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(Larry MacDougal)
(Larry MacDougal)

At the Top

Mr. Manufacturing in the oil patch Add to ...

There is something heroic about Mel Svendsen - in the way he fights for manufacturing in energy-mad Alberta. He steps up as his industry's voice on everything from the effects of a supercharged Canadian dollar to shortages of labour.

But behind the forceful opinions, the 61-year-old is president and co-owner of a Calgary company, Standen's Ltd., which produces vehicle suspensions for global industrial, auto and farm equipment markets.

Here, he talks about what it's like to be Mr. Manufacturing in the oil patch.

What were the origins of this company?

Cyril Standen was a blacksmith apprentice, who in the 1920s was chucking away on his anvil, making whatever was needed in the market. One of the first products was a stiffener plate for cowboy boots. He had this blacksmith forge and someone had a broken spring that needed repair. Next thing you knew, he was spending more time repairing springs than making other things. Over 86 years, we grew into a suspension business.

When did you come aboard?

I joined as a student in 1967, and full-time in 1968. I grew up north of Edmonton on a farm and this was going to be my experience in industry before going back to the family farm. The farm lost out, I guess.

I was a teenager when I started and I was in management by time I was 21.

As a company that exports two-thirds of production, has the Canadian dollar volatility been a big part of your career?

It has been and it is still painful. We in Canada are not efficient enough as a nation to be able to thrive at parity [with the U.S. dollar] I'm talking about our costs of doing business, based on such a small population in a large country.

We have to build buildings that are a hell of a lot better than our competitors in most of the U.S.; our roads take a hell of a pounding just by virtue of our winters. All these things add up to make us less efficient.

On the positive side, we don't have to maintain the same level of defence industry as the Americans and we have the benefit of a pretty well-educated work force.

So why do you keep doing this?

Probably for the same reasons our founder did - because we're Calgarians, because we're Albertans, because we're Canadians. By God, we know how much better we have to be than our American competitors or our foreign competitors, and we do everything we can to maintain that.

We are privately held, and we're not greedy folks, so we are prepared to take a little longer-term view of what is success and what isn't.

We are not reporting to the stock market every quarter, and so we can be a little more patient with our investments and our people. But long term, without a doubt, we have to make every effort possible to be better than our competitor.

Is there a rule for business?

If you make something better than your competitor, and deliver it on time, and at the same price, you ought to win. If you are just equal with competitors in all those things, you are going to have a problem. But if you can be better in at least one of them, you have a good chance.

Many years ago we gave up on selling on price alone. You just can't do it - it's a race to the bottom. That doesn't mean we can ignore competitive pricing.

Typically we try to find those accounts who need just a little better level of quality and focus on meeting their needs.

How do you manage now in this volatile economy?

Most of it is thanks to a strong loyal work force. [In recent years]the long-term employee who had almost zero likelihood of being laid off was willing to share his or her work with the new employee. That work-sharing indicates the esprit de corps here.

Also, we keep encouraging our staff to pressure their retailers to recognize the purchasing power of the Canadian dollar. When the dollar is strong, never make a deal on a significant expenditure without asking for the best possible price. Somebody in that supply chain is probably making out pretty well with the strong Canadian dollar and should have some room to budge.

So whether we are buying nuts and bolts, or whether our people are going out on their own to buy a new TV set, we encourage them to say, "Look, if this has an imported component to it, we expect that savings to be passed to us."

What is your own skill background?

I am a technologist in the automotive and mechanical side of industry. It fits well with our type of business and I've augmented that with other studies, mostly in business.

The key is to stay abreast of technological change. That often comes from short courses and seminars. I try to network as much as possible and I probably read 10 hours a week on things related to our industry.

You have been hurt by the recession, but is there any upside?

When we go into times like this, there is a plus. The stability in the market that comes with these downturns in Calgary gives you more time to focus on your global business. You are not being encumbered with worker shortages, not being encumbered with high material costs, and your access to outside services is better.

So it ain't all bad, if you know what I mean.

Did you learn things from your father?

The greatest honour my father bestowed upon me was letting me strike out the first furrow in a field. I think I was 16 before he let me to do that, because a Svendsen farm would never have a crooked line down the field. He came from Norway, and the farm he grew up on was damn near on the side of the mountain. You couldn't create a straight line.

But on those flatlands of northern Alberta, you could see a crooked line a mile away. He would never let that happen.

How did you become a leader in manufacturing?

I quickly noticed, being a farm boy, that most of the equipment here was sort of stationery farm machinery ... We were dealing with hydraulics or electrical machinery. Having grown up on a farm, being able to understand the workload was almost intuitive.

A lot of those first steps came from my farm background because in managing work, the issue was: How do we make the work as productive and easy to do as possible?

When did you know you weren't going back to the farm?

Fifteen minutes after my dad asked me when I was coming back. I had to face the question: Was I going to leave Standen's? It was four years after I started here, and he called to say his health wasn't getting better, and the time had come to make a decision.

As we went through the conversation I came to the realization I was not prepared to give up the excitement of manufacturing for the value of owning a farm. By that time our farm had significant value but I said to him, "I don't think that's for me."

Manufacturing can be a grinder and it came be a killer at times, but the creativity is so often in your own hands. Yeah, we have these problems with economic cycles and currency.

Farmers have those too, plus they have weather and pestilence and all those other things you have no way of controlling. At least with manufacturing, we can take our bad luck and turn it into opportunity.

Was one of those opportunities in China?

We were producing things for the international shipping industry, and that production moved to China. It was primarily the chassis that carry the boxes when they come off a ship; we produce 90 per cent of the suspension springs for those.

The Chinese got more of that business, and they came to us to say, "We're going to build these things in China but the customers are intent on having your springs." They convinced us to put a couple of plants there to service this business. But unknown to any of us was how bad that international shipping market would get - it went off the cliff.

Are you still going to do production in China?

We have just completed construction of the two plants in China. Our venture in China was never planned to bring things back to North America directly; it was to service our customers in China who were shipping back to Europe and North America.

Now we are thinking about the domestic Chinese market. I think it will be a strong market even when it is soft because it is just so big.

****

Mel Svendsen

Title: President, CEO and co-owner, Standen's Ltd., Calgary

Born: Feb. 17, 1949, in Radway, Alta.

Education: 1968, diploma in technology, Southern Alberta Institute of Technology.

Career highlights:

1968: Joined Standen's, initially on a part-time basis.

1971: Appointed supervisor of manufacturing.

1990: Became a part-owner, as he rose through the ranks.

1995: Took over as president and chief executive officer.

Sits on national board of Canadian Manufacturers & Exporters.

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