Volume 34, Number 3, March 1999

 

The Great Philosopher

by Debra Levy

In another life, Russ Ebeid might come back as a Jesuit teacher. Ebeid, president of the glass group of Guardian Industries of Auburn Hills, MI, is a quiet pontificator just as likely to respond to a question with a question as with an answer. He is a master strategist with an extensive knowledge of glass manufacturing throughout the world. Ebeid can rattle off the location of just about every float plant in the world, and its owner, with Pentium processor speed. Spend a few hours with him and you’ll get the impression that no one has a better finger on the pulse of international glass manufacturing than he does.

How the son of Lebanese immigrants came to run the third largest glass company in the world is a Horatio Alger story to be sure. But the deeper paradox is in how a master philosopher reconciles his work for a company that has a reputation, by its own admission, of not following the rules. The 67-year old Guardian began as a small windshield manufacturer in Detroit, MI, and has grown to one of the world’s largest. Its products include Fiberglass, automotive trim and mouldings, an optical imaging system and glass. The company is owned by William Davidson, whose family founded it in 1932. Davidson took the company public in 1965 and then bought it back in 1985. Generally considered to be one of the best run and most profitable glass companies in the world, Guardian faces a number of challenges. It lost the head of its European operations in the plane crash that also killed Secretary of Commerce Ron Brown in 1996. It is believed to be watching the anticipated sale of Belron, or its U.S. company, Safelite, with more than a passing interest (See January 1999, USGlass, page 9).

Ebeid’s office offers some interesting insight into his personality, as he has only one drawer with paper and files. "I figure if someone sends something to me and they don’t think it’s important enough to keep a copy, then why should I?" he asks theoretically. He works from a table with four chairs rather than a desk ("so everyone can feel equal") and decorates the office with memorabilia from Guardian plant openings and visits to its locations abroad. USGlass was fortunate to spend an afternoon with Russ Ebeid in his offices in late February.

When you were at Glass Week two years ago, you were on a panel with other glass manufacturers. Each person was free to talk about whatever he wished. You decided to talk about hiring good people. You said there were three things you looked for when hiring . . .

I think I was talking about how to make judgements. How do you judge a plant? By its size, its productivity or what? I judge the capability by its housekeeping and safety record. A safe plant is not inefficient. If you have a manager who worries about that level of detail, then the big stuff is getting done. A good plant manager is spending 80 percent of his time on people, five percent on profit and 15 percent on everything else.

In the glass industry, a lot of people move around and there is not a lot of fresh blood. There’s a lot of retreads, and we don’t usually want them. So I don’t interview for qualifications. Resumes are among the second biggest lies there are. How many people say "well, I got fired"? When I read the resumes of those people, I have to ask myself –"with all those qualifications, why didn’t they keep you?"

So, what I said at Glass Week is that I look to where a person came from. Their training is of moderate importance. Seventy percent of what we need is character. Training and the rest will only effect 20 percent. I want to know if the guy is a child of immigrants. Did he have to work hard and fit in? Resumes count for very little.

That’s where I was going. How would you answer those same questions about yourself?

My parents are immigrants from Lebanon. My Dad worked piling rocks there for many years until he had someone write and pin a note on him saying "Get me to Detroit." He came here with nothing. He eventually started a potato chip factory, worked as a sheriff and a die maker too. After working here 15 years he went back and brought my mother over.

We were raised under the European rule which was "make life better for your kids." We didn’t have—or worry about having—$100 tennis shoes. I wore homemade suits to school everyday from the age of five on.

That must have caused a bit of a stigma.

I didn’t feel bad about it, because I was the best dressed kid in school.

Did you work in high school?

I wasn’t even 11 when I started peddling newspapers. I sold shoes. I worked for 45 cents an hour at a discount store. You meet all kinds of people and characters there. Learning how you maneuver people into buying something was good experience, even if the pay wasn’t.

