- PNC is proud to support "Business Forward," where local leaders discuss the challenges and opportunities in how we do business in Central Illinois.
(light music) - Welcome to "Business Forward."
I'm your host, Matt George.
Joining me tonight, Chris Ober.
Chris is the president and CEO of Morton Industries.
Welcome, Chris.
- Thanks, it's good to be here, Matt.
- Yeah, I've been trying to get ya on for awhile.
You're busy, I'm busy but I'm so glad you're on because I love talking about regional businesses that actually make substantial change in a community.
And sometimes you're the hidden gem, or you know, under the radar type business.
But we're gonna get to that in a second.
We have a lot to talk about, but let's talk about you.
Are you from Central Illinois?
- No, Matt, I'm not from Central Illinois.
I actually grew up just outside of Detroit.
Kind of in auto country.
Yeah, grew up there, went to school there.
It wasn't until 2008 I had an opportunity to come here to Central Illinois.
And the company I worked for at the time said, you know, Chris we've got this great opportunity for ya.
You can be president of this great company.
It was Morton Welding at the time.
- [Matt] Okay.
- And I said, wow, that sounds amazing.
But where's Morton Illinois?
- Ha, yeah!
- So, they said it's right outside of Peoria.
And I said, I'm still, like, I don't know.
And when they explained, it's not too far out of Chicago and I could commute home on weekends and catch graduations and birthdays and things like that, we said, yeah, we could do that.
So I moved my family here in 2008 and got my kids enrolled in school and bought a house and got things rolling.
- Well, we're glad you're here.
So, Morton Welding.
So who at the time, was that individually owned?
- So at that time, in 2008 it was owned by a private equity group.
And they had done this roll up of these different suppliers all across the country.
And Morton was kind of this odd duck out.
It was in this fabrication business.
It didn't quite fit the automotive world.
They were supplying to Caterpillar, John Deere not Ford, GM, Chrysler.
And so when I came here, we decided, we pulled kind of a group together and said, let's kind of strip it out of that.
Let's strip it out of that private equity group and take it private.
- [Matt] Okay.
- And so we did that in 2009 and changed the name to Morton Industries because it was much more than a welding company by then.
And we thought, that's a good time to kind of refresh the brand.
- But when you're talking about when Morton Industries was actually founded, you're talking about in the '40s, right?
- 1946, yeah.
- I mean, that's crazy.
- Yeah, Verden Rinkenberger.
He came out of the war, World War II and he was really mechanically inclined.
And he wanted to have his own business.
And he bought a little welding shop for $1,000 back then.
Took a loan from the business owner.
I think he had it paid off in like the first two or three months, so.
- [Matt] Oh wow.
- He was always really proud of that.
- Yeah, you know, I love the philosophy of service and willingness to learn and grow as partners in change.
I saw that on the website, I thought that was really cool.
- Yeah.
- So tell us, other than what I know about you, but from a CEO's words, if someone came up to you and said, give me the five minutes of what your company does.
What exactly do you do?
- Yes, so well.
You know, it obviously started in humble roots, but today we are the largest tube fabrication company in the country, actually.
And we're contract manufacturing.
So we're taking what our customers need, tubing is our main specialty.
We have some other emerging products we can talk about, but you know, if you've ever climbed a tractor.
You know, a John Deere tractor or a CAT mining truck, you're grabbing our iron.
If you've ever hit the levers on their machines, it's our tubes that are powering all that equipment.
So, and we're the largest suppliers for them in the country, really.
- So let's just take Caterpillar.
So, how does a relationship like that look?
Like how do you, I'm guessing it's a longterm relationship, or it has been a longterm relationship.
But if they have new products coming in, or they're developing something new, or whatever it may be, do they go to you and say, hey, we need something different?
Or how does that play out?
- Yeah, really, so as a contract manufacturer, I mean we just become kind of intertwined with these large OEMs.
And that's pretty much all we service is large OEMs.
- [Matt] And what does OEM mean?
- Original Equipment Manufacturer.
- [Matt] Okay.
