TS: Every time I turn around I run into the name Tim O’Keeffe. Paging through the most recent LINK magazine I saw an article on the “Fastener Advisory Board” that was written by you, then just a few pages later I read where G.L. Huyett is now a Sherex Master Distributor. First, tell me about the Fastener Advisory Board.
Tim O’Keeffe: FAB Group was started by the NFDA some thirty years ago as a non-competing peer review group, distributor-focused, along the line of Vistage and Young Presidents-type organizations. Our group is the only remaining one, and counts Ron Stanley of Empire Bolt; and Screw and Don Nowak, retired from Falcon Fastening Systems, as founders and alumni. I have gotten a lot out of it. We are trying to recruit another distributor member and we write those articles to keep our name out there, in the event there are other like-minded professionals. I think I could say FAB has been life-changing for me, both personally and professionally. On another level, it can be lonely as a CEO in the fastener business, what with our varied locations, and thus I count some of my best friends among the FAB members.
TS: How did the Sherex Master Distributor situation develop?
Tim O’Keeffe: I know Adam Pratt through FAB Group, so I suppose one could say the idea was hatched from that introduction. We try and maintain very careful boundaries in FAB with respect to conflicts of interest and such. I would like to think Adam would have considered us anyway, as we try and support the OEM distribution supply chain as a supplier partner with firms like Sherex, and a focus on distributor support. The Sherex arrangement was made more complicated by the fact that we are an AVK master distributor as well. We commenced the AVK relationship in 2015 when we bought Precision Specialties. Since that time we have more than doubled our AVK share, and we like that line and work hard for them. Our intentions are mutually exclusive but related when it comes to our arrangements with Sherex and AVK. We think we can grow the Sherex business and the AVK business concurrently because we fill a gap in the supply chain for OEM fastener distributors, and we bring a lot of value-added services in engineering support and operational excellence, such as offering product certifications free of charge on a “no-touch” basis on-line. We want to help increase the market size of what we refer to as the industrial skincraft market. There remains a lot of new design-in options out there.
TS: Aztec Lifting is your most recent acquisition. And before that I believe it was Tinnerman Distributor, Precision Specialties. So you have been growing through many different channels – some acquisitions, some product extensions, and then acting as a master distributor. Can you give us any insight on your growth strategy?
Tim O’Keeffe: Our growth strategy is distributor focused grounded in product expansion and operational excellence. We opened a Technology Center in Sidney, Nebraska about a year ago, so as to leverage the talent pool from the former Cabela’s organization, which has been consolidated with Bass Pro Shops. We are scaling that operation to rapidly increase our pace in new product expansion; product content creation with an eye on communicating features and benefits more simply using media videos and storytelling; and additional technology tools. For example, we are releasing new on-line tools so our customers can quote custom lifting hardware such as clevises, yokes, turnbuckle assemblies, and special eyebolt configurations, instantaneously, self-directed, and with just a five day lead time. We demonstrated the tool at the STAFDA show in November and found it challenging to communicate how easy and instant the tool is. It is so good as to be non-believable, and is something we hope to expand to other custom parts categories. In addition we continue to invest in technology and talent in enriching the customer service experience. Internally we maintain dashboards that measure response time to RFQ’s. We know that speed kills. We have specific training plans that are elevating the product knowledge of both our inside and outside sales teams. Our outside sales team now covers all of North America so we can work shirt-sleeve-to-shirt-sleeve with distributors to solve problems and add revenue to their own sales mix.
TS: If I’m not mistaken, you purchased G.L. Huyett, correct?
Tim O’Keeffe: Yes, in November, 1992.
TS: What did you do before you bought out Huyett and what was some of the company history before you acquired it?
