The Decade-Long Overnight Success

There have been turnarounds both flashier and faster, bbut few so surprising as this Nebraska farm-equipment manufacturer's 10-year transformation. Tony Raimondo made Behlen profitable again by making it a great place to work

Turnaround Entrepreneur of the Year

An individual whose management skills resurrected a moribund or declining company

The Winner

Tony Raimondo

Behlen, Columbus, Nebr.

Manufacturer of livestock-handling products

Founded in 1936 (bought out in 1984)

$108 million in 1994 revenues

$5 million in 1994 profits

1,132 employees

The Finalists

T.J. Rodgers

Cypress Semiconductor, San Jose, Calif.

Manufacturer of semiconductors

Founded in 1982

$305 million in 1994 revenues

$12.6 million in 1994 profits

1,262 employees

Carl Aschinger

Columbus Show Case, Columbus, Ohio

Manufacturer of retail display cases

Founded in 1895

$19 million in 1993 revenues

$1.4 million in 1993 profits

208 employees

The word on Tony Raimondo, as far as anyone at Behlen remembers, was that he was crazy. Crazy to think he could overcome a $7-million loss. Crazy to think any bank would deal with him. And crazy, crazy to get rid of the factory time clock.

"When Tony took out the time clock, I'm thinking, 'Our company's going to go broke -- half the people won't show up to work," recalls Allen Cooke, a Behlen vice-president. "I've never told him this, but I had serious reservations about the ability of Tony's philosophy to lead us to success."

"I didn't trust Tony for shit," says Jake Jakub, once a fervent union member who's now a team leader in Behlen's truck shop. To guys like Jakub, Raimondo's talk of employee participation sounded like so much management hogwash. He says, "I'm from Missouri, the Show-Me State, and I said, 'Show me!"

Jeanne Raimondo, too, was looking for proof that her husband wasn't loony. Who would stake his family's future on a troubled company in Nowhere, Nebraska? "There are 20,000 people here in Columbus," she says. "If you exaggerate." She remembers when, in 1984, her husband announced his plan to save the company. "Honey," he gushed, "we're going to buy Behlen." Jeanne shot back, "Oh, no, we're not!"

There were times when Tony Raimondo wished he'd listened to his wife. More than once, he found himself wondering late at night, "Will it all be worth it?"

The outlook for Behlen, a manufacturer of steel agricultural equipment, was considerably more upbeat in 1982, when Raimondo, then 43, joined the company as general manager. Spanning the length of 17 football fields, the factory is the sort of all-American backdrop favored by politicians. John F. Kennedy stumped there in 1960. A black-and-white photo taken during his visit captures his toothy grin and the dazed bemusement of the Republican Behlen clan.

The Behlen brothers, who were inventors and builders of grain-drying and -storage equipment, sold their small 30-year-old business to Wickes Corp., a California conglomerate, in 1969, at a time when farmers could depend on grain-storage subsidies from Uncle Sam. Behlen had profited handsomely for years. In fact, the company couldn't keep up with orders for its steel silos and prefab buildings.

"When I joined Behlen we had an incredible backlog for grain bins," says Raimondo. Wickes's plan was to pour in capital and to diversify. Raimondo's years at General Motors, Moog, and Sperry Corp. had prepared him for his new job. "I was very enthusiastic about coming in to grow the company." He shook the hands of hundreds of plant workers. He memorized their names. He told everyone to call him Tony.

Raimondo's ambitious plans as general manager included a from-the-top-down reorganization and modernization of the plant, which had become a mess, thanks to a mix of divergent products. He painstakingly deconstructed product costs, arriving at a gross margin for each line -- a first in Behlen's history. He also began buying much-needed equipment.

Behlen closed 1982 with a tidy $3-million profit on $50 million in revenues. Everything seemed to be on track, and workers were talking about decertifying the union. But there was a disturbing development hard on the heels of that encouraging news. In the summer of 1983 the government announced it would no longer subsidize grain storage, replacing those subsidies with a new program that would pay farmers to keep their land idle. Like chaff in the wind, much of the $300-million grain-storage market was gone. By year's end Behlen's revenues were down by 50%. The agricultural world was in an upheaval, some say the worst since the depression.

"I had never seen that kind of trauma," Raimondo says now. "It was terrible," agrees Bob West, CEO of competitor Butler Manufacturing.

If Behlen was to salvage anything, Raimondo had to act fast, and he'd need everyone's help. The future hinged on the union's decertification. Tensions shot heart-attack high on the day of management's last appeal. Many workers showed up at the meeting displaying union buttons. Raimondo coached his managers to "thank people for wearing their buttons, because that means they want a better company." It was close. "We won by a whisker," he says. "That was just good fortune."

In the gut-wrenching months that followed, Raimondo reflected often upon that election. "It was a tremendous vote of confidence that really inspired me to say, 'We need to find a way to do this.' I'm not sure we would have had the courage or the determination without it."

January, 1984. The Wickes-owned Behlen posted a shocking $7-million loss. The parent company wanted either to sell or to liquidate the once-profitable division.

"Guys got together, saying, 'How can we pool our money?" recalls Bill Kubas, a 42-year veteran in shipping. "I was even counting my pennies to see if I could buy it." So was Raimondo. With his personal savings, he, his lawyer, and two Behlen managers feverishly pursued a leveraged buyout. The company was seeing red ink, but its assets were worth some $32 million. When the group finally located two banks willing to take the risk, Raimondo kept a promise to his wife: he did not pledge their home to the LBO.

Just after midnight on May 5, 1984, Behlen returned to local ownership. Later Raimondo and his partners staged a poignant ceremony. They played "Take This Job and Shove It" as they lowered the Wickes flag, and they served a barbecue lunch for their 500 employees, who sang "Happy Days Are Here Again."

The truth is, things didn't improve for a while. Raimondo's vision of a profit-sharing environment would have to wait. In his first months as chief executive he was forced to let 200 people go. Layoffs were continual. "You saw people coming and going all the time," says Dave Streeter, a welder in those years. "The mood out in the plant was, 'This company ain't gonna make it.' It was very bad. In the pit, the hatred was thick."