| The Miller Legacy: Intelligence & Surprise
A History Of Surprise My impressions of Bill Miller over the past fourteen years are probably based more on actions of the company, Miller Industries, than of Miller himself. Miller had not been around industry-related functions all that much. In the course of events, he had receded behind the scenes, letting his CEO, Jeff Badgley, become the visible commander of the front lines. Over time I also perceived that Miller and company do not cotton to publicity. This CEO has a preference for lying low, particularly when strategic maneuvers are in the works. Miller once turned me down on an interview request, on the eve of major company acquisitions. Understandably, he likes keeping intentions close to his vest. Miller Industries is no more secretive than any other private enterprise, nor is Miller himself so. But the company kept making bold, aggressive moves, and when they happened, they surprised an industry at a time nothing else was happening on such a large scale. It doesn’t seem that long ago when Miller had swooped out of nowhere, or so it appeared, to take control of Century, Holmes, Challenger, and Eagle Claw, back in 1990. Then in 1996, Miller, by now a public company, acquired Boniface (the British wrecker manufacturer) and Jige (the French wrecker manufacturer). About the same time, Miller began acquiring wrecker distributorships in the U.S. The company then acquired Vulcan Manufacturing. More than ever before, Miller was seen as an industry giant rising above the corn stalks and into the clouds. What Could Be Next? At the American Towman Exposition in Baltimore in November of’96 the cat was let out of the bag. Miller people, in the hopes of squelching wild rumors, met with this American Towman editor in a conference room to report that Miller Industries would be forming a national towing company in 1997, through acquisitions and mergers. This Miller Division would be called, RoadOne. The “stealthmaster,” as I had begun to think of Miller, had struck again. As if that wasn’t enough, the following year Miller acquired Chevron, known for its carrier technology, and then obtained rights to the Dynamic Self Loader patent. Becoming more familiar with Miller has brought into focus a tremendous contrast, the bold and aggressive Miller history, and the chairman himself, a down-to-earth man with blue-collar roots. Bill Miller grew up the son of a Ford factory worker and then went to the University of Michigan, earning a bachelor’s degree in industrial engineering and a master’s degree in business administration. He rose to several management positions with major manufacturing companies, including the Ford Motor Company, the Bendix Corporation, and the Signal Companies. He was the owner and president of Flow Measurement, Inc. at the time he made his entry into the tow equipment marketplace. Throughout his remarkable rise, Miller continues to wear his blue-collar sleeves, literally. When I told him he may want to be photographed in shirt and tie for this article, he replied, “But this is what I normally wear (jeans and polo shirt).” Miller is an unimposing figure; about 5’ 9”, trim and fit, and bespectacled. If anything, he looks like a physics professor who doesn’t appear the type to give one a break on a grade, until he starts talking, and then he seems like the nicest of guys. He’s a family man who also rides a Harley and can wield a tennis racquet or golf club in his spare time. To the industry at large, however, Miller is a corporate name without a human face. With controlling interest in the world’s largest tow-body manufacturer (today Miller Industries reports about $250 million in total sales and employs over 1,000 people at seven production plants), Miller himself is a shadow behind some of the industry’s greatest names in wreckers and it’s the way he has wanted it. Leadership Miller Industries has been an organization that clearly wills its own destiny. But like the face of the corporation itself, its leadership culture is complex. Miller lives in Atlanta, not Chattanooga where the company builds all those wreckers. He visits certain company plants several times a month, but his own command center is in Atlanta. Miller has earned a reputation for being the industry’s most aggressive company. It is an organization that is usually on the offense. For example, Miller has defended and enforced company owned patents, like the famous L-Arm wheel lift design. The company attorney, Frank Madonia, working out of the Atlanta office, has won patent battles both in and out of court against four other wrecker manufacturers. Some would say Miller’s style of doing business is very much a take-no-prisoners approach. In the beginning, Miller dared conceive a consolidation of manufacturing and marketing processes in an industry where the head of the average wrecker builder was engineer, salesman, and founder all rolled into one. “Consolidation” was not in their vocabulary. Miller came in and made it a reality. Even today, Miller considers that first act the company’s most important legacy. “We were able to save several major manufacturers from bankruptcy and improve efficiencies so that these wreckers and carriers could be bought by towers at an affordable price.” Here was also a successful businessman who acted like a riverboat gambler (an ilk that once plied up and down the Tennessee River by Chattanooga). Miller rolled the dice when forming the industry’s first national towing company (1997). It was, without parallel, the boldest strategic move by anyone in the history of the towing and recovery industry. How much of a roll of the dice it really was became evident soon after, when the company’s stock prices began dropping, eventually plummeting. The dice-roll resulted in the company losing its manufacturing focus, losing some market share to its competitors, and effectively tripping over its own feet at the moment it was chugging like an unstoppable locomotive. With stock prices continually sinking