Howell and Syme didn't just preach excellence; they stood on the line, setting the example stove by stove. "It became standard practice that everybody who touched a casting was a QC inspector -- if you didn't like it you'd put it aside," Bill Floyd, Vermont Castings' first employee, remembers. "There was no close enough; it was either there, or it wasn't."
Everything about the stove had to surprise their customers, giving them more than they expected. Complaints were dealt with simply: if your stove didn't work you'd get a new one, no questions asked. "Our intention was for you to have acquired something of lasting value," Syme says. "If it failed in any way there was an implied breach that had to be rectified." You weren't buying a stove, you were buying membership in a movement,
It was a rare and unusual place to work, too: the best wages and benefits in the region, profit sharing, and the satisfaction of knowing you were number one. They worked hard, double shifts to meet demand, but they partied hard, too, departmental six-packs for a production record broken or a design problem solved, company wide Christmas parties and Halloween parties, and a spring fling on the day the winter's snow finally disappeared.
Planning, such as it was, was casual. "We never considered anything as sophisticated as developing 'a line,' " Syme says. "The Defiant was selling like crazy, but after you hear 150 times from customers that it's too big, you get the idea." So Syme designed the Vigilant, a smaller stove with still higher efficiency, adding optional glass on the doors. Thus began a steady stream of new stoves, each more combustion efficient than the last, each with new customer-oriented features.
The only problem was the supply of parts. Few of America's rusting foundries produced parts of high enough quality. But depending on the more sophisticated European facilities limited Vermont Castings' flexibility to build whatever those people on the phone wanted. In 1979 Syme and Howell built a facility of their own, the first new foundry for the casting of stove plate to be built in the United States since the turn of the century.
They dreamed big, designing the foundry with capacity for $50 million in stoves. Growth, they felt, was "manifest destiny"; they were building the industry juggernaut, with $50 million in sales the next plateau. They'd already started bringing in new managers, outside professionals to help them take that step.
The bankers were skeptical. But it didn't matter what the bankers thought. Stoves were selling so fast that Syme and Howell paid all but $250,000 of the $5.5-million construction cost out of cash flow.
In June 1979, construction completed, they decided to throw an open house, a chance to show off the company to their local neighbors. They weren't expecting much of a crowd; there'd been no effort to spread the world, except for a short note in the "Owners' News."
Five thousand people showed up, proud Defiant owners from across the country. So a tradition was born, the annual Owners' Outing, a gathering of the tribe, repeated every August in growing numbers, a celebration of the dream.
Looking back, the 1980 Owners' Outing was probably the high point in Vermont Castings' history. Sales would climb for one more year, to $29 million, but by Christmas 1980 Howell's cancer had been diagnosed.
It was Howell, along with the board of directors he assembled, who convinced Syme to turn the company over to "the corporate types," as they were later so scornfully called within the company. It was a question of keeping their "manifest destiny" alive, Howell argued: that $50-million goal was still within reach, but to get there without Howell's steadying hand, the ball-bearing factory would have to grow up. Vision wasn't enough; they'd need strong executive leadership, professional management to bring in systems and procedures, a formal planning process, and a chain of command. With so much of that infrastructure already in place, by the early '80s it was time for Syme to let go of the torch.
"It was a hard argument to disagree with," Syme says. "At that point I didn't have a job in the company in any case."
No one expected Syme to take over. His role had been corporate wildman, the blithe tinkerer. Clearly he was too obsessive to function in the real world of balance sheet and bottom line, too disruptive to be part of the effective management team they would need to cope with the new problems facing Vermont Castings in the early 1980s.
Those problems kept getting worse. The wood-stove boom was over, the market dropping between 10% and 20% year after year. The back-to-the-land set had traded their overalls for pinstripes and moved to the city; the old problem of unfillable demand had been replaced by a growing battle with inventory control.
Vermont Castings' wood stoves were still among the "99 Things that, Yes, Americans Make Best," according to Money magazine, and market share was growing enough to keep revenues fairly flat. But profits were slipping. As a one-product company in a shrinking niche, Vermont Castings looked particularly vulnerable to further market erosion. That $50 million worth of infrastructure and unused foundry capacity now looked like simple, expensive overhead.
There was a logic to every decision the corporate types made over the three years after Howell's death, each a conventional management solution to a perplexing corporate problem. But Vermont Castings had never been conventional; those well-meant decisions would nearly destroy the company, severing its connection with the market and its work force, putting its reputation and franchise at risk.
How does conventional management cope with falling profits? One way is cut costs by adding controls. Vermont Castings' management still preached quality, but it implemented management by objectives, with foundry and assembly workers measured by their ability to improve scrap and assembly rates.
Sure enough, the scrap rate went down; employees stopped rejecting marginal castings. The assembly rate improved, too; fewer cosmetic defects were being caught. "We may have accepted some stoves that were 'close enough,' " Bill Floyd says. "We'd always looked at the numbers, but under the corporate types the numbers became job one. I don't know if quality dropped off that much, but it certainly wasn't as much fun to work here."
