Art Mann’s ‘Buckets’
An Interesting Life, in his own words

Produced by John Stewart

John reports: “I had written to Art and asked him questions based on his very interesting comments at the last class coffee hour, and this is his response, lightly edited. After two long and fascinating phone calls, I realized that what follows is the top of a whole barrellfull of great stories.

“In thinking about the best way to present all of his activities, Art thought that putting them into ‘buckets’ would be a good approach.”

Bucket 1: Donsco, Inc.

After my Navy stint I came back home intending to go to Carnegie Mellon for a master’s in computer science. Instead, I fell in love with the foundry business while working there before going back to school.

From a 50-person operation to what exists now has been a long trek in a difficult business. Back in the 1980s I was designing and making cookware for our John Wright company. I wanted to feature porcelain coated items but was limited by the lack of coating services in the US and the daunting environmental restrictions. So I ended up working with a Taiwan-based company, Brico, to make the items. (but that story is another bucket)

When Mr. Lo, Brico’s owner, leased a foundry in Tianjin, China, I decided to fly over and see the operation, since the quality of the parts had deteriorated. During that visit we went to Beijing Jeep to see their foundry operation. From that visit, I got a contract to start up their new foundry. (another bucket)

From those experiences, I could see the potential threat that China could be to the domestic foundry business.

At the same time, I received a resume in the mail from a Chinese student who had just graduated from the University of Missouri with a PhD in metallurgy. He and a fellow classmate were looking for work. I hired them both with the idea that I could learn about China through knowing them. There’s a long story with Yuan Sun, who eventually went back to China and started his own foundry and machining operation. It was through him and his political connections that I got to meet high-level officials in Shanghai and was able to learn of China’s long-term plan to overtake the US as the world leader. (another bucket)

With this background, Donsco saw its large customers slowly migrate to Chinese suppliers. Having visited over 200 shops myself, I could see that Taiwanese owners had brought to bear both the foundry technology and the finance to build state-of-the-art factories. Tax-free operation for five years and a VAT export rebate along with the 40% currency reset in December 1990 meant unfair competition.

So I began to look to setting up shop in China. (a bucket for another time)

Meanwhile, back home, we plugged along and actually purchased another foundry from New Holland farm equipment in Belleville, Pa. We were forced to shut down that shop in 2009 when business disappeared and we collapsed the production into our Mt. Joy foundry.

During this entire time, our customers would put us under price pressure, quoting the Chinese price as the one we should meet. At those prices, we could remove all of our labor costs and still not be competitive. The foundry industry in the US began to shrink under the pressure. Politically, there was no understanding of the long-term price to pay as the large international companies wanted the cheap parts. But there was a price to pay. (another future bucket)

So, when we had the fire at the Wrightsville plant, we were faced with a difficult decision. The insurance cash payout was in the middle 8 figures. The family had to decide whether to take the money and shut down, or rebuild.

The decision to rebuild was based on what we saw in the international market, as China’s increasing costs and its emerging political threat were beginning to affect companies’ buying decisions. Further, companies were discovering the hidden costs of buying overseas, so that the market firming up.

We also liked the challenge and we understood the fact that the economy of the small town of Wrightsville would suffer if we did not rebuild.

We had to retain our customers, so we outsourced the production to other foundries while we supplied cores and finishing, and grinding the parts.

Then, once we started up, we had to find new business. Then the virus panic came along, and our business collapsed. In the 1990s we employed over 800 people in our operations and by last summer we were down to 310 people.

As of right now, we have a world-class foundry operation and we’re coming back from a low of $30 million sales rate to over $50 million at the beginning of this year, constrained by a labor shortage (temporary, I think) and with a three-month backlog.

Bucket #2 John Wright

I have a small business, John Wright, that specializes in shutter hardware. We still have some porcelain coated products for wood stoves and an Easter-related product –Doc Hinkle’s egg dye. Check out the website at www.jwright.com.

Years past, this company made mechanical banks, hardware, hand painted figures, doorstops and gift items.

The entire line was copied in China and the business collapsed to what it is today, with most of the items being imported from India, China or Taiwan. They are too labor-intensive for production in the US.

This is a separate operation from the foundry and machining business.

We’re always looking for new markets. For instance, the pandemic upset the exercise industry, and a kettlebell shortage appeared as Chinese deliveries stopped.  With Donsco’s new foundry back in operation, this product could be made here competitively, so we designed the product, built the patterns and entered the market as Brutus Tools. We’re competitive with the Chinese product and we have excellent ratings on our website: www.brutustools.com. Check it out.

Bucket #3 Restaurants

As a family, we own two restaurants in Wrightsville,

The larger one, John Wright (above), sits along the mile-wide Susquehanna River. It’s a terrific view and the reason we decided to upgrade the small lunch restaurant that was there.

