In 2003, Bill Kiefer sold his company to a small engineering business, A. Stucki Co., which had been involved in the dynamic control of railroad freight cars for more than 90 years. Six months later, he stepped in as president and CEO of Stucki.
“When I started Independent Draft Gear, we were three people, and when I sold it, we were six or seven. I think Stucki then was 15 people,” he says. “Today, A. Stucki Co. is pushing 1,000 people. So in 10 years, it’s had phenomenal growth. We’re not Apple, Google or somebody, but for an old industrial company, yeah, we’ve grown quite a bit.”
As its primary customer, the rail industry, consolidated, Stucki found itself consolidating as well, because purchasing agents would rather buy more varied products from one supplier.
“We were somewhat forced to do it,” Kiefer says. “The days of being a small family-grown company in the rail business and having one or two products was gone; the industry was consolidated. But as our company grew, we became more and more dependent on suppliers.”
In order to better assure its supply, Stucki started strategically buying the companies who provided machine parts, springs or ductile iron. It also added businesses that allowed it to increase offerings in the rail industry.
The business now owns 14 different companies grouped into five different operation divisions, and touches almost every part on a freight car.
“Fifteen years ago, if you were building a new freight car, I think we could have built $215 on that freight car,” Kiefer says. “Today, we can build as much as $18,000 on a new freight car.”
The next step is to better use its divisions to grow the industrial side of business, outside of rail. But it hasn’t always been easy to manage this kind of rapid growth — Kiefer describes it as equally exciting and grueling.
Spread the ownership
The No. 1 rule at Stucki is: Check your ego at the door.
Kiefer encourages this by ensuring his management and key employees have the responsibility and pride of ownership.
“They should experience the sleepless nights. They should have their own capital committed,” he says.
About 45 different managers own more than 30 percent of Stucki.
This allows Kiefer to manage the business, not the people. He doesn’t have to micromanage expense reports or have a large HR group overseeing everything. This helps tremendously with managing growth.
“Most of my people work 60 and 70 hours a week because they want to — they are invested in the company,” Kiefer says.
He says he always tells younger people with companies to cut their people in so they’ll give their heart and soul, as opposed to just their time.
When they acquire a company, Stucki is also buying the management — their independence and way of thinking.