November/December 1992
Business challenges are nothing new to 103-year-old Harris Group. The firm is emerging from recent financial travails with plans to be even better than before.
BY KENT KISER
Kent Kiser is associate editor of Scrap Processing and Recycling.
John R. Redmond, president of Harris Group (Peachtree City, Ga.), wants to make one point perfectly clear: "The rumors of our demise have been greatly exaggerated."
That may seem like an unusual statement, coming from the world's largest manufacturer of shears and balers, but the past few years have been unusual and difficult for the firm. Ever since its parent company, Amdura Corp. (Tulsa, Okla.), filed for bankruptcy in 1990, Harris has had to relentlessly point out that it was never part of the Chapter 11 proceedings. It was, and continues to be, a profitable Amdura subsidiary. Amdura's problems, however, forced Harris and Crosby Group, another profitable Amdura subsidiary, to assume its debt. "In many ways, we were innocent bystanders," Redmond says.
Still, Harris adjusted to the imposed debt payments, which were based on its 1989 sales—at $68 million, a record year. But as the economic recession deepened, the payments became increasingly unrealistic and burdensome. As a result, the firm elected not to make its June 1992 payment, requesting instead to renegotiate the payment terms. Harris Group's competitors naturally took "full advantage" of this opportunity to cast doubt on its financial health and future, says Ronnie Fuller, vice president and general manager. As Redmond remarks, "The headlines said one thing, but the text said another, and some of our competitors seized the headlines and ran with that."
The truth is that Harris is "alive and well," Redmond says. "The default was a conscious act taken in the best interests of the company. The old debt level would have put the company in a maintenance mode, at least until the debt was paid off," he explains. "Harris would have missed a wonderful window of opportunity to develop new equipment and further increase its market share."
After weathering the worst of the Amdura bankruptcy storm, Harris Group is embarking on a fresh start, with Redmond leading the way as its new president of four months. "Our recent trials have forced us to reshuffle the deck, look much deeper at everything, and define some pockets of opportunity," he observes. The bankruptcy also ushered in a new board of directors of Amdura that is committed to Harris's growth and optimistic about its potential. Now, bolstered by a new payment plan and an improving relationship with its term-lender group, Redmond says, "We're looking forward to growing this company instead of just maintaining it."
In Search of Unity
The Harris Group was born in Cordele, Ga., in 1889 as the Tomlin Harris Machine Co. More than a century and four name changes later, the company is an internationally known equipment maker with more than 300 employees and three domestic manufacturing plants. The 20-acre Cordele plant serves as the firm's "driving force," Fuller says, making Harris balers and shears, as well as its new equilibrium crane. In addition to parts, service, and administrative offices, the plant encompasses five buildings devoted to initial fabrication and steel storage, machining, cylinder manufacturing, shot-blasting and painting, and final assembly and testing—325,000 square feet of covered space in all. The final assembly and testing building is, without a doubt, the plant's most impressive feature. The building, which resembles an airplane hangar more than a manufacturing facility, features a 100-foot-tall ceiling and 68,000 square feet of space—enough room to contain the plant's three 125-ton American cable cranes and 12 or more projects that might be in their final stages at any given time.
The second "group" under the Harris umbrella is Selco Products (Baxley, Ga.), which the firm acquired in 1987. Selco manufactures a variety of balers—vertical, horizontal closed-end, horizontal automatic, and two-ram—for nonferrous and nonmetallic scrap materials. Selco will also become the primary manufacturer of Harris's conveyors and related sorting and processing equipment for material recovery facilities.
In 1988, Harris acquired its third operation—Amfab Resources (Woodburn, Ore.)—which makes equipment for the solid waste industry and provides fabrication work for the paper and wood processing businesses. Amfab's main product is the Transpak waste-compacting system that presses solid waste into a dense trailer-sized log, maximizing a truck's carrying capacity and, thus, making long-haul disposal more economical. In early 1993, Amfab is set to introduce its new wire-management system that can cut, remove, and process wire from bales into a manageable, salable form.
These three diverse groups give Harris a repertoire of equipment and services that no other manufacturer offers, Redmond points out. "My challenge is to unify the collective talents of our three companies," he says, "and market them as a single source for whatever equipment our customers need. I've got to capitalize on those elements that make us different and continue to exceed our customers' expectations."
Part of Harris's corporate unification will involve enhancing cooperation among its three plants. "One of my goals," Redmond explains, "is for our different groups to share engineering designs and manufacturing capabilities, and increase use of our existing assets and capacities."
Changing the Corporate Culture
As Redmond discusses his plans for Harris Group, he peppers his sentences with words such as opportunity and empowerment, adding a dash of phrases such as statistical process control and continuous improvement. He learned these corporate concepts during his 20 years with Reynolds Metals Co. (Richmond, Va.), Alcoa Recycling Co. (Knoxville, Tenn.), and, most recently, Alcoa Recycling Machinery Services (Memphis, Tenn.).
Redmond plans to "Harris-ize" these concepts—streamlining the company's operations, standardizing processes between its groups, and refining the firm's corporate systems. "Our equipment is extremely high quality," Redmond says, "but some of our internal processes are lacking. There are a lot of variations. To be truly high quality, you have to eliminate as many variations as possible." As one example, he would like to get the engineering departments of Harris's three plants all using the same computer-aided design and drafting system. "Our manufacturing systems must be compatible with our accounting and production control systems, and so on," Redmond insists. "We've got to achieve consistency."
