CEO's You Should Know x Alliance Material Handling, Inc.

Episode Transcript

Speaker 1 (00:02):
iHeartMedia Presents CEOs you should know.

Speaker 2 (00:06):
I am John Dinkle, founder and CEO of Dinkle Business
Development and former publisher of the Baltimore Business Journal. This
is iHeartRadio CEOs you should know and I'm here today
with Tom Albero, chairman and CEO of Alliance Material Handling.
Welcome Tom, and thanks for being here.

Speaker 1 (00:22):
Oh thanks, thanks for having me and I appreciate it
very much.

Speaker 2 (00:25):
Yeah, listen board our conversation. It's been a little while.
I thought we'd maybe start off by maybe getting to
know you and the organization a little bit. So for
those who may not be familiar, can you tell us
about Alliance Material Handling?

Speaker 1 (00:40):
Sure, I love to. So. We are a warehouse solutions
provider and what that means is it includes forklifts, sales, parts,
service rentals. We also design and install warehouse racking, mezzanines modules,
basically anything within a warehouse that a customer could need.
As I like to put it, we'd love to be
the one throat that choke so they only have to

(01:00):
go to one place to get every youthing fixed. My
marketing team doesn't love that term, but that's what I
think of. My warehouse manager is really looking.

Speaker 2 (01:08):
For and what's your mission?

Speaker 1 (01:12):
So our mission is basically to provide the best services
both in sales and service for any material handing the
needs and we will always want to exceed our customers expectations.

Speaker 2 (01:23):
Awesome, And can you tell us a little bit about
your you know, typical client or customer.

Speaker 1 (01:29):
Sure. For us, it's distribution centers, manufacturing, plants, lumber yards,
companies like Tracks, Whole Foods, Amazon, Acme, Paper, any large
warehouse anywhere within the Maryland, d C, Virginia, Ohio, Delaware,
and West Virginia.

Speaker 2 (01:49):
Gotcha, Yeah, I noticed or i'd heard that you have
made a couple of acquisitions in twenty twenty two and
expanded your geographic locations. What do you what do you You
have a store in near future or down down the
road as far as expanding your.

Speaker 1 (02:05):
Geographic location, yes, we're just finishing up on the last
two in twenty twenty two as far as getting them
entrenched in the culture that we've built here at Alliance,
and we're now in the mode to me a couple
more so, we're looking to get one in actually today
I think is the actual official closing, and another one

(02:26):
in the end by the end of December. And our
theory is we want to do one of two things
in these acquisitions, either expand on our geography or find
a service that our existing customers need that we don't
provide to them currently. So that's why one of the
acquisitions we made was a dock and door company, So
we used to do everything inside the warehouse except docking door,

(02:48):
and now we added dock in door so we can
take care of all their needs.

Speaker 2 (02:51):
Awesome. Awesome, And now are you selling up all across
the country? Are you mainly focused on those geographic regions
that you had mentioned.

Speaker 1 (03:00):
So on the forkliff side, it's very regional. You get
a you get a franchise agreement to sell a certain
product in your territory and nobody else can sell in
that territory. So from a forklift side is very regional.
On the warehouse solutions, where we're providing racking or mezzanines
or module or offices, that is nationwide, and it's even
you know, we've done two jobs out outside of the

(03:24):
US Germany, actually three Germany, Mexico and Canada. So I'm
not quite yet ready to say we're international. Really we're
really technically you are, ye yeah, in the US, but
but it's growing, so that's fantastic.

Speaker 2 (03:45):
Yeah, that's that's great. And talk to us about like,
how are you different from your your competition.

