"Volume," Seymour now muses, "can overcome anything."
Thanks largely to Jeff's aggressive marketing, Blue Ridge today sells $50 million worth of salads to grocers in 30 states plus Canada. An in-house staff now handles the advertising. And with the help of a fancy Manhattan public relations firm, the story of Blue Ridge Farms has now appeared in The New York Times, Forbes, and New York magazine. Instead of worrying about their one big customer, the Siegels worry about holding market share against such new-comers as Orval Kent Food Co., or such potential rivals as Campbell Soup Co.
Actually, with his younger son, Richard, in charge of production, and with Jeff as the marketing maven, Seymour doesn't worry much at all these days. He's learned to relax and spend his time creating the perfect cheesecake, or playing with his 1929 Duesenberg, his '65 Rolls-Royce, and his '84 Maserati.
"My only job now is to keep the kids from getting a tit in the wringer," says Seymour. "I know sons have always thought their fathers were too conservative, but I seem to be getting smarter as they get older. I say to them: 'Look, I've got my money. It's your money you're using now."
EMPLOYEES AS FAMILY
Jan Swatzell, with 13 years on the shop floor, knows what the transition from Ruben Frost to young Chad has meant at the Grand Rapids manufacturing plant where she makes overhead conveyor-trolley-bearing rings. It's given her a future.
In the old days, Swatzell had punched in for an eight-hour shift stamping out parts on a machine bought during the Eisenhower era. Grime lined the walls, and scrap lay around in piles, unattended. "This place was a real hole," she recalls, "both the way it looked and the way people felt." Then Chad took over, promising to build "the most automated factory in the world," and Swatzell got a new job. With a team of all other "shareholders," she is responsible for one of the 14 computer-controlled manufacturing cells that run somewhat autonomously in Frost Inc.'s Grand Rapids plant.
"Back when Ruben was here, they would never let a woman work on a new machine," says Swatzell. "We would have been told, 'No, you're not capable." But under Chad she's been turned into an expert, taught not just how to run the machine, but to program the computer and monitor the robots as well.
It's the little changes about "the new Frost" that Swatzell notices most often, though. She no longer has to strain to hear herself think above the din. There's fresh paint and a clean floor; there's a new cafeteria, and a wellness center on the way. The time clocks are gone, too: Chad put Swatzell on salary, like all 117 shareholders, working for productivity-based bonus and profit sharing and her share of the action when he takes them all public.
Swatzell can see the results of the changes firsthand. In the old days, it used to take up to 12 hours to reset the old machines; with automation, her team can write a new program and have it running in minutes. Quality control used to reject 1 out of 4 pieces the company manufactured; now the figure is 1 out of 200. Before automation, sales per employee at Frost were $80,000 annually, slightly above the American manufacturing norm; now they're above $150,000, more than most Japanese firms.
"We all feel like we're just one unit now," Swatzell says. "It used to be the managers would just walk around and ask how come things weren't done, but they never listened to what we had to say. But Chad got rid of them. Now we're asked every day about how things are going, and we all roll up our sleeves together."
Chad Frost, the 42-year-old CEO and majority shareholder, has become somewhat of a hero these days, but not just on his factory floor. With so many Rustbelt manufacturing firms failing because family owners are unwilling or unable to reinvest in new equipment, Chad has shown them it can be done. Told by the consultants it would cost $12 million to $15 million to automate his factory, Chad brought it in in less than three years for $5 million. Now he's even spun off his own consulting firm to help others modernize their plants.
But it's not the technology that makes Chad most proud, or the recognition by the Small Business Administration as Michigan's 1985 Innovation Advocate of the Year. His biggest accomplishment, he says, has been in transforming the attitudes and values at Frost developed over 74 years and four generations, mainly by getting his family out of the business.
It was the teenage Chad who first dismissed the idea that his family or its business had a special place or legacy in Grand Rapids. "We were brought up as if we were the elite because our name was Frost, but I never bought it," he says. "I always thought achievements had to be real to be worth something, but there was nothing real there. I'd seen the same vague shows of authority in Vietnam and with Nixon."
Two summers working in the factory only confirmed his rejection of the family business opportunity. The company was a dying beast, he decided, doomed by lack of leadership. His father ran the archaic factory like a fiefdom, avoiding decisions and afraid of change. Because Ruben kept hard information to himself, managers couldn't very well manage, and they turned to fighting among themselves. Of course, they weren't exactly professional managers to begin with: they were born to the job mostly, relatives who frittered away much of their energy competing for titles and worrying about their individual net worths.
At least that's how it looked to Chad, and he wanted nothing to do with it. When he graduated from college in 1967, he fled East to Textron and aerospace. But three years spent wrangling with corporate bureaucrats over such things as time clocks and unauthorized overtime soured him on big business as well.
In 1970, he came back to the family company -- "reluctantly" and with rules. Chad agreed to try turning around an acquisition in Cleveland his father had mishandled; his father agreed to provide all the funds that Chad thought necessary, and promised that no one from Grand Rapids would ever set foot inside the door. Within two years, Chad had managed to get the subsidiary in good enough shape to consolidate it with the company's main operations. Now his father was asking him to try his hand as general manager of the parent company, which by then was losing money.
