“This is our predicament. Over and over again we lose sight of what’s important and what isn’t,” Kent Finkbiner said in opening his keynote speech during the Perry County Development Corp. annual meeting at the Hoosier Heights Country Club.
His address followed one by Clay Ewing, chairman of the PCDC directors board, and in order to “trump” the videos Ewing had displayed, he flashed a picture of a baby onto the screen next to him.
“My wife, Susan, and I just became first-time grandparents Dec. 18, so we’re a little bit proud,” Finkbiner said, explaining that “it’s important as we’re going through the downturn to keep the focus on what’s important, what’s important about life and what’s important about how we conduct ourselves.”
A lot of people talk about the quality of life in Perry County, continued the president of the Webb Wheel Products Truck and Trailer Business Unit in Tell City.
“How do you foster that quality of life for the families, for the businesses, for the community?” he asked. Tough decisions have to be made going into a recession, “and now we’re on the other side of that, and coming out of it – how do we keep that proper focus, that quality of life going strong?”
He provided some background on Webb Wheel, launched in Webb City, Mo., in 1946. It remained in that state through the 40s, 50s and 60s, then became an Indiana company, he explained. “They were in Lebanon, Ind., through the 70s and 80s … and then in the early 80s, they chased cheaper labor … and moved down into Alabama.”
Finkbiner is a lifelong Hoosier and spent the majority of his career supplying components to the transportation industry, according to biographical information on invitations for the annual meeting and dinner. Holding a mechanical-engineering degree from Purdue University and a master’s from Indiana University, he led the startup of Webb Wheel’s Tell City unit from its kickoff in 2004.
“With our business starting up in Tell City, it was really kind of a homecoming,” he said, “coming back into Indiana.”
“As a participant in this community, we do have a very strong financial base; we’re a strong company and we’re driven to become stronger financially every year. We’re a debt-free group of companies and we’ve got a good base for moving forward,” he continued.
Webb Wheel is owned by the Marmon Group, which is composed of nearly 100 companies with 250 production facilities and “about $6 billion in sales,” Finkbiner, “so we’re a large group of companies.”
The group’s highway-technologies division boasts approximately $125 million in investment, he continued, and “of that, about $40 million went into Webb Wheel over these last few years, and $24 million of that was in Perry County.”
In addition to the original-equipment-manufacturer plant he runs in Tell City, Webb Wheel has after-market facilities in Alabama and Arkansas, the president said, adding, “we’ll be headquartered here for the foreseeable future; I sure don’t have any plans to move.”
“It feels like a long time ago, but it was only 2004,” he said, displaying a slide of the company’s site next to Waupaca Foundry in April of that year. “We had a lot of work to do. We only moved 700,000 cubic yards of dirt” while Waupaca’s construction required 3 million yards to be moved. “Well, we moved our 70,000 in 90 days through an incredibly wet period of time. It was a challenging construction project,” he continued, showing more slides depicting progress of the work. “By the time we got toward the end of June, the site was wrapping up.”
The plant was built by October, then highly automated production equipment went in, “and by the end of the year, we were running our first parts, so it was about a nine-month project from the first tree being shoved over … quite a quick process.”
Finkbiner complimented local people and companies that contributed to that, including Clay Ewing, German-American Bank and Waupaca. “Just a lot of you were really instrumental in helping pull this thing together, and we did appreciate it at the time and still do,” he said.
Webb Wheel makes wheel hubs, brake drums and rotors, he explained, “really the same products that ATTC makes, just for a different size of vehicle.”
Threefold Increase
Since starting production in January 2005, “we’ve increased our market share threefold,” he said, “from 17 to more than 60 percent of the truck-trailer market. A big part of that has been the work ethic and the quality that the work force in Tell City has pulled together.”
Truck applications comprise about 70 percent of the company’s business, and military vehicles like the Osh-kosh M-ATV the remaining 30 percent, he continued, adding that a research lab built in Alabama over the last three years supports the Tell City and other facilities.
