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Taking the reins during a rebuilding season

Edward Maier:
Taking the reins during a rebuilding season

Each Friday during the fall, Edward Maier arrives at work clad in blue and yellow. The garb reflects his enthusiasm for the gridiron adventures of his alma mater.
“I am an avid University of Michigan fan. I wear the colors on game Friday,” says Maier, the new president of ENI, a division of Astec America Inc. A Michigan Wolverines hat sits above his desk.
Maier, 43, was promoted Jan. 1 from executive vice president, succeeding John Stratakos as part of the company’s long-term leadership succession strategy. Stratakos had headed ENI for the past nine years and remains with the company as executive vice president–international.
Like a new coach, Maier must rebuild ENI’s sales and profits–hurt not by injuries, bad decisions or lack of talent, but by a worldwide semiconductor industry slump.
ENI ranks as the No. 2 worldwide manufacturer of radio-frequency and DC high-power conversion systems for the thin-film processing industry. It competes in a $300 million market serving the semiconductor and industrial plasma, storage-media, test-instrumentation and medical-imaging markets.
ENI does not release its profits or revenues, but Maier says sales are less than $75 million. Before last year’s semiconductor industry slowdown, sales ranged between $75 million and $100 million. One of his goals is to boost sales above $100 million
The company’s employment has stabilized at 400 in Rochester and 450 worldwide, down 10 percent from a year ago. Most of the cuts occurred mid-year, and a few employees have been brought back.
“It is fairly easy to manage something that has understandable forecasts. This is a true test of management capability,” Maier says. “When in (a) decline and the whole market is going down, just to hold the morale of the company together is a big challenge. When you do layoffs, people are wondering, ‘Am I next?'”
He says the key to working through the downtimes is communication.
“We had just quarter after quarter of bad news last year. I’d be foolish to think it didn’t affect morale–it did,” he says. “(But) we had very low attrition from people who said I’m getting out because the ship is sinking.”
Much of that is because of a core group of people at ENI who lived through similar slumps in 1986 and 1991-92.
“If you’ve been here for 10 years you begin to realize that this is only a few-month period. This is not a black hole. There is an upside,” he says. “When things turn up, it’s gonna happen fast and you are going to need to turn on the spigot quickly.”
ENI was founded in 1969 by three former General Dynamics Corp. engineers. Their first products were underwater navigation systems for the U.S. Navy that spawned the name ENI, or Electronic Navigation Industries. Emerson Electric Co. bought ENI, then an $11 million company, in 1982. Maier, as part of his duties as a member of Emerson’s corporate technology and development group, wrote the business plan for the acquisition.
Maier joined ENI in 1986 as director of business planning. In 1989, Emerson sold its power-supply companies to Astec. Emerson retained some 40 percent stake in the company, however, and now is expected to close on a deal to acquire Astec and reacquire ENI this month.
Ronald Sonkin, a founder and former executive of ENI, first met Maier when Emerson began its first acquisition of ENI. He expects Maier to be successful as president.
“He is a smart, young, aggressive guy,” he says. “He was real willing to learn.”
Sonkin says Emerson has a culture based on performance and profit and loss, and that is where Maier obtained much of his early training. “He came out of that culture,” Sonkin adds.
Maier likes the company’s culture, and views Emerson management as a role model.
“I have been impressed with them. It’s a tough management style, but effective,” he says. “They call their planning process a full-contact sport. It is direct, focused on the issues and not on blaming people.”
Maier was born in Erie, Pa., but has lived in the Midwest and the Boston area, where his father was a successful businessman at Xerox Corp. He received a bachelor’s degree in mechanical engineering in 1977 from the University of Michigan. He worked in Chicago five years as an engineer with International Harvester (now Navistar International Corp.) and received his MBA from the University of Chicago in 1982.
Before joining Emerson, Maier briefly worked in the nuclear power industry.
“I enjoy math and sciences. I still do,” he says. “I’m kind of a tinkerer. I always studied hard.”
He maintains his technical expertise and serves as acting vice president of engineering.
True to his engineering background, what impresses Maier most about the always-jammed 110,000-seat Michigan Stadium is not the sea of humanity that fills the stadium, but its “clever design.”
Beyond his Michigan football interest, Maier skis, golfs and runs. He is the charter member of the companywide ENI golf league, and when traveling on business for the company, he always packs running shoes. He has run everywhere from Germany to Japan.
He and his wife, Debra, live in Pittsford with their three children–Sara, 14; Mark, 12; and Rebecca, 9. Maier enjoys participating with his son in Boy Scout Troop 167 of Pittsford, going on campouts and attending other activities, as well as woodworking and listening to classical music.
