The EC-2000 chassis, devised largely by Karkau and Williams -- with a big assist from vendors energized by the task of designing components for it -- came out in 1990. The project cost the company about $500,000. Last year sales of the chassis totaled $30 million, and Spartan expects that number to double in 1992. Out Tim Williams's window at work there is tangible evidence of that bet paying off, in the form of plant number four, under construction and rising from a concrete pad. The new plant will be devoted exclusively to the production of EC-2000 chassis.
John Rouser, manager of original-equipment-manufacturer sales at Cummins Michigan, which supplies Spartan with diesel engines, says the development of the EC-2000 chassis is true to the company's form. He calls Spartan "my favorite account," because of "the sheer number and complexity of the things it is doing. It builds unique products, and we have a unique relationship. We take our resources and its resources, and together we go farther than either of us could alone." Rouser goes on to note that Spartan has now become Cummins Michigan's biggest account, entailing a degree of risk. "We do $60 million a year in sales, and at any one time we might have $3 million to $4 million tied up in inventory and receivables with Spartan. But it has never let us down. We share the risk. We bet on its ability to execute."
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Blurring the Line Between Labor and Management
Once a quarter Sztykiel goes into the plant to give each shift a review of the company's performance over the past three months. On a recent autumn afternoon, Sztykiel, wearing a windbreaker and no tie, got into his beat-up, eight-year-old compact car and drove over to plant number three. There he greeted the second shift, about 100 workers sitting in folding chairs 10 rows deep. A subsequent show of hands revealed that about half were recent hires.
Sztykiel took his windbreaker off and laid it on top of a cardboard box in the corner of the room. He climbed a small stepladder, sat on the top step, and, like a senior professor giving a classic lecture he has been delivering to a generation of students, began: "Welcome. We think this is a good corporation. It's run on the same principles that a family is, because we think that's the most effective way human beings have managed to get along. We try to split the gain with everybody.
"Your bonus is a very good indication of the well-being of the corporation. If it's higher, things are looking up. If it's not, they aren't." The bonus for the third quarter of 1991 was double what it had been the previous quarter, or about an extra two weeks' worth of pay.
Sztykiel proceeded to relate how in the fall of 1976, with the payroll stretched to breaking, it looked as though he would have to lay workers off. Instead, he told workers on a Friday that they would have to take a 15% cut in pay, and that anyone who could not tolerate that should simply not show up for work on Monday. "They went home mad. Who wants to work for less? They were so mad that in three months we had things restored to where they were before."
Today the assembly-plant workers at Spartan make roughly 80% of what their unionized counterparts at GM do. Sztykiel, however, thinks he can offer his company's workers something of greater importance -- namely, profit sharing, job security, and a sense of fairness and equality.
Spartan distributes 10% of pretax profit quarterly among its workers, a sum that currently amounts to about 10% of base salary. Spartan, in contrast to the automotive industry, in which plant shutdowns and worker furloughs are the norm, has never had a layoff, and Sztykiel vows that will never happen: "You wouldn't do that in your family. If you have 10 children and times get tough, you wouldn't send the 3 youngest ones out the door. It's not only immoral, it's stupid. Why? Those who have been let go are soon forgotten -- screw them -- and the ones who stay haven't learned anything from the experience."
Meanwhile, Sztykiel believes most American executives are grossly overpaid. Last year, when Spartan had about $90 million in revenues, the company's six top executives paid themselves a total of $430,000. That included bonuses. Sztykiel, running a company whose average return on stockholder equity for the past five years was 35%, earned $78,000 -- or about four times as much as the lowest-paid worker at Spartan.
"We don't recognize the terms labor and management here," says Sztykiel. "I am not the boss. I am the number one servant of this corporation." At Spartan all job openings are posted, and anyone can apply. If Sztykiel were to be run over by a fire truck tomorrow, his job would be posted.
Katharine A. Michalak, an analyst with First of Michigan Corp., a Detroit-based securities firm, notes that Sztykiel's common touch transcends the fact of his modest salary or egalitarian pronouncements. "George built Spartan's first chassis himself," she says. "He still has the ability to go into the plant and build a chassis. How many CEOs of manufacturing companies of Spartan's size do you know who can do that?"
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Benchmarking
Ludvik Koci, president of Detroit Diesel, another large Spartan supplier, calls the company "a very aggressive organization that reflects George. He is always moving in new and different directions." John Rouser seconds that, saying, "Over and over again he surprises the industry, he shocks the industry, and he has moved the industry."
