Why Ralph Reins is 'Unretired'

Like a Phoenix rising from the ashes, Ralph Reins is back in action.

Not that his career as an automotive nomad ended on the slag heap. When he retired at age 57 in January 1998 as president and chief executive officer of AP Parts International he was, by his own account, a very wealthy man. He settled in the Phoenix area, ensconced in his sprawling 8,500-sq.-ft. (790-sq.-m) home on the 15th hole of the exclusive Troon Country Club.

He formed Reins Enterprises (a family business), did some consulting and remained on a couple of corporate boards, but otherwise watched the cactus grow.

"I thought I'd enjoy retirement, but you get bored," he says. "My wife said, 'You're bored,' and I said, 'You're right,'" he says. "I'm not the world's greatest golfer, and I never will be." Gin rummy? That's a different story.

Sitting still has never been something that comes easily to Ralph Reins. No one keeps score, but it's highly unlikely that anyone can match his record as an automotive vagabond (see below): In just 13 years, from 1985 to 1998, he served as either chairman or president of Mack Trucks Inc., ITT Automotive, AlliedSignal Automotive, United Technologies Automotive, AP Parts and Envirotest Systems Corp., a Phoenix outfit that does vehicle emissions tests under contract.

Before taking on these high-level assignments, Mr. Reins spent 13 years at Rockwell International (now ArvinMeritor), moving up to president of three different groups over a six-year span.

And don't forget General Motors Corp., where he began his career and spent nine years at the Chevrolet Detroit Gear & Axle Plant before joining Rockwell.

But if Phoenix is his home base these days, his heart apparently remains very much tied to the automotive industry.

Fidgety in retirement, "I began looking at a lot of opportunities," he recalls.

Rather than participating as a hired hand, this time he wanted to own a hunk of the action as well. He found what he was looking for and "unretired" when Mascotech Corp. decided to unload its aftermarket operations, a diverse $100 million manufacturing business ranging from windshield wipers to heavy-duty braking components.

At first "they (Mascotech) wanted to sell it lock, stock and barrel, but when they saw our strategy, they wanted to keep some ownership," he says. A new privately held company called Qualitor Inc. was formed in April 1999 to take over the Mascotech businesses, with Mr. Reins perched at the top as president and chief executive officer - and with nearly 10% ownership - while Mascotech retained a 20% share.

Qualitor's largest shareholder is Wind Point Partners, a private equity investment firm based in Chicago and Southfield, MI, with 50% ownership. First Union Capital of Charlotte, NC, holds a 10% share, and Qualitor's management team the remaining 10%. "I didn't want another job," he says. "I wanted to be an owner. I really don't need income. I'd rather work and have fun."

What he got was Mascotech's Pylon wiper division with $20 million in annual sales based in Deerfield Beach, FL; Hebco, which makes brass air fittings and hose assemblies for the heavy-duty truck and trailer market, also with $20 million sales and based in Bucyrus, OH; BLD, which makes passenger car engine and emission controls, with $30 million-plus sales and located in Holland, MI; and IBI (International Brake), also a $30 million company manufacturing hydraulic brakes at its plant in Lima, OH.

Although small compared to the companies he has previously headed, Qualitor added a big chunk of revenues when it acquired Anstro Corp. last July. Based in Wolcott, CT, Anstro makes disc brake components. Its 1998 revenues totaled about $40 million. Mr. Reins expects Qualitor's sales this year to reach $150 million.

Nor are he and his partners content at that level. "We want to get to the $300 to $500 million range, but we're patient," he says, adding that it could take up to seven years.

As for additional acquisitions, "There are lots of opportunities out there," Mr. Reins observes. Right now he's eyeballing several possibilities. "We want products that have a predictable wear rate - replacement three to five times over the vehicle's life," he says. "But when you go on an acquisition binge, you'd better get your synergies right."

Qualitor also may consider an IPO (initial public offering) "eventually," he allows, "or we could be part of the consolidation game. The key is to create value."

Qualitor's headquarters staff consists of Mr. Reins, Chief Financial Officer Jim Thomas (a Rockwell veteran), Vice President-Business Development Ted Thacker (from Mascotech) and a handful of support people. Its factories employ 1,000.

Mr. Reins views his role in the new venture as chief strategist. "I've always loved the strategy part - putting round pegs in round holes and square pegs in square holes," he says.

In the early going, he's targeting expansion of Qualitor's existing aftermarket businesses, bolstering its relatively small original equipment service (OES) volume and perhaps taking a plunge into foreign markets, where it now has a small export position. "We're thinking globally and scoping out possible acquisitions outside North America," he says.

