Kentucky Bat Maker Changes As Game Changes

LOUISVILLE, Ky. - Chuck Schupp was watching a New York Yankees game on TV two years ago, and he couldn't believe what he saw.

Wade Boggs, a loyal fan of Louisville Slugger bats, was swinging a bat made by Rawlings Sporting Goods Co.

Schupp, manager of pro baseball sales for Slugger manufacturer Hillerich & Bradsby Co., called the Yankees' equipment manager. "Wade didn't like the handles on the last bats we'd sent him," Schupp said. "We got another shipment to him real fast, believe me."

Soon, Boggs was swinging a Slugger again. The Tampa Bay Devil Rays third baseman, a five-time American League batting champion, makes no apologies for being finicky.

"I go by the feel," Boggs said. "The bat is the tool by which I make my living, so it has to be just right."

Hillerich & Bradsby, the 114-year-old Louisville company that has made Sluggers for everyone from Babe Ruth to Ted Williams to Ken Griffey Jr., has at times struggled to get the right bats in players' hands.

Since 1970, almost everyone but pro baseball players has gone to metal bats, because they never break. Metal now accounts for about 90 percent of the bat market, and H&B had to figure out how to sell metal bats while keeping its wood-bat standards high.

The competition is tough. Easton Sports Inc. built a huge lead in metal bats before H&B got moving. And H&B's wood bat business has 22 competitors, such as Carolina Clubs, a North Palm Beach, Fla., company that caters to stars like Ryan Klesko of the Atlanta Braves.

At the same time, H&B has worked to diversify the company, with mixed results. Its hockey division is growing but finding it hard to make money, while the golf division is struggling, as many golfers have dumped the company's PowerBilt clubs for other brands.

Getting the right balance of products while building on its proud baseball tradition is the responsibility of John A. "Jack" Hillerich III, the great-grandson of the family business' founder.

In the early 1980s, the future of H&B was shaky. But Hillerich engineered a turnaround by doing what his great-grandfather did: asking players what they wanted in a bat. Hillerich, 57, now preaches the total quality practices of W. Edwards Deming. He set up a stock ownership plan to turn employees into owners. And while he looked back at his family's history for some tips, he also looked forward for better manufacturing and marketing ideas.

H&B, which had about $20-million in revenues in the early '70s, is now a $100-million company powered by metal bat sales.

"They've worked to do much more than just work off their brand-name recognition," said Jim Darby, vice president of promotions at Easton.

It all started in 1884 when 18-year-old John A. "Bud" Hillerich offered to make a bat for Louisville baseball star Pete "The Old Gladiator" Browning.

Browning looked over Hillerich's shoulder as he turned a piece of white ash on a lathe inside his father's Louisville woodworking shop. Browning batted 3-for-3 the next day.

As the company grew, it looked for ways to get the bats in more players' hands. H&B was one of the first companies to use players to endorse its products. In 1905, the company signed Honus Wagner to an endorsement deal, a first. Today, more than 60 percent of major-leaguers use Sluggers, including Devil Rays Boggs, Fred McGriff and Kevin Stocker.

But the market changed in the '70s with the arrival of metal. In 1974, H&B's wood-bat production peaked at 7-million; today it's at 1-million.

H&B decided early on to make metal bats, but at first the move was a disaster. One player called them "toy bats" not suitable for serious players. Meanwhile, Easton took over the market, using technology it had used to make metal arrows.

Between 1980 and 1985, H&B's profits fell about 90 percent. And by 1984, arguably the low point of H&B's history, the company's sales had stopped growing.

Some wondered whether the family-run company would survive. The Hillerich family and H&B employees own the company's stock, with the family having voting rights.

In 1984, Jack Hillerich had been CEO for 15 years but was still tentative in making decisions. For too long, he had leaned on the advice of a longtime senior vice president. At one point, an outside board member asked him, "Just who's running this company?"

So Hillerich decided to make some changes. He became a more aggressive manager, but at the same time put Deming's Total Quality Management theories into action. For instance, the executive offices at H&B headquarters don't have doors. His top priority: turn around the company's metal bat business.

