DWM - 2006 - September

Volume 7, Issue 8 - September 2006

Plant Tour

Living the Dream
That’s What the New Owners of Weathervane Say They are Doing Now
by Tara Taffera

“We have never led with our product. It’s what we can do for the customer,” says John Vatcher, vice president of product development and engineering at Weathervane Windows.

This may seem like an odd comment from a window manufacturer, but this is the philosophy held by the management team at the new Weathervane Windows in Kent, Wash.

Taking Over an Established Company
The history behind the new Weathervane is a colorful one as told by its president and chief executive officer, Marlin Clausner. But first, a little about the former company that started in 1979 in Kirkland, Wash. The company manufactured wood windows, and then added vinyl in the 1990s. In addition to manufacturing doors and windows, it also distributed products for Pozzi (now Jeld-Wen).

According to Clausner, the former company’s owners began to lose interest in manufacturing moving into the early 2000s.

At the same time, there were a lot of changes occurring at CertainTeed Windows, located only seven miles from the new Weathervane plant in Kent, Wash.

According to Clausner, CertainTeed bought Insulate Windows in 1996, and approached Clausner the following year about working for the company to help push its expansion on the West Coast.

“Insulate went to market in 11 states, and reached about $65 million in revenue while I was there,” says Clausner.

But later, management changes at CertainTeed and its parent company, Saint Gobain, resulted in more centralization and pressure to do such things as abandon the Insulate line and solely use the CertainTeed line. Frustration with management intentions such as these led Clausner to walk away from the company in 2002.

“I had a one-year non-compete agreement,” he says. “Also, many members of the CertainTeed management team wanted to come with me, so I started looking for “non-window companies to acquire.”

But while looking for non-window companies, Jim Hebert of Hebert Research in Bellevue, Wash., had mentioned to him that Weathervane might be interested in selling, though it was not on the market.

“I met with the owner Ted Vander Hoek but nothing happened immediately after the first meeting,” says Clausner. “But he warmed up … and the acquisition was complete August 15, 2003 [well after the one-year non-compete agreement].”

New Management Makes Changes
But Clausner wasn’t facing the challenge of a new venture alone. Owners of Weathervane include Garry Wamsley, co-founder of Insulate, and his wife Marilee, who hold the biggest percentage share; Clausner; and two former employees, Garry’s son Dale, vice president of sales and purchasing, and Vatcher. Five other managers round out the senior management team.

“Of my seven current direct reports, only two weren’t with me at CertainTeed,” he says.

“As soon as Garry found out it was a window company he wanted to be a financial partner,” adds Clausner.

He adds that all except Garry Wamsley are involved in day-to-day operations. Garry has varied outside interests, but likes to develop new product ideas, helps in calling on old customers, and attends trade shows for new developments.

“He has a wide range of interests,” says Clausner. “One of these days he’ll come in here and say, ‘Look what I created,’ or he’ll find us a great deal on surplus equipment.” But what about the remaining workforce? Clausner says he knew the company needed to move from the old building to a location that would attract additional skilled labor and provide more space for future growth.

“We said at the outset that we were going to lose half the workforce,” he says. We were prepared for that.”

But he wasn’t prepared for what came next—rather he was pleasantly surprised.

“Out of 42 people, we only lost three when we moved,” says Clausner.

The new Weathervane spent six months at the Kirkland location before moving to Kent. There was much work to be done in the new plant, a former grocery warehouse.

“This really was a labor of love,” says Clausner. “I didn’t come into this to create a bundle of money, though that would be fine. I wanted to create a good working environment for people—that was the motivator.”

Differences Between Old and New
As with any business, any time there is new ownership there are bound to be changes, which was the case at Weathervane. One major shift was in its distribution channels for its vinyl products that are aimed at the upper end of the market. The new company sells exclusively through dealers and distributors including glass shops and small to mid-size lumberyards. The former owners sold direct to builders.

“We didn’t want to do that,” says Clausner, because our experience showed us that we could expand our market reach more efficiently through dealers and distributors.”

Interestingly enough, former owner Vander Hoek now serves as a Weathervane dealer. Clausner notes that almost all of its dealers carry three to five window lines.

“What we look for in a dealer is a partnership and desire to support our product,” he says. “Also, if someone isn’t set on a particular brand then the dealer tells them about Weathervane.”

Competition/Growth
One of the other names the customer may be set on may be a Weathervane competitor.

“We have two main competitors—CertainTeed—because we built it up and Milgard,” says Clausner. “Most other companies compete mainly on price. But Milgard and CertainTeed have the same price points as we do.”

While those companies have a national reach, Weathervane distributes its products to only Western Washington and Northwest Oregon.

“We will continue to expand, but we need to do so carefully. We got our foot in the door [with dealers] because they know us,” says Clausner.

Weathervane sells through 220+ dealers currently and posted 50 percent growth from 2003 to 2004 and again from 2004 to 2005. (Sixty-70 percent of the company’s business is in new construction while the remainder is in remodeling and retrofit.)

“So far we are up 18 percent this year,” he adds. “We’re still bringing in new dealers every two-three weeks.”

When it comes to expansion, the company employs what Clausner deems an “ink-blot strategy.”

“Let’s not leap frog and leave this entire space empty,” he explains. “The cost per unit goes up if you can’t fill your trucks.

He admits that the company violated that policy in Oregon, but it is growing gradually in other areas.

“Some of the competition was stubbing its toe in Oregon,” he says. “We thought, maybe we should go there before they get on their game.

“We’ll get to the rest of Oregon and the rest of Washington—beyond that I’m not sure.”

While the company doesn’t rush to expand, it also waits for the right timing when it comes to products.

“We know when not to introduce something and to do so when we need it,” says Clausner.

