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Pennsylvania-based Eriez Celebrates Its 75th Anniversary

Published: October 9, 2017 |

[Click image to enlarge]

Tim Shutleworth, CEO of Eriez Manufacturing, feels grateful as he looks back at the last few years.

First, he’s grateful that he didn’t have to show a profit each quarter.

He’s equally grateful he had the money to invest in new products at a time when few in the important minerals and mining sectors had money to buy them

As the company celebrates its 75th anniversary, long-depressed minerals markets, including commodities like copper and aluminum, are showing signs of recovery.

That’s good news for a company that’s been plowing money into research and design over the past several years.

“We kept developing products through the bad spell,” Shuttleworth said. “When companies want to buy new products, a lot of them our going to buy ours.”

In short, he said, a turnaround seems to be starting, and Eriez is ready for it.

TOUGH TIMES

It’s easy to feel upbeat now, but Eriez Manufacturing has been through a storm, one that’s eliminated thousands of jobs in the mining sector, including jobs at Joy Global in Franklin, which was sold, and at GE Transportation in Erie, which saw locomotive orders slow to a trickle with a slowdown in mining.

Eriez, which got its start in business in 1942 by selling special magnets to grain millers who used them to catch stray pieces of steel, horse shoes and tools, leaned more heavily than ever during the minerals downturn on the food segment of its business.

“We had troubles with iron ore and copper markets, but food keeps producing. It’s the biggest market we serve,” Shuttleworth said.

Still, when minerals-producing companies were in a downturn, Eriez felt the pain. A worldwide payroll of nearly a thousand had to be trimmed to about 700 people, including about 150 cuts here in Erie.

There was never a layoff, Shuttleworth said.

Instead, the company offered what he called a generous early retirement package that left older workers with a lump sum to walk away early. Secondly, a number of jobs left empty by attrition were left unfilled.

Finally, he said, the company raised its standards, making a handful of targeted cuts that affected people who weren’t showing up on time or weren’t pulling their weight.

Shuttleworth is proud of the company that’s emerged on the other side and is pleased with the patience demonstrated by Chairman Richard Merwin and the company’s shareholders.

“We are more agile now, but we kept developing products through the bad spell,” he said. “I’m glad I wasn’t trying to manage a publicly traded company. We’re allowed to have a bad quarter.”

It’s different for a lot of publicly traded companies, he said.

“If you try to cut your way to profitability in a long slog like we have been through, when it’s all over, you don’t have any talent left,” he said. “We could have been more profitable. We decided to be less profitable and have our house in order.”

A return to larger profits at Eriez isn’t just good news for a few shareholders in the closely held company.

It’s good news for everyone who draws a paycheck and participates in the company’s profit-sharing program, which can account for as much as 20 percent of an employee’s earnings paid into his 401(k) plan.

“The employees tend to see the company’s view here,” Shuttleworth said. “We have everyone in the game.”

STICKING WITH TRADITION

Shuttleworth, who has led Eriez since 2003, took the helm from Chester “Chet” Giermak, the company’s longtime CEO and a well known business leader.

Giermak, who died in 2015 at the age of 87, was famous locally for removing timeclocks, delivering ice cream to second-shift workers on warm nights and talking about how to make company workers better people.

Shuttleworth, who worked for years at Giermak’s side, said he learned a lot from his old boss and held on to much of what he taught him.

That’s why, with few exceptions, Eriez doesn’t hold internal meetings each day between 9 a.m. and 4:30 p.m.

That means customers who call Eriez are rarely told that the person they’re looking for is busy in a meeting.

Shuttleworth said that also means that meetings held at the beginning or at the end of the day get right to the point.

“We have a joke that if you call a meeting before 7:30, you have to bring doughnuts out of your own pocket,” Shuttleworth said.

Eriez is old-fashioned in other respects.

Visitors to both Erie locations are greeted by a receptionist, not a phone. Calls are likewise answered by a person.”

“No one is getting snarled up in our phones,” Shuttleworth said.

“Some of these things are old-fashioned,” he said. “But they are old-fashioned things that work for us.”

But Shuttleworth hasn’t been afraid to go his own way at other times.

“Chet was great in so many things, but he was paternalistic. He was the father and we were the child,” he said.

That meant that Giermak held the company’s financial situation close to the vest.

Shuttleworth takes a different approach. During regular companywide meetings, he gives every employee a copy of the company’s financial statement.

“These people are educated and making decisions,” he said. “And they are in the game because they are in profit-sharing.”

Thanks to a combination of patience and investments during some tough times, Shuttleworth is hopeful employees will like what they see in some of those future statements.

— By:  Jim Martin, GoErie.com

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