Driving north out of Indianapolis on Interstate 69, it's not hard to see why this sprawling metro has become a component and panel framing mecca over the past several years. Subdivisions nudge elbows and stretch to the horizon, sprinkled with brand-new, super-sized and suburban-friendly Best Buys, Borders bookstores, multiplex movie theaters, and The Home Depots. Drive a good 30 miles out, however, and the cornfields begin replacing construction sites, the Pulte Homes and Trinity Homes freeway signs dwindle away, and the small-town Indiana made famous by singer John Cougar Mellencamp takes over. It's here, in towns like Anderson and Marion, where a building material dealer can make a real-life impact on its employees, customers, and community, and where the effects of industry consolidation—for better or for worse—are often felt the most.
In Marion, now-defunct Wickes Lumber operated a location for more than 20 years on West Second Street, selling to custom home builders, repair/remodelers, and consumers who, if not farming, likely spent their days at either a Thomson Electronics plant manufacturing picture tubes for RCA TVs or at a General Motors metal fabrication plant making fenders for the Detroit-based automaker. In March 2004, however, the last of 4,000 workers were given their walking papers as Thomson Electronics shuttered the tube plant. To make matters worse, word was spreading fast that Wickes was in bankruptcy and was likely going out of business. At an auto parts store across the street from the yard, a sales marquee read “We Believe in Marion!” but business there and elsewhere in the town seemed less than brisk.
“We just had RCA shut down and a bunch of people were losing their jobs here [in town],” says Kelly Rowling, an inside salesperson who worked the Wickes counters in Marion throughout the Vernon Hills, Ill.–based company's voyage through Chapter 11 and its eventual liquidation of all remaining locations to Redmond, Wash.–based Lanoga's United Building Centers (UBC) and Home Lumber divisions, Broken Arrow, Okla.–based Hope lumber and Supply, and Avenel, N.J.–based Bradco Supply Corp. “The rumors and the gossip on the street were bad,” Rowling says of the business atmosphere in Marion last spring. “We had some coworkers quit and go to the competition, and everyone in town was saying we were going to just close down.”
With a bankrupt Wickes in ultra-cost-cutting mode, squelching the rumors that Marion's hometown lumberyard was going the way of Thomson Electronics was difficult, to say the least. “We had been so financially strapped, with very low inventory levels, that it was extremely hard to service the customer,” says yard manager Jack Sherron. “For the past several years there had been so much cost-cutting [at Wickes] that there really was no support. The business in Marion is all custom and repair/remodel and consumer, and the general attitude had been to hold tight rather than spend on new construction.” According to Sherron, Wickes also focused almost exclusively on production builders during its final years, a model that was not conducive to more rural locations like Marion.
Then the call came through in early summer that Wickes was indeed going out of business, but that the Marion location would at least survive, albeit through acquisition by Lanoga's Winona, Minn.–based UBC division, an entity that was still virtually unknown to the Indiana market. “I'm glad they didn't just lock the doors and leave everybody hanging,” says Rowling. “I'd hate to see us going away after all these years. But we were all a little bit nervous [about the acquisition]. Business had been really rough, especially for our sales reps, and there was no energy behind us.” To alleviate some of the jitters and apprehension, Rowling and others at the Marion store called Wickes locations in Wisconsin and Michigan that had been absorbed by UBC in a separate 25-unit deal completed in October 2002. According to Rowling, the inside info was very encouraging, and although staff members were still concerned about more change, opportunity seemed to be looming in the future for Marion's lumberyard.
Been There “Consolidations are always apprehensive,” confirms Dan Rudolf, who managed the Jackson, Wis., Wickes location before UBC acquired the yard in the 2002 deal.(Rudolf did not speak directly with Marion employees.) “The first couple of days you wonder, ‘What's going to happen? Who are these people? What is this company?'” Rudolf says that in his 20 years at the Jackson location, he's been through three acquisitions, though two occurred in his first years as a part-time salesman and he recalls little change other than the company name on the door. As a manager who endured the 2002 UBC buyout, however, he can relate to the mood shifts between apprehension with excitement and uncertainty with hope his colleagues in Marion may be going through.
Rudolf's advice: Hang in there just a bit longer. “The last two years were pretty rough on Wickes employees and managers just because of the financial difficulties they were put in on a daily basis. There were employees who were very fearful about what the future was going to be like.” However, Rudolf quickly found that UBC lived true to the corporate acquisition strategy of its parent company Lanoga to make acquisitions based on a strong match in business culture and the promise of greater strength in combining scale with local market talent.
“[Lanoga and UBC] do a lot of homework, they don't just acquire anybody,” Rudolf says. “That says to us, ‘You know your staff, you know your customers, you know your market, we don't know them like you do, so we're not going to come in and tell you how to run your business.'”
In both the 2002 and 2004 acquisitions, the corporate cultures between UBC and Wickes were surprisingly similar, according to Lanoga vice president of market development George Finkenstaedt. “The Wickes locations were built on a hard and honest work ethic,” Finkenstaedt says. “Lanoga is focused on taking the successes of the acquired company rather than trying to [import] success, and these were top-performing locations as well, so they fit in quickly to the high-performance atmosphere at UBC. I don't know an exact percentage, but a very high percentage of management and sales have stayed on.”
For Rudolf, UBC relieved his yard's anxieties by making immediate capital investments in inventory and vehicles. “I had been waiting years to be owned by a financially strong company,” he says, “and within a week we became much more comfortable with the acquisition. Obviously, they tweaked a few things [including computer systems], but primarily UBC is asking you what you need to help your location go out and be a hitter in the market.” Since the change of ownership, Rudolf estimates that the Jackson yard has become one of UBC's top four locations company-wide.