Redmond is also taking steps to improve Harris Group's internal communications. Most notably, he moved the firm's headquarters from Minneapolis to Peachtree City, near Atlanta, in late October. "Our corporate office and plants have to operate as a team," he states. The move not only brings Harris's executives physically closer to its main plants in Cordele and Baxley—and back to its Georgia roots—but it also enables Redmond to "sell the company as a unit, as one entity, rather than as distinct parts."
On the management level, Redmond plans to improve communications by injecting new life into the regular development meetings among the top management, engineers, and sales directors of each group. These meetings, which provide ideas and direction for the company, have been helpful heretofore, but "not to the level they need to be,"Redmond says. Other interoffice meetings, such as technical meetings of the engineering managers, engineers, and customer service directors for each group, will similarly be improved.
The success of these ambitious corporate changes depends, of course, on Harris Group's employees. "You have to empower your employees and use their collective talents if you're going to succeed today," Redmond says. "The old command-and-control hierarchy won't work anymore." What this will mean, he notes, is instilling a greater sense of accountability and responsibility in each employee, as well as giving them greater authority to make their own decisions.
"We plan to increase our employees' understanding of the tenets of total quality," Redmond says. "We also want to do more along the lines of teaming and partnering in all facets of our organization." That includes Harris's managers and supervisors, who play a crucial role in employee improvement. "If you want employees to do what they're supposed to do, they've got to know what is expected and how well they're doing," and that is management's job, Redmond explains.
To help bring about Harris's corporate transformation, Redmond has promoted Kerry Fleming, Amfab's former controller, to be the firm's new manager of information and administrative systems. Working out of the new Peachtree City office, Fleming has the imposing task of developing more effective policies and processes for Harris's sales, service, parts, dealer management, pricing, and manufacturing operations.
Keeping What's Good
While looking ahead, Redmond has no intention of losing Harris's many existing strengths. One of these is its network of 20 independent sales distributors—the firm's "extended family," as Redmond calls them—that represent Harris's HRB balers as well as the Selco and Amfab lines in the United States, Canada, the Pacific Rim, and Europe. While Harris has always sold its large ferrous balers and shears directly—and plans to continue doing so— Redmond points out the advantages of selling some of the firm's equipment through independent distributors. By being "on location" in their territories, for instance, the distributors can closely monitor customer needs, legislative trends, and regional market changes. "That's where the rubber meets the road every day," Redmond notes, "so that gives us much more reliable, timely information and service than we could offer if we ran all our sales out of a central location." As independent businessmen, Harris's distributors are also extremely motivated, which means more sales and better service, Redmond notes, adding, "It's a win-win situation for everybody."
To help its distributor network run well, Harris maintains a six-member dealer council that formulates distributor policies, ensures two-way communication between Harris and its distributors, and serves as a self-policing body to keep the peace among the firm's representatives. Redmond is considering expanding the council to help Harris identify and develop new market opportunities. "An expanded council could better tell us what equipment's hot, what the customers' needs are, what the strengths and weaknesses of our competitors' equipment are, and more," he explains.
Equipment reliability is another Harris tradition that Redmond plans to preserve and enhance. "Harris has a tremendous track record for performance," he asserts. What makes a Harris machine last? Precision manufacturing—the firm does virtually all of its own design, machining, and fabrication—and quality raw materials. Sunny Rosser, director of engineering and services, says, "We've always believed that steel is the least expensive part of a machine, so we use a lot of it. That allows us to make a more rugged and heavier piece of equipment that will last."
Another Harris strength is its technical innovation, reflected in its 36 patents. These patents include developments such as the tuck-and-fold squeezebox for shears, the bale-release mechanism on its two-ram balers, and Teflon-coated piston heads. "It has always been a Harris policy to stay on the leading edge of technological advances," Rosser says. In particular, he notes, the firm has spent the last 12 years developing more productive and energy-efficient machines. The new Harris HRB -2002 baler, for instance, can process more material with a 100-horsepower motor than its 200-horsepower predecessor. Recent HRB and Selco two-ram models also feature Harris's patented, state-of-the-art Navigator computer system, which simplifies operation of the equipment, Rosser says. "It provides a lot of data to the operator and allows diagnostics to be built into the control system itself," he notes. The Navigator also enables Harris service representatives to analyze a machine's problems and assess its service needs long-distance, using a telephone modem hookup.
Regarding service, Fuller asserts that Harris has "a tremendous reputation for standing behind its equipment," whether it be shipping out in-stock parts within 24 hours, providing in-house rebuilding and machining services, or offering maintenance and safety classes and videos to its customers.
With all of these attributes going for it, Harris Group is hardly on its last legs, despite what the doomsayers contend. "The sky is not falling," Redmond muses. "Harris Group is alive, it's making a lot of products, and its sales levels are picking up." And despite, or perhaps due to, the company's recent difficulties, he asserts, "We're going to be a much better, bigger, and stronger company than we ever were before." •
Business challenges are nothing new to 103-year-old Harris Group. The firm is emerging from recent financial travails with plans to be even better than before.