Create Jobs, Eliminate Waste, Preserve Value

There is no good time for the implosion of a major employer. But at least the bankruptcy of the Beloit Corp. occurred when Hendricks had leisure to devote to the problem. In 1998, he had hired David Luck, former president and CEO of Bridgestone/Firestone Retail Operations, to be president of ABC Supply. That allowed Hendricks to, as he says, "do my entrepreneur thing." So while Luck embarked on a plan to take ABC to $5 billion by 2009, Hendricks was able to fling himself at the Beloit Corp. project--body, soul, and canyon-deep pockets.

Confronting 35 acres of decaying buildings and 3,500 out-of-work people, he applied his trademark six-word formula: create jobs, eliminate waste, preserve value. His first act after buying the property was to persuade Metso, the Scandinavian papermaking company that had acquired Beloit Corp.'s intellectual property, not to retreat to the land of the Vikings with its spoils. He offered to construct a new building to Metso's specifications in Beloit's industrial park and lease it on generous terms if the business would stay. Five months later the 80,000-square-foot facility was ready, a speed record that won Hendricks an award from the governor. The feat retained 165 engineering jobs in the community.

Hendricks then commenced structural rehabilitation, transforming the old campus into sleek, exposed-brick offices and bountifully appointed manufacturing space. Simultaneously, he began prospecting for businesses to fill it. It takes a village to raise a village--Hendricks is by no means one-man-banding the revival of Beloit, which has dozens of smart and deeply engaged civic leaders. Still, Beloit Ironworks houses 17 companies, all of them there at the behest of Ken Hendricks.

Some Ironworks inhabitants are tenants, lured by attractive rents. Others are companies Hendricks bought and moved, such as Specialty Automation, a maker of robotic machines for the automobile industry. Two companies in the building are pure start-ups. Another, Stainless Steel Tank, predates Hendricks's purchase of the site, having leased a building from Beloit Corp. before its demise. That company, which makes fluid-carrying tanks that ride on trucks, was financially wobbly when Hendricks bought it and restored operations, preserving 80 jobs and creating another 60.

Sam Popa's company took a more serendipitous route to the Ironworks. Popa, a 41-year-old Romanian immigrant, begins his tale as we are removing our safety goggles in a blessedly silent room above his cacophonous factory floor. It is an entrepreneurial story inside an entrepreneurial story: two neophytes' humble start-up sprouting within a veteran's ambitious vision.

After moving to the United States in the early '80s, Popa worked 16 years for a fabricator of aluminum ladders in Franklin Park, Illinois. Then management thumbed down his proposal to diversify into other products. Frustrated, Popa flew to Japan, where he used his savings of $400,000 to buy all the machinery in an abandoned aluminum-extrusion factory. "I said, 'Okay, dismantle this thing and ship it to the United States,'" says Popa. "Only I didn't have a ship-to address. The only building we could find that could fit all this equipment was in Beloit, Wisconsin."

Hendricks believes you can tell what people value by what they discard. On Ken and Diane's first date, he accosted a departing restaurant patron to request the uneaten half of his sandwich.

So Popa and Darius Szczekocki, who had become his business partner, stowed the machines in a bay of Beloit Ironworks while waiting out construction of a plant in Kirkland, Illinois. It was 2003, and the Ironworks buildings were still in chaos. The partners wanted to use the facilities for just six months, for maintenance and repairs. "Then one day as we were unloading the containers a guy comes by and says, 'What's all this?'" Popa recalls. "We said it does aluminum extrusion. He says, 'What is that?' We explained. He said, 'How many jobs will you have?' We said a couple hundred.

"He came back later and said, 'My name is Ken Hendricks and I own the building. I want to reanchor this complex. I want something that's going to be big, that's going to create jobs. I want you guys to stay.'"

Hendricks offered to buy 70 percent of the business for $5 million and sealed the deal with a handshake. He made $150,000 worth of modifications to the building, digging 18-foot-deep foundations to support the 200-ton extruder, which resembles an enormous Play-Doh machine. In 2005, the three partners attended a machinery auction in Ohio. Hendricks bought nearly every lot and launched an Ohio company, which Szczekocki runs. American Aluminum Extrusion, in Beloit, and American Aluminum Extrusions of Ohio have combined sales of $85 million.

The strangest new business in the Ironworks is undoubtedly American Industrial Art. Its provenance is vintage Hendricks. When he bought the Beloit Corp. property, the entrepreneur found nearly half a million patterns--wooden molds, of assorted shapes and sizes, used to make machine parts. A bankruptcy judge paid him $35,000 to haul this trove to the dump. Instead, Hendricks called on Jack De Munnik, an old friend and onetime artist at advertising agency Leo Burnett in Chicago. Like the king in the Rumpelstiltskin tale, Hendricks presented his protégé with a mountain of cheap material and challenged him to spin it into gold.

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