- change ups
A track record of making things happen
The new Hines Building at the main intersection in downtown Muskegon isn't called that because Larry Hines owns it. It's because he helped make it happen.
Hines, whose business headquarters is in nearby Norton Shores, is an archetypical entrepreneur with a long track record of making things happen in business and in the Muskegon community.
He serves on the boards of the Muskegon Museum of Art and the Mental Health Foundation of Western Michigan. He served as the chairman of the Community Foundation for Muskegon County and was on the board of The Employers’ Association.
He donated $100,000 toward the construction of a new home for the Muskegon Area Chamber of Commerce — which became the Hines Building. He also donated $100,000 to Mercy General Health Center for cancer care and $50,000 to Harbor Hospice.
Recently, he volunteered to help a group of Muskegon County human service agencies raise millions of dollars to buy and renovate a large vacant building — a former supermarket, actually. He started the fundraising campaign with $100,000 from his own pocket. Today, Tanglewood Park is a reality.
He said that as a taxpayer, he loved the idea of helping find a new home for the four agencies where they could save hundreds of thousands of dollars a year by sharing some of their basic costs.
Hines sees opportunities where others may not.
Founder and owner of the privately held Hines Corp., a holding company, he sums up his business strategy succinctly: "We buy underperforming companies and fix them."
Today he has found and fixed a number of companies that together employ about 750 people, almost half of them in West Michigan. Two of the Hines Corp. companies, Bennett Pump and Johnston Boiler, are among the famous old names of West Michigan industry.
Hines was raised on a farm near Sac City, Iowa, and attended Drake University, where he earned a degree in finance. After graduation, he worked for White Consolidated Industries for eight years in accounting and finance. At that time, White was buying underperforming companies and turning them around, and Hines was a member of that corporate team.
The acquisition business "tickled my fancy," said Hines.
Next, he was recruited by McGraw Edison in Chicago, where he was in executive positions at several of the corporation's divisions, including SpeedQueen and Bussmann. He eventually was named president of McGraw Edison's Clarke Floor Machine, which was based in Muskegon at that time. That was in 1982, and he has lived in the Muskegon area ever since.
After eight years with McGraw Edison, Hines went on his own in 1985 to form the Hines Corp. Since then, Hines Corp. has held more than a score of companies, including Pacific Floor Care, Johnston Boiler, DynaTorque, Plymouth Industries, Garlock Equipment, Garlock Safety Systems, Russell Dean, Cimline, U.S. Floor Systems, American Coil Spring, Silver Bullet Manufacturing, Bennett Pump, Stickle Steam, E&S Valve, AM Roof Systems, Michigan Spring and Stamping, Kimble Mixer and Kimble Chassis Companies, EQUIPT Manufacturing, Duraco Industries, Shanghai Bennett and Shanghai Pacific.
Some, such as DynaTorque and E&S Valve, have since been sold, but there are still currently about 16 companies held by Hines Corp.
He is always looking for businesses that are underperforming but that can be transformed through operational improvements and financial discipline. He looks for manufacturers and distributors serving commercial and industrial customers in mature markets — no consumer products — with sales of $50 million to $150 million.
Finding a prospective underperforming company to acquire is "hit or miss — a real imperfect process," said Hines. Some are suggested to him by business brokers, bankers and lawyers. Some he hears about elsewhere and decides to pursue, after having done due diligence.
There are several reasons why a prospective acquisition is underperforming. One might be because of aging ownership, or it is underfinanced, or it has not evolved with time and is now producing the wrong products for the market in which it is trying to compete.
The Hines Corp. team doesn't take the plunge in buying an ailing company without first giving it minute scrutiny.
"Usually, if we can't figure out what the problem is and what to do to fix it, we don't (acquire it),” he said.
He became familiar with Pacific Floor Machine, Hines Corp.'s first acquisition, when he headed Clarke Floor Machine, a competitor. Later, when he left Clarke and bought Pacific, he moved the company from San Francisco to Muskegon because this area is centrally located in the main U.S. floor machine market, he said.
Being totally involved in a small independent company was a learning experience for Hines, after spending 16 years in major corporations.
"You have to wear a lot of hats, learn to do a lot of things," he said. But when the Hines Corp. does acquire a company, it takes a hands-off approach on day-to-day management of that company.
"Each company has its own president," he said. "We're very decentralized," he added. Each president "runs the company as they see fit, day to day."
His second acquisition was Johnston Boiler in nearby Ferrysburg in 1987. Johnston Boiler was founded in 1864 to make boilers for boats hauling lumber from West Michigan to Chicago, eventually becoming very well known in the steam boiler industry. But when Hines came on the scene, Johnston was owned by a British conglomerate that was trying to sell it.
"Eventually, they decided they were going to shut it down," said Hines — but the Hines Corp. managed to buy it before that happened. Johnston Boiler now employs about 75 or 80 people.
Hines Corp. acquired Bennett Pump Co. in 1998. One of the oldest names in the petroleum dispenser industry, Bennett Pump was founded in 1919, becoming known around the world for decades in the design and manufacture of gasoline pumps. Today, Bennett Pump has some of its production in China and serves markets in over 90 countries. It is still one of the world's best-known component and dispenser suppliers in the industry.
Hines said the typical American sees China as an economic threat, but he noted that doing business in China was what saved Bennett Pump. The weakness of the U.S. dollar in comparison to the euro and yen puts America in a better position to compete for exports to China and other Third World markets, he said.
U.S. companies that can export "are pretty strong right now," he added.
It was about 10 years ago when a surge of U.S. companies began manufacturing products in China for the U.S. market, Hines said.
"To use (China) as a low-cost supplier for the U.S. — I think that's short lived," he said, adding that there are already signs that manufacturers are moving production from China back to the U.S. and to Mexico.
As for Hines Corp. overall, 2007 was "a wonderful year," said Hines. This year, too, was very good up through July, but then Hines began seeing "some degree of slowdown."
The home mortgage industry problems were inevitable, said Hines, because of "hype and bullshit" that was similar to the frenzy of investments in dot-com companies 10 years ago.
LARRY W. HINES
Company: Hines Corp.
Birthplace: Sac City, Iowa
Residence: North Muskegon
Family: Wife, Lari; four children
Business/Community Organizations: Mental Health Foundation of West Michigan, Muskegon Museum of Art, Community Foundation For Muskegon County, The Employers’ Association.
Biggest Career Break: Working at White Consolidated Industries in the 1970s, where he learned about acquisition of underperforming companies.