ORLANDO, Fla.They're young, eager to succeed in a business often considered old, andwhen you come right down to itthey've discovered in some cases that finding success can be downright challenging.
During the recent 2014 International Tire Exhibition & Conference (ITEC) in Orlando, tire dealers from different generations and different segments of the industry gathered on a panel to discuss the realities and struggles for a younger work force, how businesses get handed down to the next generation, and other salient issues facing today's tire industry.
Jeff Wallick, marketing manager for K&M Tire Inc., moderated the panel and got straight to the point when he asked panelists: What are the odds that the best person to run the business is related to the founder or the owner?
It has to be fairly low that the person that is best suited to run and expand your business and to succeed the business is related to you, answered Carson Cornelius, manager at Statewide Tire Distributors Inc., who is a second-generation employee of his family's business.
However, that does not mean it's not possible for the next generation to be capable of being the best person to run the business, he added.
What we have to do is look at educating and investing in that next generation, he said, or they will not be successful.
Mr. Cornelius said his father started him off at the ground level of the company, so he was actively involved in the day-to-day operations in the warehouse.
I had some of the unfortunate jobs as being the lowest man on the totem pole, he said, but by doing that, he realized how important education is for succession.
Mr. Wallick asked Ross Kogel, Jr., president of Troy, Mich.-based Tire Wholesalers Co. Inc., if the idea of passing off the business to the next generation is really such a good idea.
Sometimes it is, sometimes it isn't, was his reply.
The first thing about a successful family business that I found is that every family in a family business is just as important as the family that owns the business.
Any family that aims to simply perpetuate a business to employ its family members and to maximize its income is doomed, Mr. Kogel said.
Passing down the business to someone because he or she is a relative is not a good business strategy.
I think that looking down the line, it needs to be something that works for everybody, Mr. Kogel added.
One area that business owners need to look into when passing down a business is making sure the next generation has a respect for that business.
Sherry Clay Marcoe, who retired from Jeff Clay & Sons Inc. in Kissimmee, Fla., said there are some local businesses near her whose owners passed their companies down to their childrenwhom she said are spoiled rotten.
Mr. Cornelius said this is something his father made sure did not happen to him, and that is why he worked at so many different areas of the business.
My father made me value and respect all positions within the company so that I didn't take anything for granted, he told the ITEC audience.
Running a family business and crafting a succession plan is different than for a large company, panel participants said, but there are benefits to that. Family businesses focus on the long term and do not necessarily have to think about quarterly investments, etc.
You have the opportunity to create a business in your own image and what you really want, Mr. Kogel said.
It's funny because I got into my family business thinking it was the Kogel family, he said, but the reality of it is that it is also about the family of the people at the business and their kids. For instance, there is a driver who works for us that has health insurance for his family through us.
I need to do the correct thing day-to-day, to pay his kids' health insurance tomorrow.
In the end, there is a 3-year-old out there who doesn't care what I do, Mr. Kogel said, but if he gets sick, he needs to go to the doctor.
I feel an enormous responsibility to try to earn my job everyday, Mr. Kogel acknowledged. I want people to forget that I am a family member in that business because I want them to see me as the true person who actually deserves the job.
Ms. Marcoe has first-hand experience about how this problem could pan out.
Growing up, she had three brothers and a father who wanted one of his sons to take over the business, but unfortunately none of my brothers had the business sense to do that and it fell on my shoulders, she said.
Although she inherited his business sense, Ms. Marcoe said her father still wanted one of his sons to step up, which was difficult. I tried really hard to make it work, she said.
I had one brother who would not come into work for months at a time and then would come back and want to be the boss, she said. Eventually she had to fire him, and while that lasted for a little more than one year, her other brothers insisted she hire him back. When she did not, they said it came down to him or her, so she sold her shares in the tire dealership.
In the end, we're a product of the culture that we create within our business, Mr. Kogel said.
The brutal underbelly of what we are talking about, he added, is that family members need to be able to demote or fire other family members. If not, it not only affects the performance and the culture of that person, but the business as a whole.
The focus should be on the we in businessnot the I, Mr. Kogel said. Family businesses do not necessarily outperform non-family business, because it depends on the culture that has been created in which the business operates.
First, you need to get the right people on the bus and then get them going in the right direction, he said.
I can't pay people to respect our group decisions. They do or they don't. It has to be earned.
