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TS:  I’m from your area and have known of your company my entire career.  But for those people new to the industry or maybe from another geographic area, give me a quick company background.

Charlie:  1947, my grandfather, Charles L. Kerr, and a few other associates, revived a dormant machine shop and named the new company C. L. Kerr Industries, Inc.  This company ran turret lathes and produced small lots of larger diameter fasteners turned from bar stock. 

A second business, Lakeside Machine Products Company, organized in 1943, ran single spindle Brown & Sharpe Automatic Screw Machines producing smaller parts in larger lots sizes.  Because Lakeside Machine Products and C. L. Kerr Industries had different types of manufacturing equipment, they regularly purchased and resold each other’s products.  This eventually led to the consolidation of the two companies into Kerr Lakeside Industries, Inc. as of July 1, 1948.  Seventy-Two years later we are a fourth generation family business.

In 1970 we purchased our first cold header, a National 1000-5 (1-1/8” max thread diameter).  Over the next five to seven years we added two National Boltmakers, an 8L4 (1/2” max. thread diameter) and a 1012 Boltmaker (3/4” max thread diameter).  In the early 1990’s we added 2 National FX24L headers (5/16” max. thread diameter). 

We started out as a screw machine shop, and today while we still run that type of equipment, cold heading standard Hex Socket Screws and related make to print specials is what our reputation is based on.

TS:  Your company is a family business and has been for a long time.  You worked for a long time with your father and now you have your son working alongside of you.  Care to jump in and share some thoughts or experiences on the family dynamic?

Charlie:  First let me state I never worked with my father, I worked for him.  Big difference.  My dad really liked running the business and he was responsible for building the company into what it is today.  But as he aged he refused to step back, slow down, or delegate.  This created a very stressful situation for me.  The pace of doing business was getting faster and my dad just could not keep up.  He became a bottle neck for everything he demanded to be involved with.  This did not threaten the viability of the company, but it did make for difficult moments especially when customers were kept waiting for answers on routine inquiries.  While this was going on at the office, members of the family who had nothing to with Kerr Lakeside Inc. other than being related to us, thought that Dick’s ability to go in every day was great.  Had I done anything to push my dad aside, I would have been excommunicated from the family.  Being able to walk in the door every day is not the same making a productive contribution to the operation.  I am not the first person to deal with a less than easy management succession and I won’t be the last.

When Alex joined the company several years ago I made a commitment to him he would not have to stand in my shadow.  I never make commitments I’m not 100% sure I will keep and we’ve made this management transition successfully.  Our next big milestone will be Kerr Lakeside’s 75^th Anniversary Celebration scheduled for May or June, 2023.  Save the date!     

TS:  I am sure you have the opportunity to give advice to your son Alex on a weekly, if not daily basis.  What advice do you have for the younger people who might have 5 years or less in our industry?

Charlie:  I rarely offer Alex unsolicited advice.  My dad was always giving me advice, actually instructions he expected me to follow. That was his way of making sure I knew he was calling the shots.  I am still active in the business, but I have relinquished control of day-to-day functions to Alex. 

Before joining the business, Alex worked as a commercial airline pilot and before joining the airlines he was a flight instructor with the Odegard School of Aerospace Sciences at the University of North Dakota.  His skills as a pilot and instructor transfer very nicely to our operation.  He has the ability to solve problems and at the same time is comfortable allowing others to solve problems.  As far as advice for people who have entered our industry in the last 5 years; be patient and don’t expect instant gratification.  There are a lot of fastener industry people currently in senior management positions who got started packing boxes, driving delivery trucks, or running machines.  The path into management today is different for several reasons but the newer members of our industry need to realize many of the successful leaders in this industry got to where they are by learning the business from the ground up.       

TS:  You are still involved with several industry based organizations and have a long history with the North Coast Fastener Association.  What are your thoughts on industry organizations and the role they have played for you and your business?

Charlie:  The short version of the answer is this; had Kerr Lakeside Inc. never belonged to any industry associations we would be out of business and that would have happened a very long time ago.  Starting in the 1970’s when I joined the company on a full time basis we have been confronted with a very long list of challenges that failure to conquer would be disastrous.  An obvious one is the Fastener Quality Act (introduced as HR 3000 in July, 1989) and related things such as third party testing lab accreditation and ISO Certification.  Absent active participation in IFI, ASTM, ANSI/ASME, and NCFA Kerr Lakeside Inc. would not have been able to deal with this issue.  When it comes to things the government does to regulate your business, if you are not at the table, you are on the menu.  All industry associations have some governmental affairs involvement.  This is a very valuable benefit of membership.   

