McMahon's Tire builds culture as it expands into retreading

FORT WAYNE, Ind. — McMahon's Best-One Tire & Auto Care prides itself on its positive company culture, but assimilating a group of employees from another company can be daunting, as the dealership discovered when it ventured into retreading early this year.

McMahon's determined that as it grows its commercial tire business, which accounts for more than half its sales, it should also get into retreading.

So when a local retread plant became available from Isaac Tire Inc., the dealership sold its wholesale division and bought the retreading operation in January, said Co-owner Patrick "Bubba" McMahon III.

"So we just basically 'swapped' — we got into retreading and got out of wholesaling," he said. "We're a manufacturer now. It really changed the playing field."

The dealership spent $1 million to remodel the plant, which uses the Bandag retreading system. The company bought new overhead doors for the 22 bays, repainted the facility's interior and added some new equipment.

The plant features a monorail system to transfer tires to various stations, with a color-coding system to organize customers' casings and the days of the week the tires are due for retreading.

The facility also features a truck/trailer service department and stores an inventory of new truck tires that are mounted for OE customers as needed.

The company also inherited 30-plus employees who worked for the previous owner. They had been working without 401K retirement, insurance or overtime benefits, McMahon said.

"We didn't put anybody out of work but, essentially, they lost a job," Clayton Millay, president of dealership's commercial operations, said of the employment transition.

"We had to be extremely delicate in how we approached things, how we interact with the guys, because there already is a culture in place, and to move in on a Monday morning or first of the month and try to immediately assimilate is impossible. I mean, you would have lost the entire staff," Millay said.

"So it's been a gradual thing as we slowly incorporate our current company culture into this new culture. You're borrowing and sharing, and some of the culture that was here has bled into our own," he said.

McMahon's has acquired other businesses with a few employees in the past, but the large number of workers who transferred with the plant was a challenge, he said.

"We operated on a standard minimum wage, so on Day One everybody got a raise. And that wasn't a retention thing; it was just a policy," Millay said.

"All the employees were provided uniforms. We did a complete remodel of the work area that focused on production, safety and really brighten the plant up. So it was a lot of positive changes."

McMahon's tried to overcome the initial distrust of new ownership by extending the company's benefits and providing uniforms for all the employees, who didn't wear uniforms before.

The dealership also shifted the plant's work week to five days from four. That meant the plant employees are working 60 hours per week, with overtime pay. When given an option, the staff said they wanted to maintain the extra hours, Millay said.

The company tries to be flexible with schedules, especially considering the new employees were used to having certain days off in the past for other commitments, he said.

"I understand when individuals work a certain shift for a long time then we come in and change that. We had to incentivize it because we're pulling them away from their families, we're pulling them away from their regular routine," he said.

"It's working with individuals to make sure we're not completely upsetting their lives," he added.

Other incentives to build culture included encouraging the staff to have lunch together every Friday and periodically giving company wearables, such as T-shirts.

"I think overall as a group they could see that we had their best interests in mind versus coming in and doing the same thing and slapping a bunch of rules on the board and moving forward. So it was a really good reception," Millay said.

He said he believes the new employees are buying into the company culture "which is always the hardest part. If it's a gradual thing, it just happens versus trying to force it on people. ...

"The staff here, I couldn't ask for a better one. They have been so receptive to the changes we've brought in. The majority of it has been positive," Millay said.

The retread plant has been in operation for more than 20 years, producing, on average, about 45,000 retreads a year. This year McMahon's expects to retread 70,000 tires and has a goal of 85,000 retreads by 2025.

The plant is one of 16 in the Best-One Tire dealer network, and McMahon said his company already has increased production to become No. 3 in the network in terms of output.