Thursday, August 1, 2013

A family for better bush-bashing

So I sat down with Tom Jacob of Ironman 4WD (bull bars, winches, driving lights etc, exporting to 160 countries) at a little suburban café and over scrambled eggs and a flat white, and kicked off the conversation, as I usually do, by asking how long his family business has been going.
"Oh, since the 1650s," he replied. Huh? Did they have LandCruisers and Pajeros back then?
"Well, no. Our family were scrap metal dealers in Germany from the mid-17th century. We go way back." Oh, right. I get it.
And if it weren't for Hitler, Tom might still be in Germany, dealing scrap. His father, Gunther, had been carrying on the family metal business in the 1930s when the business was "acquired" by the Nazis and he and the rest of the family were shipped to Auschwitz.
Gunther was good with metal so his usefulness saved his life; he was one of the few Jews to survive the horror of Auschwitz.
After the war ended, Gunther emigrated to Melbourne, Australia, and got a job with Henderson's Springs, one of the most successful post-war family businesses, supplying the booming local motor industry with steel suspension. He married and had a daughter, Barbara in 1950 and Tom in 1955. And then in the early 60s he started his own business… making springs in his backyard, bashing them out on his own anvil after roasting the steel in his backyard furnace.
And so the 300-year-old Jacob family business resumed after a 25-year pause, on the other side of the world, making springs for horseless carriages instead of dealing scrap.
The neighbours in Moorabbin soon got sick of all the banging, so Gunther had to move his furnace and anvil somewhere else. He did a deal with a blacksmith in Oakleigh: he could make springs in the morning if he helped make shoe horses in the afternoon.
It seems Gunther Jacob was bloody good at making springs, and as Henderson's business declined, so did Gunther's rise. He became Melbourne's largest producer of springs for trucks, according to Tom.
But the young Tom didn't see his future in sweating over a furnace and anvil. Instead, like your correspondent, he was called by the typewriter, and decided to become a journalist, getting a cadetship on The Age as a 17-year-old in 1972.
He did that for six years – politics, police rounds, sport – and loved every minute of it, but in 1978, with his father's health failing, Tom and Barbara both decided to join the family business and help out.
Says Tom: "Dad created this business through hard work – I didn't want him to think I didn't care, so I took six month leave of absence from The Age and then just stayed on."
It was the time when air suspension was replacing steel springs on trucks, but four-wheel drive vehicles were still using steel, so the Jacobs started to specialise. Gunther passed away in 1985 from a heart attack (he smoked 20 cigars a day), and at the age of 30, Tom became managing director, with Barbara handling personnel (now HR). They each inherited 50 per cent of the company.
The business grew steadily. Tom started exporting to Europe in 1991 and, with margins getting squeezed, began to source lower cost product from Asia a few years later. In 1999 he closed his Australian factories and started having all the products made in Asia, while still designing them here.
In 2005 Tom and Barbara got their big break (all businesses need at least one big break) and ironically it was another war – Afghanistan. Tom got a call from an Australian engineer in Thailand who had a contract to supply the US military with accessories for its vehicles in Afghanistan.
Over three years Ironman 4WD, as it was called by then, fitted out 55,000 military vehicles for the US Army. Suddenly, unexpectedly, Tom and Barbara had made tens of millions of dollars and, like many family businesses, they decided to plough the cash back into the business – opening operations in 19 new countries in 2009 alone.
Tom says the key to the business is innovation. They employ 40 people in Dandenong in Victoria doing product development (total staff is 250, in countries all over the world). They don't make anything anymore, but they design everything – a huge range of accessories for 4WD vehicles, as well as camping equipment and, recently, fishing rods.
He's now about to open a warehouse and showroom in Los Angeles as part of a "big push" into the United States. He says he's been following the Japanese carmakers around the world because "they don't understand what people actually do with their 4WDs".
Well, around where I live they use them to take their kids to school and do the shopping, but I get that a lot of people actually take them into the bush, where it's less comfortable and you need things like winches and snorkels and tents that fit onto the roof.
Tom and Barbara Jacob's Ironman 4WD now turns over $50 million and is growing at 20 per cent a year. They make a good profit, while also running free canteens for all of their staff, including lunch, because that's good for both morale and productivity.
Tom Jacob is still enjoying himself and is very ambitious for the business, but it's not clear what happens after him and Barbara.
They each have two children and only one of them – Barbara's son Daniel – is in the business. Her daughter Rebecca is a cheesemaker; Tom's daughter Maggie is a singer in Ireland and his son Samuel is an apprentice plumber.
Will the business be passed on to the children, or sold? Tom doesn't know, but there's plenty of time. He wants to get the sales to $150 million first.


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