Speaker 1 (03:52):
So the the biggest thing, UH as to how we're
different is we are on percent employee owned company, So
every every employee the company owns a piece of the rock.
And when you get a company that sees that believes
it and understands what it means to them, that helps
us drive and try to exceed that customer expectation. So

(04:14):
a technician, when they're out on the job, they know
if they mess up, it's going to cost us some
money to fix the problem. So they're always always, always
trying to get trained and learn more and more to
make sure those kind of mistakes do not happen. And
we've grown it. You know, we've been a FISA for
about twenty two years now and as it stands right

(04:36):
now as the last evaluation, we have twenty five millionaires,
which yeah, kind of which of those are technicians, and
we have over seventy six other employees that have over
five hundred thousand dollars. That's incredible, that's incredible. Yeah, when
you think about that, That's what really drives everyone wanting
to exceed the customer's expectations because they know a good

(04:58):
customer is going to be a long customer, and the
longer they are, the more chances are ESOPT value is
going to go up.

Speaker 2 (05:04):
Yeah, that's that's fantastic. I didn't realize you had been
in esopt for that long. What what made you go
in that decision? And you know, I would love to
hear a little bit of the history behind that, because
it's interesting. You think, around Baltimore, I think I've only
know one other esop. I'm sure there's plenty plenty of others,
but also kind of curious, you know, I want to

(05:25):
hear about the history behind it, but also like why
don't more companies do that? In your view? But but yeah, yeah,
I'd love to hear the history behind that.

Speaker 1 (05:33):
Okay, Well, ESOPs in general, they're becoming more and more
popular right now. The fear that people had there's there's
a lot of badops, a lot of bad ESOPs that
are failed. People are promised a lot of things and
it doesn't doesn't really happen. And I really have been
involved with a few of them, and what I would
say really comes down to the owners that are departing.

(05:54):
How how did they structure the deal? If they structured
the deal where they get all the money and put
all the debt on the company and just drive the
company into a place where they can't, you know, invest
in other things that they might need to do, that
that's where you see a lot of failures. Our former
owners took on a lot of seller notes just to
make sure that if we had any hiccups, we could

(06:14):
stop payments, which did happen. I mean, if you think
about that, we started in two one thousand and four,
we had two thousand and eight, two thousand and nine.
Those owners said, stop paying us, wait until things get
better and then pay then keep paying us double or
triple payment payments if it wants the things get better better,
And that's what we did. And it was very a
very very good scenario from the front form of owners.

(06:38):
And then we were able to get shares and employees hands,
which made it made even greater for them to see.
And they rode that little wave. You know, it's like
owning a stock. It went up some years and eight
and nine and went down and it came to warn
back up. But now we've had eleven straight years of
increase in price per share and want to keep that going.

Speaker 2 (06:59):
Absolutely, I'm sure they'll do too, Yeah and yeah, So
what was the so in the history behind that? Obviously
the former owners, but anything else you want to talk
about in that regard.

Speaker 1 (07:13):
Sure, So when we made that decision, we were originally
going to do a management buyout, and for a number
of reasons, it just didn't didn't work out. Nobody had
great personal financial statements and the owners were a little
concerned about that, and no one was willing to put
any money down except for me, and I was the
only I had only been the company with a year

(07:33):
when we decided to go to this esup route, so
not many of the managers even knew me. So in
the meeting they said, all right, we're going to sell
the company to you. We need all this information from you.
But at that meeting he also said the one caveat
is is that Tom Alberra has to be the CEO,
which shocked me because he never told me that. So
I was faced with a situation of either becoming the

(07:56):
sole owner and having a bunch of people that didn't
know me, and the fear of I'm leaving because I
didn't know the industry well enough at that point in time.
So and we also had this huge problem of technicians.
They were leaving for a dollar an hour to go
some work somewhere else and were head over. I think
it was the high was a sixty two percent turnover
rate with our technicians. So I suggested we could do

(08:17):
something else. We could become an esop and let everyone
own a piece of rock and once they see enough
dollars in their accounts, they probably never would want to
leave the company. And we've really really seen that, and
our turnover has gone down to the low teens, which
is way below the industry average. But when you get

(08:38):
to the heart of it, why did I do this?
When I say this company has a lot of my
mothers in this company, those technicians feel like my mother.
My mother raised five kids with no funding for my father,
and she did it as a secretary of Volkswagen of
America and worked twenty hard years to end and retire.

