Foam Is Where the Heart Is

G&T Industries
Written by Allison Dempsey

Building a company foundation on foam is something G&T Industries has done successfully for 66 years, starting in 1954 with office seating foam and gradually expanding to polyurethane foam fabrication in the packaging, furniture, medical, transportation, military, electronics, HVAC, athletic and marine markets. The company prides itself on a number of achievements, including its three locations, its dedication to resolving complex customer issues, and its laudable ESOP status as a 100 percent employee-owned company.

In 2005, former CEO, founder and President Bob Wood sold G&T Industries to the employees who formed an Employee Stock Ownership Plan (ESOP), making it one of only 7,000 employee-owned companies in the United States.

“After one year of employment, every employee, from the highest executive level to the newest hourly associate on the shop floor, all own the company together,” says COO and current President Jeff Hoeksema. This means each employee owns shares in the company, and as the company does better, the share value of that goes up, generating nest eggs for employees.

But more than that, an ESOP creates a common goal for all employees to strive for.

“We have 400-plus people who are all owners rowing the boat in the same direction,” says General Manager David Boggiano. “It’s hard to stop that momentum.”

There is no publicly traded stock in ESOP: It’s designed to be a retirement mechanism or for profit sharing. On top of the share value, G&T does quarterly gain sharing to each of the employee-owners.

“We truly all win together or we all lose together,” says Hoeksema. “If we do something wrong, that impacts every single one of those owner-employees. And when we do things right, they are rewarded for that. We’re all tied to the overall results of the corporation.”

Even with three foam locations — Byron Center, Michigan, which also serves as the Global Headquarters; Jasper, Indiana; and Reading, Pennsylvania — an ESOP designation ensures cohesiveness between the facilities and every single employee.

“The multiple divisions create accountability to each other and [the ability to] share success or to solve problems,” says Boggiano. “It can help create a very friendly competition because, as Jeff said, when we win, we all win. We all want every site to be successful and profitable and if we can help each other, we do.”

“It’s not like our people here at a Byron Center location are on a different system than people in Jasper or in Reading,” adds Hoeksema. “It’s based on corporate overall results and when the company does well, the owner-employees do well.”

With an ESOP, all company sales results are shared with employee-owners, so everyone knows the profit system details, both negative and positive. There are no secrets and no surprises; information and knowledge is power for the employee-owners, who also have the ability to impact the results.

“It really leads to an open sharing environment from the top down,” says Hoeksema. “Clearly we have titles and roles as a company, but we are not hierarchical in our management style. We walk the floors and we interact with the operators, and it builds trusting relationships at all levels.”

An ESOP is not only designed to provide a wealth-building mechanism for employees; it’s also is a mechanism for a former owner to transition out of the business. When an owner decides to sell a conventional company, they can sell to a competitor – who may or may not take care of the employees – they could sell to a private Equity Group, or they can decide to sell it to a strategic buyer looking to get into the foam business. Or they can decide to sell it to the employees. This is done as a normal transaction with a fair evaluation process, with the new owner-employee group collectively as a company purchasing it from the former owner.

“Most times a former owner who sells to an ESOP truly cares about their employee base,” says Hoeksema. “They’re not giving the business away by any means, but they’re truly looking out for the long-term good of their former employees.”

This collective dedication extends to quality product and stellar customer service as well. One of G&T’s general managers uses the tagline, ‘Think like the customer and act like an owner,’ and that really puts it all in perspective, Hoeksema says. G&T is extremely customer-centric in how it approaches all things, from engineering, to design and manufacturing, to delivery and quality.

“Thinking like an owner forces you to think of how we can do it better, be more efficient, continue to do all the right things that help the company’s results and therefore help the employees,” he says.

In terms of capabilities, one of the things that separates this company from its competitors is having three facilities, says Boggiano. Within each facility, the wide range of services means there is some duplication, with the core capability of cutting foam. “All three facilities have that strength and that capability. If something goes wrong, we have other facilities that can take on some of that capacity,” says Hoeksema.

“Another core strength of ours is our overall engineering service that we provide,” adds Boggiano. “We offer hundreds of years of experience in our three facilities relative to quoting foam, sampling foam, and finding the solution to difficult problems.”

The quality and delivery of value provided to customers is another point of pride for G&T. “We work with customers that sometimes give us no – or very short – lead times, and we’re able to meet these times start to finish, whether it’s engineering, design, or production order,” says Boggiano.

Growth is also at the forefront, with the acquisition of Foam Fair Industries in 2015 giving G&T new opportunities in the rubber industry, and World Resource Partners bringing high-quality, low-cost die cast aluminum, plastic injection molding and self-skinning polyurethane components to the North American marketplace from Asia. WRP is a division that sources finished goods and/or components and manufactures in a variety of industries. G&T warehouses those products at its location, and then delivers to them on an as-needed basis for their production requirements.

“As an organization, our strategy is to grow the geographic circumference around each of our facilities, and expand that out further from each of our facility locations,” says Hoeksema. “We have targeted market growth in medical, consumer products/retail, and in the packaging industry for the growing e-commerce business. As companies have changed dramatically how products are purchased, they’re now delivered one at a time to consumers, rather than skid loads to a store, and with that comes the need to properly package the item so it arrives safely.”

In addition to measured growth, environmental sustainability also takes center stage, and G&T has several initiatives on board, including recycling polyurethane into carpet padding and underlayment for outdoor football stadiums, soccer fields, and playgrounds, as well as recycling and reusing corrugated boxes. “We just know we need to do the right thing,” says Hoeksema.

G&T also uses 10 high-power water jets in its buildings with chillers to keep the cutting water cooler, so less water is used to cut foam. The company has plans to conduct a large-scale water reclamation project whereby all of the water it cuts with is completely reused and recycled in a closed loop system.

Finally, safety plays a huge, ongoing role in the company’s day-to-day operations, and it’s a subject G&T takes extremely seriously.

“Having 440-plus employee-owners means safety is a big deal,” says Hoeksema. “We measure it, we watch it and we track it. Having zero safety incidents is always our goal. We set that goal every year for the general managers and the plant managers, and we truly hope to get it to 0. We don’t want one of our own to get hurt.”

The start of each month begins with safety discussions, says Boggiano. It’s the first thing that every group has to talk about – before sales, before profitability and before quality.

“A strength we also like to talk about is our buildings,” says Hoeksema. G&T’s campus is housed in well-lit buildings, and beautifully landscaped. “We’re tour-ready every day. When we have a customer coming to tour, we know our buildings absolutely show better than any competitor I’ve ever seen. When customers walk into our facilities, they say, ‘You cut foam here?’ They’ve been in lots of foam companies, yet they’ve never seen a facility like these.”

G&T Industries prides itself on clean, safe, worker-friendly environments. For this company, employees as owners work together with one another to create environments and products everyone can be proud of.

“We’re super customer-centric and we’re entrepreneurial as a company,” says Hoeksema. “When looking at ideas and solutions and problem-solving for customers, we talk about giving us your most difficult. We pride ourselves on being able to solve those problems.”

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