Name: Robert Batting
Position: President and chief executive officer of Kenney Manufacturing Co. of Warwick, which produces home furnishing hardware.
Background: Started with the Singer Company, moving from New Jersey to Scotland to the Carolinas. Came to Rhode Island originally with the Leesona Corp., which was sold to a British Company. Then worked for Textron, serving as president of two divisions and as a group officer. Worked at Brown & Sharpe before accepting the president’s position at Kenney Manufacturing three years ago.
Education: Bachelor’s from Allegheny College in Pennsylvania, 1963.
Age: 58
Family: Wife and four children, three grandchildren
Residence: Barrington
ROBERT BATTING: ‘We have a great work force… we have done very well here.’
PBN: Kenney was founded, I believe, by Charles Kenney in 1914 in Cranston when he bought the Brickley Woodworking Co., which produced wood towel bars, before the advent of plastic.
BATTING: It’s all wood and roll forming metal parts, cast parts. It’s been in the family since its inception in 1914. And I guess, it’s been pointed out to me by Dick Kenney, who is still the chairman, that the first time they had an outside CEO was when I stepped into this job. Prior to that he was chairman and CEO and relinquished the reins and brought in an outsider.
Part of what is amazing is not only has the ownership stayed the same, it’s basically the same product.
Both a strength and weakness. It’s a very narrow area and as you saw, what we are developing, we’re looking to get into a much broader area of distribution and other new products. It’ll make the company a heck of a lot healthier on a go-forward basis. The other thing is, I don’t think people comprehend how big somebody like Wal-Mart is. I mentioned Textron before. I’m not sure what its annual sales are right now, but say $11 billion in sales. Wal-Mart’s year over year increase was about $25 billion. It closed out last year at $165 billion, so the size of that organization and its array of products and what it’s doing is quite staggering.
What is the relationship between Kenney and Wal-Mart.
Wal-Mart is our biggest customer and that’s probably true of a lot of people who are dealing in general retail, just by the fact they are the biggest retailer in the world. In many areas, if you’re not dealing with Wal-Mart you’re not in the business. They’re huge. They are the single biggest customer. Very big, very organized, very powerful.
Explain the awards you’ve been won over the last few years from Wal-Mart.
In 1999 we took supplier of the quarter three of four quarters, and closed with supplier of the year award from Wal-Mart. You really can’t get that unless you’re on-time deliveries, shipping rates are in the 98 percent range. Your pricing has to be very competitive. We are very sophisticated with our MIS functions in our ability to use Wal-Mart’s retail line to track the various SKUs in the store. It’s not playing checkers. It’s playing chess. It’s a whole other dimension and you have to have the logistics and all that goes with it. We also have about 25 acres with another 150,000 square foot facility down in Jonesboro, Arkansas, which is a stone’s throw from Memphis, Tenn., which is the shipping hub of the U.S.
The total company is around 500 employees?
About 500 employees.
How many in Rhode Island?
Actually it would be a little bit higher. We’ve got just around 500 here in Rhode Island and about 50 or so in outlying areas, sales offices. We don’t publish a lot in our size or financial figures for a variety of reasons, most of them competitive.
For the record I’ll ask what your annual gross sales are?
And for the record, I’ll decline. D&B(Dun & Bradstreet) says we’re under $100 million in sales and we’re north of $50 million. We just don’t pass it out.
If you were to describe the product line now is there a brief description you can give to it?
We make hardware, and the hardware goes into a variety of areas. It’s window treatment, it’s in the bath products, and probably the thing that has us very interested in going forward is that we’ve come out with some very different, and very competitive storage systems that go into garages, basements, storage sheds and so forth.
When will that see its way to market, or is it already there?
It’s totally tooled and we’re in the process of completing the promotional information and we’re going to be taking orders and hopefully shipping products in the next couple of months.
All the manufacturing is done here?
The unique thing about this particular product, the people we have been working with are all in this Rhode Island area. Most of it is stamped here in house, roll formed in house. We’re using powder-coating facilities up here in Central Falls. We’re using Hindley Manufacturing for some of the hooks and other components. And we’re using an East Providence firm, doing our graphics. It’s a real local effort.
If you were to characterize the state of how are we doing?