- So yeah, the people making the equipment.
So yeah, I mean it kinda starts where their engineers will say, we need to build this machine.
It needs these parts.
It needs these handrails, or these tubes that go into the machine.
And then they'll contact us and say, we'd like you guys to take a look at this.
We work with their engineers.
So we have engineers that we are really designing for what we call manufacturability.
Like, is your design gonna be good to produce or not?
And are you doing it in the lowest cost way?
So we're really working with them way up front.
I mean, the design phase to say, hey, you should use this tooling design.
You should use these types of fittings.
You should this type of material.
And then their engineers are kind of putting that in a final design, making a blueprint for us and that's what we'll manufacture it to.
- So when you say tubing, explain, I'm just picturing a tube.
So like for our viewers, what does a tube mean?
- So, yeah.
- [Matt] It could mean anything, right?
- Tubes are, I mean, it's all metal tubing, first of all.
- [Matt] All right, that's good to know.
- Yeah, anything that, again, if you kind of picture your climbing up and you're grabbing a handrail, that's the tube.
Or a lot of people know about brake lines or grease lines or hydraulic lines, those types of things.
All of that what's kind of lumped in as tubing.
- So, are your engineers and let's say Caterpillar's engineers, they have to not only be aligned, but let's just say there's a new CEO at Cat, just as an example.
And they come in and they have a new idea for a product line and so on.
And they put together their strategy or whatever it is.
And then that trickles down and then to be able to produce what they wanna produce those engineers talk to your engineers to be able to produce what's needed and then here's what I find interesting.
Then your shops or factories so to speak, you fabricate to whatever they gotta make, right?
- Yeah.
- I mean, I know I'm really not sounding very educated in this right now, but I think this is so interesting because I don't think people understand really what companies like yours do.
- Right.
- And that's pretty cool stuff.
- It is, oh yeah, I mean and again, you're taking this huge machine and what they're doing is they're saying, okay, we have suppliers who make engines, or fittings, or blocks, or rubber tires.
But in the tube space, or the metal fabrication space, we have a list of trusted suppliers.
We're on those lists, fortunately.
We worked very hard over 50 years with Cat and we're coming up on 30 years with Deere, actually.
- Wow.
- And so, then they say, okay, we're gonna collaborate with these suppliers, Morton Industries being one of 'em.
And we're gonna start working with them on, how are we gonna make this thing?
How's it all gonna come together?
And I mean we're talking, when we're working with their engineers, we could be four years out.
I mean, especially with all the new technology that they're putting into their machines.
I mean all this, there's AI, there's camera systems, autonomy.
So you know, driverless machines.
And they're like, well how are we gonna mount this camera?
Well, we gotta have brackets and we've gotta run wires through it and we've gotta do all these things.
So, how do we fit into that?
So, that's kind of where it starts is when they're dreaming up what's this machine gonna do and how is everything gonna connect?
Then they'll pull us in and say, okay, we want something that's gonna connect like this.
So what's the best way to do that?
- Wow.
So, you've got Caterpillar and Deere.
I mean, you're talking two of the most solid brands in the world.
So, when you're looking at potentially scaling your business where do you start?
Do you look at it from a, do I need another brand?
Or do you look at it from expanding your line of engineers?
Like, what does scaling mean to a CEO like you?
- Well, great, great question.
And I think at first when we were smaller it was all about just penetration into current customers.
What can we do for them?
And do more of and more of?
Because what we're trying to do is build a really longterm, sustainable business here in Peoria.
So, you gotta have some scale to do that.
Once you kinda get, I would say we're fairly saturated.
I mean, we're already the biggest one, so you're not gonna get orders of magnitude bigger with them.
So then you gotta either find new customers to sell your same products into, or develop new products that we're gonna sell those into either our current customers like Caterpillar, John Deere, and Komatsu.
And so we kind of focus on both, actually.
So we have new products that we're working on.
I mean, we have to support the change to electric vehicles, right?
And there's gonna be-- - I was gonna bring that up.
- Different requirements for that.