Before the FQA, fastener manufacturers had to integrate statistical quality control techniques (SPC) in the plant at the point of production.  SPC wasn’t new, but back in the days before affordable multifunction pocket calculators, slide rules were the prevalent tool for doing math.  Under those conditions, SPC was very cumbersome and the most economic quality control practice was in-process inspection and post production final inspection using sampling plans like MIL-I-105 that provided for acceptable quality levels (AQL).  In other words it was OK to ship out of spec parts as long as there weren’t too many of them.  Try that today. 

In the early 1980’s, Statistical Process Control, a prevention driven system versus in-process and post production inspection which is detection driven, became the law of the land for heading and screw machine shops.  I flunked out of statistics 101 in college, so we had a very serious problem to deal with.  Our company’s membership in the Precision Machined Products Association (then known as National Screw Machine Products Association) gave our company access to SPC training that saved us from extinction. 

I took a long time to make an important point; membership and actively participating in trade or professional associations is a mission critical activity.  I want to go back to a previous question about advice for some of the less senior members of our industry.  “You earn your paycheck while you are at work.  You earn raises and consideration for promotion as a result of what you do when you are not at work.”  Taking classes at a local community college to stay current on generic skills like creating sophisticated spreadsheets would be one example of doing something outside of work to enhance your value to the people you are employed by.  Industry specific skills can easily and affordably be augmented through participation in programs offered by the various industry associations.  These groups are very valuable resources, take advantage of them.        

TS:  For a lot of companies, continued growth and increased sales is a benchmark or a measuring stick of success.  For others, profitability is the goal rather than just growth for growth’s sake.  How has Kerr Lakeside navigated that urge to grow with determining what is best for the company and the workers?

Charlie:  First, I am a very debt averse person.  There is no getting around borrowing money to add new machines and make other improvements to keep the operation efficient and competitive but I’m not one of those people who is comfortable going deep into debt hoping for the best.  Our growth has been gradual compared to some other businesses but it has been sustained.  Growing too fast might look good in the moment, but many of the fastest growing companies 20 years ago are not around today.

Another business philosophy of mine is to avoid deviating from core competencies.  We are a precision machining and cold heading shop.  We are good at both processes and do a fair amount of secondary machining on near-net-shaped cold headed blanks.  The two processes are different but we have been successful at “merging” them under one roof.        

TS:  What are your biggest opportunities as a domestic manufacturer?

Charlie:  I might be wrong, but I think three years from now North American manufacturers will look back at Covid-19 say it was the best thing that happened for business since China started capturing our work 30 years ago.  Inexpensive components to purchase became very costly when the supply of them was interrupted starting in March, 2020.  We are already seeing a surge in RFQs for parts currently being sourced in China.  There are a number of ways to tell the part is being made in China, but the raw material specification is usually the most obvious.  The Chinese use many steel grades that are not produced in North America unless you want to order 800,000 pounds.    

TS:  What are your biggest challenges as a domestic manufacturer of fasteners?

Charlie:  Getting new blood interested in pursuing a career in our industry.  This problem is not unique to fastener manufacturers.  Every business that brings raw material into the building and sends that material through some process to convert it into a finished product has this problem.  The size of the talent pool is the single biggest constraint to taking full advantage of the opportunities created by re-shoring parts that went to China and other low labor cost countries.  

TS:  How does a long-standing manufacturing company integrate new technology into its operation?

Charlie:  The answer to this question depends on the nature of the technology.  If we are talking about advances in production technology, the supplier of the technology, usually a machine tool builder, will facilitate the integration with training and other support services.  Since the early 1980’s when CNC lathes and machining centers became less costly and easier to use followed by CNC enhancements to heading equipment, the machine tool builders recognized that the smaller shops collectively would be destinations for far more machines than the mega OEMs like an automotive plant.  Smaller plants do not have the resources of the bigger ones, so the machine tool builders supplied support to go with the hardware.  Pretty simple and straight forward.

