Family Focus: Autotec Succeeds In Several Transitions

Family Focus:
Autotec Succeeds In Several Transitions

by Debbe Skutch

Sometimes one transition is not enough.Autotec has recently been through several.With succession to the next generation came changes in culture, focus of the company, family dynamics, family location, and management style.As founder, John Schuster has sold his company to his son-in-law, Thomas Ballay.The company, the family, and the changes they have made to successfullyenhance each other tell an inspiring story.

In 1971, John had a vision, much courage and just a little luck. He left his position with an engineering firm to act on his entrepreneurial spirit and a desire to design his own machines.He had only his mechanical engineering degree, two drawing boards, a partner, and no capital to speak of. The company now manufactures machinery, mainly in the packaging industry, for customers all over the country.

John:We became Autotec because the name Automated Technologies was not available.Our primary job was to design a machine related to the cassette industry. The design progressed very well but due to the large scope of the project and limited capital, the decision was made to pursue more conventional projects.We evolved into an engineeringservice and designed machinery to enhance automation. After time, I bought out my partner.Design was my forte and the jobs just kept on coming little by little.

I wouldn’t change a thing about how I got started.I have to give my wife, Pat, a lot of credit.She was always supportive and never had a discouraging word.If I had thought about all the risk and downsides, Autotec may not have become a reality.

We have two daughters and a son none of whom were interested in working in the business or taking it over when I was ready to retire.The company had grown and my maturity motivated me to look for a buyer.

One of the Schuster’s daughters, Beth, had married Thomas Ballay. They were leading an exciting life while he was employed by Freeport McMoran, a Fortune 300 corporation.Extensive travel from the United States to Australia to Irian Jaya in Indonesia made their lives interesting yet increasingly hectic with four young children, not to mention being far from home and family.Thomas and Beth were also ready for a change.

Thomas:I had looked for years at other positions that would enable my family to establish some long-term relationships in a community.It became clear that I would have to change my career in order to change our lifestyle.

I had followed what John had accomplished with Autotec.When we heard he wanted to sell the company, I wrote him a letter expressing my interest.John flew half way around the world to discuss the possibility.Even though Autotec was a family business, I wanted the deal to be as professional and business–like as if I were any other buyer.

John:Knowing what Thomas had accomplished on past assignments with Freeport McMoran, I was confident he would succeed with my company.I still had concerns about the changes this transition meant for him and his family.Thomas was used to dealing with heavy equipment in the mining industry and was accustomed to the management style of a large publicly held corporation.But he really dug in, working long hard hours to learn more about working with the intricate details of machinery design and production and adapting to the culture of a smaller family-owned business.Being your own boss can be a difficult adjustment.

Both men agreed that keeping family issues separate from business issues was necessary.They appreciated the positions of their spouses, other family members, and non-family employees.Thomas knew he had many changes to make and the struggle was well worth the effort.

Thomas:One of my first decisions was to go back to school for an M.B.A.I also had to develop my own network of resources, suppliers and customers.I made a few mistakes through the learning process, but I began to develop my own vision.

All the while I wanted John to remain involved as much as he desired.Even though the focus of our business has evolved into more production than design, I didn’t want to lose John’s creativity and development talents.Now he just didn’t have the responsibility and pressure.

There were many advantages to buying a family business.We can make a decision and act on it immediately.Our philosophy is:

“See snake; kill snake.”We also have John’s reputation to build upon.The values, ethics and professionalism he established are the foundation of our success.

The challenge of buying a family business is that all the risk is mine.Also financial and human resources are more limited than in a large publicly held corporation.These can become advantages as well.It takes time and patience to manage a smooth transition and make the necessary changes.

John:I’m very proud of what Thomas has accomplished.Retirement is no great shock to me.I enjoy travel and my grandchildren.I maintain an office and the opportunity to be involved if we truly think I can be a positive influence.This transition has been good for my family and the business.

Thomas and John have managed to maintain the traditions they value while refocusing and expanding the company.Autotec remains a small family owned business.Many transitions have been successfully completed with results that make each proud of the other’s work.The struggle to retain the best of the past and create the best for the future is ongoing.When and if any of Thomas and Beth’s children are interested in the business, the process begins again.Autotec will continue to provide good opportunities for both family and non-family employees, the industry, and the community by good management of the company.