It's People That Count

That's what John Mariotta learned after three business failures.

By Cheryl Morrison | 
 

John Mariotta, a Puerto Rican high school dropout with three bankruptcies behind him, is still getting used to his role as president of a company that did over $12 million worth of business this year.

The president's background isn't the only unlikely thing about Welbilt Electronic Die Corp. Even less auspicious is its location. You've heard of Fort Apache, the Bronx? In 1965, as other companies were beginning to head for the suburbs with the urgency of wagon trains under attack, Mariotta and a partner founded Welbilt in a garage not far from Yankee Stadium. Each time the company has outgrown its quarters, Mariotta has reaffirmed his decision to stay by purchasing still more space amidst the rubble of an area that has become synonymous with urban blight.

Mariotta's loyalty to the Bronx extends even to his living arrangements. Though he drives an expensive company car, he and his wife still live in the same four-room apartment they moved into 16 years ago -- in the same week he started Welbilt. "The only difference," he remarks, "is that 16 years ago it was $150 a month and now it's $450, and it's older and in worse condition."

How has Mariotta finally hit the jackpot? Hustle and hard work haven't hurt. As Welbilt has grown, Mariotta has put in more hours rather than fewer. "You can't relax," he says. "In business, there's no such thing as security."

According to his employees' accounts as well as his own, Mariotta is on the job night and day, keeping close watch on Welbilt's operation and staying in close touch with its 250 workers. One of the worst tasks he ever faced, he says, was giving layoff notices to some of Welbilt's workers during a tight spell a few years ago: "I had no choice.It was either that or the whole company. But I hated it. I know these people, and I know some of their families."

Mariotta was born in Spanish Harlem. His father, a Puerto Rican immigrant, was a tool-and-die maker. After serving in the Army during the Korean War, Mariotta set up a machine shop with his father and brother. The business failed. He moved to Long Island and started a company there. He went broke. He set up another metalworking business; once more he went bankrupt. "I lost my shirt on Long Island," admits Mariotta. "I came back to the Bronx licking my wounds."

Along with his shirt, however, he shed a naivete that had contributed to his business failures. It was in the suburbs, he says, that he worked his way through "the school of hard knocks."

Some of his lessons had to do with his own limitations. Mariotta had started his Long Island firms on his own. When he founded Welbilt in 1965, he teamed up with a partner who had some business savvy.

"I'm just a tool-and-die maker," Mariotta says. "Some things I don't know about. I'm stupid, so now I get help from other people."

He sought to avoid another pitfall by dealing only with customers who have the capital to back up their orders. More than once in his earlier ventures, Mariotta says, he fell prey to undercapitalized manufacturers who ordered parts, then failed to sell their products, leaving them unable to pay for the parts. "If they can't sell their products," notes Mariotta, "you've invested all your time and money for nothing. If they go down, so do you. I learned not to be hustled, not to be conned."

Nowadays, his customers have deep pockets. About 80% of Welbeit's work is for the government. The company makes stabilizer fins for the Navy's Side-winder missiles and cooling kits for Army tanks. It is the sole manufacturer of a device called a Bell crank, which regulates the air intake of engines in the Air Force's F-104 and F-4 aircraft.

Mariotta produced precision metal parts for the military with his old companies, too, but he worked as a subcontractor. "Some of it was sub-sub-subsubcontracting," he says, "and if there was a break somewhere in the chain, I'd be left whistling for my money."

As Mariotta tells it, there are two kinds of government contracts -- small ones that truly are put to open bid and more substantial ones that usually go to conglomerates despite ostensibly open bidding. The small contracts, he says, "are cut down to the bone. There's no money in it." For five years, Welbilt hobbled along with small government contracts and occasional commercial jobs.

The turning point came in 1970 when Mariotta signed on a new partner, Fred Neuberger, because his original partner wanted to retire. It was through Neuberger's efforts that Welbilt got its first big government contract.

"We went to the procurement office and looked over the blueprints, and Fred picked out one that was illegible," Mariotta recalls. "Fred said, 'If we can't read this blueprint, nobody else can, either.' We put people to work on that blueprint with magnifying glasses, to figure out how to bid the job. Fred was right. Nobody else could read the blueprint, and consequently no one else bid for the job, so we got it."

Having successfully executed its first substantial government contract, Welbilt was in a better position to negotiate for other high-ticket jobs. The company also benefits from laws that set aside a portion of all government contract work for minority-run firms. The set-aside requirements apply to corporations that subcontract work for the government as well as to the government itself.

The company's most important commercial customers are General Electric's Aircraft Engine Business Group and Western Electric. Neuberger and Mariotta are ardently wooing other corporations in the aerospace industry. They would like to see the company do proportionally more work for industry and less for the government. The corporations, they're convinced, are more likely than the military to follow congressional guidelines on contracts for minority companies.

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