Technology integration for office automation and management information systems is not as simple.  I can’t speak for how other companies in our industry addressed this but our approach has been primitive.  We are in the process of migrating from two software systems (ERP is one system, Distribution is the other) into one.  The software vendor gave us a list of several of their customers in our industry.  We called everybody on the list and we able to visit a few in the area.  We received positive reviews of the program and vender’s support so we went with them.  This is pretty much the same method we used back in the mid 1980’s when we settled on the distribution software.  It was being used by several customers and competitors and everybody liked it so we went with it.  Pretty much the same story ten years later when we put the ERP system in.

TS:  How hard would it be to start a fastener manufacturing facility from scratch today?  

Charlie:  Assuming you wanted to start a cold heading shop with the idea of producing and stocking a full line of common standard sizes, absent an unlimited supply of cash, next to impossible.   

You need production machinery, tooling, raw material inventory, finished goods inventory, QC equipment, support machines for tool room & maintenance, packaging equipment and materials, material handling items like cranes, lift trucks, and tote bins.  Then you need a spacious building with a good roof and very thick concrete floors to house everything.  You will also need customers to buy what you produce and you need the expertise to produce what you offer.  The barrier to entry in this industry is high.   If somebody is serious about getting into fastener manufacturing, acquiring an existing shop or two would be far less painful. 

TS:  Where is this industry heading?  Private equity and consolidation are more prevalent than ever and probably is not going to go backwards.  What does the future look like?

Charlie:  Hard to say.  I get this Magazine called Smart Business.  The most recent issue dedicated a lot of space to M&A under the Headline “Thaw In Ice Cold M&A Market?”  The focus was pretty generic (not industry specific) but there are groups with money looking to buy businesses.  If reshoring is for real and I think it is, fastener manufacturers along with other metal working companies could be targeted for acquisition.  You might see some smaller companies in our industry merge to reduce redundant overhead costs and gain other benefits that come with consolidation.  In my opinion a smaller number of larger companies is not a positive circumstance.  Competition results in a better outcome for all interested parties.  Consolidation reduces competition for customers, and employees.  The more choices a customer has, the quality of the product and service will be better.  Fewer choices result in mediocrity or worse.

A few parting thoughts regarding M&A.  If a party with serious interest in buying your business approaches you, keep in mind, what makes your company valuable to them is not what you have done with the business but what they expect to do with your business if they buy it.  With reshoring in mind, if the interested party thinks they can double the sales of the company in three years, they will be willing to pay a premium over a party that would be satisfied maintaining the status quo.  There are many methodologies used to estimate a company’s value.  The seller may use a different method than the buyer and if the different methods yield a wide gap in valuations, a deal will likely not happen.  Bottom line, a business is only worth what somebody is willing to pay for it. If you are thinking about putting your business on the market, the more prospective buyers the better.  I’m not suggesting you arrange a bidding war between multiple parties, but if you are only involved with one suitor, you will likely leave money on the table.              

TS:  Tell us a couple things about Charlie Kerr that we don’t know from other interviews you have done.

Charlie:  The reason there is a penny shortage is because around 500 lbs. of them are in my bedroom closet.  I collect Wheat Pennies and the rest are in a five-gallon water bottle.  If you see me picking pennies up off the sidewalk it’s because I’m looking for Wheat Pennies.  I have several that over 100 years old.

I consider analog clocks (clocks with hands) powered by weights or springs employing a pendulum are the most fascinating machines ever built.  Anybody who has ever been to my house or office will notice a have clocks everywhere.  Punctuality is important to me but that’s not why I collect clocks.  Once I find a nice grandfather clock, I’ll consider the collection complete.

Note from TS:

I have a regular column in Fastener Technology International (FTI) magazine, called 10 Minutes with the Traveling Salesman, which can be read online at www.fastenertech.com. Subscriptions to FTI, print and digital editions, are free-of-charge for fastener manufacturers, distributors and users as well as suppliers to the industry.”

TS:  You have been interviewed before so I’d like to try to ask you some questions that you have not already been asked.  Maybe some question that I would find interesting.  The success of BBI is unquestioned and your company’s growth is impressive.  But I’d like to dig into some other areas and not just all about the business.

Before getting involved with Brighton Best did you have any previous experience with the fastener industry?  How is it you came to target the fastener industry for acquisition and investment?  What opportunities did you see that were not being addressed?

