In an industry in which he has seen competitors get rolled up into large conglomerates, Chuck VerMerris, president and CEO of Radix Wire Co., vows fiercely to remain independent.
“The whole commitment to independence is probably what makes this company tick,” VerMerris says. “We believe that we can continue to lead the transition of this company to whatever level it needs to go to be better, quicker, faster, more effective than the competition. They will have their advantages, but our innovativeness, which is our real weapon, is what’s going to hold this together. We preach it. We teach it. We practice it. That’s what’s going to pull it off.”
VerMerris’ business plan, and the success it has brought, were validated with his selection as an Entrepreneur Of The Year in the manufacturing/industrial products category. But VerMerris would be the first to tell you he didn’t earn that award alone.
“An entrepreneur does not accomplish what happens in isolation anymore,” he says. “An entrepreneur is someone who has a vision to achieve or accomplish something. But in order to get that done, he has to focus a lot of people on the same objective. An entrepreneur is very much a people-oriented person today. And I think that is something that we do pretty well. That has been my style.
“I just try to create and sustain an environment where people with talent can thrive. And that’s how this all come about. And I think that that is what has made this business worthy of being recognized this way.”
VerMerris moved to Radix Wire in 1974 as one of six managers orchestrating a leveraged buyout of the prior family of owners. The company initially formed in 1944 as a manufacturer of high temperature insulated wire products in the appliance industry. Every three years, the company intentionally makes its products obsolete.
“If you’re going to talk about risk, we think that that is a pretty interesting aspect of our story,” VerMerris says. “We’re very, very aggressive about obsoleting our own products. That’s not a cheap way to do business. I think it’s a fairly risky way to do business.”
In 1997, he bought out the last remaining partner and acquired a majority of the stock. At that time, VerMerris made the employee stock ownership plan a larger part of the company’s financial picture. Today, several employees own a combined 39 percent of the company.
“There’s no doubt that our people are very positively impacted by the ESOP,” VerMerris says. “They recognize the significance of that ESOP in their life. Everybody in this company comes to work every day as an entrepreneur. That’s the kind of company that we are.
“The valuation of that stock has increased extraordinarily, again,” he says. “I think its probably increased about 70 percent in the last two years. And, it went up substantially more than that the first year (of the turnaround). We are a very open book company. We believe that every employee can do his job better if he has the information. And we start out by giving them all the economic information.”
What the employee-owners and VerMerris have been able to do in the past year suggests the company is headed in the right direction. Radix Wire is in its third profitable year following a turnaround. Half of its profits have been invested back into the company. Radix expanded its horizons, moving into heavy industry steel mills, glass plants and petroleum refineries. An affiliate company, Electovations, moved to a new facility in Aurora, and the company launched a new market in Europe.
“We’re still planning to follow our strategy for controlled growth,” VerMerris says. “We’re not growing at the tip line that much. That isn’t our goal, although we will enjoy growth this year. Last year, we were looking to grow the bottom line and we did that. Now, we are looking to begin growing the top line again.”
Among the strategies to do that, the company is looking at growth through key acquisitions of other companies.