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New Plant, Next Generation Grow McHenry Industries
AUSTINTOWN, Ohio -- A manufacturer in business for 48 years has undergone dramatic changes since its move from Youngstown three years ago, leaving the future wide open for the next generation of family owners, principals say.
“There is a different dynamic having a family business versus working for someone else,” says Ron Musilli Jr., vice president of McHenry Industries Inc. and the third generation of his family to step into the business. “I’m more likely to talk to my father about something than I would a different boss.”
His father and company president, Ron Sr., says that it’s routine to sit down and discuss issues with his son every day. “Sometimes we don’t see eye to eye, but it’s normal for us to talk and we settle it,” the father says. “At the end of the day, we always find a solution.”
Ron Sr., his son, and his daughter, Laura, are all part of the family business today. Ron Sr.’s father-in-law, Ed McHenry, started the company with $5,000 in 1964 as a manufacturer of plastic bases for commercial signage. Other family members started working in the business, and it grew from there. “It got to be pretty big,” Ron Sr. says.
By the mid-1980s, the company incorporated sheet metal fabrication into its manufacturing, enabling McHenry Industries to become a full-service wholesale signage company.
The company does work for clients throughout the country that supply retail banks, restaurants and service stations.
Ron Jr. says working with his father is productive since they both have specialties that translate well into its different operations.
“We have two different management styles, two different thought processes, really,” he says. “He’s really good at the manufacturing end of things, whereas my background is more business-oriented.”
For example, the younger Musilli says that he’s more likely to take on a job that promises thinner margins. “Sometimes my dad will say go for it, then I end up getting stuck with it,” he laughs.
Laura Musilli, company administrative assistant, says that it’s not difficult working every day with her dad and brother. “We still are able to go out for family dinner at least once a week,” she says.
It’s tough keeping work and social issues separate when it’s a family business, adds Ron Jr.
“Your mind is racing on something that happened during the day,” he explains, “and there’s the person you need to talk to across the table from you. So it’s hard not to bring things up.”
Among the more challenging aspects of keeping a family business together is convincing subsequent generations to assume the responsibility of running the company.
Often, owners choose to sell the business should the next generation pursue other career paths, Ron Jr. says.
The younger Musilli says his father approached him with the opportunity while he was studying business at the University of Akron.
At the time, Ron Sr.’s partners – two brothers-in-law – had decided to retire, and a decision needed to be made on whether to sell the business or prepare the company for the next generation of ownership.
“I didn’t want to sell and do that to the employees we had because they were too loyal to us,” Ron Sr. recalls. “We had to at least try and it worked out real good.”
The Musillis also took a creative approach to dividing the assets of the company between brother and sister. “It was hard to make a decision as to who gets what between the two,” the elder Musilli says.
In this case, Ron Jr. received the majority stake in the business while Laura owns the new building that houses the company. “It equals out,” the father says. “It’s hard, and nobody has the right answer for you either.”
It was the new ownership group that initiated efforts to expand at its former site in Youngstown on Industrial Road, Ron Jr. recalls. However, after commissioning several architectural studies, they determined that expanding at the site was all but impossible.
They then decided to construct a 38,000-square-foot manufacturing plant on Victoria Road in Austintown at a cost of $4 million. Since the plant opened in February 2010, the company’s payroll has increased to 76 from 35, and annual sales have doubled to $8 million.
“It’s a credit to those people out in the plant mostly and the staff we have out here,” the elder Musilli says. “We sell by word of mouth and the quality of our work.”
For Ron Sr., he says that one of the great rewards about a family-owned company is that he gets to see his kids every day and watch them grow in their jobs, an experience few professionals can claim.
“It’s just a joy to come to work,” he says. “So, I have no intentions of retiring.”
EDITOR'S NOTE: This story was first published in the October edition of The Business Journal. CLICK HERE to subscribe.
Copyright 2012 The Business Journal, Youngstown, Ohio.