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Fourth Generation Takes Helm Of Grand Rapids Label
GRAND RAPIDS — According to a recent report in the Wall Street Journal, research indicates that no more than 30 percent of family-owned businesses make a successful transition from the first generation to the second. Only 12 percent survive a transition to the third generation, and only about 3 percent make it to the fourth generation.
Grand Rapids Label Co. is in the 3 percent.
One of the oldest family-owned companies in West Michigan, its owners learned about a year ago that company president Bill Muir was suffering from amyotrophic lateral sclerosis, often referred to as ALS or Lou Gehrig’s disease, a progressive neurodegenerative disease.
Muir, who had been president for more than 40 years, retired in November, and his son, Will Muir, moved from vice president to president — a seamless transition to the fourth generation.
“Even with my dad’s illness, we were able to successfully transition because it started a long time ago,” said Will Muir.
The Muir family and its cousins, the Allen and Crosby families, have owned Grand Rapids Label for generations, he explained, and the extended family has never entertained ideas to sell the company. The management team at Grand Rapids label includes Muir’s cousins, John Crosby, vice president of sales and marketing; and Steve Allen, director of sales services. Other relatives serve on the company’s board of directors.
Through the generations, “There has always been (assumptions of) a transition to the next generation,” added Muir.
The original company was incorporated in 1884; the Muir family bought into it in 1887. It began as a printing company that produced train schedules, posters — including one for a Harry Houdini performance — and books. The antique printing press still used for demonstrations in the Public Museum of Grand Rapids was once owned by the company. According to Muir, the name changed to Grand Rapids Label Co. around 1900.
The company became known for its gummed advertising stickers, labels and embossed seals, and one of the company’s largest customers today is the U.S. Postal Service, which uses about 500 million labels a year at bulk-mail centers. Distribution labels required by Meijer and Wal-Mart are also provided by Grand Rapids Label. It produces a wide variety of consumer product package labels, such as deodorant sold by Procter & Gamble and mint candies that come in small tins. It also manufactures equipment used for applying shipping labels.
The automotive industry is a customer, too. Grand Rapids Label makes many of the durable labels found under the hoods and in other concealed areas of many vehicles, bearing information such as part numbers or instructions on how to use the jack in the trunk.
Today, Grand Rapids Label is a $10 million business with about 65 employees, located on Oak Industrial Drive in Grand Rapids. Most of its production is shipped out of Michigan throughout the country.
Keeping a successful company like Grand Rapids Label in the family for so long is partly the result of family tradition, and partly the owners’ willingness to look for advice from external sources.
Crosby noted that the families have always tried to get the kids involved early in the business.
“We were all brought in to work here in the summers as kids,” he said. “The business has been part of the family for as long as anyone can remember.”
Over a series of years, the children receive gifts of stock shares, which is a gradual transfer of ownership of the company, which sends a message that gets them involved, Crosby added.
As the families grew, it became necessary to agree on guidelines for employment of family members. The young ones looking for their first summer jobs are required to start out in something where “they get their hands dirty,” said Muir. It’s a real job, too, not one created for that individual.
No family member brought in as an employee is allowed to think that “all I’ve got to do is show up,” said Muir. That is to protect employee morale throughout the company, he said, as is policy that requires a young family member to report to a non-family member on the job.
A few years ago the owners of Grand Rapids Label turned to a consulting firm in Chicago, Family Business Consulting Group.
“They really kind of helped steer us down the right path,” said Muir. “The key to the whole thing is making sure that all the (owners) are involved in the process.”
Muir said “the biggest thing is to communicate. You can’t beat around the issue, you have to get it all out in the open and keep a positive attitude. You have to remember that you’re all family, in the end, and that’s the most important part.”
“We’re fortunate. It’s a close-knit family,” added Allen.
Muir said his father’s medical condition “could have been a panic for us,” in terms of who would head the company. But it wasn’t, “because we were prepared. We had started the conversation about it” prior to the bad news.
Muir noted that there are many outside resources for family-owned businesses, because the challenges facing them are more complicated than those facing other businesses. One valuable resource here is the Family Business Alliance, a joint venture between the Grand Rapids Area Chamber of Commerce and the Family Owned Business Institute (FOBI) of Grand Valley State University.
Representatives of Grand Rapids Label attended a recent seminar at the GVSU Eberhard Center that focused on boards of directors of privately held companies such as Grand Rapids Label. Now the company is planning to add some non-family members to its board of directors.