In today's economic climate, there are many generations in the workforce.
I have an aging workforce and there are days I wake up in the morning and it scares me how dependent I am, said Justin Garzolini, general manager of Garzo Tire Inc. in Terre Haute, Ind.
Especially in the earthmover business, it is very labor intensive, he said. It is a trade and an acquired skill set that makes finding younger people difficult.
Other parts of the industry may be faring better than the independent dealer channel, as far as employing younger workers.
People are coming to a company like Continental Tire the Americas L.L.C. either because they have some kind of passion for the auto/tire industry or they are people who just want a great opportunity, said Sean McDermaid, national sales manager, U.S. Dealer Group, Continental.
Recent college graduates want a good job, he said, and a sound financial environment with benefits.
There are unfair stereotypes for younger and inexperienced employees in the workforce, Statewide Tire's Mr. Cornelius said. From his experience, regardless of age, the same types of problems arise. Same with the positive side of the hiring processit has more to do with attitude.
It really isn't generational, Mr. McDermaid said, noting that in any generation, there are folks more inclined to rise to the top. It may take more time to train older generations on certain technologies that come easier to Millenials, he added, but on the flip side, older generations can have skill sets that are invaluable.
The differences can be more frame-of-mind than generational differences.
I think there are challenges when we don't do a good job hiring, training or executing a plan Mr. Kogel said.
Every individual is different, he said, so it's hard to categorize people.
Mr. Kogel touched on how there are times when a young person coming into a business may be in charge of older employeesan experience he faced when he was 28.
After the first week, if you command respect, nobody notices anymore, he said.
He advised to never bring up the age difference, as it would just draw attention to it.
Jay Christman, Midwest regional sales manager, Alliance Tire Americas, said generations need to be open to change since younger people often come in wanting to change something.
You have to be open to what the older generation has done in the past,...they've learned from experiences, he said.
The older generations have that experiencesomething the younger demographics may not have yet to make judgment calls. And change is not always good, Mr. Christman saida concept younger generations sometimes have a hard time figuring out and accepting. This is true especially in the tire industry, where so much has changed in the past five years, he added. Time is needed to adapt to those changes.
Independent tire dealers, by the nature of the business, handle a lot of issues, Mr. Garzolini said. It's just kind of business in general.
He referenced government regulation, such as not being allowed to keep tires outside in his county.
Mr. Garzolini, who runs an OTR tire distributor, said the independent guy has to really focus and has to be...business-minded to survive.
Whereas larger companies may be able to split the costs with others, independents don't always have that luxury.
At the distribution level, Mr. Cornelius said the instinct is to say younger generations are using eCommerce options, but that is not necessarily accurate.
Our customer base seems to be, even the older self-proprietors,... engaged in the new technology, as engaged in the digital atmosphere of our business, he said.
More than 50 percent of Statewide Tire's orders come in online. Mr. Wallick said the same is true for K&M Tire.
Alliance Tire's Mr. Christman said, looking forward, he sees the social interaction that has always been important in the tire industry now fading as online business becomes more prominent and customers search for the best deals.
It's becoming much more an international forum than it is just a local or regional, he said.
Jobs like mineregional sales managerwill be diminishing to a very low point in 20 years, Mr. Christman added.
The Internet has produced more-educated consumers, Mr. McDermaid said, which means independent tire dealers need to be mindful of their best online presence. The independents need to find a way to differentiate themselves, he said, as they compete against large companies that have huge media capability.
Mr. Cornelius added that Statewide Tire sells service and experience more than products to remain relevant.
While social media is a great way for retail dealerships to connect with customers, as a wholesaler, Mr. Cornelius' focus is on teaching his customers how to use it well.
Really, I don't want end users trying to buy tires from me, he said. It creates conflict because we are only wholesale. But what I do want to do is (to use) social media to drive customers to my customers so that it creates value.
Ms. Marcoe said the way business is being done nowadays is much different. A handshake used to suffice, she noted, but now backstabbing or people changing their relationships is more prevalent. However, the old-style types of relationships still do exist, she added.
Mr. Cornelius said he does believe the tire industry is still a good career choice for young people.
The median age for the tire industry is below median for all industries. And I think a lot of the value is in the opportunities that you are afforded as independent tire dealers where you can get on and be able to use a plethora of talents you may have, he said.
To reach this reporter: [email protected]; 330-865-6143.