Monday, January 25, 1999
Metal king served by soft touch
The biology of business is a young heart and an old brain.
Hans Zimmerman, 76, has thrown away the calendar. In the process, he has built CMP Metal Products Ltd. into one of the most modern and fastest-growing custom sheet metal manufacturers in North America. Zimmerman, a former police officer, plumber and tinsmith in his native Lucerne, Switzerland, is a big guy — 6 foot, 2 inches and over 200 pounds — who still likes to walk the beat. But these days his beat is his 112,000-square-foot plant in Chateauguay.
Its filled with big, expensive computer-operated machines with multi-colored buttons and he-man names like Strippit, Vipres Z358 and Motoman. They have one thing in common — they cut and punch holes in sheet metal.
Close to 300 employees works three shifts a day, six days a week filling the orders for big clients like Northern Telecom and Hewlett Packard. Every day, $150,000 worth of speciality electronic components are manufactured, assembled and shipped out.
They make more than 10,000 different items in quantities of 10 to 100 parts per production run. Their computers are hooked up directly to those of their major clients in Canada and the U.S. so CMP engineers and technicians can stay in close touch.
It's fast-expanding business — seven employees and revenues of $300,000 in 1982 had grown to 280 employees and $32 million in sales by 1998. The jargon is technical, but Zimmerman uses simple words to explain his success.
Stay sharp so you don't miss one of the juicy aphorisms that drops from his mouth as he walks you through his plant. "It's only what you learn after you know it all that counts," is one of his favorites.
Hold on a minute. What's that on the floor? An errant screw? Zimmerman swoops down and scoops it into the garbage. Another lesson to be learned from the CEO: "Sweat the details." If a screw falls out of its supply basket, don't try to put it back in its right place for fear it might end up in the wrong basket with screws of a different size. That, in turn, could lead to a costly error on a precision project.
Here's another bon mot courtesy of one of Zimmerman's favorite French writers and authors, Francis Picabia: "The head is round so thoughts can change direction." It means stay flexible to find a better way to meet your client's needs.
Meeting your client's needs depends on a highly trained and motivated staff using the most modern equipment. If a machine is more than three years old, it falls out of favour with Zimmerman. Time to reinvest in new equipment. During its lifetime, there is regularly scheduled maintenance.
Staff members continually upgrade their skills — seminars in the plant, company-paid university courses and training at the factories of computer and machine suppliers.At CMP, the worker is king — an air conditioned plant, subsidized hot meals 24 hours a day in the company cafeteria, a fully-equipped gymnasium with showers, company contributions to RRSPs and health insurance, an in-house sports league and social activities.
Unlike many patriarchs who can't bear to let go of the reins of power, Zimmerman has already passed control of the company and a subsidiary called Zimac to three of his four sons who range in age from 38 to 44. Andreas works part-time in the family business. Steve is president and John is vice-president of CMP. Danny is president of Zimac, which has developed a state-of-the-art system to bond a composite patch onto the aluminum structure of aircraft which show signs of metal fatigue. They have sold two $100,000 models — one to the National Research Council and one to Boeing — with more prospects in the aerospace industry.
What makes this family success story all the more remarkable is that Zimmerman did not buy CMP until he was 50 — an age when most businessmen are thinking of retirement. At the time — 1972 — CMP was a small metalworks shop known as Chateauguay Machine Parts doing about $50,000 worth of business annually. Zimmerman — who until that time had spent half of his adult life working in metalworks plants in the Montreal area— had recently been laid off by a company which had been sold. He decided to do freelance sheet metal work from his garage, but quickly ran out of space.
To solve his space and equipment problems, he bought 10 percent of the then three-year-old Chateauguay Machine Parts for about $5,000 borrowed from friends. Within two years, he bought out both of the original founders. His two sons, Danny and Andreas, joined him, together with his wife, Martha, who kept tab of the books and the financial transactions. In total, there were seven employees.
The main customer they inherited was Northern Electric, which eventually became Northern Telecom. In order to expand his revenues, Zimmerman knew he needed new equipment and more space than the 4,000 square feet he had taken over with CMP.
In 1976 he bought a 6,000-square-foot building on Bombardier Street in Chateauguay over the strenuous objections of his Toronto Dominion banker who felt Zimmerman's business could not afford the larger space. Zimmerman, who eventually switched to Banque Nationale, knew he could not afford not to keep improving his capacity if he hoped to add to his revenue base.
He and Martha recall the late 70s and early 80s as a struggle to grow the business. Many weeks, they opted not to cash their modest paycheques in order to pay suppliers.
"It was not easy," he recalled. "Our equipment was too old. We struggled."
The turning point came in 1985 when they approached the federal government's regional development department for a $100,000 grant to buy an automatic hole puncher which was more than 100 times faster than the manual one they had been using.
With the new equipment in place, their business began to grow rapidly. Zimmerman knew the secret of business success. Take care of your staff like family and keep upgrading your equipment. Between 1985 and 1991, he received $1.5 million in grants from the federal government and a $120,000 loan from the provincial government for new equipment.
The growth curve took a steep turn up. By 1988, the seven employees had grown to 65 and the annual revenue had jumped to $3.8 million from $300,000 in 1982. By 1991, there were 110 employees and annual revenues of $8.5 million.
Not bad for a family which immigrated to Montreal on May 10, 1957, with little more than their suitcases, air mattresses and a tent, which they used to camp out in the fields of Laval for two days before they found a small apartment.
But true to form — be it in business or their private lives — they always found a way to make the parts greater than the whole. Martha recalls plunking their prized Persian carpet in the middle of the tent to make it homier.
Even when money was tight in those early days while Zimmerman searched for work as a sheet metal worker, the family never considered returning to Switzerland. He didn't want to be known as a "rückwanderer" — the German word for someone who can't hack it.
"I wouldn't have been caught with my pants down on that one," Zimmerman said with a laugh when asked whether he ever considered giving up — either as a newly-arrived immigrant or two decades later after he went into business for himself. "We're not quitters."
Warren Perley is a former Gazette journalist who is president of Ponctuation Grafix, a graphic design and marketing company.