I spent my entire working career in manufacturing facilities. Manufacturing in the best of circumstances is tough. With today’s offshore competitors, primarily the Chinese, but it is just not the Chinese for high volume consumer products, similar to what we produce. Labor is virtually irrelevant in those areas because the pay is so close. I might add that applies to presidents of companies, so it’s not like I’m pointing the finger anywhere. It’s true of our wage basis. So manufacturing is a tough proposition. You and I both pick up the paper and somebody has moved offshore; they’re bringing in more imports. It’s difficult, and compounded. I might add that we are where we are. Taxes are high here (Rhode Island).
What keeps Kenney Manufacturing here?
The Kenney family. Objectively if somebody were to wave a wand, I think perhaps decisions might have been different at another point. Having said that we have a great work force. That’s not said tongue and cheek. We have a good work force. Good skills. We have done very well here.
There’s also a management style you bring to the workforce. There seemed to be a really good rapport between you and the people on the floor.
They’re interested in the same thing I am. I’m not just saying that. They’re interested in their jobs. They’re interested in security. They like where they are. I think that there really is a cooperative spirit to try and see that we can compete.
There is something you have to bring to that, in terms of the people who work here.
Keep informed. Try and push to get other new products in here, because that’s where our long-term security is, and it really is the case.
What do you see as the key to Kenney’s success at this moment.
If I were to look at the past couple of years, I think a lot of the improvement made in terms of our own performance is paying attention to a lot of details, whether it was our operating costs, transportation costs, insurance costs. There literally is not a stone we haven’t turned over to see if there isn’t a better, more effective way of handling things. I know everybody tries to say that, but in our case it is a fact.
Tell me about the variety of the workforce. It seems to range from those with light skills to those with considerable skills.
Which is true. If you were to look at this workforce it’s from the lowest skilled operations on some of our packing lines to skilled tool and dye makers. We have a very highly qualified MIS function. Our engineers are fully CAD capable. We cover the whole array. I think that’s one of the things that’s unfortunate when you look at the decline of manufacturing, that the opportunities are not as great as they used to be 20, 30, 40 years ago. A lot of those mainline manufacturing entities are gone.
We talk in Rhode Island about creating an economy based on high technology and financial services. Are we shortchanging part of our population by also not talking about strengthening manufacturing?
I think that could be answered – I’m not being cavalier in saying this – try walking around in North Providence, Woonsocket, Central Falls or Pawtucket and tell me how many of them are going to be operating those same computers. I’m just making that as an observation. We can’t live here without them, but not every person walking the street is going to be in a high-tech or Internet type capacity. There is an area here of providing a lot of other jobs and services and when looking at that, as you saw with the people downstairs in the factory, we do have a decent wage base and we do have very competitive fringe benefits. I’m not just talking medical and dental benefits, but also a 401K match and so forth that is extremely competitive.
It’s a pretty tight job market, according to the most recent Manpower report. Are you having difficulty finding people?
No we haven’t. And I think that speaks to the fact that you have to turn around and ask the question. Where does somebody with those skill sets find a job today, the caliber of what we have to offer here. The answer is there aren’t that many here. You look at automobile expansion here in the U.S. It took place in Georgia, South Carolina, Tennessee, Kentucky. So the spill over out of the Midwest went down into the Southern tier states. If you look at the banking center of the U.S., outside of New York City, where is it? Charlotte, North Carolina. So I think some of those job issues and where people are seeing the expansion and what we have to do in the state of Rhode Island to attract jobs, we shouldn’t delude ourselves.
Your competition now is mainly overseas?
You have to segment the market. A lot of our competition comes directly out of China, Taiwan, and places primarily in Asia. On the domestic side, our competition is the people of the caliber of Springs Industry down in South Carolina, or Newell Rubbermaid is a major competitor of ours, and finally Masco, a very heavy plumbing and hardware supplier. Most of these are New York exchange companies with sales anywhere from $3 billion to $6 billion. Even with our domestic competitors we are up against very tough qualified competition.
With the new trade arrangements being discussed relative to China, if it comes to pass will that make it tougher?