Research & Development
“We’ve poured about $5 million into our (research and development) effort over the last three years,” he continued, explaining it has included new dynamometers, fatigue machines, a full-capability metallurgical lab and a 500-pound foundry that makes it possible to develop quick-turnaround prototypes. “We’ve been seeing some dividends,” Finkbiner said. “We’ve got some new products up now that are helping us generate higher margin (and) helping us generate more value for the customer.”
Product development leads to higher quality of life for employees, he said.
He showed a bar graph to demonstrate the effect of the recession on his company.
Highs & Lows
“At our peak, we were at 130 employees, roughly, between our Indiana and Alabama plants” he said. “At our low point, we got down to almost 50 employees. So the recession that we have just been through really has been tough. We closed the Alabama plant and consolidated everything into Tell City; I guess that’s good news for Perry County. Now that the economy’s been coming back over the last 15 months, we’ve seen our employment go … up into the low 70s right now.”
He foresees that regrowth continuing, he said, and as the company re-expands, “we will stay, for Webb OEM, focused on the Perry County area … before, we were fractured between Indiana and Alabama. I think it will pay dividends for Perry County down the road.”
He said messages about the national economy are mixed, such as “new-home sales jump 18 percent” and “new-home starts in December were at half the number considered healthful.” In a transportation-industry publication he reads, Finkbiner sees headlines like, “orders are up 320 percent.”
Uncertainties Abound
“Of course it’s easy to get 300 percent when you’re at such a low level,” he said. “Then you read the headline right next to it, and it says diesel jumps $3.51, pushed by the cold wave and all the uncertainties of Egypt and Iran and Yemen, and all these things.”
Inflation is over 9 percent in India, he said, over 4 percent in China and hovering around 5 percent in other countries. Commodity prices are going up.
Things are getting better, but it’s happening slowly, and “transportation tends to be a good harbinger of what’s going on in the economy in general,” Finkbiner said.
“I want to get away from economics and get down to basics. Why do fleets buy trucks?” he asked. “To haul freight,” he said, confirming a response from someone in the audience.
“Next question, when do fleets buy trucks?”
Murmurs run through the crowd, but no clear answer emerges.
“When they have money,” Finkbiner said. He listed stock gains for several publicly traded trucking companies, showing they’re making small gains. Trailer production was about 140,000 units in 2001-02, when the nation experienced “a terrible recession,” he said. It plunged to 77,000 trailers “in the pit of this recession, 2009 … half of the last most serious recession we ever had. You have to go back 50 years to find a trailer-production level that low, so that’s how tough the economy’s been.”
The recovery looked like it would be slow and gradual, he continued, ‘but the reality is it’s looking stronger and stronger … optimism in transportation is building … and I think optimism throughout the economy is building, and will show up in general media in three to six months.”
Recovery in Progress
“We’re right back on a strong recovery for this year,” he said. “I think one of the best comments I heard from a customer the other day was ‘just buckle up and hang on for the ride, because things are getting stronger in a hurry.’ And I’m hopeful that while the economy’s still going to be fits and starts … in different parts of the industry. I think we’re headed in the right direction and more strongly than we would expect. For Perry County, I think we’re in for several good years, and I think the rate of the recovery is going to accelerate. I think one of the challenges we’re already starting to see a little bit is pressure for qualified people. We’re hiring … we just put the entire plant on a seven-day-a-week schedule to keep up with production. We’re going to do that for three weeks. We’re going to be bringing people in as fast as we can. I do think this manufacturing trend in the U.S. is for real. We’re seeing it a little bit in our category. I think that’s going to accelerate. I think that’s opportunity for Perry County, for sure.”
The Hoosier Approach
For the longer term, he suggested, “let’s take the good Hoosier approach. Let’s live within our means and let’s hope we can avoid another bubble.”
When people finish playing a game such as Monopoly, he said, everything goes back into the box regardless of who won or lost, “and you give the box to the next generation to play.”
“Let’s just hope that we create the kind of quality of life in Perry County for our businesses, our families, our community, that we give them a game that they can really enjoy playing down the road.”
He returned to the beginning by flashing another picture of his new granddaughter, taken a few weeks after the first.
“Let’s work on using these next few years of good economic times to really build on the quality of life in this area,” he urged.