I worked for a dry cleaner. I would pick up and deliver uniforms to military bases. I also did electrical wiring. I always had at least two part time jobs growing up. I also played baseball– loved baseball–basketball and golf (I even shot an 82) and I caddied at a prestigious Detroit country club.

You were obviously working hard but spending time with the affluent. Was that a bit of a culture shock?

You learn there are two types of rich people. They always travel in packs—snobs with snobs, nice with nice. The distinction between how they had obtained their wealth, whether it was old- or earned- money, was always interesting.

I assume you eventually graduated and went to college.

Yes, I went to a co-op school for five years. You worked one month and went to school one month. It was great experience. I went to Kettering University in Flint, MI. The co-op program took me to General Motors where I worked in a different department each time. In four years, I had 24 different experiences at GM.

I also studied electrical engineering because it was the toughest course work and I wanted my money’s worth (laughs). So after five years and one thesis, I got my bachelor’s degree.

So you were destined for GM?

I went to work for GM full time and stayed there until 1970. I worked in engineering, maintenance, production. I was a supervisor . . .

I also went to night school and got a Master’s degree in Industrial Engineering from Wayne State University. I thought I had it made–I was a senior mechanical engineer.

How did you come to join Guardian?

I started with Guardian in 1970. I was the afternoon shift superintendent at GM and had 200 tradesman and several foremen working for me. One foreman was the father-in-law of a guy named Ed Sczesny.

Ed was legendary in this business. Anyway, this foreman was an old Navy man and he said "You know, I’ve got a son-in-law as crazy as you are. He was a big shot at Ford and he went to work for this schmucky company Guardian. I want you to meet him." Now at the time, Guardian was building the Carleton plant. So I went out to have a hamburger and a beer with this guy’s son-in law Ed . . .

This had to be a big decision, since you already had the responsibility of marriage. How could you leave the security of GM?

The higher you go at GM, the more policy books they throw at you. I was now 30 and at the point where I needed to shut my mouth and buy into it or leave. They [GM] were treating me great. But the higher you go there, the more the walls start closing in, so I was ripe to leave.

I had married at 21. I had four children by this point, but my head was ready to leave. So one Sunday I asked my wife to go for a ride. We rode and rode and just happened to end up in Carleton–farmland then. "Gee," I said, "isn’t it nice here? "Wouldn’t you like to have a house here?" My wife just looked at me and said "You’re up to something." So I told her. She said I was crazy, that this building wasn’t nearly as big as GM’s. Then she stopped talking. All the way home she didn’t say another word. She really didn’t say anything else to me about it, but she did talk to a few neighbors. When one of them told her to relax, that Russ knows what he is doing, she did.

That was 28 years ago now. And that’s how I became Carleton’s second employee.

So what did you do at Guardian?

I had a bunch of jobs. I was superintendent of maintenance and plant engineer for two years, production manager for two years. In 1978, I got to be plant manager of the plant in Kingsburg, CA. In 1981, I became vice president, then president of the glass group in 1985.

Did you have a career path that you were trying to follow?

When you come out of school, you have life goals, plans and ambitions. But I’ve found that life travels in a three-year cycle. It’s better to stay light on your feet because of it. The world changes too quickly. Planning beyond three years has little value. Who would have forecasted the situation we have today? I don’t usually plan more than three years out, because everything will be so different.

I’m curious as to how you work with Bill Davidson [William Davidson, owner of Guardian]. How active is he in running the Glass Group?

I make 90 percent of the operational decisions. He never says "change this" or "do that," but he always asks the right questions. He is not very involved in day-to-day activities. He is very knowledgeable but he doesn’t interfere . . . and he gives me a nudge when I need it.

How does he interact with you and with the company?

He goes on patrol. He will come in to the office and make his rounds. He will sit down and we talk. He has a demeanor that says "I know what I want," and he is very principled. He sticks to the principle that "this too shall pass."

