ONE-ON-ONE
- November 2001
by Ed G. Lane 'I am the American
Dream'
Henry Jackson believes in education, preparation and
commitment to succeed in business and life
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Henry
Jackson
A dramatic success story, Henry L. Jackson was
born to a poor family on Chicago’s South
Side. At the urging of his grandmother, he
pursued an education, eventually earning degrees
from DePaul and Notre Dame universities. From
1978 until 1994, Jackson worked for Clark
Material Handling Corporation, rising through the
ranks to become the company’s CFO and Senior
Vice President. He eventually became the
company’s managing director, overseeing the
company’s European operations from its
offices near Dusseldorf, Germany. Jackson is
president of two Kentucky-based manufacturing
companies; Screw Machine Technologies Inc. and
Jackson Plastics. Jackson Plastics is the larger
of the two companies and is headquartered in
Georgetown. It is an injection molding company
that supplies plastic parts to the automotive
industry. |
Ed Lane: Jackson Plastics has had an exceptional growth
rate since it started operations in 1994. To what do you
attribute the company’s success?
Henry
Jackson: We empower our employees to participate in
all levels of management. Understanding the
customer’s desires and needs and fulfilling them
makes us a good supplier and we’ve been
rewarded. It didn’t happen overnight. We started
in ’94 with about $1.2 million in sales. Now we
should end this year up with approximately $21
million in sales, plus another $6 million from a
joint venture.
EL: What does
Jackson Plastics make?
HJ: We
make wheel covers for McKechnie, out of
Nicholasville. The president of McKechnie, Mark
Bennett, is the key person that got us started in
this business. Today, we have more than 35 presses
going at three plant locations. With 35 presses, our
potential goes up to about $43 million in sales.
EL: In
addition to McKechnie, what other companies are major
clients?
HJ: Our
major client is Textron Automotive. Textron is a $10
billion Fortune 500 company. They do about $2.5
billion yearly in plastics and are the single largest
plastic injection molder in the U.S.
EL: How has
Textron helped?
HJ:
Jackson Plastics has a joint venture with Textron
called Synova, which was formed to sell products to
Toyota. The joint venture company is owned 51 percent
by Jackson Plastics, 49 percent by Textron. Textron
provided us with the expertise to make products to
Toyota’s high expectations.
EL: If
Textron had not been involved, what problems would have
resulted?
HJ: We
probably would not have gotten the business because
Jackson Plastics is not a tier one supplier. Until we
teamed up with Textron, we were a tier two supplier.
EL: Toyota
Motor Manufacturing initiated a major program to recruit
minority suppliers for their company. Has this program
benefited your company?
HJ:
Without a doubt. Toyota has two people who helped
Jackson Plastics, Chris Nielsen and Adden Wagner.
Without their help, Synova wouldn’t have
happened. Toyota brought Jackson Plastics and Textron
together.
EL: In what
cities does your company operate?
HJ: The
Jackson Plastics headquarters is in Georgetown.
It’s a warehouse we will eventually turn into a
manufacturing site. We also have facilities in
Nicholasville, Danville, Ill., and the joint venture,
Synova, is in Morristown, Ind. Then we have
Millennium Steel Service, which is in Princeton, Ind.
EL: Why are
you in more than one city?
HJ: We
locate to fit the customer’s requirements.
Synova’s location is to satisfy Toyota’s
Princeton and Kentucky plants. The plant in
Nicholasville is to satisfy requirements of
McKechnie, which is also in Nicholasville. And the
Danville, Ill., plant services a Textron plant
that’s 30 miles away. That way, we save freight
costs and give our customers quick response.
EL: Explain
how “just-in-time delivery” works.
HJ: All
of our clients use “just-in-time delivery.”
Some of them use “kanban.” McKechnie, for
example, has a “com-bon” system where they
give us cards each day that we pull stock to the
number of cards that they give us. We make three or
four deliveries a day.
EL: What
happens if deliveries get screwed up?
HJ: Oh,
it’s hell to pay. Believe me, you won’t be
in business too long if you do that too often. You
might get one or two chances. We certify to our
customer that we will be on time and we will ship the
product that they asked for. And we live up to that
certification.
EL: Prior to
starting your business, you were the CFO for Clark
Material Handling Corporation. How did this and your
other prior business experiences help you start and build
your successful business?