As background, over the years, as adjoining property to the restaurant site would come up for sale, I would buy it. So, now we have a strip of buildings along Front street. The John Wright restaurant takes up two floors of what was a silk mill for necktie fabric. We have completely rehabilitated the old factory and added on a patio.

During the summer we can seat over 300 people and we feature a wood-fired pizza menu.

Our partner, manager and New York Culinary graduate Jim Switzenberg sources our ingredients locally.

I made the furniture and fixtures (except for chairs).

Check out the restaurant website at www.jwrpa.com.

When you do, you will see my one and only bronze sculpture that I had cast in Lancaster by George Mummert. George is an artist whom I helped to build a foundry in Lancaster, and coincidentally is also the artist who cast the bronze dinosaur at Yale’s natural history museum. Kids love to jump and play on it.

We have suffered through this corona virus pandemic with the help of the PPP loans. We have also kept our people on the payroll except for those who took a voluntary layoff. We have a very loyal staff and very little turnover.

As of this Valentine’s weekend we are fully booked and are just starting our retail store to sell our prepared foods that people can take home. Fresh pasta, ice cream, unpasteurized milk, local honey, sauces are all available to take home. This is a new venture, so we’ll see how it goes.

The restaurant business is capital friendly. Let me explain.

Upfront capital cost is necessary to start.
Inventory can be kept to under two weeks’ sales.
You get paid immediately upon delivery.
You pay your people weekly and your vendors monthly.

So, if your business grows you generate free cash as long as you are profitable and a good restaurant model is 10% return on sales.

You need a good and honest manager, and a good accounting system and you are only as good as your last meal……

Contrast that with the foundry business model which is not so favorable.

Upfront capital cost is high.
Startup cost is high.
Your customers want to pay in 60 days.
You pay your workers weekly.
Utilities in 30 days.
Vendors in 45 days.

So if you grow quickly, you will quickly run out of cash and foundries need constant maintenance and upgrades to equipment.

The biggest help to small business was the allowance of $500,000 a year in equipment write-off, helping businesses to buy new equipment and become more competitive.

The other restaurant is the Burning Bridge Tavern (www.bbtpa.com) up the street, owned by my three sons. It’s a local pub with live music and good food, with its own smoked brisket.

The bar is made from a walnut tree from my farm the tables from oak and poplar. I have a WoodMizer sawmill that I used to use to make the lumber for my wood working operation (shut down now as the space has been converted to process castings from the new foundry).

Bucket #4 Hourglass

With a few friends, I started the Hourglass over 20 years ago.

The concern was Lancaster County was in danger of growing in such a way that the quality of life would be slowly eroded unless some thinking and planning could prevent that from happening.

We began with a survey of the county population (at a time when you could get people on their home phone) that was statistically accurate +/- 3%.

That survey uncovered the fact that a large majority wanted something done, especially concerning farm preservation. Over 80% supported it and most of them expressed the willingness to pay taxes to pay for it. Farm preservation is now well supported but in the year 2000, it was still under debate. We embarrassed the county commissioners to start with $25 million. But the main force has been the private Farm Preservation Trust in the highly successful farm preservation program in Lancaster County.

Our board has met in my kitchen every Friday morning at 0730 since the beginning.

We attempt to look at key issues and attempt to bring expertise to Lancaster to educate and inform our political leaders.

Aside from perusing our website, Tom Friedman wrote a column based on his experience visiting with us trying to understand how we operated and why we were successful. If you google [  Thomas Friedman July 3, 2018 New York Times ] you can access the article.

I find the comments on that article to be interesting in that people are essentially racist. Some have a problem with it being a board of white people who are older, successful and experienced. Somehow, not having a board that reflects the racial makeup of the community, Hourglass is flawed. Ironically, we have attempted to recruit members from the Black and Hispanic communities but there are few leaders from which to choose and they are busy. We talk and confer with them and support their efforts in the community.

Lancaster is full of entrepreneurial spirit – we see it in the immigrants and mostly from the Amish and Mennonite communities. The Webstaurant, or Auntie Ann’s Soft Pretzels, for instance. The Amish, with their 8^th grade education, get into some sophisticated manufacturing. I can take you to an electronics factory on the second floor of a back building on an Amish farm where three young men design and build electronic devices with automatic insertion machines and wave soldering. They rebuild and reprogram their machine tools. When I asked one of the kids where he learned all this technology, he pointed to the three computer screens in front of him.

This is the Amish way of life that underpins Lancaster County: be self-sufficient and don’t depend on someone else to support you.

No Social Security insurance
No medical insurance
No insurance of any kind
Strong family ties
Hard work
Provide for the education of their children and pay taxes to educate others.

As a closing note on this pandemic, the Amish don’t wear masks, operate their schools without masks, don’t social distance. It would be a great study to compare their experience with the corona virus and the rest of the community. But, strangely enough, the government is not keeping records on their experience.

 

We welcome your comments below.