Lexington, KY - Henry L. Jackson is chairman and president of Jackson Plastics of Nicholasville, a tier-one supplier to Toyota Motor Manufacturing in Kentucky. A Notre Dame MBA, Jackson has over 30 years of experience in finance, manufacturing and business ownership. He has served as managing director of Clark Material Handling Company in Germany and senior vice president and chief financial officer for Clark in Lexington. In addition to Jackson Plastics, Jackson Enterprises holds majority ownership stakes in Millennium Steel of Texas and Indiana and Sanova Carpets of North Carolina. Jackson spoke with Business Lexington's Tom Martin about the condition of his industry and his business philosophy. The interview is available as a podcast online at www.bizlex.com.
We've sketched your background, but I wonder if you would tell us more: where you grew up, what steered you into manufacturing?
I grew up in the ghettos of Chicago, Illinois, on welfare, raised by my grandparents. Had an opportunity to go to DePaul University in Chicago, get an undergrad there on a Ford Foundation Scholarship. I left there, worked in a couple of manufacturing organizations, eventually landed with Clark Equipment. I went back to school to Notre Dame to receive my MBA, spent about 20 years with Clark. In that time I was president of Europe for Clark Material Handling for a couple of years, came back here in 1994 and started my own business - Jackson Plastics in Nicholasville. I worked with people at the University of Kentucky, I used to be on the Board of Trustees at the University of Kentucky, and I feel as though the university was quite helpful to my business endeavors. But I started Jackson Plastics in 1994, as I said, and from there I started Millennium Steel and Sanova Carpets with Toyota's help. Toyota has been quite good to me, and I think they have been quite good to this state and to this country.
How did you make the Toyota connection after you started your company?
When I looked around Kentucky back in 1994 to see what minority companies serviced the automotive industry and particularly the plastics industry, there were very few in Kentucky. And that was my window of opportunity. I knew a couple of the executives at Toyota by serving on different civic organizations, and I went and talked to them. Toyota was a hard one to get into. It took me six years before I got my first contract directly with Toyota as a tier one (supplier). I started off as a tier two, but once I achieved a tier one status with Toyota, my businesses grew rapidly.
What is Jackson Plastics' role with Toyota?
We produce things like scuff plates, interior parts for cars and trucks, and we deliver those parts to Toyota in Georgetown and Indiana.
What's your perception of the condition of the auto industry right now?
It's in its worse downfall in the last 20 years. For example, in 2007-2008, we produced almost 14-15 million cars a year here in the States; 2009 - 2010 we'll probably be somewhere down in the 10 million (area) at best. That 30 to 40 percent reduction in sales has a tremendous effect on part suppliers like myself. We're able to absorb maybe a 20 percent retraction in the market, but once you start getting up to 25, 30, 40 percent reductions, it's hard for us to absorb that fixed cost, and therefore what happens to a small manufacturer like myself, we become totally dependent on the big car-producing companies to help us - help us by giving us better payment terms, by giving us price increases, and that becomes difficult because they're in a bind themselves for cash. So, this government plan of helping the Big Three is absolutely necessary for the survival of the automotive industry. And when I say automotive industry, I'm talking about three out of every 10 jobs in the United States almost. The impact that automotive production has on the United States is tremendous. Most people don't realize that. They think of the automotive unions and the people getting $20- and $30-an-hour wages. But there are a lot of people out there like, for example, those who work for me, who only make $9- or $10-an-hour and are getting basic benefits.
Is it enough in your view to bail out the Big Three, or does government assistance need to extend into the supply industry, as well?
It needs to extend into the supply industry, but first you've got to stabilize the Big Three. To stabilize us would be nice, but that's not the issue. Because we can't make it on our own; we depend on making products for the Big Three. So either you've got to stabilize the Big Three or you've got to do it in such a manner (that) if one of them fails, that work is absorbed into the other automotive companies here, whether it's a foreign company or the remaining two. But the volume has to stay there, the confidence of the American consumer has to be built back up so they can start buying cars again, because just pumping money into suppliers, keeping suppliers afloat, won't do that much good. You'll help us for awhile, but you won't sustain us. We need sustained growth and we need the automotive industry to come back to where it was a couple of years ago.
You can't sell 95 percent of a car. All the parts have to be there. Isn't the automotive industry somewhat like a car, like one big organism? Every component has to be there. If some component suppliers within the supply chain are no longer there, how does that affect your company?
There are enough component suppliers that if a couple of them fall out, that will just make it a lot better for the rest that remain. You hate to say it, but the truth is, it is the time to fix that two percent, three percent hole that's created by that supplier going out of business.
What changes in the automotive industry do you see on the horizon?
I see suppliers becoming more aware of their financial conditions. I see suppliers learning at a rapid rate how to survive and become a more lean manufacturing organization. By lean, I mean a supplier who learns how to manage his cash, how to manage his people, and know the importance of people in an organization.
Let's talk about your business philosophy and principles. When they go home at night, what do you want your employees to be saying about the experience of working for Henry Jackson?
First of all, I want them to be proud that they work for the Jackson organization. I want them to feel part of the organization, that they can speak their opinion and not worry about it. We're a union-free shop, and I think one reason we are is because we give people the challenge to be the best they can. My favorite saying when I have a meeting is: Treat others the same way you want to be treated. Talk to others the same way you want to be talked to. Don't down a person because they're not up to your standards - bring them up to your standards. Help them. Understand their values, understand their concerns and then help them become part of a team. My principle of business is simple, and it is just that: treat people the same way you want to be treated. Talk to them the same way you want to be talked to. Help people achieve their own greatness, because every man and woman has something to offer an organization, you just have to find out what that is. You've got to give them the environment, the working environment, to work with you, not against you.
Are any important "silver linings" developing as a result of this economic situation?
I think for the small manufacturer what he will learn is to be more conservative, not to be worried about growth as much as he was before. We're in a society that was push-push-push, grow-grow-grow, get bigger, get bigger. Now we're sitting back, saying, 'Well, I shouldn't have taken on that debt,' 'Maybe if I had not bought that piece of equipment, I'd have more cash-flow to help me through these rough times.' So it's teaching us to be more conservative. I'm not talking about a political conservative person; I'm talking about conservative in the financial sense. Ö And as I said before, attune the finance and attune the people, make certain of both - that you are in control of your finances, of your people skills - and bring all that together.