Western Cascade Truck -- Trucking Company Workers Revved Up About Business

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WESTERN CASCADE TRUCK

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- Employees: 11 (Six owners, five employees)

- Headquarters: 6440 S. 143 Ave., Tukwila

- Business: Truck and trailer parts and service

- President and general manager: Pat Malara

- 1989 revenue: $800,000

- Expected 1990 revenue: $1.2 million

- Clients: Operators of fleet vehicles

- Major competitors: Truck dealerships, independent truck repair companies

- Strategy: Offering maintenance contracts to fleet owners

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Pat Malara and Bill Nystrom say that when they go out to sell the services of Western Cascade Truck, they ``double-team'' potential customers.

The reference to sports is apt. The two men look like linebackers and move about the large shop floor as if it is a playing field, ducking beneath immense tilted hoods of semis and sidestepping engine parts without pausing.

Parked in one corner of the Tukwila shop is the Miss Budweiser hydroplane, a sleek trophy whose presence reminds everybody at the company that they beat the competition in securing the owner as a customer. Beside it, mechanics are working on the craft's tractor-trailer.

Nystrom, sales and parts manager, says he can be enthusiastic to customers about what his mechanics can offer because he knows they will always deliver.

``We go out and handpick our accounts,'' Nystrom said. ``And then we give super business. Customer's demands can't scare me because our guys can do it. Knowing something like that definitely gives you sales confidence.''

An evident shared confidence and pride in workmanship at the shop comes because the employees own the business, said Malara, company president. It is the only employee-owned truck service company in the Puget Sound area, and Nystrom says that has made the difference in its success.

``In an employee-owned cooperative, each employee owner shares in the profits and losses,'' Malara said. ``Each employee owner sits on the board of directors, or has a representative sitting on it, to help make major business decisions.''

Malara, who worked for truck dealerships and Western Peterbilt Inc. for many years before putting together the idea for Western Cascade Truck in April 1987, said the interaction between management and mechanics at his company is more than what is usually found in conventional businesses.

``There is no input about your job at `Big Brother' companies,'' he said. ``The owner doesn't communicate with the guys on the floor, and people are interchangeable. Nobody is perfect, but conventional businesses don't have the patience to deal with problems. Here, we sit down and work things out. This company is probably closer than a lot of marriages.''

Western Cascade Truck started up when Malara and five others left Peterbilt during a strike, raised $15,000 and put their own tool boxes in a leased building.

They asked for and got help from agencies around Seattle, including the Puget Sound Cooperative Federation, the Seattle Workers Center and the Cascadia Revolving Fund, a non-profit, private community-development loan fund that provided the company a $36,000 loan for operating capital in 1987. And they worked under trucks long after mechanics at other businesses had gone home for the night.

Mechanic Dave Gallant, one of the original employee owners, acknowledged that although there are rewards, taking charge of your job isn't the easy way out.

``Everybody dreams of being their own boss,'' Gallant said. ``But you have to care enough to put in 14-hour days when the demand is there. When you're an owner, you fight.''

Carol Bergin, director of the Puget Sound Cooperative Federation, which offers educational assistance to small businesses, offered training sessions about board-management relations and helped provide ``financial literacy'' lessons for the members so that they could understand financial statements.

Bergin said she is impressed by what the company has accomplished. ``Their work is difficult and complex,'' she said. ``The members are not only professional machinists on a shop floor but also assuming the responsibility of ownership. The commitment to both is very strong and commendable.''

``Education is an important part of what makes it all work,'' said Richard Feldman, a business analyst with the Seattle Worker Center, which also offers assistance to businesses.

``It's not like everyone at the company decides together on how many paper clips to buy, but people have information on what they need to do,'' he said. ``The general manager makes business decisions, and the board of directors makes overall policy decisions. The guys at Western Cascade Truck are survivors and have built-in survivor mechanisms. When there are tough times, the member-owners are willing to suck in, and when there are good times they can share in it.''

The company has had to be flexible. Initially Western Cascade Truck did business with independent owner-operators of trucks, but deregulation in the industry made it difficult for such drivers.

``We took a bath from non-payment,'' Malara said. ``So we looked at a new strategy, going after the fleet market, the companies with 40 trucks or less. We put together a package offering 100 percent maintenance, and we've picked up some excellent customers. Fleet trucks are required by moving and storage companies, distributors, delivery firms, and any sizable business that needs to transfer products or equipment from one site to another.''

Western Cascade Truck is an inspection station for several major national moving companies and has just completed negotiations to offer authorized customer service to Mercedes trucks.

``Our service is specialized,'' Malara said. ``Other independent repair facilities and truck dealerships are primarily interested in selling or leasing new and used trucks and servicing them. We go after the fleet customer and concentrate on their needs. It doesn't matter if we have to stay until 4 a.m. to get the job done.''

This year the company expects to do $1.2 million in business, allowing it to break even for the first time. Mechanics make journeyman wages of $15.42 an hour, with an average yearly salary of $32,000, and the company has remained a union shop.

``We've grown, but haven't increased expenses. Nobody has lost anything,'' Malara said. ``It has been profitable in the sense it has been able to grow, but not profitable in the sense of dispersing profit-sharing checks. We have opted to invest that money.'' The parts inventory has been increased, new tools have been bought, and a new communications system was purchased, enabling the shop to keep in touch with employees in the field, he said.

In the first year, however, the company lost money in a leasing deal and found itself in serious trouble, Nystrom said.

``Members took a 10 percent voluntary pay cut,'' he said with obvious pride. ``You sure couldn't do that in a union/owner business. Here, you either dive in and help or you don't stay.''

Three of the original employee-owners did leave not long after the business opened.

``We were undercapitalized, and there was a lot of stress,'' Malara said. ``Some of the guys weren't business educated and were used to working 8 to 5 and going home and forgetting about it.''

He said the first year was hard on everybody. ``It was scary being undercapitalized,'' he said. ``This is a straight-on business. The biggest misconception of employee cooperatives is that once you've put money on the table you're an owner and don't have to twist wrenches. Being an employee owner allows you a voice and to share in profits and losses, but otherwise it is run just like any other business and controlled by a tight set of by-laws. Everybody has a job to do, and everybody can't be chiefs.

Malara laughs every time the company takes a customer away from a trucking service located closer to a client.

Ron Glatz, president of Rossoe Energy Systems, said his company hauls oil products from Harbor Island to its own facilities and then delivers them to homes, and needs trucks on the road around the clock.

``Western Cascade Truck has been very responsive to our requirements and willing to accommodate to us in all reasonable ways, even giving us home phone numbers of mechanics,'' he said. ``They'll work on trucks at night, and when the problem is in the field, they'll go there.''

John Nunmaker, operations manager for McCall Heating Co., says he has been impressed with the quality of the work Cascade has performed.

``Let's hope this is the new wave coming,'' he said. ``Now I'm dealing with not only the mechanic but the owner.

``The integrity of the men shows, and I have nothing but admiration for them. They found a niche and developed it. I prefer them to the big companies.''

Strategies appears weekly in the Business Monday section of The Seattle Times.