Maine Trails, April - May '11
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What’s slowing the recovery?
A strong bond

A strong bond

Canadian heavy equipment dealer Strongco’s acquisition of the New England powerhouse is the latest chapter in Chadwick-BaRoss’s storied commitment to the regional market

Outwardly, there are no obvious signs of the big changes happening at Chadwick-BaRoss, Inc. There is a full complement of new and used heavy machinery in the Westbrook dealership yard, ready for the upcoming construction season. Inside the company headquarters in Westbrook, Maine, business is humming.
Moreover, Stuart Welch, who has a long history with Chadwick-BaRoss and has headed the company since 2007, is upbeat about the region’s slow, but solid recovery from the recession. Already, he sees signs of a strengthening forestry and utility construction markets. Welch also is optimistic about his company’s prospects – particularly now that it has joined forces with Strongco Corporation, one of Canada’s largest heavy equipment dealers. Strongco acquired 100 percent of Chadwick-BaRoss shares in February.
“This promises to strengthen the Chadwick-BaRoss brand – and expand the depth of our product line,” said Welch, who will continue to serve as Chadwick-BaRoss’s president under the new ownership. While both Chadwick-BaRoss and Strongco carry the Volvo Construction Equipment and Terex lines, Strongco also carries several complementary lines, including Case Construction, Manitowoc Crane, Terex Cedarapids, Skyjack, Fassi, Allied, Taylor, ESCO, Dressta and Sennebogen. Strongco sees Chadwick-BaRoss’s long-time alliances with Powerscreen and Ponsee as advantageous, as well.
A good match
Welch’s confidence in the new union with Strongco goes deeper than access to expanded equipment lines. Announcement of Strongco’s recent buy-out is the culmination of a two-year search for a compatible investor and goes straight to the heart of the two companies’ philosophies of business.
Welch met Robert Dryburgh (prounounced “Dry-bur-u”), Strongco’s president and CEO, through a family connection, and the two soon found common ground. Strongco already has 24 branches in its native Canada and approximately 500 employees. The addition of Chadwick-BaRoss’s five New England branches will add 100 employees to the company. As Welch explained it, Dryburgh “gets” the corporate culture of Chadwick-BaRoss. Both companies are strongly customer focused, and both have a deep commitment to their employees.
“We felt and Bob Dryburgh felt that there was a lot in common. Bob understands the strength of the Chadwick-BaRoss brand and its position in the New England market,” said Welch. “He also understands how important its people are and the role they play in business.”
For its part, Strongco, a publicly held company traded on the Toronto Stock Exchange, has been searching for a suitable introduction to the United States market.
“The acquisition is in line with our strategy of building scale, in part by acquiring dealerships closely associated with the major brands represented by Strongco and located in regions that are geographically contiguous with our current markets,” Dryburgh said at the announcement.
Welch confirmed that Dryburgh and Strongco have “very ambitious” plans for the U.S. market, and that the acquisition of Chadwick-BaRoss gives the company an important “footprint” from which it will be able to continue its expansion beyond Canada’s borders.
Changing places
Strongco’s buyout marks the official retirement of George Corey, former Chadwick-BaRoss president, CEO and, most recently, chairman. (Corey has also recently retired from the MBTA board.) The acquisition also marks the end of a long association with majority-owner Dieter Strobl of the Strobl Group, an Austrian company that purchased its ownership stake in the company during the mid-1970s. (Welch also held ownership shares of the company until the buyout this winter.)
While Welch and his team will miss the experienced counsel of Corey and Strobl – both have been instrumental in building the business over the past three decades – the new ownership is proving a chance for a new generation of talent to shine.
Welch said that one of the conditions of the sale was that Chadwick-BaRoss be able to retain 100 percent of its staff, many of whom have been with the business for two decades or longer. In addition to Welch, six other long-time employees will serve as officers in the U.S. company. Ryan Thebarge will be the new chief financial officer, and Gary Thebarge will be vice president of customer service. Michael Sullivan, current Westbrook general manager, and John Thebarge, general manager for the Bangor and Caribou dealerships, also will become vice presidents. Dan Rott and Mark Silva are staying on as vice presidents at the Chelmsford and Concord locations, respectively.
The company also plans to add to its workforce, beefing up its sales and service staff. In Westbrook, the company recently added its first female service technician and plans to add another three or four technicians at its other locations. There are also plans to add two more parts specialists and two or three sales staff.
Poised for recovery
Retaining Welch as president has been another key element in Strongco’s bid to enter the U.S. market. “I am particularly pleased that Stuart Welch has agreed to stay on to lead this business,” Dryburgh said. Dryburgh credits Welch for successfully guiding Chadwick-BaRoss through the recent recession in the U.S.
Welch’s history with Chadwick-BaRoss goes back to the first time he worked for the company as controller from 1978-1981. Welch left the company to attend graduate school and rejoined the company in 1994 as treasurer.
Welch is, himself, proud of the strategy that enabled the company to emerge from the recession without a single layoff at any of its locations. “Two-thousand-and-eight was a pretty good year for us,” recalled Welch. “But by 2009, we very quickly could tell that this was going to have a lasting impact on our core industries,” said Welch. So he pulled together his team to brainstorm on how to exploit the company’s internal strengths – its in-house service and parts team – to weather the downturn.
The move to focus on service was a smart one, and while it does not carry the same profit margins as new equipment sales, it has earned the company remarkable loyalty from its customers who all have been learning to do more with less. That Chadwick-BaRoss’s service and parts were on-call 24 hours a day, seven days a week, has also been critical in cementing the company’s reputation for superior customer service. The strategy paid off with the company adding several new high volume service customers and a resulting 18 percent sales increase in the service and parts divisions.
Welch said that product support will continue to play a role as the economy heats up. He already has seen demand for new and quality used equipment increase, with work now underway to upgrade Maine’s electric transmission grid. Still, he expects regional businesses to continue to hire and to invest in capital cautiously. “This is the ‘new normal,’” said Welch. “Yes, the machine sales will come back, but our industries will continue to be very competitive, and we will be there to help our customers operate as efficiently as possible.”

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What’s slowing the recovery? | Page 6 of 6 | A strong bond