(08:59):
And she never owned a new car in her name,
and she never owned a house. And when I thought
about that, and I think about our technicians and other
Edmond people in our company, they're all like my mother,
and I did not want them to have the same
ending when their retirement came that my mother did, and
this ESOP was a perfect way to make that happen. Uh,

(09:21):
And it is. It is working great now. Some people
have retired and they told me what they're doing in
their retirement, and always it's always something much better than
they ever thought.

Speaker 2 (09:29):
So that's that's awesome. That's a great story. I appreciate
you sharing that. I want to go back to the
company just real quick. A couple of other things. I
know you do a lot of sale lease obviously around manufacturing,
distribution centers and things like that. Now you do is

(09:50):
your parts and service division? Is that a big part
of your of your overall revenue portfolio or or no?

Speaker 1 (09:58):
Yeah, for sure. Our service and parts combine is close
to fifty percent of our WOW revenue. So yeah, it's
a big, big part. We have over one hundred and
twenty five technicians on the road right now, and it's
kind of like an auto dealership. The only big difference
is nobody can drive their forklift to us to get

(10:19):
us sick, so we have to put technicians in vans
and go out to their location and service the forklift.

Speaker 2 (10:25):
Gotcha, and you do training as well as the training
for obviously people that buy and lease the forklifts and
the other equipment that you're doing, but it's also is
a training part of Obviously you do a big training
priant program for technicians and stuff, but what's the training
aspect of the business.

Speaker 1 (10:43):
Yes, we really have three dedicated trainers, one for in
house just to make sure that we keep all of
our technicians trained as best as we can, and we
also bring in three every quarter, we bring in three
technicians with no experience and run them through a program,
year long program that will take them from an increase

(11:05):
of like sixty percent in their wages if they graduate
by the end of the year, so they can become
a road technician. But it is a structured way to
get them in. So every quarter we're bringing in free
some usually usually between eighteen and twenty one year old,
but we've had some forty and fifty year olds in
there too that just want to learn a new business,
and I think a lot has to do with also

(11:28):
just being part of the ESOP. The other two trainers
are mostly customer trainers. There's a lot of osher regulations
on forklift licenses and other things train the trainer program.
So we do a lot of those throughout the years
as well.

Speaker 2 (11:43):
God God, thank you, thank you for sharing that. All right,
switch gears a little bit. I always like to talk
about leadership on the show. Could you tell us about
your leadership style?

Speaker 1 (11:54):
Sure, I kind of. I always like to call it
like a coach player relationship. We're very, very very strong
on culture structure and very data driven, so all our
decisions are usually that must be the CFO and me
that comes out every now and then, but we follow
what's called an EOS model entrepreneurial ownership model, and we

(12:18):
do it throughout the organization. So we have a leadership
team of eight people. We meet every Monday for ninety
minutes and we talk about all the things, issues and
problems that have come up and how we're going to
solve those. Once we're done those, we cascade all those
messages down to our departments and then they hold their
meetings so that they can cascade down the message and

(12:39):
then they fulfill what we're asking them to do, and
they also in doing that, that puts every single employee
in a position where everyone knows they have a number
that they need to hit for the day or for
the week, and when you have that target and they
know what it is, it helps things done pretty quickly.

Speaker 2 (13:00):
That's cool, that's awesome. Yeah, And I know the talking
about like kind of communication there, And obviously the pandemic
is way past us now, but I think a lot
of people learned a lot of lessons there. When you
look back on that time, what did you learn about,
like managing people and leadership and communication.

Speaker 1 (13:22):
So we had to find different ways to communicate, for sure,
but we made a big decision, very different than a
lot of other four foot dealerships. When COVID first hit,
I mean it attacked our customers big time. A lot
of them shut down. We were in the position where
we were coming up with fifty people that we thought
we might have to terminate if things didn't turn around,

(13:42):
and it wasn't looking very good. But then the PPP
thing came out and that really saved fifty employees from
losing their job, which was a fantastic program. And thank
god we did that because it took a while and
it didn't happen in every one of our locations. Like
we are still struggling coming out of COVID for the

(14:04):
other branches. It came roaring back. The material handling business
became something that was a great need. We're essential, so
we made the decision that we would not let everyone
go go home and work from home. We needed everybody
in the building. So what did we do. We secured
the building locked everywhere, nobody could come in accept employees.