HJ: As
CFO I worked for Gary Bello. He gave me a chance to
be more than just a CFO. I was CFO and COO at the
same time. Being the CFO, I had to know all the plant
operations to understand their cost structure and to
be able to recommend when we needed to have cost
improvements. Gary also taught me the most important
thing, which is how to manage people. I tell my
employees, “Treat me the same way you want to be
treated. Talk to me the same way you want to be
talked to. If we do that as a people, we’ll get
along fine.” When we violate those three little
principles, that’s when problems happen. All
Jackson Plastics facilities are union-free.
EL: Who
designs your products?
HJ: We do
no design work at all. We take products that have
already been designed by our customers and we work
with them to get molds built. We go through what we
call a mold try-out. We test the mold for
manufacturability and recommend changes so that the
process will run more smoothly and create a better
end product.
EL: When you
left Clark you had a choice of going to another corporate
position or becoming an entrepreneur. How did you get
into this business and what guided your decision?
HJ:
I’m originally from Chicago, but, my kids grew
up in Lexington. The one thing my wife wanted was for
all of my kids to go through the same high school.
There are not that many Fortune 500 companies in
Lexington for me to go and look for a CFO job or COO
job, so, I found a few jobs in Detroit and Chicago.
But my family wanted to stay here. I used to be on
the Board of Trustees at UK, which has a think tank
called the Center for Robotics.
I went
over there and talked to Bob Keelen, who took me
under his wing. I asked him, “what kind of
industry does Kentucky lack?” Bob said,
“Henry, the one thing we don’t have is a
minority-owned plastics company.” He gave me a
couple of books to read on the industry. I left Clark
in the spring of 1994 and during the summer I read
these books and chit-chatted with Bob. I decided that
this is something I could do. So, Bob introduced me
to plastics. I put a business plan together. He
introduced me to McKechnie and that gave me a chance
to buy my first machines and have a customer before I
went into business. I also used the resources of the
Small Business Development Center at UK’s
Business School. Janet Holloway was a big help there.
EL: Can you
say which banks helped you?
HJ:
National City. They were pretty good to me. Actually,
for my businesses, I’ve used National City Bank,
Bank One and Central Bank.
EL: Is there
any differentiation, like one bank financed real estate,
one bank financed equipment?
HJ:
National City was the lead bank. Bank One did the
real estate and Central Bank helped do some
subordinated debt.
EL: What does
that mean exactly, subordinated debt?
HJ: Lines
of credit.
EL: Did you
receive any assistance or incentives from state
government to start or expand your business operations?
HJ: I
received some training grants from the Cabinet of
Economic Development. And, from KITFA, I received low
interest loans. Floyd Taylor was my main contact over
there.
EL: So,
people at the state treated you well?
HJ: I
knew a lot of people from my days as a member of the
Board of Trustees at UK and as Clark’s CFO. They
knew me as a person and that helped a whole lot.
EL: What is
your major concern regarding the day-to-day operations of
your business?
HJ: The
economy in general. I’m concerned about 2001,
and primarily because of the state of the world,
right now. I think what happened September 11 has
caused a lot of concern and a lot of insecurity in
people in general. My products are all consumer
products, so, I’m dependent on the American
consumer to buy.
EL:
Let’s say that the automotive sales did turn down
and volume went down. That would directly impact your
business. Do you have a contingency plan?
HJ: Yes.
My business is capital intense. My cost is made up of
three things: the cost of the equipment, the cost of
the resin and the cost of the labor. I don’t
control the cost of the equipment, it’s done
once I buy it. I just have to pay for it. The resin
cost is dictated by the oil prices.
What I
control is the labor. In our case, we have a mixture
of temporary and full-time employees. What we would
do is layoff the temporaries first and keep our
full-time employees, if we had to let someone go.
Then I would do like everyone else, turn off lights
we don’t need and things like that.
EL: Do you
have any difficulty recruiting qualified and skilled
workers for your operations?
HJ: We
actually have been pretty good at that. We’re a
minority company and get business sometimes because
we’re minority-owned. Be that as it may, we want
to be treated and awarded business on the basis of
our attributes. At the same time, I want minorities
in my company. Our purpose is not for one person to
make a bunch of money, it’s to bring a whole
group of people up through the system.
Our
Danville, Ill., plant is 75 percent African-American.
Our Nicholasville plant is about 65 percent Hispanic
and 10 percent African-American. Our Synova plant,
which is our newest, is only about eight percent
minority-staffed right now. By April of next year we
hope to be about 15 percent.
EL: Have you
received any consulting or employee training assistance
from Kentucky colleges and/or technical schools?
HJ: They
took us through the training to get our QS9000
certification. That was done at Central Kentucky
Technical College.
EL: Jesse
Jackson has been pressing for the use of more minority
business by major corporations. How effective do you feel
this program has been and do you think it had any direct
or indirect affect on your business?