While preparing for this interview, I did a bit of research, of course, and would like to read you an excerpt from Hoover’s Online. "Guardian president and CEO William Davison owns 70 percent of the Detroit Pistons and has a reputation for playing rough–he uses such tactics as hiring top people away from rivals and aggressively copying the glass technology of competitors." Others I talked to seemed to confirm this description. A few even called the company "ruthless."

Ruthless? Those [employee-stealing] stories really don’t go with Guardian. We’ve seen other companies steal our employees, milk their brains and then fire them. We tell them they shouldn’t go there but sometimes they go anyway.

Let’s talk a bit about your auto glass business. Guardian has thus far resisted the temptation to develop a network or referral service such as PPG did with LYNX Services. Is this a philosophical decision?

From a customer viewpoint, we promote independence. We would like your business, but we don’t want to create a hammerlock on it.

But I would think your customers are losing a lot of business, especially insurance business, to larger chains. Don’t you see this as a trend?

The insurance companies have got to be a bit skiddish about the arrangements they currently have. They must wonder if they are sleeping with elephants or true partners.

LYNX does give insurers an alternative to this consolidation. But where does the insurer go otherwise? What do they do in the future?

You have some retail locations and there are always rumors that you’ll be expanding.

Yes we have retail locations, but no we are not actively buying. We keep those branches to keep a pulse on what’s going on out there . . . that’s why we have them. We have them for intelligence purposes and we do it [run those retail locations] in ways that don’t threaten our customers. Why would I want to get further into a downstream business? In larger companies, the sharp guys always get promoted; the weakest people are always the ones in front of the customers. I don’t want to be in that situation.

Does Guardian have an interest in a company called Duncan Systems?

Duncan? No I don’t know them. We don’t own them, not involved with them.

There have been quite a lot of rumors about Guardian owning Duncan, your expansion etc. You sure get hit with a lot of rumors. Any idea why that is?

It’s the mystique of Bill Davidson. Here is a man who personally borrowed $300 million to do what he set out to do. The guy took on Pilkington. He is Jack-the-giant-killer and many things are attributed to people of mythical proportions.

You are involved with Apogee Enterprises, are you not?

Not true. Now we did own eight percent of Apogee for awhile. That was our effort at a long-term relationship. We would have liked it to be a 50-50 relationship but they didn’t want it. They passed a poison-pill resolution and we took our cards and went home. The relationship ended.

Do I detect a twinge of regret?

Their Viracon division does a pretty decent job and they make a decent set of coatings. They have been on the front end of the coatings curve and done a good job of it. But they also got burnt by overextending themselves. Their backlog is too high right now. They got beyond their britches and took a bath at their Harmon division.

Coatings, I believe, will be the most exciting part of the glass industry in the next millennium. There’s a million permutations of coatings out there and many more to come. How many elements are there? We’ve only used a few for coatings so far. Every area has distinct geography and coatings are tailor-made for such differences. So Viracon would have been a nice fit for us, but it was not to be.

So how are you positioning yourself as a coater?

Carleton is being upgraded. We are purchasing new equipment for Corsicana, TX. Our location in Germany has a new coater. There’s a lot happening in Brasil.

When I travel worldwide, I see Guardian receive a tremendous amount of respect. But the situation is not the same domestically.

It isn’t?

No, I would say it’s very different. Guardian does not receive the same amount of respect stateside as it does worldwide. Why do you think that is?

We broke up the clique. We don’t play by other people’s rules. We earnedsome of our reputation out of not following the rules. Here we are a maverick and mavericks don’t typically get a lot of respect at first. The rest of the industry has its "pattern of conduct" yet we come in like a raging bull. But if you talk to our customers, you’ll find they are happy with us.

This plays out one way internationally and another way here. I was at a dinner recently with some of our customers and a lady from Argentina came up to me with tears in her eyes. She wanted to thank us, thank us for coming to her country and –these are her words–thank us for freeing her from the cartel.

So why didn’t PPG make it in Europe?

My opinion? Because they rotated people in and out. Both Archinaco and Boswell were over there for a three-year period and they knew that going in. Now you might work productively for one of those three years. The first one is spent getting acclimated, moving, accessing. Do you start anything new in the last year? Probably not. So they didn’t have continuity of management.

