Jun 272014
 
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Wright lawn mowers survive Great Recession and cut a path to commercial success

Article by Thomas Heath
Photo by Ricky Carioti/The Washington Post

I get a million pitches to write about professional services companies, health firms, staffing services and consultants. But a lawn mower manufacturer? In Washington’s back yard?

It conjured up romantic images of Henry Ford-like industrialists strutting through their factories, building fortunes, commanding legions of blue-collar workers.

Then I interviewed William Wright, a 58-year-old tinkerer and inventor who had to raise millions, mortgage his home, fire dozens of workers, iron out a million mechanical problems and fight off a financial crisis to give birth to his vision of the perfect — and profitable — lawn mower.

The Frederick, Md., manufacturer’s sales dropped by more than a third in three months and stayed there for a year during the Great Recession. The company went into the red. Cash was drying up. Banks were not lending.

Chief executive Wright went into cost-cutting mode, slashing head count from 125 employees to 75. The layoffs left him with a lean, highly motivated workforce, “the best of the best,” said the former Volvo mechanic.

Thanks to those moves and to a resurgent economy, Wright Manufacturing came out the other end of the Great Recession a leaner, stronger company. It expects to ring up more than $40 million in sales this year and produce enough profit to send its 22 investors a monthly dividend.

Nearly 85 percent of its 170 employees are factory workers, turning out between 600 and 800 lawn mowers a month. The machines sell for $7,000 to $11,000 apiece, depending on size and horsepower. Most Wright lawn mowers are known by a distinctive perch that allows the operator to ride standing at the back.

The company’s lawn mowers are sold to dealers across the United States and Europe. Wright’s best markets are Massachusetts, Florida, Chicago and Kansas City. Wright also makes mowers sold under the John Deere brand.

Wright would not provide the scope of his profit except to say, “We make a serious margin.”

He said the company’s edge is its ability to keep warranty claims to about 1 percent of revenue. The industry average is 2 percent.

“We went through skin, muscle and bone and were left with an amazing team. We had a lot of brain power. We got rid of costly traditions. We gave people permission to improve their work.”

The company encouraged workers to share training tips, including more efficient ways to perform the same tasks. Basic things such as new ways to store tools became part of the company’s “goof proofing” campaign to reduce mistakes.

“If you wait for management, it may take years to get done,” said Wright. “But the workers come up with more, smaller ideas, more frequently and get [them] implemented faster.”

During the recession, Wright’s managers became fanatics about hiring, looking for highly motivated employees.

“We don’t take weak employees,” the founder said.

The company increased its hiring standards. Prospective hires are interviewed by three Wright employees, who must unanimously agree to make the hire. Prospective employees must also tour the plant and meet people so they get a taste of the culture.

“We are careful,” Wright said. “We are extremely selective. We got paranoid about hiring good people. We hire for attitude and aptitude, not prior experience or credentials. We like to train for the jobs in-house.”

Take the all-important welders. Each lawn mower has hundreds of parts that must be skillfully welded so the machine holds together. Because of the skill and training involved, welders tend to be higher paid than other factory employees, earning between $14 and $18 per hour, depending on their skill and productivity.

But Wright didn’t necessarily want longtime, skilled welders. He wanted young, inexperienced — less expensive — laborers whom he could mold into Wright Manufacturing employees.

“We would rather have somebody who worked at McDonald’s and has good character and work ethic and teach them how to weld,” he said. So Wright instituted a welding school to train workers from scratch.

Wright grew up north of New York City, and after a year of studying engineering at Clarkson College, he quit to go to a small Florida college.

He started off his professional life three decades ago repairing Volvos in the Baltimore-Washington area. In his spare time, he and his wife began a lawn mowing business to make extra cash.

Wright loves tinkering with gadgets, and around 1983 he decided to build an all-metal grass catcher to attach to his lawn mower. He then approached a local lawn mower dealer about selling his contraption. The dealer sold 200 Wright-made grass catchers the first summer.

Making such a small number of the accessories was not yielding enough profit, so Wright rented a 1,200-square-foot space in Gaithersburg, bought a welding machine and scaled up his grass catcher manufacturing.

“We could make them cheaper if we could make more of them,” he said.

He recruited 400 dealers across the United States, charging $300 each for customized grass catchers that fit more than a dozen different mowers.

He also designed and built a “sulky,” which allowed the person operating the lawn mower to ride standing at the back.

As the business was getting off the ground, he could fall back on other revenue streams. Wright’s lawn mowing enterprise had grown into a $1 million-a-year operation, with 12 trucks, 500 customers — mostly Potomac homeowners — and netting him a $200,000 a year living. He had learned computer programming during his one-year stint at Clarkson, so he put that to work in 1983 by writing software that helped keep track of his mowing service.

As his manufacturing business grew, he decided he wanted to build not just grass catchers but the entire mower. He sold the software business for $125,000 in 1993. The same year, he sold the lawn mowing business for a six-figure profit.

He still needed more money. He mortgaged his multimillion-dollar home, twice. He contacted friends and others through word of mouth, raising between $1.5 million and $2 million. He took out bank loans and maxed out his credit cards.

“When you are an entrepreneur, you get creative and desperate at the same time,” Wright said.

The first year he made mowers, he lost $18,000, and the business grew in fits and starts after that, turning a profit one year, then losing money. Wright struggled to control its warranty costs and figure out a price that allowed both the company and its dealers to turn a profit.

Over the past three years, though, Wright Manufacturing has hit its stride, turning its 20 investors into happy campers.

“You work on every angle until one day, you sort of come out of the woods,” said Wright, who owns 57 percent of the company. “Running a business means eliminating as many problems as you can. You always have problems. But when enough parts start to work well . . . the profits start rolling in.”

Click here to see the article on the Washington Post’s site.

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