"What you need is a manager ... a manager," says the gravel-voiced Burgess Meredith to Sylvester Stallone in the first Rocky movie. This is good advice for up-and-coming boxers as well as automotive suppliers who are constantly facing demands for price cuts and a shrinking supply base.
Richard S. Crawford, the 48-year-old president and CEO of Madison Heights, MI-based Cambridge Industries Inc., could be a disciple of Mighty Mick. Good management, he says, is the reason he could buy a company like Nortec Precision Plastics with $4.5 million in 1988 sales and add six other businesses to fashion an entity with $350 million in annual sales.
Under Mr. Crawford's direction, Cambridge has become one of North America's most process--and product-diverse plastics suppliers, and it is among the auto industry's largest molders of thermoplastic and thermoset rials. Cambridge injection, compression and blow molds, extrudes and co-extrudes hundreds of different parts for some 70 car and heavy-duty truck models.
"Customers want to make earlier purchasing decisions these days, and because we are so diverse, we can go into a bid with no process or material bias, which is unique," says Mr. Crawford. One example of Cambridge's flexibility is a fan shroud contract originally awarded as a thermoset component. Midway through development, the customer decided to use a thermoplastic. Instead of having to re-bid the part, Cambridge said it would switch to the new material.
The company made national headlines in 1994 when it acquired Rockwell International Corp.'s Automotive Plastic Div., a company twice its size. The move made Cambridge a full-service supplier with black-box capabilities and a customer base that includes all major domestic and transplant automakers. That business is now "significantly more profitable" (around 50%) than it was before Mr. Crawford staked his claim.
Another acquisition, Voplex Corp., lost $22 million in 1991. Mr. Crawford took over in January of '92 and a year later Voplex had a $3 million profit with the same $55 million in sales it had the previous year, even after givingCorp. a $3 million price cut. "The only thing that changed was the people managing the business," he says.
He says one of his company's strengths is that it's not restrained by corporate structure. "I give customers my home phone number so they can call me when they have problems." He adds that his lieutenants at the plant level also are empowered to make decisions, speeding customer response.
Mr. Crawford never aspired to run an automotive supplier company. As a corporate turn-around specialist helping Comerica Bank aid financially troubled companies in the mid-1980s, he saw opportunity in the plastics processing business.
He observed that steel companies had solid, experienced management but vied in a fairly flat market. Plastics companies had good mechanical people, but were "unsophisticated" managers in a rapidly expanding market.
After consolidating seven companies into Cambridge Industries, going from 108 people and one plant in 1990 to 3,000 employees and 11 plants in four states and Canada, Cambridge achieved annual sales and operating profit growth of 200% and 280% respectively.
"The goal has always been to create value with the least risk," says Mr. Crawford.
This vision is now global. He expects to have a strategic alliance or a joint venture in Brazil and a plant in Mexico before the end of the year. In Europe, two or three acquisitions should be complete within two years. Cambridge is just getting started in Asia.
Like the sage Mickey who guided boxer Rocky Balboa to a celluloid championship in Rocky II, Mr. Crawford says he knows what it'll take to get Cambridge to a world supplier title. "We need to be much larger, global and even more focused on plastics technology."