More Begets More For Large Companies

Industrial gases and welding distributors at many large-sized companies acknowledge that their success and growth bring more advantages to their businesses. Unlike smaller companies that rely on private investors for growth, most of these large companies work closely with their banks, not just for money, but for advice and insights. Large companies often try to operate like small companies, but with all the advantages of volume and mass.

“Size is a negotiating tool, especially with banks.”
Bob Roberts, President and CEO
Roberts Oxygen Company, Inc.
(Rockville, MD)

“I will not delegate anything that affects customers, whether dealing with larger accounts, establishing relationships, or pricing. I want to be part of the process to make sure that everything adheres to the company’s mission.”
David Johnson, President and COO
Nordan Smith (Hattiesburg, MS)

“Relationships with banks are exactly the same as relationships with customers. You have to make them happy by providing them with the things they want, like financials.”
Greg Walmsley, President
Oxarc, Inc. (Spokane, WA)

“Human capital is like financial capital. Don’t spend what you don’t have. Manage things properly. Don’t overextend your labor force just like you don’t want to overextend your financials.”
Robert Anders, President and CEO
Holston Gases (Knoxville, TN)

“A large-scaled company shows organization and stability, qualities that are attractive to customers.”
Dennis Hulth, President and CEO
Mittler Supply, Inc. (South Bend, IN)

“A bank causes our company to act with greater discipline, requiring accurate accounting, forecasting and reasons. Consequently, we operate our company as if it were publicly held rather than privately held.”
Robert McEniry, Chairman and CEO
nexAir (Memphis, TN)

“We believe in long-term relationships with our attorneys, banks and insurance companies, and hold those relationships next in importance only to relationships with our customers and suppliers.”
Daniel McKenna, President
F & M Mafco (Cincinnati, OH)

“I don’t like to think of Nordan Smith as a ‘large’ company,” says President and COO David Johnson. “We’re small enough to be flexible, but we’re large enough to provide our customers with exactly what they need.” A regional company headquartered in Hattiesburg, Mississippi, Johnson uses his company’s size and success to negotiate with local banks for better rates and services.

Of course, it’s always about the customer, regardless of company size. “Since the customer is the one who keeps the business going, the faster we make them happy, the better off we are,” says Greg Walmsley, president of Oxarc (Spokane, WA). Walmsley acknowledges that the ability to purchase more products creates larger inventories, allowing for faster responses to customers.

According to Bob Roberts, president and CEO of Roberts Oxygen Company (Rockville, MD), a large company is able to get new products and new services very quickly to customers. “We enter the market with a new product as early as possible, which gives our customers the best possible service,” says Roberts.

President and CEO Robert Anders has a different take on bringing new products to the customers of Holston Gases (Knoxville, TN). “More assets enable us to invest more into our business and to take more risks.” One of these risks is to try new product lines and new services that may not earn money for the company, but don’t affect the bottom line. Says Anders, “We can experiment and find new things that can help bring about new product demands and new sources of revenue, whereas a smaller company couldn’t handle those risks without dramatically gambling with its bottom line.”

“While a smaller company might view a larger company as having a purchasing advantage,” says Robert McEniry, chairman and CEO of nexAir (Memphis, TN), “the real savings come from how a company handles what it purchases.” McEniry believes the advantage of being a large company lies in operations. Like other companies, about 65 percent of nexAir’s operating expenses are people-related. “So it’s important to find and hire the right employees and keep them.” nexAir hires college graduates, starts them in entry-level positions, and moves them through the company. “With a large employment base (290 employees), the trainee sees our track record of promoting from within, and is more patient with the process. Consequently, we are able to hire a lot of well-educated employees who end up getting an overall experience of the company.” McEniry also acknowledges that a large company is much more able to offer better benefits packages, which helps recruiting.

Many large companies acknowledge that banks are very willing to work with them, now that they have a proven track record. Dennis Hulth, president and CEO of Mittler Supply, Inc. (South Bend, IN), says, “Banks like working with companies that produce and have a steady cash flow. Really, size does matter, but it’s also about success and track record.”

Gil D’Arcy, president of Pain Enterprises Incorporated (Bloomington, IN), agrees. “Banks know who we are, and they know what they stand to gain or lose from our relationship.” D’Arcy also points to the availability of money that comes from savings on bulk purchases and is used to grow the business in other areas.

“A larger company may have broader capabilities in a variety of areas such as product knowledge, safety and training resources, without having to deal with outside consultants who may not be available 24/7,” says John Hanlon, president and COO of S. J. Smith Welding Supply (Davenport, IA). “By having these assets for our workforce and customers, we can respond quickly and effectively.”

Aeriform (Houston, TX) is currently in 30 markets, and Michael Logan, president and CEO, believes this market coverage provides more leverage for his company. “The ability to create name recognition goes a long way,” he says.

Daniel McKenna, president, F & M Mafco (Cincinnati, OH), agrees. “As our company grew and branched out, its name became recognizable, even in areas we did not have a physical presence. Often, a potential customer or supplier has had experience working with us at another location. This is a much better position to be in than where we were 30 or 40 years ago and were considered a ’small’ company. Not many people knew who we were or what we did.”

What’s Not to Delegate?
Many CEOs of these large distributorships have delegated the details of the day-to-day operations. However, there are some things even they won’t give up. Greg Walmsley wants to know exactly where the company’s money is being spent, so he will not delegate asset purchases. “I want to have the final decision. I think that’s the most important aspect of my job.”

The number of employees at large companies range from 120 to 150. Employees directly reporting to the president range from 4 to 12.

Robert Anders says, “Choosing the people who will lead the company is very important to me, and proper care needs to be taken with them.”

Company strategy is what CEOs of large companies revel in. “It’s my job to focus, to be forward looking, while still making sure that the customers’ needs are being satisfied today,” says Gil D’Arcy.

Robert McEniry makes sure there is a management team in place to carry on nexAir’s strategy, and that the company culture fosters growth among all employees. Michael Logan must be involved in situations which deviate from Aeriform’s business plan. Logan also handles Aeriform’s community involvement. Bob Roberts makes sure the right people are doing what they are supposed to be doing.

Presidents of LARGE COMPANIES would never delegate…
Company’s Strategic Direction and Focus

Large Vendor and Customer Relationships

Asset Purchases

In a family business such as F & M Mafco, five relatives (four brothers and a cousin) handle the operations of a company started by their grandfather 57 years ago and passed on to their fathers, now them. Daniel McKenna says, “There is nothing that can’t be done without me, and vice versa.” McKenna also says, very seriously and without hesitation, “My title is ‘president’ and I just had to put down the broom to answer this phone call!”

Evidence would probably show that McKenna’s experience is shared by all of GAWDA’s passionate and successful executives in small, medium and large-sized gases and welding distributorships. 

Gases and Welding Distributors Association