(14:24):
We put all kinds of equipment inside to make sure
the air was constantly fresh and that. But what we
did do is we changed from desktops to laptops for everybody.
So if somebody had a sniffle, we say just stay
home and work for the day, but if it doesn't
become COVID, come back in. So that's kind of how

(14:46):
we worked it. And because of that, it kept the
culture the same as it always was. It actually enhanced
it because the reality is we didn't have a one
COVID positive test until December of twenty twenty, and that
was after a couple people went out of the country
for a vacation. But they came back, they had it.
They stayed home and we did not have any kind

(15:07):
of big spread within the office. But it was great
to see how we were able to maintain the culture
throughout all the COVID issues.

Speaker 2 (15:14):
Yeah, that's me, that's me. Appreciate you talking about that. Yeah,
I wanted to ask you. I know that the ESOP
has had a big role in this and your retention
and acquisition of talent, But curious of, you know, kind
of what you're seeing out there as far as the
two younger generations, the gen zs and the millennials. Do

(15:35):
you see a lot of folks and those age ranges,
I guess could say, wanting to get into the trades,
wanting to get into being a technician and working their
way up, and just kind of curious from your perspective.
I you talk to a lot of other business owners
and people in the industry, so it's just kind of
curious what you're seeing out there.

Speaker 1 (15:56):
Yeah. I think it's an interesting time because we have
so many generations where together right now? Yeah?

Speaker 2 (16:01):
Five right, five generations? Crazy right.

Speaker 1 (16:05):
It's funny. I sit in my office and someone comes in.
I have to like sometimes that's I think with my head, Okay,
what generation is? Figure what's the right way? And that's
what you really have to do, because you can say
one thing to one person and another person gets offended
by it, So you just got to really manage it
and know and understand your people. But as far as
the trades, you know, I think this is the current generation.

(16:30):
They're calling them the tool belt generation, that they're looking
more into trades, and we certain are seeing that. So
when I say we have we bring in three technicians
every every quarter that have no mechanical experiences, but they
have the We test them and they have the ability
for it. So we used to struggle to find three
every quarter. I think we have a backlog of about

(16:52):
a year right now. Oh my god, tell those people
we have three in now, But in ninety days we
you know the work, we'll bring in three more. So
that that used to be an issue and we're not
seeing that now though. So that tells me that some
of what they're talking about is really true.

Speaker 2 (17:07):
Yeah, that's that's really good to hear too, because you know,
I have a son actually that wanted to start to
get into the trades and work in his hands and
ultimately didn't work out. He went into the professional went
to school for but it did say something to me,
and I think that this generation is a little more
open to it, and I think I think a lot

(17:28):
of parents actually recognize because really does start with them too,
Like they they point their kids to where they see opportunities.
So I think maybe it's the trades. I mean, it's marketing.
Maybe it's just you know, uh, the word getting out
that you know a lot of kids that you know,
really don't need to be going to school or you know,

(17:48):
a four year degree and going to college room and
they can just you know, be in the trades and
have an incredible career maybe in some cases start their
own businesses, but or work with you know a lot aliens.

Speaker 1 (18:00):
That has an ethop.

Speaker 2 (18:01):
I mean, there's just I think finally communication out there
is better about you know, the trades and the opportunity there,
which is good to.

Speaker 1 (18:09):
Hear, Yeah for sure. And from our standpoint, we we
love getting you know, like hey, if your son ever
wants to come over, just call me. But but you know,
we take people that have that same kind of mindset
maybe I want to do this, but we also let
them know, Look, if you come in and you want
to be a technician and you think you want to
do something more and you want to go to college,

(18:30):
we'll pay you know, we reimburse for college based on
grades to get them. So we have many technicians that
have gone from just being a technician to a team lead,
to a field service manager to a corporate corporate service manager.
So we really drive that through them there. If you

(18:50):
want to do more, we're happy to pay for it.
And so that that's worked out well for us as well. Awesome,
super cool.

