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Executive Q&A

For Ariens Co., weather trumps economy

Luisa Acosta (foreground) and Judy Behnke conduct final assembly work on a snowblower last week at Ariens Co. in Brillion.

Mark Hoffman


As winter approaches, demand for snowblowers exceeds projections

Dan Ariens is president and CEO of Ariens Co., an outdoor power equipment manufacturer founded by his grandfather and great-grandfather in 1932, originally making tillers for the agricultural market.

He joined the family business in 1983, starting in the marketing department, and for the next 14 years worked in nearly every facet of the company, including sales, engineering and manufacturing.

In 1998 he became president and chief executive officer.

A proponent of lean manufacturing principles, Ariens has been a recipient of the Eli Whitney Productivity Award from the Society of Manufacturing Engineers. He is frequently tapped as a mentor by organizations promoting lean leadership.

Since 2000, Ariens has been a board member of the Outdoor Power Equipment Institute, including a term as chairman.

He is heavily involved in the Wisconsin business community, serving on several boards for educational groups, companies, and economic development organizations including the Wisconsin Economic Development Corp. and Wisconsin Manufacturers & Commerce.

He is also on the executive committee of the Green Bay Packers board of directors.

Privately held Ariens Co. does not release sales figures but said it's one of the market-share leaders in two-stage snow throwers and is a smaller player in the lawn and garden equipment business with larger competitors such as Toro and John Deere.

In an interview, Dan Ariens talks about the outdoor power equipment industry, the economy, manufacturing and employment.

Here are excerpts from that interview:

Q. As we head into winter, what are your thoughts about the health of the outdoor power equipment industry and snow removal products?

A. In a word right now, it's panic in terms of demand. It is exceeding all of our projections and is exceeding just about everyone's estimate for what we thought would be a strong preseason. We are struggling to build enough product right now as fast as it's being consumed. We are setting production records daily, and we still are not getting enough out.

In the last couple of winters, the seasons were strong enough and long enough where most manufacturers ran out of product. So when someone can't get a snowblower when they want one in January or February, they aren't going to miss next year and will start buying in June and July.

Q. Overall, how do you feel about consumer confidence?

A. We actually think consumers are more confident than the numbers show. We had a very strong summer and fall for lawn mowers and lawn equipment, and we are having a very strong fall for snow equipment.

I think consumers are in two camps. They are not very confident about the direction of the country, and that's related to policies and taxes and regulations, but in their own case I think they are feeling that, if they've survived the downturn and haven't lost their job, they are OK.

Q. Ariens products cost more than some others that don't last as long. How do you get people away from the disposable products mentality?

A. Our brand promise has been about products that last a long time. We have snowblowers that are still performing 25 years later. We have a lot of product that was built in the 1960s and is still running. We still design our products so they are repairable.

But Americans want American quality at Chinese prices. That's just the nature of free enterprise, to pay only as much as you have to but wanting the most value for the dollar.

Q. Your products are made in the United States. Why not Mexico or China?

A. I am a pound-the-fist-on-the-table kind of guy who says we won't do that. It goes back to the early 2000s, when this business was in tough shape. We needed our folks here to get engaged in making this a better business. I couldn't do it on my own.

So I made a commitment in 1998 that we were not going to take jobs away if we made productivity improvements. We redeployed, cross-trained and became a smarter manufacturer, but we did not run to China.

We have brought work back from China. In 2000, we were buying things there that we now make in our plant, such as components, shafts and castings.

Q. How do you compete with much bigger companies, such as Honda?

A. We can look at Honda, John Deere, Toro, Briggs & Stratton, all of the big companies. But if we spend our time worrying about that, we aren't going to focus on where we need to make improvements.

We are up against big companies. There are some in China that are out to eat our lunch. I always tell people here: 'They want your job and they want my job. They want to be us.'

But our business is something like a professional sports team. Right now the Packers are on top, so everybody wants to beat them. But the Packers can't look at everybody else. They have to look at themselves and say what mistakes did they make last week and what do they have to improve on when they practice this week.

Q. How troubling is the European economy for Ariens?

A. It's a concern, but in our product category the Europeans are very particular about what they buy. They are very thoughtful consumers.

While an American consumer may choose disposable products, it's absolutely not that way in Europe.

And the European economy is something like the United States in that some states are doing better than others. I had an economist tell me he doesn't think anything major will happen in the European Union until 2013, when a treaty among euro trading partners expires. It calls for the developed countries, such as France and Germany, to subsidize or support the euro. In accordance with the treaty, they are bound to support it until 2013.

Q. Does weather trump the economy in U.S. snow removal equipment sales?

A. For us, the outdoor power equipment industry, the economy really started to fall in 2006 and 2007. What was happening then was consumers had overspent their ability in buying homes, and they weren't putting anything in the garage or the living room. There wasn't any furniture in the house, but they had the big house.

In 2006 and 2007, definitely the economy trumped the weather because we had heavy snow in the Midwest but we didn't have a great year in snow equipment sales.

We started to see a rebound in late 2008. Today I think we are through the malaise, and I would say we are back to the weather trumping the economy in snow equipment sales.

Q. How do you find the employees you need in a rural area surrounded by some big manufacturers, such as Oshkosh Corp. and Manitowoc Cos.?

A. We want to be the No. 1 employer wherever we have a location. So I like to think we have been promoting this idea around the Fox Valley that Ariens is a great place to work.

We do a lot of things, but it starts with saying 'let's have a good attitude.' We expect people to become engaged in this business.

I don't care if you come here to clean bathrooms or to be the next CEO. This has to be a place you really like coming to. It has to be safe, clean and a place that challenges your intellectual curiosity.

Q. What are some things you do to develop talent?

A. We have to develop everyone at every level. If you are an assembler, we want you to grow into becoming the next assembly leader.

We have a lead intern system, where we take someone off the production line and put them through our own classes to get them involved in leadership. They volunteer, and we take about six people a year. We have had managers, assemblers, welders, punch-press operators in the program. In six months we put them through classes, getting them involved in leadership, and hopefully they will be the next leaders in our company.

And in Brillion, the high school is working out fantastic with interns in engineering. We have sent a lot of these kids off to engineering colleges. The hope is that some of them will come back to work here someday.

We have had students in their junior and senior years in high school actually design some parts that are on one of our products. We have an engineer that oversees the work, and the students take it to the lab, where they make a prototype. Then we help them test it and put it into production. So the students go through a whole product development cycle.

© 2014, Journal Sentinel Inc. All rights reserved.

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