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CALIFORNIA | SMALL BUSINESS | LEARNING CURVE / KAREN
E. KLEIN

Basic Instincts

Plant Owner Relies on His Own Vision

May 06, 1997|KAREN E. KLEIN

John Gill was hired as the plant manager for a company called C.E. Howard Corp. in 1987. By December 1993, the company's owner was going the way of many other large manufacturers in Southern California--selling his assets to an Eastern company, closing the plant and filing for bankruptcy. A month later, Gill assembled a group of loyal employees, borrowed $40,000 against his house and reopened the company, calling it Howard Fabrication Inc. Early this year, the company won the U.S. Chamber of Commerce's Blue Chip Enterprise Initiative Award, which recognizes small companies that have overcome adversity and emerged stronger than ever.

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The day my boss came into my office and told me to clean out my desk and get off the property was the day I made the decision that I would never work for anyone else again.

We saw some pretty tough times in the beginning. But I knew the industry, and I decided to trust my instincts, work hard and be honest.

I also had this vision that no one else could see. I knew that even though our defense contracts had fallen by 50%, all the aerospace companies were going to come back with commercial contracts. When I told people our future was in Hughes Aircraft, JPL and TRW, they looked at me like I was nuts. But now the aerospace companies are busy replacing communications satellites, and they use our products to do it.

In early 1995, my accountant called me into a meeting and told me the company was $300,000 in the negative. He told me that if I stayed in business through the end of the year, we'd be $1 million in the red, and he said I was setting myself up for ruin by giving health insurance and safety training to all of my employees.

But I knew that number crunchers and bean counters don't really know what's going on. I fired him that day, hired a new accountant and finished 1995 with an $80,000 profit because I was building a team that I knew could succeed.

I also knew some of the work coming up later in the year would be more profitable, because I had given cut-rate contracts to some of our old customers to reestablish contact with them.

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I had to be really honest with all my major L.A. suppliers. Most of them had gotten stiffed in the bankruptcy. I had to go back to those very same people and ask for equipment C.O.D. If you make a deal with me, I said, and my business goes under, I'll come over and mow your lawn until I pay off my debt. Pretty soon, word got around that there was still a manufacturer in California that they could work with after everyone else had moved out of state.

Since we were an undercapitalized company to start out, we decided not to borrow any money from the banks. I made a commitment that every single penny the company made would be reinvested in buying equipment.

Had I played it conservative like everybody wanted me to, I would probably be mowing lawns now. But I knew all along where I was going to be today.

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AT A GLANCE

Company: Howard Fabrication Inc.

President and CEO: John Gill

Nature of business: Manufactures stainless steel pressure vessels and vacuum chambers used in aerospace, pharmaceutical and food production applications.

Location: 240 N. Orange Ave., Industry

Founded: 1994

Employees: 60

Annual revenue: $4.5 million

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