We give people job assignments abroad with indefinite time lines. We tell people "You’re going to Thailand for us. I don’t know for how long. But if you do a good job and ask to come back, you can come back."

PPG [in the US and in Europe] was really two separate companies. They did things so differently that I can’t believe they were part of the same company.

Guardian has been very active in trying to open up the Japanese glass market to manufacturers from outside Japan. These efforts are not generally considered too successful as yet. Do you think this will change in the near future?

It’s not going to change soon. They need a catastrophe over there to get things to change–and a government that will stick to the issue for awhile. Japan is one of the worst places to make glass. I visited one of Asahi’s distribution centers awhile back and it was appalling. They were putting Chinese glass on Asahi racks and selling it as a domestic product. But they do hawk detail more than Americans, but not nearly as much as the Germans do. Japan needs to have the right combination of economic crisis before we will be able to make any breakthroughs. But when it comes, we will really push. If the economy is relatively healthy, they will stick to what they have. It has been a great disappointment for us.

You also faced quite a challenge internationally in April 1996, when David Ford was killed. I can’t imagine how you handle such a personal and professional loss at the same time. That must have been very, very difficult.

[Long pause]. You grow up together. We’d been all over the world together. You spend a lot of time with someone that way, you really get to know them. I was, ironically, coming back from a funeral when we heard the news was not good. We had early information from the government that there was little hope. But I was in denial for almost a week. He’s David Ford, I thought, he always comes back. He’ll come around the corner any minute. It really took me until we met the bodies at Dover Air Force Base to believe that he was gone. His eulogy was one of the hardest things I ever had to write . . . I just got quiet for a long time.

But you also had to contend with a European operation without a leader.

First, we certainly missed him in Europe. Now we had this vacuum . . . still do in a way. We appointed a successor who did relatively well once he learned the game.

It has been interesting to me that almost every time there has been a change in the channels to market Guardian has been the instigator. I imagine you take quite a bit of heat for that.

Look, we messed it all up for them [the other glass manufacturers]. We broke up their party and didn’t play by their rules. Now there are two ways to look at this. First, it has never been our intention to harm anyone, but we have gone into markets in somewhat unorthodox ways. What am I supposed to do? Stop because we’ve rained on their parade? If our style was bad, we wouldn’t have customers that way. And if we get lame or slow or dumb, our customers will leave us.

What do you think of Cardinal’s entry into manufacturing?

We were a fabricator before we had a float line. This has happened as well many times in Europe. It’s not that unusual. Cardinal is big on insulating glass. They focus on Anderson and have honed and honed their business to meet the needs of that customer.

Guardian has no real equivalent to PPG’s Starphire® glass. Do you have any plans to manufacture a similar product?

Why should we? PPG is closing the plants that make Starphire. This means the product couldn’t stand alone. There’s a limited market for it. It has higher pricing, so maybe there are higher costs. . . look, I’m not going to knock it. It’s a good product, but it doesn’t have enough value for us to make something similar.

What do you think about AFG’s entry into the auto glass market?

The AFG entry into this market will cause changes for sure. But you also need a whole set of services for the auto glass business that you don’t need for commercial glass. With auto glass, you just don’t send blueprints electronically in the mail. You need to have a connection and a relationship with your customers. It will take them a few years to develop that, so I don’t see much change in the short-term. But once they have built these relationships we will see a change. They say their intention is to service Toyota. It will take a few years for them to be a free market threat.

Finally, who, outside of family of course, would you say has had the greatest influence on you?

Sister Paraclita no doubt. I was a jokester in high school. Oh, I didn’t do anything malicious, just aggravating and annoying. I had to be the prankster. Sister Paraclita had an interesting way of handling me. She just came and, without a spoken word, stood next to me, all the time. She thought I could do better than I was and she was right. She made me see it by just standing next to me. Sometimes that’s all it takes.


USG

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