Second-generation company heeds founder’s philosophies for success.
When Hurricane Katrina ripped through the Gulf Coast last summer, it devastated much of what stood in its wake. Jackson, Mississippi-based Equipment, Inc. is headquartered about 200 miles north of the hardest hit areas, so it was spared serious damage beyond power failure. Even the company’s coastal branch in Mobile, Alabama, was relatively unscathed save for some minor wind damage. But that doesn’t mean the company didn’t have an interesting few days.
President Joe Schmelzer did not expect to be open in the days following the disaster. “But we had storm chasers, private enterprisers who wanted to get in quickly and get the reconstruction contracts, at our door the next day. They came from as far away as New Jersey, Ohio and North Carolina to get Bobcats, SkyTraks and other equipment. I never expected that. If we hadn’t opened up, they probably would have found their way in and taken the equipment themselves. Our computers were down for about four days, we operated for the first time on a cash basis, and a lot of cash changed hands in those few days.”
As devastating as the hurricane was to many, there is a silver lining for construction and material handling dealers. “It’s sad to think of so much destruction, but somebody is going to have to rebuild. We’re fortunate to have the equipment that will be used,” Schmelzer says. Providing equipment for the continuing cleanup process has kept the company busy, as has replacing all the fleets of customer equipment that were destroyed in the storm. The new equipment and service opportunities have fast-forwarded the company’s growth in what was an already booming region.
A Diversified Strategy
An influx of new industries, as well as the standard range of construction and industrial markets, provide Equipment, Inc. with the customer base for growth. The old standby industries include furniture, agriculture, shipbuilding, food warehousing and bottling, but two industries relatively new to the state are what really have businesspeople buzzing. The automotive industry is taking hold, thanks to the new Nissan plant in Canton that has also brought with it a tremendous amount of new customers. Also, the state of Mississippi now has more casinos than any state besides Nevada, with more on the boards.
The future of Equipment, Inc. looks bright, as it has ever since Joe Schmelzer Jr. founded the company in 1951. The company began as a provider of heavy construction equipment sales, rentals, service and parts. The company proved very successful with construction equipment, but in the late 1960s saw a trend that led to diversification into material handling. The interstate highway building boom was over, several large levee projects on the Mississippi River were complete, and a recreational reservoir outside Jackson was finished. Also around that time, Schmelzer Jr. felt the construction business was maturing. When the Nissan (then Datsun) forklift franchise became available, he called on his son to start the company’s forklift division.
Joe Schmelzer III became president in 1976, and the company increasingly focused on material handling equipment. “That was my interest, more so than construction. As my dad became less active in the business, the company was built around material handling and the Nissan line.” However, it didn’t take long until the old genetic predilection to diversification came through. Schmelzer III saw an opening to begin offering booms, scissor lifts, aerial work platforms and the like. Equipment, Inc. now splits its revenues between material handling products like Nissan, Jungheinrich, Steel King and Navigator, and construction lines such as Bobcat, JLG, SkyTrak and Lull.
With expanded product offerings came growth. The company now employs 80 people spread across three branches, with a fourth coming soon. The headquarters office in Jackson is home to about 45 employees, and the facility is currently undergoing a renovation and expansion to 37,000 square feet. The first branch opened in Pascagoula on the Mississippi Gulf Coast in 1974. In 1996, that office relocated to a 10,000-square-foot facility in Mobile, Alabama. A branch store occupying 20,000 square feet was opened in Tupelo, Mississippi, in 1994. Later this year, construction will begin on a building sitting on a three-acre parcel of land adjacent to Interstate 59 in Hattiesburg, Mississippi. These stores allow the company to service customers throughout the state of Mississippi, a few border counties in Louisiana, the coastal counties of Alabama, and the northwestern panhandle of Florida.
Taking Care of the Customer
Equipment, Inc. still practices much of the spirit instilled by founder Joe Schmelzer Jr. The company’s mission statement reminds employees to be dedicated to solving customer problems. “We want to solve their problems with the best equipment available in the marketplace, give them the best service after the sale, and help them design the solution to their problems,” Schmelzer notes. It’s a message that resonates well with customers. They have been coming back for long enough to make Equipment, Inc. the oldest equipment company in Mississippi that is still under the same ownership.
