldwide, top $1 billion annually.
Then, in 2009, a break in the streak: Sales fell 6 percent. Yet last year Stihl reached a record and announced that it had become the nation’s No. 1 seller of hand-held outdoor power tools, which Whyte counts as his finest achievement.
“We did take a hit from the Great Recession,” he said, “but we bounced back strongly.”
Whyte attributed the bounce to a national advertising blitz, including USA Today, The Wall Street Journal and cable TV, and pent-up demand from consumers who had held off on buying tools to pay for gas.
Whyte projected yet another record for 2011. And dealers already have been alerted that Stihl expects a 6 percent bump in sales in 2012.
“I haven’t heard anyone saying, ‘Fred’s smoking funny cigarettes,’ ” Whyte said at the sales meeting.
Longtime friend David Bernd, CEO of Sentara Healthcare, said Stihl has flourished because “Fred has a clear vision for Stihl, he hires great people, and they’ve got great products.”
Whyte shared credit with the Stihl family in Germany, which founded the company in 1926. The Stihls, he said, won’t flinch from spending millions of dollars if that’s the best way to fix a manufacturing problem.
Whyte also touted Stihl’s distribution system: More than 8,000 independent dealers, none of them big-box stores, sell and repair Stihl products.
Buyers “know they’re getting a quality product that will be properly serviced and that the company stands behind it.” The Stihl reputation for quality, though, came into question with three recalls in the past year, totaling more than 2.3 million items.
“I wouldn’t read too much into the recalls,” Whyte said. “The safety of our customers is always paramount. But if you build as many units as we do, occasionally it’s going to come up snake-eyes.”
He attributed the largest recall, involving potential fuel spills, to the frustrating properties of ethanol, which tends to attract and absorb water. Stihl has been in Virginia Beach since 1974. When Whyte took charge in 1992, it had 450 employees. Now it has 1,920, working on more than 90 acres off Lynnhaven Parkway. The plant makes more equipment than any other Stihl plant in the world.
Stihl won’t be moving, Whyte said. Virginia Beach offers proximity to ports, a right-to-work environment, and a strong labor pool, including military retirees.
“This is a long-term investment,” he said. “This is the largest market for outdoor power equipment in the world, so it makes sense to produce it here.”
Ten employees gathered with Whyte and two other executives for the quarterly President’s Roundtable, a chance for workers to air their gripes and questions.
Whyte struck up small talk with a few of them (“Mr. Morgan, how is your golf game?”) and then encouraged them to open up about everything but complaints about their bosses. “If we don’t know about something,” he told them, “we can’t fix it.”
They did, though the answers weren’t always what they wanted to hear.
In response to a request to add a ceiling fan to cut the heat during the summer, manufacturing director Lorraine Wagner said the plant already has a “really good” HVAC system. The problem, she said, was that workers were leaving doors open.
Rogers, the receiving clerk, was at the roundtable. For her, it was typical of Stihl’s atmosphere, where she can talk to Whyte about his haircut (her husband goes to the same stylist) or joke with her boss.
It’s not just the friendly feeling that keeps her there. On top of a pension, Rogers said, Stihl matches 70 percent of an employee’s 401(k) contribution, up to 7 percent of her income. “It’s just a great place to work.”
Annual turnover is 7 percent for hourly workers, Whyte said, less than the industry average.
During the down period in 2009, Stihl had no layoffs, Whyte said. Some workers were furloughed but still received 90 percent of their pay when they were off work. Others were reassigned to tasks such as cutting grass. “People would look at you and say, ‘That’s OK. We know what you’re trying to do.’ ”
Whyte lives in the Little Neck area of Virginia Beach with his wife, Karen, and his beloved golden retrievers, Fergie and Hogan. He met Karen when she played for an all-female bagpipe band at the University of Iowa, which he managed. A Scotsman by blood, he’s played the bagpipes since he was 8 (“It’s much harder than it looks.”).
He’s more likely to play golf now, but he acknowledged that his wife is better at it: “When I walk into the clubhouse, people say, ‘There goes Mrs. Whyte’s husband.’ ”
Whyte doesn’t put on façades, said Burton, the Stihl vice president. “There’s no light switch that goes on and off. It’s the same person, whether he’s on the golf course or here in the office.”
Another thing Burton likes: “You can disagree with him, and that’s OK. Then you lock arms and you move on.”
Whyte won’t retire when he turns 65. Three of the four top executives under him, including Burton, will retire or transfer within the next year, so he’s been asked to stay aboard through 2013.
In a note to Whyte in honor of his 40th anniversary, Hans Peter Stihl, chairman of the board of Stihl Holdings AG, wrote: “You have been a stroke of good fortune for the company.”
