January/February 1993
Here's how a family company grew from a small welding service among the mines and timber operations of the North to become an Alabama-based manufacturer of grapples and buckets serving the material-handling world.
BY JEFF BORSECNIK
Jeff Borsecnik is assistant editor of Scrap Processing and Recycling.
"An ideal piece of machinery is one you run for x number of hours or years and it all falls apart at the same time," says Charles E. "Mack" McElderry, president and owner of Mack Manufacturing Inc. (Theodore, Ala.), a manufacturer of material-handling grapples and buckets. "That's what we strive for: to have a balanced product that doesn't have any weak points in it. We like a grapple to wear out, not fail."
Of course, it would be nice to think that the best grapple wouldn't ever wear out, but the fact is, grapples have to take a lot of abuse. "They're subject to severe stress, forced into scrap, banged against concrete abutments," says Robert E. Childs, Mack Manufacturing's vice president of marketing. "They come into contact with just about every type of material and surface there is." So Mack Manufacturing builds its grapples and buckets out of T1 steel—a heat-treated alloy that reportedly can take three times as much pressure before bending and has twice the structural strength of mild steel—allowing it to manufacture stronger, longer-wearing attachments with lighter material, the firm says. These attributes are also said to improve the productivity of the attachment's base machine.
The company's commitment to building strong, balanced products goes beyond its material selection. "Only the best-quality workmanship will do—that's everything we do," boasts Mack. "We buy the best components, we hire the best people," says Mack, adding, "The one thing you can get fired for is getting sloppy on me."
Like many of its scrap industry customers, Mack Manufacturing is a family business. Founded a half-century ago by Mack's father, Maurice M. McElderry, the firm is well into its third generation of family management, with three of Mack's sons helping to run the business. Nevin is general manager of the firm, Maurice D. serves as plant superintendent, and Chris handles maintenance. There's also an eager fourth generation, led by Nevin Keith, Nevin's 15-year-old son who works summers at the company, cleaning up and learning to weld.
And like other family businesses, Mack Manufacturing has seen different management styles emerge from different generations. "When I started, my dad was The Boss," recalls Mack. "I'd go out and sell a product, come back and design, and build it, but I didn't really make business decisions." The current top McElderry says he manages the company differently. "My sons are allowed to make decisions," he says, "and they do very well at it." He prefers "working with them, rather than being their boss," he explains.
Nevin describes the relationship among the father-and-sons team as casual but efficient. "We can have a corporate meeting real quick," he says. And when a problem comes up, he notes, "we can meet at the house and talk about it—though we don't really talk as much about work after work any more as when were all working in the shop. Now the problems can be a little more severe and we like to leave them at work."
Grabbing Opportunities
Maurice McElderry, a welder by trade, established Mack Manufacturing in Duluth, Minn., in 1942 to fix mining machinery in the nearby Mesabi iron ore range. Because it was wartime, the mines hired the company to repair even equipment that wouldn't normally have been repaired, recalls Mack. The mines were also willing to provide Mack Manufacturing with welding equipment, which was not available on the market because of the war efforts.
When time allowed, Mack, who had been working under his father as a welder, began to work to expand the firm's business, looking for jobs for the also move into sales, looking for jobs for the fledgling firm in the timber as well as mining industries. Occasionally, he says, he would take a look at equipment that companies wanted repaired, and he'd know that replacement was a better answer so he'd offer to make the necessary equipment. "I knew where it broke, so I could build a new one," says Mack.
As the company moved further into manufacturing new equipment, it shifted away from the repair business. Today, it makes grapples and buckets for a variety of industries, including maritime shipping and wood products as well as scrap recycling. Over the years, the firm has developed and patented several tremendously successful products, including the first five-tine "orange-peel" grapple and the first electro-hydraulic interlocking log grapple, according to Mack. The five-tine unit allows the user to corral and retain more loose material than previous grapples, as each tine moves toward the center rather than toward an opposing tine. And the log grapple "changed all the log handling in the United States ," Mack reports, noting that it enabled the wood products industry to work with full-length logs instead of segments, dramatically boosting efficiency.
In 1972, the firm took a big step south, moving to Prichard , Ala. "It was a larger facility, more centrally located" and handy to railroad lines and major ports in Mobile , Ala.and New Orleans, says Mack. "The weather is better, too," he adds, joking, " Duluth is nine months of winter and three months of bad sledding." For years, his son Maurice ran the plant and Charles was on the road as the firm's only salesman, helping his father design and build new equipment in between sales trips.
Mack Manufacturing began to specifically aim its expertise strategically at the scrap industry only about a decade ago, but it has worked with scrap processors for much longer even selling scrap grapples in Greece back in 1960s. A four-tine version of Mack Manufacturing's orange-peel grapple—whose square configuration allows it to better reach into the corners of trucks and railcars—is now found in many scrap plants, with most processors using a ¾ or 1-cubic-yard-capacity version.
In 1988, the firm further expanded the kinds of material it is equipped to handle and its potential customer base by purchasing the bucket division of McGinnes/Royce Corp. (Houston). "We took a short cut into the bucket business," explains Mack. "We'd built buckets before, but we bought an existing bucket operation to shorten the time span" to get a foothold in the industry.