to new lows, and losses mounting, RoadOne was eventually abandoned in a long painstaking process. Miller decided not to sell off the company as one block, an option that was considered, but instead, gave former company owners and/or, current managers the opportunity to take over ownership at their respective locations. The towing operations were indeed sold back, in most cases to those people. Along with this major sell-off, the ten distributorships that had been acquired were spun off, with many of those outlets, too, being sold back to the original owners or current managers. Yet, at the start of it all, many inside the industry thought this rolling of the dice was a sure-shot. Because of Miller’s march of acquisitions and a healthy stock performance through 1996, by 1997 many figured that the RoadOne venture was a fait accompli — in the bag. Miller was perceived as a business maverick who could not lose. But destiny had another player outside the industry who didn’t share in the perception of Miller’s invulnerability. In fact, Wall Street was very much concerned with perception, but it was the perception of being in competition with its core customer base, and not the perception of being a winner, that ruled the day. It was also a time when manufacturing stocks appeared bland in an arena of new and sexy Internet and high tech ventures. In short, heavy metal was given the cold shoulder by stock purchasers for the promise of information and communication technologies. Miller will point to the lack of “scalability” and RoadOne’s inability to get to know its customer as key reasons for the failure of the venture. In short, being bigger wasn’t better in the towing business. “For example,” said Miller, “we thought we would be able to leverage our size into purchasing power that would lower our insurance costs. Instead, we paid more.” There was another critical disappointment. Both Miller and Badgley pointed to RoadOne’s inability to keep aflame the entrepreneurial spirit that was the backbone of this industry. Some of the tow-business owners who had merged with RoadOne and become “Managers” operated without their previous “drive.” When Bill Miller recently stepped into Badgley’s office to be interviewed by AT, his own Miller-stock had been devalued by more than $100 million in recent years, but he seemed, all in all, happy. He even joked and kidded around with his trusted President and co-CEO. More than anything else, he seemed up and very much game for the company’s next chapter. He even smiled, sort of, commenting on Miller’s stock market tumble. “We learned that when a company goes public, it takes on a partner that is schizophrenic—-that’s how Warren Buffet put it.” Though Miller’s stock has rebounded somewhat this year, it has not yet reached its pre-1997 level. At the time of this printing the Miller stock hovered around $9 a share. Miller tried to answer each question forthrightly and he was quite animated. His hand gestures and facial expressions were as exuberant as those of a fisherman telling the story of a big catch. Miller’s leadership style can be understood by the value he places in the relationships of the people within the Miller organization. This dynamic is evident with a core management team that has seen almost no change in fourteen years, from VP of Finance, Vince Mish, to President and co-CEO, Jeff Badgley. Badgley had started with Challenger in sales and marketing before moving over to Century, predating Miller. When Miller took over, he quickly saw in Jeff someone who would help the company progress. “I quickly learned,” said Badgley, “that Bill wanted someone who would challenge him on things. He didn’t want yes men around him.” “We work better together,” said Miller, “than either of us work by ourselves.” The strong relationship has sealed Badgley’s longevity through the worst of times, when it wasn’t far fetched to expect that Wall Street would demand a CEO be offered up as a sacrificial lamb. Miller never considered it. “I stand by my people not just though the good times, but the hard times.” He refers to Jeff Badgley as one of the “most respected, most dedicated, and most knowledgeable leaders in this industry.” Badgley smiles about his relationship to Miller and recounts, “I was once asked by a Wall Street operative, what kept me up at night. I told him, ‘two a.m. phone calls from Bill Miller.’” The calls from Atlanta are regular, often, and at any time. Through a collaborative thought process over most issues, the leadership of Miller Industries takes focus, every day. Being intelligent is certainly one of Bill Miller’s traits that affect his leadership ways. But it is the gathering of intelligence that probably played the biggest role in the Miller course of events. In my talks with Miller, I stumbled across the fact that he spoke one of the Baltic languages, something he learned at the military language school in Monterey, CA. He had served in Army Intelligence and was a strategic analyst (code-breaking being one of his disciplines) twelve miles from the border of Czechoslovakia in 1968 when Russian tanks rolled in. He had also performed a similar assignment while stationed in Vietnam. It was clear in listening to him talk of these episodes in his life that he had relished intelligence work. “Knowing the strategy of your opponent is critical,” he said, referring to the business of competing in the wrecker and carrier market. Market Share Miller would probably like to know the new strategy over at Jerr-Dan, since that company was recently acquired by Oshkosh, a two billion dollar specialty truck manufacturer. While Miller still has an estimated 60 percent of market share, Jerr-Dan has come on strong over the past ten years and Oshkosh is known for becoming a market leader in any field it enters. “We welcome the competition,” Jeff Badgley said. “In fact, if they can help us raise the competitive bar a little, the industry will benefit.” Other Miller people I spoke to at the Miller plant chimed in on