Declaration of independence: There are no plans to sell, says Les Schwab CEO
Since Les Schwab’s death in 2007, rumors have swirled about the fate of Les Schwab Tire Centers Inc. The company’s move from small-town Prineville, Ore., to resort-town Bend, Ore., already was in motion, but that hasn’t stopped the naysayers who predict a sale is inevitable.
Chairman and CEO Dick Borgman laughs at even the mention of selling off the 57-year-old company. “I start every meeting by telling everyone ‘Britney Spears hasn’t offered to buy us yet!’ I’ve heard every possibility under the sun who might be buying us... it does get pretty wild.”
And no, he says, there are no plans to sell Les Schwab Tire Centers.
The move gives the company a greater labor pool from which to draw, says Borgman. Bend, with its population of 100,000 people, is more than 10 times larger than Prineville. And as a resort area, it also serves as a recruiting tool.
He says there is plenty of room to expand in the new 120,000-square-foot headquarters. That’s by design, “because we hope to continue to grow.”
Les Schwab Tire Centers always needs people. With 351 company-owned stores and 70 associate dealers, it is the third largest independent tire dealership in the United States. The company’s immediate plans call for the addition of eight to 10 stores in 2009.
“We think of it as intentional growth,” says Borgman. “What makes us different from other tire dealerships is that we own the real estate and build the building ourselves. That limits how fast you can grow as well.”
The company also doesn’t take on debt, he notes. “We do it through internal earnings — expand, provide opportunities for employees and get into markets.”
Les Schwab outlets represent considerable market share in Washington, Oregon, Idaho, Utah, western Montana, northern Nevada, and northern central California as far as Modesto.
“Right now, our strategy is to grow in the fringes of our current markets, and that has worked well for us in the past.”
Prineville hasn’t been forgotten by Les Schwab’s disciples. “We will have about 600 people in Prineville for our production, distribution, equipment and trucking,” says Borgman. “These are all different functions in Prineville.” (About 310 people relocated from Prine-ville to the new headquarters.)
Whether in Bend or Prineville, the company’s leaders still follow the examples set by Schwab. That includes being a good corporate citizen. The company continues to dispose of anyone’s tires for free as part of its “closed loop tire program,” which was started in the 1980s. More recently, the company switched from lead wheel weights to steel weights.
In 2007, the company was recognized for its work in environmental stewardship by the Association of Washington Business.“We pay enormous respect to everything Les developed,” says Borgman, who has been with the company 19 years. “The fundamentals he developed got us this far, and they make sense for the future.”
Those fundamentals apply even in today’s business environment, whether rebranding is required (a full-page ad in Lexani Lifestyle Magazine hypes the company’s “wheel, tire and suspension super stores”) or hard decisions need to be made (the company recently laid off 65 employees in Prineville, but hopes to recall 38 of them when business picks up).
Les“Being independent was one of his biggest fundamentals,” says Borgman. “Les was the ultimate independent.” ■