It’s nothing more than acknowledging what’s real anyway. The K-Marts and Wal-Marts and most of your mass merchandisers have been selling imported goods for decades. There’s nothing new in that. And most people don’t really look to see if it’s made in the U.S.A. as a reason for buying it. They’re looking for a low priced product with high quality. They’re looking for the best bang for the buck. I don’t think that’s going to change our major competitors one bit.
How do you compete with them?
We’d better be pretty damn smart and pretty good, and continue to come in with other new product.
Competing on price, quality, and service?
All of them. If you can’t do every bit of that you’re going to be in serious trouble.
There’s never been an inclination here to do manufacturing outside this country?
If I look backwards and I say what have these people been producing over the years, the bulk is tied in with our domestic market, North American market. I don’t count Mexico and Canada as being an export. The rest of our exports are really pretty minimal, some into the United Kingdom and some into the Far East. It’s very limited. The bulk of our market is here in North America.
How can the climate in Rhode Island improve for manufacturing?
Phipps (in The Providence Journal) had an article that jobs are plentiful, Providence has a great reputation, that things are really going very well here. I think that’s as much a reflection of the overall economy in the U.S. I still have a very serious issue, personally, with the way Rhode Island conducts itself on the whole issue of taxes. I’ve always applauded Murray and Skeffington and the other guys for sticking their head out of a foxhole. A lot of people took a shot at them, but I think they said some of the things that have to be said. It’s people like myself who make decisions on where you move, whether you set up factories, what is the most conducive environment and so forth. I think this state would be making a big mistake to not pay attention to that.
Obviously we’re talking about the proposals that would give a break to the top end wage earners?
It’s interesting that you say give a break, because that’s exactly the reflection of the attitude here that you’re giving a break as opposed to saying this is so outside the norm in other states that we see this never ending stream of high earners – also included in that retirees who end up putting Florida tags on their cars. You’re seeing an awful lot of income walking away from this state because of that policy. I think one of the best attitudes that people can have is look at the boat industry. We no longer see a lot of the boats with Delaware on the transom. You see Rhode Island ports. This place has become a very strong area for people to buy all sorts of sailboats, powerboats or whatever. What is it? It’s the taxes have brought that in line. So does it create jobs? The proof of it is just go down to the harbors of Rhode Island and take a look around.
How do you change a legislator’s mindset when there are few businesspeople out there banging on the doors of legislators?
I think after awhile you get beaten down. I don’t need all that abuse either. There comes a time when I’ll do something else. A lot of people have voted with their pocketbook and headed to New Hampshire or down to Florida. And I think that’s very regrettable.
Is it drawing companies away from here or individuals?
Both. I still come back to asking the same question. When people go to expand, who are the decision-makers? That’s not done with a majority rule. That’s done in a very pragmatic way, and I say that having been in that arena on a dozen occasions. I love it up here. You’re talking to someone who does enjoy Rhode Island’s quality of life. But I hear that too many times, and people need to understand that you can find our counterpart in a Charlotte or Austin, Texas or Chicago, Illinois that would be giving you the same Chamber of Commerce routine to explain why they have a superior quality of life. We’re not the only ones that have a corner on this, where people want to be or where they want to spend their leisure time. That’s all part of it. It’s not enough.
Other than the personal income tax, what else needs to change to make this a more business friendly state?
I happen to look at times with dismay at some of the seedy side of our political issue here in Rhode Island. Not everybody has that. I don’t care whether it’s New Orleans or whatever, I think we’ve been disproportionate in that. Having said that, Rhode Island has been served very well over the years, whether its Pastore, Pell or Chafee, when you look at the quality of our Senators we’ve had some very capable and respected individuals representing the state of Rhode Island. But I think that also the state government has to make good on what they promise. If they say that they put in a bond issue to change salaries and whatever and we’re going to reduce the size of the legislature, then do it, don’t rewrite it and make it seem that every time a deal is struck with the population that it’s grounds for changing it at a later date. Sales tax the same way. Automobile tax. There’s a lack of consistency in following up what is promised to the electorate. I think people get turned off and dismayed by seeing that happen time and time again.
What do you see for Kenney from here? You’ve got the new line coming in, the economy is strong. What’s in the future?
Coming to a store nearest you is our storage system. If every person in Rhode Island, the U.S. doesn’t have one, they should.