And, one product line it does not produce is wood. The former Weathervane stopped production of wood windows just before the sale to the new ownership.

“They asked if we wanted to resurrect it and we said no,” says Clausner. “There are always people who will want wood, but we decided to stick with vinyl.”

The company produces a simulated divided lite unit (SDL) that mimics the look of wood.

“In the Northwest [SDLs] are pretty rare,” says Doug Cassidy, director of operations. “It’s a labor intensive process so it’s harder for our bigger competitors to provide these.”

“When people get sticker shock over a wood window, the dealer shows them a vinyl window from us,” adds Dale Wamsley.

Production/Equipment
Space is not an issue at Weathervane (except for the company’s SDL table, which Cassidy says is almost at capacity due to high demand for these products). He points out that the company only uses about three quarters of the space in the 100,000-square-foot plant.

Currently, Weathervane operates two shifts.

Clausner’s production experience differs from when he was at CertainTeed. For example, here the company buys its insulating glass units (IGU) from Hartung Glass instead of manufacturing them in house, and also purchases its extrusions from King and The Royal Group.

“We were wary of buying these [IGUs],” admits Clausner. “But as queasy as we were, it has worked out.”

Though there were some adjustments that had to be made on both sides. Cassidy says Hartung wasn’t used to Weathervane’s grid demand as 30 percent of its IGUs require these.

Also, approximately 18 months ago Hartung invested in a Super Spacer line so now Super Spacer is standard in all of its IG units. Clausner says he is pleased with the change.

“The insulating properties Super Spacer brings is a big selling point.”

Cassidy adds that purchasing IGUs has other advantages.

“We don’t need a state-of-the-art glass line. We let our glass supplier focus on that,” he says. “Buying our glass allows us to focus on building a high-quality window.”

Weathervane’s product line includes sliders, single-hung, casement/fixed/awning/patio doors and specials. Casements account for 18 percent of total production (this was 6 percent with their previous window company).

“Our casement is better than the competition, “says Clausner. “We can’t take credit for it, but we have improved it.”

But whatever the product, all of it runs down the same production line, at least until growth justifies dedicated lines.

“We do it this way so if we have high demand it doesn’t matter,” says Cassidy. “We utilize one-piece flow.”

Cassidy describes Weathervane as “a custom job company.”

“We don’t move until we have an order,” he says. “Virtually every window is different.”

But whatever the demand, the company operates on a typical ten-day lead time.

“We have a good balance of mass production and customization,” he says. “Some manufacturers might say that is a long time but throughout the year the manufacturers can always depend on ten days—no matter if we’re in the busy season or not. Most customers don’t care as long as you deliver when you say you will. We do a rush when we have to.”

When Clausner and his partners purchased Weathervane the equipment was part of the sale.

“Basically we are pleased … it is all functional” says Cassidy.

Just a few of the machines you’ll find in the plant are from companies such as Urban and Greller. New suppliers include Alumet (see article, page 100), Truth Hardware, and the company started outsourcing production of its screens to Aluminite.

But Cassidy feels strongly that people and processes are more important than machines.

“Many manufacturers have a lot of equipment, but poor quality products,” he says. “We’re not as equipment-focused. We take good quality equipment and make it work. For us, people and processes are more important than state-of-the-art equipment.”

But one piece of equipment that Cassidy describes as “the central nervous system of the plant” is the Fenevision system from Fenetech. Purchase of this software was the company’s biggest capital investment.

“He [Cassidy] made up his mind that he wanted it [Fenevision]. We had a nightmare story while at CertainTeed and we didn’t want to face a similar situation,” says Clausner.

“If the customer has an odd request, Fenevision can do it. That is unique,” adds Cassidy. We can also add on components as needed.”

This software aids in Weather-vane’s quest toward lean manufacturing, which is part of the company’s culture. Information provided by the Fenevision software is integrated with other physical process improvements such as moving racks and equipment. This combined with employee participation allows for continuous improvement. “We even have an employee award for most improved work station.”

He adds that employing simple measures like these helps open up space in the plant, which will be crucial as production expands.

Another priority at Weathervane is safety.

“Safety is our number-one operational concern—even above quality,” says Clausner.

The company employs a human resources director/safety coordinator and has a safety committee that meets monthly. All plant workers attend these meetings at which a variety of safety issues are discussed. The company also conducts weekly safety training events and has a Safety Recognition Program. Weathervane reached the milestone of being incident free for one year and Clausner says that since then all incidents have been minor.

Differentiation/Future Growth
Weathervane owners say a variety of factors make this company unique and one with which to do business. Cassidy says it is the communication channels employed.

“The great unrecognized blessing of a small company is that it acts more like an individual. It doesn’t take long to solve a problem.”

Clausner echoes this statement.

“We can make a quick decision in the hallway. At our former company, it took several levels.”

Dale Wamsley says it is the varied options offered that some of the larger companies aren’t able to offer due to their size. These include the SDL options as well as integrated mullions in doors.

Vatcher sums it up best by saying, “We offer the unique total package for the high-end.”

“With vinyl, many people buy based on price. There is nothing we can do to persuade them otherwise. But for the people who look beyond price they find it very easy to do repeat business with us.”

And looking at the numbers, it seems there are more and more companies who are doing so. Since buying the company Clausner says its door volume has doubled, and it has redesigned the patio door and the response has been great.

“By industry standards we are a small company,” says Clausner. “We have 5 percent of the market in Washington and Oregon for vinyl windows.”

But this small company is holding its own among industry heavy weights. It posted $4.7 million in sales in its first year and that number is expected to reach $15 million in this year, and 90,000 units. But the company won’t stop there—the goal for 2007 is to produce 100,000 units. With a keen focus on the customer and a proven track record, this goal is easily within reach.

Tara Taffera is the editor/publisher of DWM magazine.