The New Face of Linamar: The Evolution of a Brand

Gareth S. Seltzer, CEO, TWS Canada, and Past President, The Empire Club of Canada; Andrew Kurek, Senior Student, Western Technical Commercial School; Grant Kerr, Pastoral Associate, St. Paul's United Church, Brampton; Maureen Cowan, Chairman and Co-CEO, Princeton Holdings Limited; Charles Fremes, President and CEO, Edelman Canada; Rocco Rossi, CEO, Heart and Stroke Foundation of Ontario, and Director, The Empire Club of Canada; Charmain Emerson, CEO, Building Blocks Communications; and Bliss A. White, Partner, Blake, Cassels & Graydon LLP.

Introduction by John Niles

The great American poet and philosopher, Henry David Thoreau, once said, "Things do not change, but we do."

It was four years ago that Ms. Hasenfratz came to speak to us. At that time, our President John Koopman spoke of how "the modern environmentalists at that time were telling us that the car was the bane of the modern world even as the modern economist called it the core of the modern economy. Yet, he said, "...in 1911, the environmental authorities said it was not the car that was the greatest polluter but the horse--with its urban problem of rancid rotting horse carcasses and fly-infested manure piles created by the 25,000,000 horses used for transportation at the time." It was the horse that was driving the economy at that time just as the auto industry does today.

Much has changed with the passing of time, for now with the advent of the new technology for a cleaner more efficient environmentally friendly car dawning, again we are seeing that it is not the car that is the number-one polluter and certainly not a horse, but rather the cow.

Cows have been awarded the dubious honour of being among the world's greatest environmental threats according to the United Nations Food and Agriculture Organization. Livestock accounts for 18 per cent of all greenhouse gas emissions compared to 13.5 per cent for all forms of transportation.

Perhaps the auto industry can offer a further answer to this problem by ordering more leather seats for our cars and steak dinners for the buyers. Does your company make leather seats Ms. Hasenfratz?

The same month that Ms. Hasenfratz spoke to us four years ago, Dieter Zetsche spoke about his passion for the completion of the instillation of Chrysler in the division of the Daimler Company. This month we have all heard how that has worked out. The industry is not an easy one to compete in. And even as our economy remains driven by the automobile, there are only three domestic manufacturers left and these three survive only at the very tail end of a complex web of hundreds of automobile parts, components and systems suppliers.

One of those suppliers is Linamar. Like so many of Canada's great organizations, an immigrant to this country founded Linamar. Forty years ago a Hungarian immigrant named Frank Hasenfratz started the company in his garage.

Linamar has since grown to over $1.2 billion in sales and there is over $60 of Linamar content in every North American vehicle. It is apparently the only company in the world that produces every machined part used in a motor vehicle.

In 1990, Linda Hasenfratz joined the company as a machine operator. This machine operator subsequently held positions in quality assurance, engineering, production materials management and finally in the ultimate self-sacrifice, as manager of an accounting department. Perhaps this leader-as-servant thing has gone a bit too far. She also has a BSc and an MBA from Western. In 1999, she assumed the company's presidency, by then probably to her own regret, one of the best-trained executives in Canada.

Ladies and gentlemen, please join me in welcoming Ms. Linda Hasenfratz, the President and CEO of this great Canadian success story to the podium of the Empire Club of Canada.

Linda Hasenfratz

Good afternoon. It is my pleasure to be here today to talk to you about Linamar Corporation, a company that has evolved over the last 40 years of business to be a world-class, enterprising company enjoying new successes every year. I would like to share those successes with you and describe how our evolution has led us to re-brand the company to better reflect who we are today and what our capabilities are.

Linamar was founded in 1966, 40 years ago, in the basement of our family home by my father, Frank Hasenfratz. Those of you who know my father know there are few his equal in terms of his entrepreneurial spirit and drive for success. His passion and enthusiasm provided the basis for a company culture at Linamar focused on the future.

That focus has taken us from a one-man machine shop in 1966 to an 11,000-employee-strong company of ingenious people working collaboratively with our customers for solutions to their highly engineered product needs. Our customers respect us for our agile, responsive approach to satisfying their needs, whether for the precision metallic components, modules and systems of our powertrain driveline business, or the high-quality, innovative aerial work platforms our globally successful Skyjack business produces.

