Steely Changes

Steely Changes

manufacturing by Mark Gordon | Managing Editor

A polished executive is making the transition from supervising a 3,500-employee dryer factory to running an entrepreneurial 80-employee steel company. Multi-tasking is key.

Late last year, Stan Kinnett was running one of the largest dryer manufacturing plants in the world as a top executive with Whirlpool Corp. The 3,500 employees under his watch at the plant 50 miles north of Columbus, Ohio built thousands of dryers a year.

The position, which Kinnett had held for six years, was the culmination of a nearly three-decade long career at Whirlpool that included opening and running plants in India and Singapore. But Kinnett sought another challenge, while his wife sought a move from Ohio to the Gulf Coast, for weather purposes and to be closer to the couple's only granddaughter, who lives in Clearwater.

Just as Kinnett began thinking about what to do with his business life after Whirlpool, another 30-year executive, Gary Claville, was thinking about what he was going to do next, too. Only Claville's business life was running on a significantly different spin cycle.

Claville, a fourth-generation Floridian from rural Polk County, had spent his career owning and growing an 80-employee steel fabrication company in Duette, a one-room schoolhouse town about 30 miles northeast of downtown Bradenton in Manatee County.

Under Claville, that company, Dixie-Southern Constructors, had found a niche in the ultra-specialized world of fabricating carbon and stainless steel for use in building the pressure vessels and stacks that surround power, chemical and water treatment plants. With customers in places as diverse as Hawaii, Pakistan and Trinidad, the melding and welding company had grown to about $15 million in annual revenues by 2007, although executives declined to release specific sales figures.

The stark differences between the two businessmen, however, turned out to be a perfect match for figuring out their respective futures. Kinnett, 51, retired from Whirlpool to take over as president and chief executive officer of Dixie-Southern in February. Kinnett is also now a partial owner of the company, as is Stonehenge Capital, a nationwide venture capital firm with an office in Tampa. Stonehenge bought a majority ownership interest in the company from Claville and hired Kinnett to run it.

The deal closed Jan. 31. While neither Kinnett nor Claville would disclose the sale price of the company, Manatee County real estate records show that the investors paid $2.45 million for the 60,000-square-foot building that covers 12 acres.

"Dixie's reputation for quality, on time delivery, specialized production and their competitive cost position makes them a natural fit as one of our portfolio companies," Stonehenge executive Steven Lux says in a statement. "I congratulate Gary and his employees for what they have accomplished."

Claville, meanwhile, is retiring from Dixie-Southern to focus more on some real estate ventures he has in Polk County and Tennessee. He is staying on with the company for a few more months and says he will remain available after that as needed. "I'm just not going to be pushing any more buttons or pulling any more levers," says Claville, 53.

Challenges and opportunities

The challenge for Kinnett now is to continue growing the company, using Claville's model of business diversification within its niche. Says Claville: "I think he has a real good chance of continued success."

But Kinnett's first step has been, and continues to be, learning the ins and outs of what Dixie-Southern actually does. That essentially breaks down to three categories, with the most significant being the power and water plant steel fabrication work.

The company also has a business division for phosphate work, where it loads buckets of the material that can be converted to fertilizer and other farming resources. The rural location of the company's facility is an asset for that work, as space for equipment and digging is plentiful.

A third business category, performing ductwork on select steel parts for coal-producing power plants, is a spin-off of the company's main steel fabrication business. That part, steel fabrication, is what Claville focused on growing for the last 20 years.

In general, the steel component, Kinnett is learning, is both Dixie-Southern's greatest opportunity and its most constant challenge. It's an opportunity because Dixie Steel is one of the only steel fabrication companies in the country that will take on certain large projects that require a good amount of manpower, fortitude and finances when it comes to shipping the final product.

Those projects, which are fabricated in Dixie-Southern's plant, also require a sizeable amount of bravado. Such as the 70 or so times the company has moved massive steel parcels for power plant vessels, with some parts stretching 180 feet long and nine feet wide and weighing as much as 250,000 pounds. Those trips are carried out on flat-panel trucks from Duette to either a seaport in Tampa or Bradenton for further shipping or to a power or electric plant in other parts of Florida and the Southeast.

What's more, says Claville, those transport jobs are heavy on the logistics. On some projects, Dixie-Southern's work crews have even had to unhook power and phone lines on the route so the wide-load trucks can have turn clearance. Those jobs, with trucks rumbling through the middle of the night, could take five hours just to go 100 miles.

The prize for being so adept at this type of work is the U.S. Clean Air Act. That bill, which requires many power and chemical plants nationwide to undergo a series of environmentally sensitive capital improvements, presents another opportunity for Dixie-Southern, Kinnett says.

Entrepreneurial spirit

But steel, as a commodity, can have volatile price swings. That challenge requires constant monitoring of the market and having pinpoint knowledge of the amount of steel each Dixie-Southern job requires. Steel price monitoring was a big challenge with Whirlpool, too, says Kinnett, so at least he's familiar with it.

Kinnett is also familiar with workforce challenges, given his past job. But in the early going at Dixie-Southern, Kinnett says managing and motivating the employee base has been relatively easy. Many employees, he says, seem to seamlessly trade one task for another.

The project estimator, for instance, also serves as a project manager on many jobs. And the office manager also serves as the help desk for computer issues and as a human resources contact.

The multitasking has inspired Kinnett. While he says Whirlpool had its share of talented employees, the corporate structure didn't encourage an entrepreneurial spirit.

"Gary really built a group of can-do employees here," says Kinnett. "We don't have any office types here."

REVIEW SUMMARY

Business. Dixie-Southern Constructors, Duette, Manatee County

Industry. Manufacturing, steel fabrication

Key. A globetrotting 30-year executive from Whirlpool Corp. is taking over the entrepreneurial company from the former owner, a fourth generation Floridian.