this sentiment. “It’s better to have a strong, intelligent competitor,” said Randy Olson, VP of Marketing. “It brings out the best in everyone.” “We welcome competition,” said Clay Traylor, VP of Sales, who pointed out that Miller’s distributor network is the best and most extensive in the industry. He intimated that any competitor has its work cut out for them to match the strength of the Miller network. While Bill Miller concedes that the past six years (1997 through 2003) was a time when the company was off track, the issue of market share being lost is not conceded. “In fact,” says Miller, “since we first consolidated manufacturing of core brands in 1990, we have gained significantly in our share of the car carrier market (largely recognized as Jerr-Dan’s strongest area). Today we are the largest producers of car carriers in the world. That wasn’t the case years ago.” Most of that increase, said Badgley, is with the Century, Vulcan and Chevron lines. According to Badgley, Miller sales in wreckers and carriers (not figuring chassis sales) have increased over the last ten years, from $38 million to $150 million, the largest area of growth being in carriers. Century, created by Earnest Holmes’s grandson, Jerry Holmes, is celebrating its 30th year. It has been the number one selling wrecker brand but today it is also a major name in car carriers. With $75 million in annual sales, excluding chassis, it is currently the number one selling brand in the industry. The Brand Challenge The challenge to Miller was, in the beginning, and still is today, building and marketing a diverse product lineup under several brand names. In cars, General Motors succeeded in building brand identity with the likes of Chevy, Buick, Oldsmobile, and Cadillac, to name a few, and the parent—-General Motors—-receded into the background to the point that most of its car owners only know the brand, not the manufacturer. Miller, in a similar circumstance, has put the corporate name more out front. The identities of core brands like Century, Holmes, Challenger, Vulcan, and Chevron may not be as strong as they once were in the collective imagination of the marketplace. Comments from long-time towers over the years about Miller’s product lines have reflected this. Occasionally a brand is even referred to as a “Miller.” The question of market-strategy of brands is certainly grappled with at the budget level. Miller has been one of the industry’s biggest spenders of promotional dollars, but because of its diverse product lineup, even their leading brands have not had the advertising presence in the trade publications as a few of the competitive brands have. Miller Vice-President of Sales Clay Traylor points out that brand-presence abounds with so much product (and their nameplates) rolling on the street. It’s also true that Miller brands get a lot of play in pictures and text in recovery stories featured in the trade magazines. Being the sales leader does create a marketing leverage that much smaller manufacturers don’t enjoy. The Holmes line, originated by Earnest Holmes in 1915, the brand with the most heritage, has clearly gotten the short end of the promotional stick. A Holmes advertisement is rarely seen and the nameplate is not prevalent on the street. But Miller states that Holmes is very much in the Miller picture for the future. “It’s the brand known around the world. It’s the name that gets our people in the door in new markets overseas.” If the Miller corporate-identity has clouded brand distinction, Badgley and Miller contend that their product lines continue to foster brand loyalty and there is a true difference among the products. “The center section and the tool boxes differ significantly, for example, between Century and Vulcan,” says Badgley. “Even the one-tons have differences. The Holmes 550 has its own proprietary hydraulic winch. With the carriers, the sub-frames are different, but you’ll also find differences in areas like railings and hook-ups.” Evidenced by the many new-product and product-enhancement press releases American Towman has received the past five years, Miller indeed has been active in its research and development department. At the Ooltewah/Chattanooga wrecker plant, three engineers are daily at work on CAD design-software. One gets the sense in speaking to Badgley about “the many Miller brands” that there may be a plan in the works for simplifying their product offering in some way to achieve greater cost efficiency. Creating fewer, individual parts and component differences is mentioned. But this does not mean that any of the brands are on the chopping block. Each brand, he claims, has a significant, industry following, large or small. Today, with the company’s focus back on manufacturing, Miller faces real competition. In the heavy-duty wrecker market, several players are offering rotators. Miller last year introduced the Challenger “Traveler” to compete directly with NRC’s Slider. The light duty, self-loader market has seen new formidable entries since the patent on the Dynamic “original self loader” expired last year. And there are many carrier producers to contend with. But the Miller team believes they are better than anyone else “on the streets” and that no one else is closer to the customer than they are. In fact, Miller has maintained its reputation for standing by the customer. Take Bob Mandy of Mandy’s Service Center in Edison, NJ, who, at the height of the RoadOne controversy, had opted to buy a Miller product. “I purchased a Vulcan wrecker with a faulty paint prep. Within a year, rust was coming through. Miller sent out a rep to look it over, and they fully backed the stripping and repainting. I’ve bought Miller since, because they stand by their product.” “In the end,” says Miller, “all anyone has is his good name. We strive for perfection, but the best process is textured by occasional human error. So it’s important that we always stand by our product.” A Visceral Interest Perhaps no one company has more to gain from a