Today, Linamar operates 36 plants in seven countries around the world in North America, Asia and Europe. We have five product development centres, nine sales offices and generated sales in 2006 of $2.3 billion. Clearly, we have had a busy 40 years!

So what does all of this have to do with branding?

Well, let's start by understanding what a brand really is. The marketing companies out there will tell you a brand is a promise of value to your stakeholders. What that means in real English is your brand tells people who you are as a company, where you are going, what they can expect from you, and what they perceive you to be.

It sums up your culture, your strengths and your aspirations in short.

It does that in a few ways. The most obvious indicator of your brand is your logo. But your logo is only a part of the story. Your brand comes through as well in the consistency of the message that you deliver to people, in the look and feel of your promotional material, your advertising and marketing materials, in the way you present yourself to potential customers, employees and shareholders, and in the language and tone you use when you describe your company.

Sounds a little esoteric for a hard-core manufacturing company, I know.

The thing is, it is critical for any type of company to have a consistent message to their customers, employees and shareholders of who they are in order to help achieve their goals. If your customers don't understand what you can do for them and how you will approach business, you won't maximize your opportunities with them. This is particularly true for a company extending its global reach. In many areas of the world, Asia being a notable example, customers almost care more about how you approach business than what your business is. Your brand helps you explain that to them.

Branding brings a company customers, but also employees and shareholders. It is your brand that drives people to make decisions about which company they want to work for, invest in, buy from, or support.

As an example, picture yourself walking into the supermarket to buy some cookies for your kids. You are faced with more than 300 varieties of cookies. How do you choose? Normally it is the brand that drives that choice. Certain brands have a reputation for quality, others for good value, others for great taste. Your decision on the cookies will depend on the key criteria you are looking for and the brand that you know best reflects that criteria.

It is exactly the same behaviour that brings customers, as well as shareholders and employees, to a company like Linamar. Our stakeholders have choices as well, and criteria of what they are looking for in a supplier, investment or employer. If we do a good job of explaining who we are and what we stand for to those stakeholders, and our brand represents the criteria they are looking for, we have won a new customer, shareholder or employee.

So why did we need to look at a re-branding exercise at Linamar?

Well a big reason is simply how much the company has evolved over the last 40 years, and the last 10 in particular.

Historically, we were a "make to print" machining company based in Guelph, focused on mainly automotive/light vehicle business, generating millions of revenue through a focused employee base of hundreds, and later thousands of people.

Today, we manufacture machined components, but also modules and even full powertrain/driveline systems as well as mobile industrial products, such as our scissor-and-boom lifts, which utilize powertrain systems.

We still make product for the automotive market, but have become much more diverse in our market segmentation. Today, we make products for the industrial, mining, construction, marine and agricultural markets to name a few. Our powertrain and driveline components and modules can be found in light vehicles, but also medium and heavy-duty trucks.

We still make some products to our powertrain/driveline customers' blueprints, but increasingly are becoming very involved in the design of the products we produce, and of course are fully design responsible for our class-leading aerial work platform products produced at our Skyjack subsidiary. We were recently recognized by the auto industry for outstanding innovation in cylinder head design to improve fuel efficiency by virtue of being named a finalist in the prestigious Pace Awards. Our scissor lifts are regularly cited by our customers as being number one in terms of quality, reliability and serviceability.

Our global growth and organizational structure of many small autonomous plants run by entrepreneurs also led to a lack of consistency in our messaging and look, another driving force in our desire to create a consistent, high-impact brand.

We have a very exciting future ahead of us as well, with great growth opportunities in both our powertrain/driveline and industrial businesses. The automotive market is obviously a key focus for our powertrain/driveline business, and the volatility and change in this market is creating huge real-time growth opportunities for us. Similarly, our industrial business is enjoying great growth prospects as we implement our product and global expansion strategies.

Clearly, Linamar is a different company today than we were in the past, and that new company needed a new look, and a new look that could be applied consistently across the Corporation. The perception of what we are has not kept pace with what we have become.

We wanted to brand ourselves in such a way to better reflect our values, our strategy, our accomplishments, our strengths and our culture all of which have played a huge part in our success.

