Gust carrying on tradition of quality at Louis Hoffmann Co.
By John L. Campbell, for SBT
When Jim Gust purchased the Louis Hoffmann Co. five years ago, one of the smartest moves he made was acquiring the company’s old telephone number.
"I get a dozen or more calls every month on our old Milwaukee line," Gust said, explaining how he purchased the exchange with a 414 area code as a supplement to the company’s regular business lines when the company moved from Milwaukee to Menomonee Falls, where the area code is 262.
"People don’t have the need for architectural fabricators that often. So it’s easy to lose touch with old customers, former clients for whom the company has worked," he says.
Gust knew that the Louis Hoffmann Co. had a long-standing reputation for high-quality work.
The company is one of Milwaukee’s oldest, starting in 1887 primarily as a sheet metal fabricator. For decades, it owned a building on Jefferson Street in Milwaukee.
Through three generations of family ownership, the Louis Hoffmann name in the architectural metals industry became synonymous with superb craftsmanship. The company built a lofty perch for itself in the industry. The recent renovation of the Pabst Theater exterior is a small sample of its work.
"The metal finishes we give our fabrications are Class A," Gust said.
More than 90% of the company’s work is ornamental, with a small percentage classified as structural.
Trying to reduce the level of quality its craftsmen are accustomed to producing to obtain lower priced work is a precarious practice. It’s like changing the culture of the company, according to Gust, who conceded that such changes could be compared to taking democracy to Iraq.
Hoffmann does business with some of the largest architectural and construction firms in the country. Every job is customized, beginning with an estimate of costs. That’s where the design knowledge acquired from years of experience becomes an important factor. Gust does most of the design and estimating himself, although he’s hiring and training personnel who will assume those duties in the future.
"What we do is translate architectural concepts into design and manufacturing processes," Gust said, explaining how an assembled fabrication might have components that are extrusions, forgings, castings and sheet metal.
Functions that can’t be done in-house are jobbed out to ether firms, but Hoffmann assumes the total responsibility for bringing the finished product to fruition. That’s one reason architectural fabricating is a high-risk business. The time it takes to complete a project could be a year or more, beginning with an estimate, followed by detailed drawings.
The ingenuity of the designer plays a role in deciding how ornamental structures are produced and assembled – areas of expertise foreign to the education of an architect.
As an example, Gust cited a project where the architects assumed the use of linear shaped structures fabricated using L-shaped steel bar. Hoffmann submitted his company’s estimate based on the cost of aluminum extrusions instead of fabricated steel.
"Not only was the material lighter in weight, easier to drill, but it looked cleaner and cost less," Gust explained.
Those qualities in the estimate were key factors in Hoffmann being awarded the project. When the value of a job runs into hundreds of thousands of dollars, customer confidence is an essential ingredient to being awarded a contract.
Sub-assemblies are usually of such large size that it takes a flatbed trailer to transport them, which is why most assemblies have to be completed and installed at the construction site.
"The physical size of our projects protect us from foreign competition," said Gust, who is a hands-on manager.
Gust admits he’s been guilty of micro-managing on a few occasions. As a journeyman sheet metal worker who apprenticed with one of the best shops in Milwaukee, Gust knows the work being done and how long it takes to do it. He worked with J.M. Brennan for 10 years.
Brennan supplied some work for Hoffmann, which is how Gust came to know the Louis Hoffmann Co. was for sale.
"This is a detail business," Gust said. "And I try to set up systems that capture those details with weekly reports. Then, I concentrate on the choke-points."
Gust has acquired two university degrees to complement his trade skills. He earned a bachelor’s degree in education with a major in mathematics, a crucial discipline in the sheet metal industry. He also earned an MBA from UW-Milwaukee.
In November 1998, when Gust acquired the company, all the accounting was being done manually. He introduced the office to computerized systems. Anyone who has lived through such experiences knows the pain involved. Now, the accounting is on computer, and all design drawings are produced and printed using computer-aided-design (CAD).
Buying a company with a 100-year-old history exercises all the management muscle Gust can muster.
During the next five years, Gust plans to concentrate on the shop and the development of management personnel. He has already added a few new pieces of equipment.
"I want to be able to buy equipment with money from earnings, not on bank loans," Gust said. "Although, Milwaukee Western Bank has been very good to me."
In the construction business, it’s not uncommon for some projects to take a year or more to complete. Contracts call for progress payments with a final payment retained until the project gets final approval.
"The jobs we get are usually high-end projects," Gust said, relating how some architects manage to generate unique and costly concepts. "One such project involved 80 feet of ornamental handrail that we sold for $4,000 per foot."
Gust is making progress pumping new blood into the company’s employment of 35 people. Along with a couple Milwaukee School of Engineering students working summers and part-time during the school year, Gust has hired a UW-Milwaukee graduate with a degree in architectural engineering.
"She’s doing design, drafting and project management," Gust said, banking on her educational background to help establish rapport with the company’s architectural clients.
Gust’s oldest of three daughters, a recent graduate from UW-Green Bay, is currently working on marketing projects for the company. The company is making monthly mailings to keep its name in front of construction contractors.
"We have a sales representative in Charlotte, N.C.," Gust said, where they have a project under way with the Bank of America. He’s looking for similar representation in New York City. Gust likes making sales calls, where he finds that his experience instills confidence in architectural clients.
The economy hasn’t cooperated by loosening corporate purse strings for new projects. Last year’s sales were a disappointing $2.6 million, down from $3.4, the previous year. "But this year is looking better," Gust said. "In the first seven months, we’ve already reached last year’s sales level."
Sept. 5, 2003 Small Business Times, Milwaukee