PT Distributor of the Year honoured
By Carroll McCormick
For the second time (the first was in 1995) National Bearings has received the Power Transmission Distributor of the Year Award from Machinery & Equipment MRO magazine. The Quebec company was presente...
For the second time (the first was in 1995) National Bearings has received the Power Transmission Distributor of the Year Award from Machinery & Equipment MRO magazine. The Quebec company was presented the 2000 honour for its smooth acquisition and integration of Bearing Power, which it took over in March 1998, into its own company.
At the time of the Bearing Power acquisition, National had 13 branches. Bearing Power consisted of 43 branch offices under four distinct companies: Fred C. Morrison in the Maritimes; Hugh J. O’Neill in northeast Ontario; Thunder Bay Bearings in northwest Ontario; and Bearing Supply in Western Canada.
“For us it was a great opportunity to grow our network,” says Yvon Goudreau, National’s president and a 25-year career company employee. “Before, we were very strong in Quebec. Now we are in nine provinces.” The acquisition, which was completed in the fall of 1999, has made National, now with 52 branches, 438 employees and two distribution centres–one in Montreal and the other in Winnipeg–the largest Canadian-owned bearing distribution company.
National, which is 45 years years old, has its head office in Saint-Laurent on Montreal Island. It is owned by the Toronto company Wajax Limited, which purchased it in 1979. National distributes products such as bearings, sealing components, power transmission equipment, hoses and fittings and material handling equipment like hoists and conveyors.
In-house engineering staff
The distributor also has an in-house line of large pillow blocks and its engineering department’s activities include designing specialty equipment for customers and supervising the installation and commissioning of turnkey projects. Its client base is represented in industries from pulp and paper to mining to agriculture.
National carried out the Bearing Power integration in phases, one company at a time: National would create an integration plan, which included a three-day training seminar for all of the employees within a Bearing Power company. All of the employees were taught everything about National’s company policies and procedures, from purchasing from suppliers to filling out orders for clients. That way, even if someone forgot one of the new procedures, one of the other employees would be sure to know how to do it.
One of the biggest tasks, says Goudreau, “was switching the companies over to the National computer system.” Once an integration plan was completely ready, National would execute it over a single weekend for a seamless changeover to the National system by the time the branch offices opened on Monday morning. “It was a very tough job,” he says.
Goudreau is especially proud of the job the people at National did carrying out the integration of the Bearing Power companies. Unlike some companies, which hire consultants to carry out an acquisition, National’s employees added the extra work to their existing schedules. And because the Bearing Power branch offices were so far flung, says Goudreau, “We had people flying all the time.”
An example of the advantage of using National employees to carry out the acquisition can be found in Andr Bertrand, now the Director of Operations for National. At the time of the acquisition, Bertrand was National’s branch manager in Ottawa. Along with National’s information technology people, he assumed responsibility for designing a three-day training program for the Bearing Power employees. He soon began leading the training programs and lending his 25 years of front-line expertise to the training sessions.
“Part of the challenge was making the new people feel comfortable with the changes that came with becoming part of National,” explains Bertrand. “As a branch manager it was a lot easier for me to answer questions about how to change. A lot of questions related to day-to-day, current events.”
Perhaps the biggest change in corporate culture that the Bearing Power employees had to make was to learn how to be part of one large team. “As far as daily business, each (company) was separate to the point that there were different branches in the same town competing with each other,” says Claude Drolet, a senior vice-president with Wajax. In fact, the only Bearing Power branch closures were in the towns where two Bearing Power companies had branches: Thunder Bay, Sault Ste. Marie and Sudbury.
One of the challenges then, was to teach everyone to be a member of a single team. Says Drolet: “We look at the company today and we are very united. I think employees are proud to be part of the group.” Drolet spent four months going to every Bearing Power branch office, with the exception of Yellowknife, to meet every employee. “It was important for me, at least to get a better feel for the company.” (Drolet previously was president of National, a post he held when the company originally received the Power Transmission Distributor of the Year award five years ago.)
National was also sensitive to the different markets represented by the new branch offices, and took advantage of the expertise of the Bearing Power people. “The business side is really the same everywhere,” says Bertrand, “but the customer base can be different; for example, oil out west, paper mills and mines out east.”
Goudreau will not reveal National’s annual sales figures, but the addition of Bearing Power, plus new sales that have resulted from being able to offer large clients the advantages of being a nation-wide sole-source distributor, have tripled the company’s sales. “The synergies have given us a marketing edge. Large customers are looking at reducing the number of suppliers. This is happening big time (in the industry),” says Goudreau.
In September 1998, National also bought Service de Roulement Harvey, a Quebec-based bearing distribution company, giving National a presence in the Quebec City area.
Future goals, post-acquisition, explains Goudreau, include improving the profitability of the new branch offices, and improving customer service, for example, by studying how National can use e-commerce with its clients.
Successfully completing the acquisition of Bearing Power was no small challenge. “There is no book out there on how to acquire companies,” says Goudreau. But perhaps his most difficult moment was when he read his award acceptance speech to the huge crowd at the Power Transmission Distributors Association luncheon in Hawaii. Says Goudreau, “I can entertain 20 persons at a time, but 1,200 is different.”MRO
Senior contributing editor Carroll McCormick is based in Montreal.
The pinion in this mine equipment in Wabush, Nfld., is supported by two of National Bearings own pillow blocks.