Hillerich visited teams to see what they wanted from their bats. He got an idea. Sponsor the Elite Coatings amateur softball team, a Gordon, Ga., club that drew thousands of fans. Learn what its stars wanted in a bat, and give it to them. Then watch word spread to other teams.

"I still remember the meeting when I told our people I wanted to spend $40,000 to sponsor a softball team," Hillerich said. The reaction: "What? 40,000? For what possible reason would you want to do that?"

It took a few years, with plenty of money sunk into research and development and marketing. But it paid off. H&B now makes 1.5-million metal bats a year. The privately held company won't disclose financial results. But officials say sales have grown an average of about 20 percent a year since 1986, and that H&B now has a profit margin between 10 and 20 percent.

About 60 percent of H&B's revenues come from baseball and softball. The company has been expanding its 32-year-old hockey division (20 percent of revenues) while working to make those products more economically. And it's trying to figure out what to do with its 82-year-old golf division (10 percent of revenues).

Golf is a big headache. The problem may not be so much about performance - the PowerBilt brand is well-respected - but about marketing. None of the game's top players use the brand, and H&B is lost in the shuffle of companies chasing powerhouses like Callaway and Taylor Made. "At some point, we may decide we have to get out of the golf business," Hillerich said.

Bats are a different story. The wood bat division barely makes money, but the metal bat business is H&B's big moneymaker.

Industrywide bat sales last year totaled $90-million, up from $66-million in 1991. Metal bat sales are growing because more women are playing softball and because serious players will pay for bats that cost $200 or more.

H&B figures it shares the amateur baseball bat market in an even split with Easton, while H&B has at least 20 percent of the softball market. Easton officials think their baseball market share is more like 60 percent, with H&B at 40 percent.

Key to building that market share was building a better metal bat. The first metal bats, made of aluminum, were duds because they were so heavy. Baseball players increasingly use lighter bats, realizing the importance of bat speed.

H&B and its competitors figured out how to make thinner, lighter walls with tough alloys. Easton pitches the Red Line bat made with material from the Ukraine. H&B counters with technology designed to give the walls support. The SpringSteel has coiled steel inside, while the Air Attack has an air-pressurized chamber.

The Air Attack was born after Marty Archer, president of H&B's bat division, brought one of his Nike Air running shoes into a meeting and asked, "How about if we try to use this technology in a bat?"

Meanwhile, H&B has built on its Elite Coatings deal to devise an aggressive marketing strategy for its metal bats.

Six years ago, it started an "advisory board" that now has 84 college baseball and 62 college softball coaches. Much like Nike pays college basketball coaches to get teams to wear its shoes, H&B pays baseball coaches up to tens of thousands of dollars to use its TPX and TPC bats.

Among the baseball coaches on H&B's staff are Florida State's Mike Martin, Florida's Andy Lopez and South Florida's Eddie Cardieri. And the word has spread, as Hillerich hoped: Today, TPX has joined Easton as one of the dominant bat brands on youth baseball fields.

But getting major-leaguers to use H&B's wood bats takes a different approach. It involves non-binding player contracts that haven't changed much for years, supported with plenty of old-fashioned customer service and attention to detail.

Joe DiMaggio is one of about 20,000 past and present major-leaguers who have their names on file at H&B's factory. Each file notes the specifications for a certain player's bat.

There was no doubt about how DiMaggio felt about his bats. In 1941, someone stole DiMaggio's favorite Slugger. He asked Yankees announcer Mel Allen to make a pitch over the air: DiMaggio would trade six new bats for the stolen one. The trade was made, and DiMaggio went on to a record 56-game hitting streak.

Major-leaguers have long been obsessive about their bats. Orlando Cepeda gave away his bat after every hit, saying it was used up. Richie Ashburn slept with his bat on road trips. And Eddie Collins rolled his bat in horse manure, figuring the odd practice kept his bat "fresh."