So we're offering different types of metals in our tubing and because things go from being powered by hydraulics to powered by motors.
And then motors need to be heated and cooled to work in all these different extreme environments.
I mean, you got mines that can be operating in negative temperatures or out in 120 degree heat in Arizona.
- Arizona or wherever.
- Yeah, so how all those things connect is changing and so we wanna be, we're working to be part of that.
Then at the same time, you know it's funny, Matt, people say like, Chris you should get into businesses or you should have customers that are counter cyclical to your current customers.
I said, well that's a great idea.
So, you know we're supplying parts to people that are feeding the world.
And building everything that's being built.
So, if we're not eating and we're not building things, like, what are we doing with all of our money?
And the answer is, well that's called a recession.
Or maybe even a depression, right?
- Right.
- Like, nobody's spending money then.
So, we have to get on something that's not, there's nothing counter cyclical to what we do.
But there are other markets that we can serve.
And so, electric power for example is a massively growing, exponentially year over year.
EVs, the whole infrastructure to support the movement into EVs.
And so we've had a heavy, heavy focus into that.
And in fact, probably more than 50% of our capital investments have gone into that EV infrastructure space.
And building a completely different set of products that's got some tubing in it, but it's mostly sheet metal enclosures.
- I mean, you've got to have a very strong CFO.
- We do have a strong CFO.
- You have to.
I don't even know.
I didn't do my research on that, but you have to, because you have to... To be able to change like that and make those decisions, you have to have that expert on there.
And it's interesting, because I've talked to so many people about this electric piece.
And what does that look like?
And the question I always have, and I just don't know if I ever, I don't know if I'm asking an uneducated question because I don't know enough about it.
Or if the other person doesn't really know the answer, but the question I have is like, is there a chance that you invest a lot of money switching into this type of business and then the business, or the grids, or something doesn't help support the business that you're working with and now you gotta switch again?
- Oh, absolutely.
- [Matt] Do you think about that?
- Yes, we do think about that!
- It was a good question.
- Yeah, yeah.
Well, and that's, I guess one of the nice things about being a contract manufacturer is we're buying equipment that can produce a lot of different things.
So we happen to be, I'll give an example in the EV space.
We're getting heavy into this enclosure business.
And enclosure is, they're all around us.
It's kind of funny, like once you start doing it you start seeing 'em all over the place.
But as an example, we just shipped 50 of these enclosures, they're probably you know, the size of half of our human body.
And they're going into Universal Studios.
We sent 50 of 'em there.
And you say, well, what's that for?
And well, they're putting equipment in to communicate and now if you go there and you get the wristband to pay for your drinks, that information has gotta flow through the park.
And so it's Morton Industries boxes that are doing that.
- Oh my!
- And so you hit it and it's wirelessly going through and communicating to basically the central servers.
And that's the industry that we're really penetrating into.
So we've got this kind of construction, mining, Ag portion of the business.
But now we talk about the IT, EV infrastructure, it's all about how things are gonna communicate in this world.
And to do that, they wanna put, it's called edge computing actually.
So what edge means is it's out in the field.
It can be in a factory, so maybe it's a hot, humid, dusty environment.
It can be out in the sun.
Like in Universal Studios.
So we're building these enclosures that are water tight, dust free, air conditioned, and are gonna maintain their operation in all these different environments.
And it's kind of a niche business as well.
And that's what we like to be in.
We don't wanna do what everybody else is doing.
We wanna do what people don't wanna do.
And build a whole business around that.
So, these are complicated.
50 sounds like a lot, but people are making 50,000 boxes.
We're gonna make 50 of something, and we're gonna make four of something else, and maybe two of another one.
- Interesting.
- And so that's what we've been focusing on.
- Yeah, so... Again, I love talking.
I know it's just a title, but it's an important title.
I love talking to a CEO because you have the vision.
You have the vision of knowing where you're going.
A lot of times even more than employees do, or your team does.
Or at least where you feel like you wanna go.
And I guess my question would be, how do you stay on top of things to know?
Like, that's a good example.