healthier towing trade than Miller Industries. Miller had hoped to raise the bars of management practices and profitability by operating a strong national towing company. A more prosperous industry, he figured, would afford tow bosses the ability to buy upward and more frequently the equipment that is essential to their trade. But it didn’t happen. Still, as the world leader in tow equipment, the issue lies at their feet: The challenge to change the mindset of an industry so that it places the proper value upon its services, making it profitable enough to put and maintain the best equipment on the street. Miller Industries may not have the answer to the industry’s shortcomings, but it has a visceral interest in the towers’ lot. Miller himself reflects much of this family owned-and-run industry now that his son, Will, has been working as a Miller district sales manager the past few years. Recently, Miller has entered in the dialogue on the heritage of the towing trade, a heritage that goes deeper than the first Holmes to winch a Model T from a ditch. At the annual Towing Hall of Fame Induction weekend this past September, Miller and son Will handed George Connolly, President of the tow museum in Chattanooga, a check for $175,000, a gift to the Museum from the Miller Family Foundation. Miller hopes these dollars will help the museum pay off its mortgage on the building it is housed in, and also create a learning-training center the towing industry can freely use. Miller, initially, wanted to keep this donation quiet, like he did over a donation to the museum back in 1995. “My mantra,” said Miller, smiling, “Is that no good deed goes unpunished.” But after serious consideration, Miller was convinced that it would help the towing museum in Chattanooga even more if the industry understood that that one of its most powerful companies firmly believed in the museum’s purpose for being. “The reason why the museum is here in Chattanooga is because the first wreckers were made here,” said Miller. “But the reason for the museum’s existence is towing’s generational heritage - families passing down the business to their sons and daughters. Our industry should have the ability to pass its history onto their children.” Miller feels strongly about the uniqueness of the trade his company serves. “These guys are every inch the dedicated kind that are the firefighters and policemen. They need to see a reflection of that uniqueness and dedication and the museum can serve that purpose. At the same time, the museum can educate the public as to what towing and recovery professionals do for them.” Today, Miller Industries is again solely in the business of building and selling tow equipment. Last October, at Badgley’s request, Miller stepped back into the day-to-day operations as its Co-CEO. Between them, the two then made a commitment to work together running the company for the next ten years. By all appearances they are enjoying the challenges before them. On November 20th, both Bill Miller and Jeff Badgley will be on the show floor of the American Towman Exposition, a sign that Miller Industries is focused on core business like never before. |
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 Century 1060S |
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 Miller President & Co-CEO, Jeff Badgley, pictured right of Bill Miller. |
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Miller On Stock Market Dynamics “We learned that when a company goes public, it takes on a partner that is schizophrenic—-that’s how Warren Buffet put it. “Miller Industries and many other public companies have had a roller coaster ride with their stock price over the last several years. I’ve learned that the stock market is very unpredictable and at points in time can either overvalue or undervalue the intrinsic value of any company. Long-term however the stock price should be a reflection of the success of the company and its ability to operate profitably over a long period of time.” |
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Lessons From RoadOne “In our case the biggest obstacle was the lack of scalability. For Miller Industries, size seemed to impact costs in the wrong direction. Part of that, of course, was simply overhead necessary to generate financials as a public company. But other costs that you would expect to decrease like insurance actually increased. We also had problems keeping the entrepreneurial spirit alive among the managers who had previously been independent owners. Developing the right system for rewarding individual entrepreneurial success inside a large corporate structure proved to be extremely difficult. “I would have to say United Road Service (URS), which was our early competitor in the industry consolidation period (URS is now a Miller customer) and RoadOne West (owned by former owners and managers), are still in the market and seem to be enjoying some success. We think that consolidation has an opportunity for success in this industry if it has a regional model as opposed to a national one. I believe it is necessary to limit your size and geographic proximity to that which you can effectively manage on a personal basis. “We failed, in the simplest analysis, because we were not able to know our customers or our costs, and these are two key principles for success in any business enterprise.” |
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Plant & Brand Profile Brands: Boniface, Century, Challenger, Champion, Chevron, Eagle Claw, Holmes, Jige, Vulcan Manufacturing Plants: Chattanooga (Ooltewah), TN Greeneville, TN Mercer, PA (Chevron) Sharon, PA (Carriers) Thetford, England (Boniface) Revigny in Sur, France (Jige, International) Longeville, France (Jige, International) |
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 Jeff Badgley |
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 VP of Finance, Vince Mish, near stacks of steel inside the Chattanooga plant. |
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