If something can be measured at Linamar Corp., there's probably a chart.
Frank Hasenfratz, the auto parts company's founder, may be retired from the chief executive's chair, but he deserves a new title, chart maker in chief.
Need to reduce costs by making more efficient use of gloves at Linamar's 39 plants? There's a chart for that. It resulted in $1.5-million in savings.
Want to know how much Linamar pays in taxes for a worker in Ontario versus a worker in one of its other sites scattered around the globe? There's a chart for that, too. The answer is $29,000. Ditto the cost of transporting waste material, including water, away from Linamar's plants. Mr. Hasenfratz is analyzing that one with a view to cutting expenses, maybe by building solar waste water evaporators.
Sometimes in this job you get offered an interview that you just can't turn down. A chance to talk to Linamar's founder is one of those times. As managers and entrepreneurs go, Mr. Hasenfratz is one of Canada's legends and he does not give interviews very often.
The occasion was the publication of a book on Mr. Hasenfratz, Driven to Succeed: How Frank Hasenfratz drove Linamar from Guelph to Global, by Rod McQueen and Susan M. Papp.
Mr. Hasenfratz is 10 years removed from the chief executive's chair at Linamar, Canada's second-largest auto parts maker. (His daughter Linda is now CEO.) He went into business as an auto parts maker in the mid-1960s, in his basement, not long after coming to Canada.
Today, Linamar has 16,700 employees, and sales that look like they will top $3-billion this year.
As the stories of the charts illustrate, Mr. Hasenfratz still thinks like a guy who owns a whole lot of shares. Because he does.
As of March, he controlled close to a quarter of Linamar, a stake worth about $330-million at last check.
The stock has created a lot of value for more people than Mr. Hasenfratz since the company went public in 1986, increasing from a split-adjusted 79 cents in January of that year to $21.49 as of Monday's close, according to Globe data. The past few years have been a bit less spectacular than the first 20, but stand back from the chart far enough and the results are incredible for an investor who can be patient, because as long-term shareholder Jeff Tory of Pembroke Management Ltd. points out, "progress is non-linear."
I could tell you what Mr. Hasenfratz said about running a manufacturing company in Canada that competes globally, but he can tell you better. Take it away, Frank.
Move up the value chain
Mr. Hasenfratz's view is that the more complicated the part, or the system, that Linamar was building, the less competition there would be.
"Once growth stops, you know there is a problem. What they made 10 years ago, we don't make today. What we are doing today we will not make 10 years from now."
"Hire the best. Don't ever be afraid that 'somebody smarter than me is going to replace me.' Never fear that. "We are handling or paying our managers accordingly. If [a manager] does a great job, he gets a certain bonus. but if he does a great job but trains somebody to replace himself, he gets more bonus."
But don't promote people too fast
"You promote them too early, he tells his friends, his family, he's been promoted. Now six months later, he's overstretched, he can't do it. He doesn't want to step back in his old job, so he quits. Now we lost a good man. I keep telling people don't promote too early. And if you do promote, say 'can you handle that for me for six months until I find somebody?' If he does a good job, give him the job."
Don't be afraid to let a person work in their sweet spot
"The most productive people are those who are a little underemployed. He is capable of doing more, but for now let's just keep him here, he knows that job inside out, he knows all his people, and he creates wealth like you wouldn't believe."
Auto parts manufacturers be competitive in Southern Ontario, even with a high dollar
"My view of it is our industry is competitive where the managers are competitive. Your plant is only as good as your manager. A manager will surround himself with good people that works all the way down to the floor. We are today as competitive as any plant anywhere, including Germany.
"The dollar going up does not hurt us. Why does an American produce better than us? They cannot. They use the same equipment. It only depends on management. People like to cry."
Canada needs skilled workers
"The Chinese are very good workers. But we can beat them with high precision, goods that require skilled labour.
"That is where the government comes in. Train skilled labour."
If we can't train them, we need immigrants. Even ones that don't speak English
"I don't have to speak English. I read a blueprint. It's a serious problem. It has to be solved. We all give it lip service."
Learn from your mistakes
"What's more important is learn from your competitors' mistakes. It's a lot cheaper."