The firm's efforts at reaching out to scrap recycling and a broader range of material-handling industries has helped its stability, says Mack. "At some times, certain industries may take a little slide—more than others—for a short time, perhaps even seasonably," he explains. "By diversifying, we've eliminated some of that."
Last spring, Mack Manufacturing moved south again—though only a few miles this time—to Theodore , Ala. Its new, larger facility—44,000 square feet of manufacturing space on more than 7 acres of land—makes it easier for the firm's staff of about 45 employees to efficiently manage the production and shipping of a higher volume of larger products.
A Good Grasp of Success's Secrets
Mack Manufacturing can now produce an almost infinite number of variations of about 125 basic models of buckets and grapples, which are sold companies to handle such varied materials as scrap, rocks, waste, incinerator ash, sand and gravel, iron ore, and sugar. The log-handling industry is its biggest customer. In fact, Nevin boasts, "We're in 90 percent of the pulp and paper mills" in the United States and Canada . Scrap recycling is probably the next largest segment followed by maritime shipping.
"We've been quite successful in most of the markets we've tried to penetrate," says Childs, who notes that even in today's dreary economic climate, when many scrap firms are seeing business worse than in the grey early 1980s, the equipment maker's pace is "not that bad." Nevertheless, he admits, business is certainly down from peak periods when the firm has had a backlog of as much as nine months. "The biggest decline has been in the last few months," Childs adds, "otherwise we've been pretty steady." Where business has suffered most, says Mack, is where "large companies are not doing the expanding they had been doing, modernizing yards and equipment."
So, what has enabled Mack Manufacturing to broaden its grip on the grapple and bucket business while riding out the peaks and valleys of the economy? "Integrity and a damn lot of hard work," says Mack. Specifically, Mack Manufacturing managers emphasize ...
... Putting quality first. "We just build a fine product," says Childs. "It's the Cadillac of the industry." Mack adds: "We have people who buy our grapple or bucket who won't have anything else, they know it's the highest quality built." Although this sometimes means a pricier product, as Nevin explains, "We want to build equipment that will just keep working."
... Listening to customers. Mack Manufacturing seeks to meet specific needs accurately and depends on its customers to direct the development of its equipment, says Mack. "We learn from our customers. They're the best grapple builders in the world," he explains. "They go out and use the equipment daily. And they say `do this, that, or the other and it'll be a better product.' We listen to that and we have all of our lives."
... Investing in people. The company's employees are skilled, well-paid, and trained to handle various assignments, Mack maintains. The firm also offers good benefits, profit sharing, and an aggressive safety program—which includes regular plant visits and staff meetings with a safety consultant, voluntary inspections through a program run by the University of Alabama , and an incentive program that rewards employees with gifts. Add to this a reputation as an industry leader—"It's always good go be part of a winning team," says Nevin—and a varied and challenging work load and Mack Manufacturing ends up with little turnover and lots of longevity on its staff.
... Customer service. "We try to build an excellent product and stand behind it because there are so many, many companies that make attachments," says Childs. "To stay in business, you have to care about your client. You have to think, `How can I improve their method of material handling?'" Service also means always being prepared to help the customer, says Nevin, emphasizing the importance of "being there, being able to get parts he needs right away because he can't wait." Mack Manufacturing also reaches out on its own initiative to each client at least twice a year just to stay in touch. And, says Childs, the firm makes a special effort to let its customers know "we appreciate their business and we don't take it for granted. I call people and tell them that all the time. People are amazed when you pick up the phone and say `thank you.'"
... Innovation. Mack Manufacturing has a developed a lot of products and specific features that are now widely used in various industries and by various competitors. Is it important for an equipment firm to innovate? "I think it is necessary in order to know your product," says Mack. "Lots of those that copy don't know what they're doing. You've got to have that base."
Grappling With the Future
A few trends bode well for Mack Manufacturing, which is optimistically awaiting an upturn in the fortunes of the industries it serves. For one thing, grapple and bucket buyers are moving toward higher-capacity equipment, which means sales of new, bigger attachments. Another positive trend is the continued and growing popularity of hydraulic equipment in scrap recycling and other industries, again calling for new material-handling tools. And, of course, wire rope attachments remain popular, especially in certain segments such as the marine shipping industry. Thus, among Mack Manufacturing's newest and most sophisticated products are clamshell buckets with self-contained, radio-operated hydraulic systems that can be used on single-rope cranes.
With these opportunities in mind, says Nevin, "We'd like to double our size and production over the next five years." As part of that growth, he adds, Mack Manufacturing plans to increase its presence in diverse foreign markets, which now account for about 15 percent of its business.
In undertaking these advances, Mack says the company will remain patient, realizing from past experience that it takes about five years to break into new industries and markets. But this patience is backed with confidence. Though the firm faces a broad array of established competitors abroad, says Mack, "We can be quite competitive with anybody in the world."
Here's how a family company grew from a small welding service among the mines and timber operations of the North to become an Alabama-based manufacturer of grapples and buckets serving the material-handling world.