Peggy:  I did not have any previous experience with the Fastener Industry.  Both Jun and I worked in Management Consulting and Finance prior to BBI.  The opportunity to work for Brighton-Best came from Mr. Shieh (my father).  From the first day post acquisition, Brighton-Best was set on a strategy of expanding into other fasteners categories beyond Sockets as well as developing our website.  We were steadfast in our strategy and was able to successfully execute on it. 

TS:   Initially, your father was involved with BBI but more recently it seems to be guided more by you and Jun.  I had the opportunity to work with my father for several years, what was it like for you working with yours?  Does he continue to be involved? 

Peggy:  My father continues to be heavily involved but more so on the strategic level.  He mostly leaves the day to day management to Jun, myself and the entire BBI team.  Family businesses have it benefits as well as challenges, but it certainly has been one of the most rewarding things I have done. 

TS:  And, while speaking of family, you have your own family with two children.  With both you and Jun so heavily involved with BBI, how do you balance home life and work life? 

Peggy:  We are so incredibly lucky to have a lot of support from family and our nanny.  In addition, with a great management team in place as well as a dynamic IT system, my job has actually gotten easier even as BBI continues to grow.     

TS:  In how many countries is there a BBI presence?  Most people who will read this have a limited scope on the world fastener market.  What areas of the world are most challenging to operate in and where is the greatest growth potential for BBI?

Peggy:  BBI has a presence in seven (7) countries: US, Taiwan, Canada, Australia, New Zealand, UK, and Brazil.  I think every country has its unique challenges due to differing local laws and competitive landscapes, but in the end it is all about getting the right managers in place.  You can have the best strategy in the world but you will not be able to properly execute if you don’t build and develop the right teams.  Our biggest growth potential, outside of the US, would probably be Canada, Australia or Europe.

TS:  During the COVID-19 pandemic we all have been challenged to conduct business differently.  How has BBI been forced to adapt and what has the company learned by dealing with these challenges.

Peggy:  What we learned is how important strong and transparent leadership is in times of uncertainty.  We identified COVID as a major concern early on given our supply chain disruptions in China.  Although we could never have imagined the level of severity it would have affected the USA and the world, we knew we had to set clear guidelines for warehouse cleanings as well as contingency plans for what would happen if one of our employees were affected with COVID.  We believe having clear guidelines and being transparent about the situation gave our managers and employees a sense of control.  We could not be more proud of the way our employees have stepped up in these challenging times – accepting the reality of the situation we are in and pushing forward to continue shipping and servicing our customers.

TS:  BBI’s use of technology has played a large role in your ability to grow and your website has been among the very best in our industry.  In the early days when you got involved with BBI did you already recognize the benefit that technology would play in making BBI and industry leader?

Peggy:  Absolutely. We recognize very early on the benefits of technology and knew that it will play a huge role at BBI and within the industry.  At first, it was actually harder to convince our internal team than our customers.   

TS:  I am currently reading a book called “The Future is Coming Faster Than You Think”.  It talks about innovations in AI, 3D printing, drone transportation, and robotics.  What technological advancements you see taking place in our industry?  What’s next?  Is Artificial Intelligence going to affect the fastener industry and how so? 

Peggy:  Although technology and analytics has always been a personal passion of mine, I do not see it having as much of an impact in the fastener industry.  This is due to the large number of standard fasteners SKUs but all at low per unit costs.  The efficiencies gained with AI, automation, and/or robotics just don’t outweigh the effort and investment dollars required at this time.

TS:  There has been a lot of distributor consolidation as well as supplier consolidation in the last five or so years.  What will the fastener look like in 5-10 years?  And what will BBI look like in 5-10 years?

Peggy:  The core goal of BBI is to help our distributors grow – not to just sell more products.  As a wholesaler, we cannot succeed without our distributors succeeding.  Hence, our investments into Fastener education seminars, our Vending program, and technology to simplify transactions of business and/or product diversification.  The strategy of diversification has benefited BBI well and we hope to see more distributors embrace this. 

TS:  Last of all, tell us something about Peggy that we do not know. 

Peggy:  I enjoy reading autobiographies.

TS: Now, be careful with this one, but tell us something about Jun that we would not know.

Peggy: Besides running a global fastener wholesaler, Jun’s other dream is to open a restaurant serving pizza, chicken wings, and beer.

TS: Well, those are some of my favorite food groups so let him know he would have me as a customer should he ever move forward with that venture!

