1) Who, What and Where: (Your name and your formal title at Drew, and your headquarters location).
Leigh J. Abrams; Chairman of the Board of Drew Industries Inc. (NYSE:DW); 3501 County Road 6 East; Elkhart, IN 46514.
Note to readers, this is a flashback interview, and other than this red text, it is as originally published.Today, Drew Industries is known as Lippert Components, Inc. (LCII)
2) Background: (Educational/Professional snapshot before entering the factory-built housing arena.).
I earned a BBA from the Baruch School of Business of The City University of NY in 1964 and became a CPA since 1967.
3) When and How: (When and how you began with Drew, which could include a recap of the years since Drew.)
After 5 years at a large CPA firm, I began my career with Drew Industries in 1969 as Assistant controller. After a series of promotions, in 1979 I became President and CEO of Drew after Drew emerged from Chapter 11 bankruptcy.
At that time the Bass Brothers of FT. Worth Texas, Richard Rainwater and Rusty Rose, all Texas investors purchased a 72% interest in Drew.
For the next 29 years I continued as CEO of Drew until 2009 when I became Drew’s Chairman of the Board. At that time, Drew’s CFO assumed the role of President and CEO until 2013 when he retired.
In May 2013, Jason Lippert the long-time President and CEO of our two operating subsidiaries Lippert Components and Kinro, became Drew’s CEO and Scott Mereness the COO of both operating subsidiaries became Drew’s President.
4) What are your personal interests or hobbies? How do you like to spend non-work time?
Since becoming Chairman of Drew’s Board in 2009, and not having the day-to-day responsibilities of a CEO , I have spent more time with my wife, five children and seven grandchildren.
In addition, I am the Lead Director of Impac Mortgage Investors (IMH: NYSE:MKT), an originator of mortgages and a real estate services business.
I am also involved with the Manufactured Housing Institute.
Leigh Abrams (center) holding Supplier's Division award plaque, Manufactured Housing Institute
I was formerly a long distance runner and completed 29 marathons and ran more than 40,000 miles in 27 years.
For many years I have collected coins and also have tried to play golf without much success.
5) You've been busy in your involvement and leadership activities with the Manufactured Housing Institute. Please give our readers a snapshot of what that looks like and over what time line.
Since 2009, when I became Drew’s Chairman, I have attended most meetings of the MHI and have served as the Chairman of the Suppliers Division. I also was a member of the Board of Directors of the MHI. Today I continue as a member of the Suppliers Division committee.
Drew Chairman Leigh J. Abrams receives MHI Supplier Division service award plaque from
George Waechter of Minute Man Products.
Although Drew’s sales of components to the manufactured industry represents only about 12% of Drew’s sales, (the remaining 88% of sales are for components to the RV industry), the manufactured housing industry remains a passion of mine since at one point MH sales were the bulk of Drew’s business.
6) As you know, Drew is one of the stocks tracked in the market report on factory-built housing in the Daily Business News stock market report. Can you give us a snapshot of Drew's growth and acquisitions in recent years?
In 1979, when the Bass Brother and Rainwater and Rose acquired a 72% interest in Drew, our sales were about $8 million, we were losing money and had a negative net worth. For the six months ended 6/30/13 our sales were $540 million. Sales for 2012 were $901 million.
We have been consistently profitable from operations for more than the last 20 years. Drew has made more than 35 acquisitions, generally of smaller, privately owned companies, owns more than 30 factories in which we have made substantial capital improvements, and has paid more than $80 million in special cash dividends to our stockholder’s in the last three years.
Notwithstanding these achievements, we have no debt, cash in the bank and substantial unused lines of credit.
We believe the formula to our success has been to recruit and retain strong management and to encourage them to succeed through profit incentives and stock ownership.
We focus on long-term strategic planning and strong risk management. Our acquisition policy has been to acquire companies that have patented products or bolster our importance to our customers by improving and increasing our product offerings and product quality.
7) Problem solving and team building are two of the keys that C-Suite level leaders deal with routinely. What sort of process do you use in your leadership role and why?
Currently I am Chairman of the Board of Drew, but for almost 30 years I was CEO of Drew and during that time team building and preparing for management succession were both key ingredients in helping to build Drew into the almost $1 billion sales company that we are today.
Our current CEO, Jason Lippert, focuses on team building by holding bi-weekly meetings where all key executives are free to speak up on the various issues that are affecting the company.
However, after seeking and listening to the various viewpoints within management ranks, it then falls upon the CEO to make the decision in which direction to follow.
Then the CEO must communicate to his management team and explain the reasons for his decision so that the entire team is prepared to eagerly follow through on the business direction chosen.
I have always followed a philosophy whereby I did not feel it necessary to fight every battle, or to win every battle and sometimes, in less important decision situations, to once in a while intentionally lose a battle so that our executives experience the consequences of the decision which they made and promoted.
8) While some still see doom and gloom, Drew has continued to grow over the years, even during the big downturn starting in 2008. Your company endured previous bumpy times, but emerged stronger than ever. For those the many who are still struggling, what experience or insights would you share that could re-ignite their passion and success?
You must never say you are through. You must stay positive and always believe that there must be a solution.
This is the time to try to get your team to be as creative as possible. No matter how outlandish an idea sounds, listen to it, explore it and you’ll be surprised that sometimes a good solution comes from this brain storming.