So how do we sum up all of this information? As we worked on this assessment, certain words began evolving, words like Enterprising, reflecting our value of entrepreneurism and our strategy of growth. We also thought of Precision--reflecting the quality of our precision metallic products, and class-leading scissor lifts and booms. We kept coming back to the words World Class--something we consistently see in our products, our design, our employees and our performance. We felt our values of responsiveness and respect, and strategy of designing and manufacturing our products meant our approach is consistently Collaborative. Our responsiveness also makes us Agile as we strive to meet our customer demands and work to improve every day, consistent with our focus on Lean, efficient operations. And certainly, our values of innovation and balancing customer, employee and financial satisfaction have led us all to be Ingenious in our day-to-day work--something you can see by walking into any of our plants any day.

We have lots of wonderful stories and examples of all of these elements of Linamar's success.

A great story about Ingenuity comes from the very first days of Linamar. My father was a one-man show in those days, juggling running a machine in the basement with knocking on doors to win business and delivering the parts he produced. As he worked on the manual lathe in the basement, he noticed his movements were happening in rhythm with the washing machine wringer working away next to him. It didn't take him long to have the washing machine disassembled and the motor installed on the lathe to automate production. Now mind you, my mother was not too impressed by his Ingenuity as it left her with no way to deal with the mounds of laundry generated by a new baby and a three year old, but my father was certainly pleased with the improvement in his own productivity, something he continues to passionately pursue today as any Linamar employee can vouch for.

I can see those lessons still in action today. Recently I visited one of our plants in Hungary, where I saw a very simple automation system in place unloading three machining centres and delivering all parts back to a central operator. The system had been designed by the plant engineers and locally fabricated for a grand total cost of about $15,000. For those of you in the manufacturing business, you know such a system would generally be quoted by an automation supplier in the neighbourhood of half a million dollars. Ingenuity is alive and well at Linamar.

Enterprising is certainly a word that comes to mind when you think of the entrepreneurs running Linamar's businesses. One of our most vibrant entrepreneurs is our company president, Jim Jarrell. Jim was always hungry to grow his business. I remember an occasion recently where Jim had been summoned to visit a customer who was looking for a price decrease on a particular part. Jim came back from the meeting and reported that not only had he avoided giving a decrease, but had actually received a price increase on that particular job and two new "Request for Quotations" for new jobs. Now that is Enterprising, not to mention Agile, Ingenious and World Class! I still haven't quite figured out how he pulled that one off!

It is the image that these words bring to mind that we wish to start to form in the minds of our customers, investors and our employees, current and future.

These words create a picture, which of course is only part of the story. The other key is the look of your message and a big part of that look is your logo.

Our existing logo, which you may be familiar with, depicted Linamar in green lower case letters in a green box. We felt we needed to make some changes. We wanted to get rid of the box--we think outside the box not inside it!

We felt the colour was not right either or the font. You can see the new look of Linamar on the materials on the table in front of you and here on the screen.

We went with the colours copper orange and metal grey, reflecting our proud history of metallic product manufacturing. Copper orange is also a dynamic colour that symbolizes the energy and enthusiasm of our employees.

The thick bold capitalized letters say we are a world-class organization, strong, proud and successful.

The diamond icon at the start of our logo reflects several things. The individual diamonds collaborate together to make up the whole just as our small entrepreneurial plants make up our company. Diamonds are strong and precise, like we are. Visually it gives you an impression of a cutting tool but also suggests the height and expansion features of our scissor-and-boom lifts. Finally, it points forwards and upwards reflecting all of us driving relentlessly towards our goals.

We kept our tag line "Power to Perform" because it reflects so well who we are. Our culture gives us the power to perform to our targets. Our hard-working enterprising people give us the power to win new business. Our ingenious systems and processes give us the power to exceed the needs of customers, employees and shareholders.

At Linamar, we live our tag line every day!

We are very excited about the future at Linamar. Opportunities certainly exist for us to drive towards our goal of being $10 billion in sales by the year 2020. Our vision is crisp, precise and focused, and powered by some of the most enterprising and passionate people working in our industry.

We have a new image of Linamar today that portrays that ambitious vision without losing touch with what has made us successful in our first 40 years. While our brand may have changed to reflect the strength and unity of our growing organization, the values that have driven our success for over 40 years remain intact.

I will wrap up today with a brief video summarizing for you our thinking around this re-brand.

A video was shown.

Thank you for being with me today to mark an important milestone in our company's history.

The appreciation of the meeting was expressed by Rocco Rossi, CEO, Heart and Stroke Foundation of Ontario, and Director, The Empire Club of Canada.