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In His Family's Footsteps

The Fourth-Generation Head of a 116-Year-Old Produce Company Is Always Looking at the Future yet Realizes the Value of Not Losing Touch With the Past


C.H. "Chuck" James III has an Ivy League business degree, a board seat at a prestigious management learning center and a city of Industry company that bears his name.

But when faced with strategic business decisions, he often asks himself, "What would my great-grandfather do?"

The original C.H. James was a trailblazer who founded a West Virginia produce firm in 1881 by bartering memorial pictures of assassinated President Garfield for the garden-grown vegetables of coal miners. The 19-year-old then sold the vegetables to stores in Charleston.

C.H. James & Co. is still selling produce. But now the company buys it from farms in Salinas, Calif., processes it at its Industry plant and ships it to thousands of McDonald's restaurants in the United States, Asia and Latin America.

"My great-grandfather moved from Ohio to West Virginia to start a business," said James, 38. "I moved the company from West Virginia to California for a very different business opportunity. In business, change is risky, but it's also necessary."

With an eye for opportunity, a willingness to take risks and a penchant for reinventing itself, C.H. James & Co. has survived a Depression-era bankruptcy and persevered for 116 years, making it one of the oldest black-owned companies in the nation.

It's also one of the nation's most successful and enduring family-owned enterprises, nearly doubling its annual revenue to $30 million in its four years in Southern California and jumping from 90 to 73 on Black Enterprise magazine's ranking of the nation's 100 largest African American-owned companies of 1997.

The company's success has been lauded throughout the century by civil rights groups, governors--even presidents--because the James family has seized or created opportunities despite historic forces of discrimination.

Now the company is being extolled as a model for minority- and women-owned firms trying to make the leap from government contractor to private-sector supplier. Such transitions are becoming more important as government affirmative action programs are being scaled back.

James always envisioned those programs as a short bridge to bigger opportunities. He used money from his government sales to purchase North American Produce, the Industry-based operation that supplies McDonald's.

"I realized that we wouldn't grow by remaining a local distributor," James said. "I always considered the government business a means for building enough revenue to expand to the national level."

James decided to relinquish the minority-supplier status that gave him access to some government contracts in order to concentrate on his new West Coast business. The firm still has some government contracts but obtains that business through normal bidding procedures.


James has vaulted from federal to corporate contracting at a time when opportunities for women and minorities are expanding in private industry--but are contracting in government. The Supreme Court recently turned down Philadelphia's plea to preserve a law that reserved a portion of city procurement for businesses owned by blacks or women. Also, a federal appeals court recently upheld California's Proposition 209, which prohibits the consideration of race, ethnicity or gender in state contract awards.

"In spite of attacks on [government] affirmative action, there is still significant growth in supplier diversity because companies are now anxious to develop a presence in the minority business community," said Reginald Williams, chief executive of Atlanta-based Procurement Resources, a consultant to major companies with such contracting policies.

Some companies set aside a percentage of their procurement business for minorities and women. Others require their primary vendors to seek diversity among their subcontractors. Some simply make a greater effort to ensure that female and minority suppliers are among those making contract bids.

As a result, diversity in corporate contracting is on the rise, Williams said. Minorities and women obtained about $30 billion in business from the 500 largest U.S. companies in 1996, compared with $22 billion in 1990, he said.

More encouraging, Williams said, is the rise in the percentage of Fortune 500 companies with some sort of supplier-diversity outreach--about 75%, compared with 50% in 1992.

Despite the increase, minority firms get only about 3.9% of corporate procurement dollars, according to some estimates.

Many would argue that James has thrived because of his determination to move beyond affirmative action.

"Businesses establish affirmative action for economic reasons," James said, "and economic forces create movements that are more sustainable than government programs."

Companies are making this effort partly because the U.S. minority population--at least 27% of the national total and 46% in California--is growing rapidly.

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