In the early days of our company, especially when we were in bankruptcy in the mid 1970’s, various parties told us that we should just close the doors. We didn’t listen and just kept fighting to stay alive. Obviously we survived.
Virtually no manufactured housing (MH) pros like Dodd-Frank (DF) in its current form. Congressman Walter Jones (NC3-R) told MHProNews that it was never Congress' intent to muzzle the speech of MH sales people. Congressman Stephen Fincher told us of his commitment to work for reforming Dodd-Frank, to name but two among others on both sides of the aisle in the U.S. House and Senate. As you know, common hits on DF include, but are not limited to, harm done to current manufactured home owners and concerns that failure to modify DF could cut personal property lending by roughly 33% +/-. MHI, MHARR and state/manufactured home communities are working to pass a legislative fix. Based on your experience in working with legislators, what would you say to business owners, rank and file, executives or managers about the need for a DF fix and how best to engage their Congressional rep and Senators?
You must communicate regularly with your elected representatives, as well as their staff. It is often the representative’s staff that helps the elected official to take a stand on an issue. However, nothing can replace direct communication with the representative.
During your meetings with the representative you must be concise and clear and initially only make the two or three key points that must be resolved.
After you get them on your side you can then expand upon the issues.
Also, emphasize the number of employees your firm and the industry employs, especially within the representatives district or state.
Remember the representative is very busy and has many constituents seeking their help, so be conscience of the amount of their time that you take.
After you meet, be sure to follow-up with a thank you and a reminder of the issues that need addressing. Get a staff member’s name and follow-up with this person.
Drew has deep roots in the RV business, as well as Manufactured Housing. RVs will likely outsell manufactured homes by 5-1 this year. Experts say part of the reason is their successful GoRVing campaign. How important do you think GoRVing is to the RV Industry? Do you think there is merit in manufactured housing doing its own image building campaign?
I think the GoRVing campaign has been crucial to the success of the RV industry. This campaign, albeit on a smaller scale, was continued even during the economic downturn.
In prior years and I continue to be today, a staunch supporter of a MH industry generic advertising campaign.
Unfortunately we were unable to gather the various segments within the MH industry to agree upon a method of funding the campaign and what the campaign should be about.
Even today only a small segment of the population can tell you much about the MH industry and the wonderful homes the industry builds. The rest of the population doesn’t have a clue about our industry, except for the image of the down trodden trailer park.
This must be changed and can only be done through advertising.
The example of AFLAC is interesting. Prior to the AFLAC advertising campaign featuring the duck, their name recognition was 5%. Since the campaign, their name recognition today is 95%. Consumer’s perceptions can be changed.
Your industry colleague, Sam Landy, said in an interview with MHProNews that given the large and growing need for affordable housing in the U.S., he sees how manufactured housing could return to new home shipping totals of 300,000 to 400,000. Others inside our industry think we ought to be happy to return to shipments in the 60,000 to 70,000 annual shipment levels. What say you? Why?
I would love to see the industry reach Sam’s totals, but would be very happy, in the short term, for MH to reach its more traditional build rate of between 15 to 20% of total housing.
There are currently many forces conspiring against our industry. These sources have significantly more funding then our industry and thus more clout within Congress.
However, we have to be diligent and consistent and must keep pressuring Congress to remove the stumbling blocks that Dodd-Frank and other recent legislation has saddled on the MH industry.
We must also work with local zoning boards to remove restrictions on the placement of manufactured homes within their communities. This is where I think a generic manufactured housing campaign extolling the virtues of MH will be very helpful.
12) Industry veteran and Green Courte Partners Chairman, Randy Rowe, called for a 5 point plan for industry recovery. It included the following: A) Better Warranties and Customer Service, B) Dealing effectively with Chattel Financing Issues, C) Economic Security for Our Customers, D) A Multiple Listing Service(s) (re-marketing system for individuals, lenders) and E) A National Marketing (Image) Effort. What would you say about these bullet points? Do you think that other possible ideas, like more "best practices" and professional sales training, are also needed? What say you on the keys for moving ahead?
I couldn’t agree more with Randy.
Whatever the industry can do to improve its image and convince the consumer that our industry is no different than conventional housing is vital to the industry’s future success.
Today our industry sells quality, comfortable, affordable homes. The homes can be almost any square footage that the home-owner wants.
In my opinion, our industry should stop using the term single wide and double wide homes and instead just sell homes by the square foot and the features that the home owner wants.
The site built housing market doesn’t tell the consumer how may boards they use to build a home, instead they just sell homes.
13) What do you consider the largest challenges facing the MH Industry in general today? For example, Triad's Don Glisson, Jr. told us: The biggest challenge I see is the continued onslaught of intrusive government regulation of all facets of our business, especially in financing. We offer by far the best answer to this country’s affordable housing dilemma, but government continues to saddle us with regulations that stifle us. And how important do you think it is for the Manufactured Housing Institute, MHARR, state and community associations to work together on issues of common interest?
As I said earlier, it is vital that we continue to work with Congress to help remove the obstacles that they have placed on our industry.
But just as important is the generic advertising campaign that the industry should implement to help improve the industry’s image.
14. Closing thoughts or comments, sir?
Build a home that the customer wants, at a price that they can afford and then support it with proper after care. It’s all about the customer. If they are happy, favorable word of mouth will help our industry to grow.