I would have never have guessed that.
How do you get into that diverse business line and even know that it's possible?
Where does that even come from?
- Yeah, well you know, what's really interesting, Matt, is I think no matter what your business is, you're in the people business.
- [Matt] I agree.
- Every opportunity that's come our way, whether it's acquiring a business, or getting into a new market has been a result of just the networking, the constant communication we have, not only with our customers and our suppliers but people in the community.
I mean, we're getting ready to do some work with another local company who started in Peoria.
We met kinda just from being around in the area together and had some mutual friends.
And they happen to be building a big plant in Forth Worth and need help with their metal fabrication.
So, it's all about just working with people.
And so, in my day, I had my kids shadow me for a couple of days once and they said, Dad, we wanna know what you do.
Like, you're a CEO, what do you do?
- I love it.
- And they spent time with me and after a few days they said, we still don't know what you do.
You just talk to people.
And I said, well, that's the whole job.
It's just, it's about, you know, you've gotta have a vision.
And we know where we wanna go.
We know we want to stay on top of industry trends, so there's tons of publications and information you subscribe to and you just, you're just always like searching for what's happening, talking to your customers.
And any opportunity you get to talk to an executive at Caterpillar or John Deere, Komatsu, you've gotta ask to those questions.
Like, where are you guys going?
- That's what I was getting at earlier with the new CEO, you know, strategy wise.
So if Deere has a new CEO, where are you going?
- [Chris] Yeah.
- Because that really, you know, because you talk about providing solutions for your customers, right?
- [Chris] Mm-hm.
- So you're providing all these different customized solutions, so to speak.
But if they switch on ya, you've gotta still provide all of the customized solutions for them, right?
- Yeah.
- So, talk to me about, because I know you enough to know that you appreciate and love your team.
You have a lot of employees.
You have a lot of team members.
600 plus, right?
- Yeah, 670 employees here in Peoria.
- I mean, almost 700 employees.
I mean that says something in itself.
But to be able to hire and train.
Let's talk about training for a minute.
Training has got to be probably one of the most important things in your business.
Am I right?
- 100% yeah.
Yeah, well, and I would say, I'm gonna sit here today and talk about how hard it was compared to 10 or 20 years ago to find people that have the skill sets.
And we're gonna say it again in 10 or 20 years.
But what's never gonna change is the fact that in manufacturing you're not going to find people who grow up and know how to do all these things.
You gotta commit to training.
So, we do that in a lot of different ways, but we have a full-time training department and we spend a lot of money on software that's gonna host all this training and schedule it and then we have to have the people do it.
And all the tools for people.
And then not only that, you're making an investment in their time.
You're paying people to train.
We started a weld school in Morton a couple years ago.
And that's really, really fed our employees.
You know, if they wanna make more money and they wanna get significant raises, go to the weld training.
We provide the trainer, the facility, and all the materials.
- Wow.
- They provide their time.
And I think we even then, yeah, I was corrected on this a couple days ago.
We're even paying them to do the training.
It used to be on their own time.
Like, come in after work and we'll train ya.
Now it's just like, we're gonna train ya.
We're just gonna shift ya over and train ya.
- Well, think about this.
You are the leader in your space.
As someone in your position to stay in that space you better have the people and you better have the training.
- Yeah.
- So you have to be best in class.
- Yeah.
And I would say, yeah, we absolutely are in the space that we're in.
I mean, and we'll even get welders who have welded for almost their whole life and they go to weld our products and they can't do it.
It's the complexity of doing, when you talk about a tube, going around 360 degrees.
You've got thick to thin metals, so your angles are really, and you're never in a good position.
So those are all the things we teach them kind of in the lab.
And we give 'em all the time they need.
If somebody takes six months to get trained, we give 'em six months.
If they can do it in six days and get certified, they do it in six days.
So it's really kind of go at your own pace.
And because we have the trainer there full-time, everybody can be kind of custom trained to weld.
- Yeah, you know what?
I know a lot of people that work at Morton Industries and the culture must be great.
Because I don't hear anything to the negative.