Tim O’Keeffe: I am a liberal arts major with a minor in philosophy and so while I always knew I wanted to be in business, my education was limited in the field. In 1985 I started a business brokerage in Kansas City and was one of the founding members of the International Business Broker’s Association. I knew I could learn a lot about business in that field, and I did. From 1985 to 1992 I closed on 300 deals– everything from a corner dry cleaner to manufacturing companies. I liked the business, but it had no residual. You sell a deal and you are out of business and have to find another client. I knew I wanted to buy a business. In 1992 I met Bob Hahn, the true creator of G.L. Huyett, in a tin shed in the middle of Kansas. I liked him, respected him, and knew I could learn a lot. There was a nostalgic appeal to me about the industry. I like the fact that the fastener business is part of the Great American Industrial Machine. We build stuff. We create tangible products. We work in and employ blue collar people. G.L. Huyett was nearly 100 years old at the time, though small and sleepy. When I bought it, the company had one employee along with Bob and his wife Dolly. The business originated in 1899 when Guy Huyett, a German immigrant, bought the hardware stock of the Globe Department Store in downtown Minneapolis, Kansas. The business continued as a single product line machinery bushings business for the first 80 years or so, selling into two step hardware distribution such as Stowe Hardware in Kansas City and Orgill Brothers in Memphis. These distributors would in turn sell into retailers, hardware stores, and farm implement dealers. Machinery bushings were considered a precision part in the day, taking up the slack on shafts. It was known that during the summer, townsfolks in Minneapolis would gather under a shade tree on Sunday afternoons, next to the tin shed plant we had, and wire machinery bushings into rings of 10, 25, and 50 for packaging. They would sip whiskey and called themselves the Sunday Southside Sipping Society, or “SSSS”. Bob started selling new customers and adding product part time starting in about 1978, while he was a professor at St. Cloud State University in Minnesota. Ironically he counted Will Oberton of Fastenal as one of his students and they remained friends for many years. As with me, I think Will thought of Bob as a mentoring figure and teacher in his life. That’s the person that Bob was.
TS: I notice you guys put a lot of effort into you booths at the IFE Vegas Show. I always enjoy the creativity and effort. Tell me about your approach to that trade show.
Tim O’Keeffe: The IFE show has changed, and our strategy has changed as well. When we first started, costs for the show and for traveling to Las Vegas were a lot less than they are now. We were the first booth to serve beer and our first booth was an actual Wild West Saloon. I even went out into the desert and got real tumbleweeds to stack on the roof. Now it is getting so expensive that we are gradually lowering our standards, so as to lower costs. My sense is that this mindset is shared by a lot of other exhibitors as well. I am on an advisory board for the show managers and I have pleaded for a reduction of the show to one longer day, say 9:00 am to 5:00 pm. They show no interest because they make too much money on the second day, even though hardly anyone goes. If they don’t listen, I predict a slow and gradual reduction in attendees and booth spaces, and perhaps other shows such as Fastener Fair might increase in relevance. There are too many shows as it is.
TS: I know you have a lot of interests outside the fastener industry and I know your company is very involved in your community. What are some of the community activities you and your company are involved in?
Tim O’Keeffe: Community development and charity are sacred to G.L. Huyett. We support six scholarships in our local high schools for college and trade schools each year. Each July we buy tokens for free rides for disadvantaged youth to the County Fair. Our fair concession is actually owned by a local non-profit because our fair is too small to attract carnival concessionaires. Our signature charity is Project Drive, an annual grant program of $50,000 for local non-profits. We have built handicap ramps for high school football stadiums; donated computers to schools, and have donated so much equipment to food pantries and old folks’ homes that I cannot even count. Ironically one of our grants was to buy a Scrambler carnival ride for the County Fair a few years back. Revenue from ticket sales has provided capital to buy more rides, including a Ferris Wheel. Last year we built a Community Garden and our employees grow and raise crops for food pantries. They also serve food at an annual Salvation Army Thanksgiving Day Dinner each year for homeless and disadvantaged persons, and G.L. Huyett donates all of the turkeys for that event.
TS: Where do you see our industry headed? If you were to look out 5 – 10 years, what changes do you see coming?
Tim O’Keeffe: Well, Marty, you know me. I will answer with honesty and my views of the future probably differ from others. For starters, the concept of product is going to change. The drive trains for battery-powered vehicles are much simpler and have a hell of a lot fewer fasteners than internal combustion motors and their transmissions. I could not believe the market for battery-powered tools at STAFDA. I saw a battery-powered generator that will run electrical power tools for eight hours. You can put that unit into a duck blind and feed your friends three meals and watch two football games without a trace, short of the smells of bacon and steaks cooking on an electric griddle, and ducks would not hear a thing. Distributors at the show told me that 80-90% of their power tool sales are battery versus gasoline. That same change will come to cars and transportation. The market for fasteners will decrease, further fortified by the continued development of composites and adhesives to make things lighter in weight. Fastener engineers might move from exclusively studying bolted joints to smelling glue all day—maybe that is not such a bad thing! One has to think the supply chain will change too. Technology will most likely wire the factory line more closely to the fastener production line. Inventory and time are costs and to drive down costs, the supply chain needs to shrink. I know I hear that most people still think personal relationships are important, and e-commerce is nothing more than an ordering portal– I disagree. Robots, machines, AI, and e-commerce are the future, and if you wait too long to organize your data and wire your ERP to the web, it may be too late.