Another lesson Schmelzer learned from his father is keeping up with technology—about half of the sales force carries a BlackBerry, and the other half will have them soon. Mostly, though, the legacy revolves around taking care of customers and employees, including training from the ground up. “My father always taught me that you may have demand for your product, but the only way to supply it is to work for it.” Schmelzer worked in every department before he earned the right to manage other people. “My father said, ‘You can start working here when you’re 15 pushing a broom, or you can start after college pushing a broom, but either way you’re pushing a broom. It’s up to you.’ So I started at 12!” He worked part time in each department until he graduated from college.
Schmelzer believes in the philosophy that business is not really about products, facilities or ownership. It’s about the people who make up the work force and customer base. Schmelzer, building on this theme, a few years ago began posting signs saying that everybody’s a salesperson. “It took a while to get everyone to buy into that, but I had to let them know that everything they do is selling. Every person who contacts a customer, from sales to service to the guy mopping the floor, is a sales representative of the company.”
The methods are working. Schmelzer has served as president of the Nissan Dealer Council on six occasions, and Equipment, Inc. has been a recipient of one of Nissan’s Gold Awards for service 10 times in the 11 years they have been given. The company also received the Nissan President’s Award in 2003, the highest honor given by the manufacturer.
Taking Care of the Employee
At Equipment, Inc., the goal is for employees to feel challenged and be rewarded for their success. Each member of the top management team—Schmelzer, Vice President and General Manager Richard Donnell, General Service Manager David Thomas, Parts Manager Eric Jackson, Sales Manager Eddie Batte, Rental Manager Lance VanDevander and Controller Chuck Snapka, plus Mobile Branch Manager Richard Fordham and Tupelo Branch Manager Jimmy Nevels—has a vote before any major decision is made, and the majority wins. Schmelzer says he has been overruled before, but has yet to have any problems with that system. “It makes people buy into what we’re doing. In other words, you have to be seriously involved with the successes and responsible for the failures.”
To join the team at Equipment, Inc., a person must be motivated, driven and stable. “We look for people who want a home, a place they want to invest in. I tell them it’s like going back to college—if you’re not willing to invest four years to have a career, it won’t work here. You’re not going to walk out of another industry right into this one and be successful without that time investment.”
Equipment, Inc. also has a reputation of taking good care of employees and paying them well. It was named one of the Top 100 Private Companies in Mississippi in 2004. Many service technicians have approached Equipment, Inc. about a job, and many of the company’s salespeople were successful in other industries first.
Schmelzer understands the importance of getting young people involved in the industry, and, after helping his son and some friends look for jobs and prepare for interviews, is sympathetic to those entering the workforce. “The one thing that repeatedly came up was, ‘Everywhere we go to look for a job, they want experienced people. How can we get any experience if we don’t have jobs?’ It’s tough. What’s common with young people, particularly college-educated young people, is after finishing school they’re going to have two or three jobs before they find what they like. If they’re new to the workforce, they are not going to know if they’re happy until they’ve been in it a while.”
Schmelzer acknowledges that this often means he’ll look for experienced people, but once a person joins the company, he believes in sparing nothing on hands-on training. “If they’re going to sell material handling equipment, they need to work around the people who use and service it long before they start selling. As diversified as we are, we need somebody five years in order to be really trained.”
That’s where MHEDA comes in. Shortly after he started the forklift division, Schmelzer joined MHEDA and started going to training seminars. “We still make sure all our employees take advantage of the programs, products and projects that MHEDA has to offer. Anyone who doesn’t belong to MHEDA misses an opportunity to learn and share topical experiences with their peers. If they don’t, it’s their loss. I’ve worked very hard to get as many Nissan dealers as possible to join MHEDA.” Schmelzer’s involvement with the association includes two separate stints on the Board of Directors, once rising to the role of vice president. He credits networking with fellow MHEDA members as the source for many ideas that have translated to success at his company. He also was overwhelmed by the outpouring of support he received following Katrina from MHEDA staff and other members—even competitors—offering all kinds of aid.
Schmelzer, 59, has been in the industry for over 35 years now, but shows no signs of slowing down. “If you slow down on the railroad track, the train will run you over. Move forward or get off the track. So I’m not getting off anytime soon.” Most of the firm’s key people are at least 10 years younger than Schmelzer and he knows that young people are the key to industry growth. “There’s nothing new coming around the bend that’s going to replace material handling or construction equipment. People are always going to be eating, drinking, needing medical supplies, building and remodeling. We really need to look for young people who are mechanically inclined or those who like motorized products, because the industry is not dead or dying. It’s still growing.”
Even Mother Nature can’t keep material handling company Equipment, Inc. and Joe Schmelzer from realizing that growth potential.