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|Articles - March 2011|
|Wednesday, March 02, 2011|
By Ben Jacklet
Josh Collins took over as CEO of Portland-based Blount International just after the worst year in the company’s 65-year history. Business had dropped off by 20% in 2009, forcing widespread layoffs. “We were looking down into the abyss,” Collins recalls. “I was observing from the board level and we were nervous. You just didn’t know how bad it was going to get.”
Collins gave full credit to his predecessor, Jim Osterman, for taking the tough steps necessary to get the company through the worst of the downturn. Then he set to work rebuilding a global business with a storied history in Oregon, the world’s leading manufacturer of saw chain and other mechanical parts and devices used for cutting.
At 46 years old, Collins is fairly young to be running a business with sales in more than 100 countries. But he was no neophyte when he took over in January 2010. He had been deeply involved with the company since he helped Lehman Brothers buy it in 1998. Prior to that he was a Marine who fought in the first Persian Gulf War and came home to earn an MBA from Harvard.
Collins went directly from Harvard to Wall Street, where he got placed into the private equity group at Lehman Brothers. One of his first clients was Blount, a sprawling conglomeration combining the Oregon chainsaw empire of John Gray with the Alabama construction and munitions empire of Red Blount. Blount bought Omark from Gray in 1985 and wanted to cash out his family’s position in 1999. “We took a good hard look and bought it,” says Collins in typically direct fashion.
Collins and his colleagues at Lehman dropped the holding company in Alabama, moved headquarters back to Portland, sold the ammunition business for a tidy profit and took the company public in 2004. Collins took a seat on the board, no longer representing Lehman but as an independent director.
Blount grew steadily after going public, but the outlook turned ominous in 2008. Ironically, it was the collapse of Collins’s former employer, Lehman Brothers, that tipped the global economy into freefall. Collins, who had nothing to do with the complex financial derivatives trading unit at Lehman that wreaked so much havoc, left Lehman in January 2008 to start his own firm with a colleague. “Good time to leave Lehman,” he says. “Terrible time to try to raise money.”
It was also a tough time to sell saw chain. The example Collins offers is Russia. In the nine months prior to October 2008, Blount closed $18 million in sales in the region. “The following nine months, zero,” he says. “No sales. Nobody had any money to buy anything.”
The first thing Collins did as CEO was to assemble a senior leadership team and gain consensus around a decision-making process that drew on his experience with the Marine Corps. “My point of view is that the decision-making process you establish is more important than any single decision you make,” he says. “Everybody in the chain needs to understand what our mission is and what we’re trying to accomplish, not just in their unit but in the entire organization. Otherwise you’re going to miss opportunities because you won’t see the larger picture.”
Collins and his team of senior managers meet for three to four hours every Monday. “We’re always thinking we’re going to get that down to an hour but we never do,” he says. “We discuss any problem, any issue that could have an impact on the company or investors.”
The next step was to run a full strategic review of the business. The process took several months and resulted in a list of specific initiatives to drive growth in three areas: existing businesses, new products and acquisitions that make a “tight strategic fit.” The company’s most recent acquisition, of Colorado-based SpeeCo in August 2010, gives Blount a huge supply of log splitters to incorporate into its global distribution network.
Collins says that if Blount stays on track with its initiatives, revenues will grow from $487 million in 2009 to approximately $920 million in 2014. “We’re on track or ahead of schedule,” he says. The company added 400 jobs in 2010, about half of them in the Portland area. It also released a new product called PowerSharp that enables chainsaw users to sharpen their saws in a matter of seconds instead of constantly having to stop work to re-sharpen. Collins predicts PowerSharp “will absolutely change our industry… This is the opportunity of the decade for us.”
PowerSharp was designed by a team of engineers based in Portland. Collins says that team and others will grow locally as Blount expands globally. “We absolutely expect to stay in Oregon,” he says. “We have an enormous commitment. We have approximately 1,300 employees in the Portland metro area and three manufacturing plants and our headquarters here. We’re not going anywhere.”
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