Another tactic is to get a jump on the aftermarket by promoting Qualitor's process and design capabilities at the automotive companies. BLD, for example, makes PCVs for the 5.4L V-8 in Ford's Expedition SUV, he says.

Although Mascotech had "strategic buyers" for each of the four basic businesses on the block, he says, "no one saw how to put all of them together in one package" until Mr. Reins' group came up with their plan, he says.

Under Mascotech, each of the operations worked independently with its own sales staffs and manufacturing operations. Qualitor's scheme was to vertically integrate them where possible to take advantage of the expertise of each, says Mr. Reins. "There was stuff we were tooling outside that we could do ourselves" by combining in-house capabilities, he adds.

There also was room for streamlining delivery systems. "We're getting 100% delivery performance," Mr. Reins boasts, in part by utilizing the calendar to reflect peak demand periods. Because windshield wipers are in low demand during the summer, Pylon builds inventory during the summer months and begins moving the merchandise in the fall. "That way, we get enhanced service and quality." It claims 100% of the Target and Wal-Mart replacement wiper business, and also lists Toyota Motor Corp. and DaimlerChrysler Corp. as OEM customers.

Scheduling is a big part of the company's strategy. Another is innovation. Pylon's wipers, for example, have a universal attachment making them easier to install, he maintains.

IBI, whose sales now go entirely to the aftermarket, counts Midas and Federal-Mogul Corp. among its large customers.

Anstro meshes with Qaulitor's vertical integration strategy. With IBI and Anstro, "We've focused on the wheel end where there is lots of wear," says Mr. Reins. "Our strategy is to be a Tier 2 supplier to the big guys - a one-stop shop for brake hardware. This also insulates us from cycles on the car-building side because the vehicle park (vehicles in operation) just keeps growing."

Qualitor also is poised to capitalize on the recent SUV and minivan market. Reason: Many of these rigs have rear wipers, which will need to be replaced. Mr. Reins also eyes growth for engine controls at BLD, where it has a small OEM presence (8% of its total revenues, chiefly at Ford Motor Co.).

Hebco's brass fitting business, now 60% OEM and 40% aftermarket, also is targeted for growth. Mr. Reins says the division is developing "kits" or modules to provide full-service capabilities for truck and trailer air-brake systems.

Because of his unique and varied background, Mr. Reins has wide-ranging contacts to tap as he leaps back into the fray. But as much as he loves Detroit, he still resides in Scottsdale on aptly named Happy Valley Road, commuting on Friday nights and returning 48 hours later.

It may be a come-down to fly on Northwest with the common folk after flitting about in corporate jets for years, but Mr. Reins says his personal life is tied to Arizona. His wife, Vickie, is an artist who has grown fond of Southwestern art, he says.

And besides, ogling cactus is not all that bad if you know you have a job to go back to on Monday morning.

Maybe it's just because he's damned good. Or has extremely itchy feet. Or a questionable attention span. Or an innate wanderlust. Or all of the above.

Whatever the reasons, Ralph Reins has been around the horn, compiling a six-page resume on a 37-year odyssey that started at General Motors Corp., where he began as a "college graduate in training."

Capsules:

1963-1972: GM's Chevrolet Detroit Gear & Axle Div., from which he departed as superintendent of production at Plant #7.

1972-1985: Rockwell International Corp. (now ArvinMeritor), where he began as engineering and reliability manager in the Truck Axle Div. In Winchester, KY, moving up to president of the Axle International Div. (1979-81), president of the Worldwide Axle Group (1981-1984) and president of On Highway Operations (1984-1985).

1985-1989: Senior vice president of ITT Corp. and president and CEO of ITT Automotive, where he pushed ITT's antilock braking business from 300,000 to 2.2 million units yearly.

1989-1990: Chairman, CEO, President and Chief Operating Officer of Mack Truck, where he settled a four-year labor dispute and reduced head count by 40%.

1990-1991: President of United Technologies Automotive (recently acquired by Lear Corp.), where his restructuring shaved costs by $50 million.

1991-1994: Executive vice president of AlliedSignal Inc. and president of AlliedSignal Automotive, which under his direction boosted revenues from $4.1 billion to $5 billion.

1994-1995: President and CEO of Envirotest Systems Corp., the post that brought him to Phoenix.

1995-1998: President and CEO of AP Parts International, where he was hired to shape up operations prior to its sale in December 1997. 1996: President of Rofin-Sinar Inc. He remains a director.

1998: President of Weirton Steel Corp. He remains a director.

1998-present: Chairman and CEO of Reins Enterprises, a family partnership.

1999-present: Chairman and CEO of Qualitor Inc., in which he owns nearly a 10% stake.