HJ:
I’m an advocate of Rainbow Push, but I’m
not an advocate of Jesse Jackson and some of his
tactics. I do believe there has been past
discrimination in America. I do believe there should
be a level playing field because, even today,
it’s not altogether level. But the way that you
go about achieving this should be with integrity.
I
sometimes question people, whether it’s Jesse
Jackson or anyone else, who uses underhanded
techniques to force companies to change. I’m one
who believes you have to be above the board to get
those changes. And corporations should do the right
thing because it is the right thing. They
shouldn’t do it because they are afraid that
somebody is going to boycott or threaten them. In the
long run, programs work because CEOs make them work,
not because the company is threatened.
Education
and commitment are the keys, not just for minorities,
but for people from Appalachia and all of our
society’s underprivileged. For us to grow as a
society, we have to provide a chance for everyone.
After
going to Vietnam and coming back, I went through
school at DePaul and Notre Dame. The fact that I got
that education opened up a lot of opportunities.
I’m convinced that it will do the same for kids
whether they’re from Appalachia, the South Side
ghetto of Chicago, or from the inner-city of
Lexington, we’ve got to get people educated.
Either we’re going to educate them or we’re
going to build more jails.
If you
look at how much it costs to educate a kid at UK
versus how much it costs to incarcerate a kid a year,
it’s four times as much. You’re better off
putting your money into educating these kids rather
than waiting to see what happens to them later.
EL: How are
business conditions in Kentucky?
HJ: I
think business conditions are real good in Kentucky.
EL: Toyota
has a brand new model and that’s probably helping a
little bit too.
HJ:
Toyota’s brand new Camry is helping and Toyota
sourcing more raw materials and parts from American
manufacturers has helped. Every year Toyota switches
more of its sourcing from Japan to the U.S. and when
that happens, Kentucky gets a large share.
EL: You
mentioned that you entered into a new business
that’s not injection molding, but it has to do with
providing the raw steel materials for stamping equipment.
How did that come about?
HJ:
Toyota actually put me in touch with Toyota Tsusho, a
trading company and a partner of Toyota’s. They
said “we’ve got an entrepreneur whose
aggressive and a good business man and we’d like
for you to interview him for your joint venture
partner.” Toyota Tsusho and I courted for about
a year and a half before we put anything on paper.
EL: What is
the future outlook for Jackson Plastics during the next
24 months? Are you going to do anything new and exciting?
HJ:
I’ve got another joint venture I’m working
on with Toyota, with a company called Collins &
Aikman.
EL: Will this
be a similar situation where you would be preparing the
products or sequencing to go into production?
HJ: This
will be manufacturing in nature. There’s a heel
pad on the driver’s side where you rest your
foot on the floor mat. We’ll be putting the
plastic part onto the carpet. And then we will
sequence that carpet on to Toyota.
EL: Sometimes
people complain because something’s not that good or
they’re not happy with it. You could have been born
in another country, but you just happened to be born in
America, and although it’s not a perfect place, we
are sort of blessed with the opportunities we have here.
Have you ever thought about that?
HJ: I do
think about that. For me, there have been times in my
life when I’ve asked myself, “Do I really
want to be an American citizen?” That was mostly
in my youth. As I said, I was born in the ghetto of
Chicago and I could see on TV that everyone else had
things. I was too young to understand what you had to
do to get those things. But, as I became a young man
and went to Vietnam and saw the world, I don’t
know a better country in the world than America for
anyone to succeed in. What you have to understand,
it’s like playing any other game: You have to
know the rules and play by them to win. One of the
rules is to prepare yourself. You prepare yourself by
education, and it’s not always a college
education; it could be a technical school, it could
be trial-and-error if you invent something – but
you have to prepare yourself. You can’t sit back
and wait for government to give you something.
The key
rule for our young people is to prepare themselves.
This is especially true for minorities. Don’t
wait for the other man to give you something. Go out
and seek it and achieve it on your own because in
America, you can succeed. I’ve been to every
continent on the globe except Antarctica and know
this first-hand. I don’t know of a better
country for anyone, black, white, yellow, it
doesn’t matter. It’s not the perfect
society by any means, but it is the best place I know
and I don’t want to be anyplace else. I am the
American dream as far as I’m concerned. I have
gone from rags to riches and I’m just a good
middle class citizen who believes in giving back.
This is the best country there is.
Ed G. Lane is
chief executive of Lane Consultants Inc. and publisher of
The Lane Report.
edlane@lanereport.com
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