Speaker 2 (18:59):
So what what gets you excited about the future of
Alliance Material Handling?

Speaker 1 (19:05):
So I've been asked that question a lot because everyone's
keeps saying when are you going to retire? And I
wait till you retire. So the reality is what gets
me going right now is this acquisition. You know, we
had a ten year target about five years ago to
become one hundred million dollar company, and we obtained that
in a four year period of time. Wow, Now we've

(19:26):
changed our goal to be a five hundred million dollar company,
and we're doing that one by growing our existing customer base.
We're meeting every manufacturer's expectation a number of fortless to
sell in our areas, and so then the only thing
we can do is expand. So I think I'm finding
a bit of a thrill in these acquisitions, going in there,

(19:46):
working with them, trying to figure out how do we
get the cultures aligned. That's pretty exciting to me. So
I'm in it until we hit five hundred million, and
then when everybody really wants me to retire, I might
choose for a billion. How about that? Lo it on on.

Speaker 2 (20:01):
The other side, what what keeps up at night?

Speaker 1 (20:05):
What keeps me up at night? Uh? Economy, you know,
there's somethings that we just can't help. So as as
we everybody, a lot of people have seen a downturn.
We've certainly certainly seen it in one segment of our business.
But uh, the the you know, the bookings were really
low in the beginning of the year, but we're starting

(20:25):
to see the bookings get bigger and bigger every month
as we go. So we do feel like we're coming
out of it. But we miss a lot of bookings
in the first quarter of the year. Uh so we
need to try to get those back and get get
get the numbers back up where we want them to be.
So that's probably the number one thing. Number number two
would probably have to be automation. Uh, you know, artical

(20:48):
artificial intelligence AI is. You know, we have everybody trying
to dabble in it. Uh I had a speaker one
time and he said, meander with a purpose in AI,
and that's what we're all really trying to do because
he says, you never know what's going to hit that
winds up being something big, so you have to do that.
But for us specifically on fork lists, they're going to

(21:08):
be driver lists forkless here soon. Yeah, and when that happens,
you would think, well, they still break down. But probably
twenty to twenty five percent of our service business is
abuse billing, meaning someone ran off, ran off and went
over a dock, someone ran out of the warehouse. You know.
Those things I think probably go away when you're at

(21:29):
the point where you have driver lists. So there, so
there's some stuff that concerns there. And how do we
you know, how do we expand into different maybe products
that gets additional service coming to our way? Got it?

Speaker 2 (21:40):
That's cool?

Speaker 1 (21:41):
Great?

Speaker 2 (21:41):
Great?

Speaker 1 (21:41):
Great?

Speaker 2 (21:42):
Well to kind of wrap things up, Is there anything
else you'd like our listeners know about you and Alliance
Material Handling.

Speaker 1 (21:49):
I guess the number one thing was we are hiring.
So if you go to the Alliance Matt website and
go to the careers page, you can see all the
open positions that we have and we would we'd love
to have a conversation for anybody who's interested in of
those positions.

Speaker 2 (22:04):
Excellent, and yeah, and how do we find more information
about Alliance material handling?

Speaker 1 (22:09):
So go to the alliancemat Com that'd be the first place.
You can also call the main headquarters three oh one
six hundred and we're happy to answer any questions. I
have a lot of talks about ESOPs. I'm happy to
talk to anybody about how ESOPs work and how we've
had such a successful one. And if you look me

(22:33):
up on LinkedIn, you can always send me a message
there too.

Speaker 2 (22:36):
Awesome.

Speaker 1 (22:36):
Well, thank you so much.

Speaker 2 (22:37):
Chat it great catching up with you. Congrats on your
success and look forward to seeing you hit that that
five hundred million dollars mark. That's amazing. Yeah, thanks for
your time and I really appreciate it, no.

Speaker 1 (22:49):
Problem, Thank you, it has been iHeartMedia CEOs. You should
know