Volume 38, Issue 2, February 2003
The Artful Roger
An Exclusive Interview With AFG’s Roger Kennedy
by Debra Levy
Roger Kennedy comes close to defying description. The 55-year-old president and CEO of AFG Industries possesses all the qualities of a long-time Southern general. On first introduction, he is exceedingly gracious with an air of no-nonsense abilities about him. But beware too, that he can turn easily into a dedicated and focused warrior in the heat of battle. And you know early that, all civilities aside, there is a line of candor that he just will not cross.
Kennedy has run AFG, a wholly-owned subsidiary of Asahi Industries in Japan, since 1999. He was kind enough to sit down with me for an “Industry Legend” chat in late January.
Q—Well, I guess we should start at the beginning. Tell me how you got started in the glass business.
A—I started in 1980 as an executive assistant to Dee Hubbard [then-president of AFG]. I worked for Dee until his retirement in 1992.
Q—I’ve heard many stories about him. I’ve heard he is quite a character.
A—Quite a character all right, but one of the hardest working people with the highest intellect and integrity I’ve ever met.
Q—What did you do as executive assistant?
A—I wrote speeches among other things. Then I became a senior market analyst, which meant I did pure market research. This was during our “high-acquisition” period—we were buying companies left and right and AFGD [AFG’s distributions company] was growing. I had responsibility for advertising, trade shows, marketing, normal stuff.
Q—All this was Kingsport, Tenn.?
A—Yes, yes. Then in 1986 I became vice president of marketing and had to relocate to the corporate office in California.
Q—Wow, what a change—Kingsport to California. It must have been hard to come back.
A—I was there for two years, and we really didn’t want to leave. AFG did an LBO [leveraged buy-out] and I moved to headquarters in Fort Worth, Texas. In 1989 I become CEO of AFGD.
Q—That must have been quite a change in responsibility, from marketing to running the whole company., Did you ever have any doubts you could do it?
A—Oh, early on I suppose I had such thoughts. But I welcomed the opportunity, I wanted the opportunity. I have a strong personality and I perform best in high-stress situations. I did not want to be a staff guy forever and this was my chance.
Q—So was it a high-stress situation?
A—[laughs heavily] Oh yes. There was quite a lot that needed to be done. We had to do quite a bit of realignment. We went from being a distribution company to being a value-added company. You have to shift people’s thinking, or you have to shift people. But it was a good way to learn to be CEO. I learned under fire.
Q—What kinds of things did you learn early on?
A—Well, going from staff to accounting in my early years had taught me to pay attention to the details. Everything is in the details. So I was heavily involved with the details. I still am. I get into everything, from operations to sales. I am very heavily involved in day-to-day management.
Q—Gee, I would expect you to be accused of micro-management.
A—Oh, I have been, more than once. But I don’t care, it’s my own style. If people feel you are going to manage their jobs, they usually do this themselves or ultimately, they leave.
Q—What were the biggest changes you made?
A—When I started at AFGD, our business was 80 percent distribution and 20 percent value-added products. We flipped that. Today it is exactly the opposite.
Q—So how were you able to do this?
A—I had a very committed team. People who saw what we were doing and believed in it. It was a strategy born of necessity, believe me. It’s wasn’t rocket science, but it sure was a lot of change at one time.
Q—That’s usually really hard to do because you are changing cultures ...
A—Well, most of the sales force and 50 percent of middle management turned over. We had to because it couldn’t keep going that way.
Q—I just finished reading “Fortune” magazine’s issue of CEOs. It said that almost every “Fortune 500” CEO learned from a pivotal mistake he made very early in his tenure. Did you have anything like that—a failure or a mistake you learned from?
A—[long pause, deep thought]. Nothing really comes to mind. I’ve had my share of failures, oh sure, but nothing like that really comes to mind. The big thing is learning to trust your own judgement. Relying on others in those situations is tough.
Q—You took over AFG in 1999 when Jim Bradford left [to found United Glass Corp.] How did you find out he was leaving?
A—Jim and I were very close. We had worked together hand-in-hand for many years. When Dee retired in 1992, there were three of us in the running for his job. Bradford got it, and I think he was the best choice at the time.
He confided in me in 1999 that he was going to leave AFG.Then I knew I had a shot at it. I was executive vice president of AFG and the CEO of AFGD.
Q—How did you find out you had gotten the job?
A—There was a guy named Joe Cafaro, who used to work for PPG. Asahi had hired him to work for them running their holding company, AGA. I got a call from Joe telling me that I was the new CEO. The rest is history.
A—Oh yes, it was fast. Quick sell the house, move—very fast. Jim will be gone in six days.
Q—That must have been a difficult transition …
A—No, not really. I didn’t find a lot I didn’t expect. I had been going to Kingsport each week. I had been part of the senior management, so there were not many surprises.
The one “surprise,” if you can call it that, that I found was that the people were much stronger than I thought they were. I had underestimated how deep the talent pool was there.
Q—Was your family okay with the move?
A—My wife, Martha, is very supportive. She is from the Tennessee region. We don’t have children and we had moved so much over the years that she never really got too attached to a home. We have built one for our retirement that we are attached to. It’s right on a golf course.
Q—So what are your retirement plans?
A—I have no plans for retirement. I don’t plan on retiring anytime soon; the job brings me too much enjoyment.
Q—Let’s talk about what it’s like to work for Asahi and how much involvement the company has in your operations.
A—As of April 2, we have a new structure. Asahi has formed a flat glass company, headed by Luc Willame, who came over from Glaverbel, where he was CEO. He understands the glass business. He is CEO of the new flat glass company. I am CEO of North America and report to Luc. He reports to the president and CEO of Asahi.
Q—Why do you think this new company was formed?
A—Luc is trying to develop synergies in key areas: hr [human resources], purchasing, R&D, business development and the like. I have known Luc for 13 years, dating back to when Glaverbel had interest in AFG. Asahi saw global competition evolving, especially in automotive. We were rather fragmented before. This [the reorganization] makes it clearer for investors to understand.
Q—What do you think are the biggest problems facing your customers?
A—We are in a poor economy. I don’t see tremendous improvement quickly and forecasting anything beyond a year is like throwing dice. I don’t see commercial construction returning until 2004. The distribution/fabrication side will have a very difficult year. Residential and automotive are doing okay, but have experienced some slowing.
Look, I want to be optimistic, but I don’t believe commercial construction will come back quickly. What bothers me is the uncertainty, and we don’t know about the material effect it will have on the world. The Iraq situation is taking away our focus on the domestic economy.
Q—What about problems your company faces?
A—AFG is under constant pressure to improve the return to its shareholders. With the slowing economy, we have the same problems as most companies … high medical insurance costs, pension funding issues and energy costs.
Q—There’s been a lot of hype about the new “self-cleaning” glass products. I know AFG has introduced a product in this field, too. What are your plans for it?
A—I am not very enthusiastic about the product in total. I think that, at least initially, the way it’s marketed is not right. We have it available because our competitors do, but it’s not high on the radar screen. Window manufacturers are not knocking down our doors for it.
Q—Well, if not there, where do you think the future lies?
A—In coatings that improve energy-efficiency—we have a new coater and we are just announcing a new line coater to
be placed in Abingdon, Va. More and more energy codes are driving the types of products we make.
Q—Anything else you’d like to tell our readers?
A—No, I think that does it.
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