Global Fastener News

Golden at WAFD: Star Doesn’t Follow Big Company Rules

Jason Sandefur

Big corporations who take over family-run screw companies are “stupid,” Wayne Golden told the Western Association of Fastener Distributors.

Golden is chairman and owner of Star Stainless, which his father founded in 1950 and he joined in 1970.

“The problem is that big corporations have authoritative, old-style, command and control management,” Golden suggested. “Star has an easy-going culture and branch managers really run their branch.”
Golden hasn’t sold Star and retired because “a big company would ruin it. Star has $90 million to $95 million in inventory and we get 1.5 inventory turns a year. The first thing a big corporation will do is cut the inventory so that Star will get four to five turns a year. As they cut the inventory, sales will go down because Star wouldn’t have anything in stock.”
As sales drop employees will be laid off and branches will be closed, he predicted.

Big corporations would close Star’s Yellow Woods because it gets only one inventory turn a year.
“But Yellow Woods gets $2 million to $2.5 million a month in sales and makes high profit margins,” Golden explains. “Big corporations would still close it, because it doesn’t follow the rules.”
Big corporations are accustomed to big accounts and “would be extremely vulnerable if they lost a big customer. Star has no customer that gives us more than 4% of our sales.”
“Any big corporation who takes over Star will ruin the company, because it has the wrong policies,” Golden speculated. “Star has an easy-going culture, not the stiff, tied-up corporate culture.” �2006 FastenerNews.com