And I can't say that about a lot of businesses.
I think every business, and you know more than me.
You know there's pain points in your business.
You know that.
But at the same time, that employee satisfaction piece.
You know, because when you have 700 employees out in the community, they're talking.
Where do you work?
Probably I work at Morton Industries.
- Yeah.
- That's how you also get employees.
And I think that's cool.
- Thanks, yeah, we have spent so much time.
And I mean, they always say the culture has to start from the top, and I get that.
But we also want to be aware of that like, I mean, everybody is part of the culture.
And so when we talk about that and we talk to our employees, if they're not happy with something at work, the only people we can turn to is each other.
Like, there is no they at Morton Industries.
I always tell people that.
It's like, well, who's they?
I mean, we're talking right here.
They is us.
- [Matt] Exactly right!
- And that's what we try to put in our core values.
It's about, obviously respecting each other, but it's also being yourself.
We want people to be themselves.
And so, we're gonna allow them to, you know, as much as they want to be, you know, do what they wanna do.
We really wanna marry people up with what they love to do.
- [Matt] Yeah.
- And, Matt-- - [Matt] Make 'em happy.
- And make 'em happy, yeah.
- Yeah.
So you have the strategy.
You're charged with that, you and your team.
So do you typically, on a strategy, do you put together one that's a year?
Do you put a timeframe to it, or do you just have an ongoing strategy?
Like, how do you put together your strategic plan?
- Oh yeah, great question.
So, we actually follow the EOS, Entrepreneurial Operating System.
So we have a facilitator, a coach that comes in and we meet...
It kind of starts with a 20 year, you know, they call it the BHAG.
The big, harry, audacious goal.
- Yep.
- And then of course, that's always like, be the leader in what we do, stuff like that.
But then it really starts to, the rubber hits the road at three years.
And we say, you know, because in three years a lot is changing in this industry.
- Yeah, no doubt.
- And so we start to make a three year plan.
What do we wanna accomplish?
You know, and then from there we start, then we make our one year plan, and then we break it into quarters.
And those quarters are then broken up into weeks.
And so, and then we as a management team meet once a month to go over kind of where we're at.
And then weekly on the weekly goals.
And yeah, we actually have our, we just had our quarterly session and we have an annual planning one coming up here next month, so.
- Yeah, that's gotta be kinda fun too.
When you sit there and kind of look out and predict what you're doing and then being in your position you actually know some of the moving parts too that are happening.
So that's pretty cool.
You and your company give a lot back to the community.
I think you don't ever brag about it.
I've never heard ya say anything about it, but it something for me personally that is meaningful because you do give a lot back.
And so just as someone in the nonprofit world for many years, I appreciate it.
- Well thanks, and yeah, it's always interesting to like, how do you decide how much and what to do?
So we, a couple years ago said, all right, we're gonna commit 1% of our net income every year to nonprofits.
And that could also include employee needs.
So we get a lot of requests, probably one a week from an employee who says, hey, I've got a kid whose gonna be in a motorcycle race and... - [Matt] Where you sponsor it.
- And we'll sponsor it and sometimes it's a church trip for, you know, for their family.
- A mission.
- A mission, or whatever it may be.
And so we'll, they have a form, they fill it out.
We review it.
And I can't think of a time we've ever said no, because one of the great things I'll say about our employees is they're humble too.
And they'll ask for what they need, and it's always easy to say yes to that, so.
- Well, I think what's cool about it is, it really starts at the top and it starts with your team.
You've got a strong team, so.
- Well, it's more than money too, Matt, because we just put, I think it was last year we put this in.
So, we can... - Yeah, I don't mean to cut you off, but you do do a lot.
And I appreciate it.
This 30 minutes went by very quickly.
- Oh my gosh.
- Yes, so I appreciate you coming on.
Thank you for everything you do for the community.
It is so cool.
Chris Ober, Morton Industries, appreciate it.
- Thanks, Matt.
- That was fun.
- It was fun.
- I'm Matt George and this is another episode of "Business Forward."
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