TS: For such a youthful guy it is incredible that you have been with the same fastener company, Metric & Multistandard, for 42 years (give or take).  That is almost unheard of, especially today.  So, let’s talk a bit about how you got started and the path that has led to you being the National Sales Manager of Metric & Multistandard.  

Rich: Between my sophomore and junior year in college a family member asked if I needed a summer job and since I answered the phone (I have three other brothers)…I took it.  Started in the warehouse and told the manager that I would find someone to work when I went back to school and jump back after my junior year.  The manager liked me, so he told the owners I might be someone to hire after graduation, so they flew me to NY to interview for a sales job at MMCC (summer of 1980).  They offered me a job on that trip, so going back for my senior year with a job in hand felt pretty good.  Worked in sales for about 5 years, then became the assistant branch manager in 1985 (I think), when the manager of the Burr Ridge branch retired in 1996, I was given that job.  Became National Sales Mgr. in 2007 and haven’t looked back!!!

TS: And you are still very actively involved at Metric & Multistandard.  You handle a lot of national accounts and are always in attendance at the trade show.  You have good energy.  What keeps you going at this pace?  

Rich: It’s always good to travel to a fun destinations. Vegas, Orlando, Long Beach, Denver, Ohio…   Vegas is always fun, since I can cover two vices (golf, gambling) in one location.  I know there are more vices there but let’s stick with those two.  I also like hanging with people in the fastener industry.  I’ve met people from all over the US, Canada, Mexico along with Europe & Far East.  I have made some very good personal friends through the industry.

TS: Talk a little about the management team at Metric & Multistandard.  I know it has been a family operation for years and still continues to be. 

Rich: When I originally started there were three families who owned Metric & Multi, then in 2007 one of the families was bought out.  The Peske & Hacaj families are on the 2^nd generation of ownership and I have a great relationship with both. Me being in IL and the owners in NY could also be a reason I’ve lasted this long.

We also own a company in Germany (MCG-Metric Components Germany) who supplies us with product throughout Europe for items like, cutting tools, wrenches, pins and harder to find metric items.  I’ve taken a few trips to Hamburg to visit our team, and travel around Germany to visit some of their suppliers.  They send weekly air freights and 2-3 sea containers a month, so we can give our customers that outstanding customer service. Our management team in the US is also very strong, with most managers being at Metric & Multi from 20 to 40 years, which tells you it’s a very good company to work for…

TS: Let’s talk about the metric market overall.  You have seen it from when most people did not know what a DIN spec was to where almost every company has some metric offering.  What have you seen change in the metric market and what changes have you seen at Metric & Multistandard?  

Rich: When I first started you could count on one hand the number of distributors/imports who sold metric…now like you said, everyone gets a call for something metric sooner or later. Biggest changes would be technology…when I first started we didn’t have a computer and we’d have to check stock by going to the warehouse to physically checking stock. Another change is DIN vs. ISO.  DIN is being replaced by ISO slowly but surely and the transition, albeit slow, is happening for most of the metric items we see.

TS: You have been involved with the Midwest Fastener Association and was president for a couple terms.  And you attend a lot of other associations events on behalf of your company.  What changes do you notice in fastener associations across the country?  

Rich: The different associations would have local tabletop shows or conferences which I was invited to attend as our company representative. And since we have five locations across the US we belonged to a lot of different groups. Lucky for me, most of them had golf included, which you know, would be hard for me to pass up.  Now with Covid a lot of the associations are doing Zoom meeting, which I’ve attended and seem to be a big hit.

TS: What are the biggest changes in the industry you have seen over the years and, in particular over the last few years.  

Rich: Acquisition of companies being bought out to form larger/stronger companies, which gives those companies a bigger variety of products/services to offer. Having an online presence should be a no brainer.  Newer/younger people to our industry don’t want to call for stock checks & pricing, they want to see it on your website, then send the order directly to your computer.

TS: What’s the future of our industry look like in your estimation?  

Rich: The fastener industry is very strong.  We need to make sure the next generation jumps in with both feet and develop those professional relationships with people, not just become robots emailing back & forth. They need to get out to shows and conferences to meet people they deal with on a daily basis 

TS: What is something that none of us know about Rich Cavoto?  

Rich: MMCC –  golf, ping-pong, dart, bocce ball, Texas hold’em CHAMP –  10 years running…maybe longer!!