“Distractions–things that force you not to think about work,” is how he describes his non-work activities. “I suppose if you didn’t have to sleep, you could be cranking away 24 hours a day.”
Maier arrives at work by 7 a.m. and generally works 12-hour days. Once at home, he responds to e-mail from Far East operations as those employees arrive at the office.
Maier describes his approach to business as analytical. “I like to look at the numbers. We are graded on how the company progresses financially,” he says.
He distills his business philosophy down to six words, a philosophy he calls QCRISP: quality, cost, reliability, innovation, schedule and performance.
“Quality is first,” he says. “My style would flow from that. I have low tolerance for poor quality.”
He also tries to promote innovation and the ability to make high-performance products.
“You have to have fun with your people too–motivate them,” he says.
Stratakos describes his successor as bright, organized and driven, with the ability to juggle multiple and vastly different tasks.
“He digs deeply into technical problems and offers suggestions that engineers close to the problem may not see or have thought of,” he says. “He’s one of the few individuals I’ve known who can run a technical sales organization and an engineering/product development organization simultaneously and provide excellent leadership for both.”
Sophie Vandebroek, vice president of research and technology for Xerox Corp., has known Maier for 10 years. Her husband was vice president of engineering at ENI.
“He can motivate other people and get things done. What makes Ed good is the way he relates to people,” she says. “He is not a person to sit in his office and send e-mail.”
Maier’s background directing both engineering and sales organizations at ENI should make him successful as president, she adds.
One of Maier’s biggest accomplishments at ENI was setting up its international distribution network. His first job was establishing ENI Japan, and he also set up the company’s operations in Germany.
“We are a fairly small company, but we have outposts all over the world,” he says. ENI exports 40 percent of its work directly, and as much as 60 percent ends up outside of the United States (exported by ENI customers).
Its global nature, however, put even greater pressure on the company in 1998, with the shaky economy in Asia and Japan.
Maier says his chief focus this year involves ensuring ENI is positioned for the industry’s rebound. Company officials and others in the industry believe the worst is over.
“Nobody would ever need a pacemaker in this industry,” he says, repeating a common inside joke. “It’s always changing. We think it bottomed for us in the third quarter.”
The company’s revenues increased in the fourth quarter, and Maier expects the same or better results in the current quarter. Several competitors did not survive the most recent slump.
“The biggest challenge is to get the company back on the growth curve. We start growing, great things happen,” he says.
The power-supply industry’s business model rewards companies that invest in designing new products during the down cycles.
“You better get to work designing new products because when it comes out again, the products that you rode in the last wave, (customers) won’t even buy them,” he says.
That model also requires patience from ENI’s parent company as it continues to invest in new products despite seeing no immediate return.
Maier says ENI has cutting-edge products it is ready to launch for the semiconductor industry. The company is betting its new products can close the gap between ENI and industry leader Advanced Energy Industries Inc. of Colorado.
Advanced Energy had $141.9 in sales in 1997 and last year acquired the No. 3 player in the industry, but it also has seen revenues fall and has laid off workers.
“It’s a dogfight right now between the two of us,” Maier says. “They are a solid competitor. They are larger than we are. But this business can change a lot in a business cycle.”
Despite an engineering education, Maier in recent years has focused on expanding ENI’s sales. He plans to maintain that customer focus and impress it on everyone throughout the company.
“I try to make one customer contact a day. You have to listen to your customer. And if you listen closely enough, they will tell you what you need to do, especially in this business,” he says.
During periods of high growth–50 percent a year–ENI has struggled to find talented employees. That struggle has prompted questions about whether Rochester is the best location for ENI.
“I have been questioned in some of our strategic meetings (if) Rochester is the right place to be,” he says. “For us, I think it is.”
If ENI moved to the Silicon Valley, competition for engineering talent would heighten steeply and ENI would battle for human resources against companies with much deeper pockets.
Maier says his short-term activities include improved access to ENI’s suppliers and spending more time on the factory floor, to better learn ENI’s manufacturing process. Strategically, the company remains focused on power supply for thin-film processing, but he is looking at expanding into closely aligned products.
Longer term, Maier would like ENI to look to expansion through acquisitions and to bulk up through further industry consolidation.
“Emerson is an acquisitive company, and we have never done a big one,” he says. “That would take us into a different league of companies, into the multi-hundreds of millions.”

2/12/99

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