When cars break down, Michael Gordon’s company benefits.
"When people hold onto their cars longer, they need to fix them," says the 61-year-old president and CEO of Monroe Motor Products Corp. "Our industry for the most part is recession-proof."
Monroe Motor Products has supplied automotive parts to independent and corporate-owned retail stores for nearly a century. The company continues to grow, in part because repair shops’ orders increase as drivers hold onto their cars longer during recessionary periods.
The company has about 180 employees, including 50 at its headquarters and distribution center on Central Avenue and the remainder at Parts Plus stores across the state. Monroe Motor Parts has annual revenues of more than $25 million, Gordon says.
Parts Plus is a national, programmed automotive distribution group run by 50 entrepreneurs, including Gordon, throughout the country. Programmed groups are buying groups that combine purchases for better pricing and marketing advantages. Products ship in large quantities to individually owned warehouses, which redistribute those products to stores. Monroe Motor Products distributes products to 27 stores in New York and northern Pennsylvania.
"When I came to work (here), we were significantly smaller and I just wanted to work at creating the best distribution company I could," Gordon says. "Never wanted to be the biggest because I knew we could never do that. But we always focused on being best in class. And I feel that if you focus on being the best, you can’t help but grow. That’s what we’ve done over the years."
A 95-year tradition
Monroe Motor Parts was co-founded by Gordon’s grandfather, Max, in 1917 when he returned from serving in World War I. Max Gordon partnered with his brother, Isaac, to acquire a fleet of taxicabs called Pullman Taxicab Co.
The company evolved into a warehouse distributor when the brothers realized it was becoming difficult to find replacement parts for their vehicles, as well as mechanics to work on their fleet. The duo formed Gordon Motor Parts, which stocked parts they needed for their taxi business, and expanded it to provide service to car dealerships and garages.
During World War II, Gordon Motor Parts closed many branch locations and focused on Army vehicles. Monroe Motor Products was born to enable the Gordons to purchase parts as a warehouse distributor.
In 1947, after serving in the Navy and graduating from Ohio State University, Max Gordon’s son, Burt, joined the company as general manager. The younger Gordon added salespeople and worked to strengthen the business by servicing independent stores, or jobbers, throughout New York.
The company flourished throughout the 1950s and 1960s as cars became more popular and more complex.
During the 1970s, Burt Gordon took the reins and his son, Michael, joined the company in 1973.
"When I came to work here, we had two stores and our main focus was selling to independent mom-and-pop stores throughout the state," the third-generation owner recalls. "We really evolved from being a line seller to a program seller, meaning we sell the whole Parts Plus program and we can offer all the services. When I first came here, maybe 2 percent of what we sold through our warehouse was to our own stores. Now it’s 60 percent."
In 1978 Gordon purchased his first jobber, and the company has continued to grow since then. In recent years the company purchased Union Springs Auto Parts in Cayuga County, and in 2009 it acquired Keuka Distributing, a warehouse specializing in case goods and specialty chemicals, as well as two parts stores.
Gordon says his primary goal for the company is to continue to grow and maintain profitability.
"Really, expand on what we feel we already do," he says. "And we continually look for opportunities in markets we’re not already in."
The success of the company his grandfather and father built is a result of the combination of its people and Monroe Motor Products’ focus on the customer, Gordon says.
"I believe that why people buy from our company is because of our people and our understanding of how important service is. Service is still the key today," he explains. "If we don’t take care of our customers every day, our competition will. That’s just what the reality is."
Gordon also believes surrounding oneself with the right people can make a company.
"Certainly after being in business for 95 years, you don’t do it by yourself," he says. "And I’m the first to tell you I’m blessed with some very, very good people. They’ve been with us a long time. And that’s good stuff."
Indeed, longevity is a tradition at Monroe Motor Products.
Gordon’s grandfather worked until he was 92. At 88, Gordon’s father still works three days a week. Burt Gordon shares a handsomely decorated office-adorned with old calendars and photos, site plans and the company’s original, working time clock-with his son.
"You need to know where you came from in order to understand better where to go," the younger Gordon says of the abundance of company memorabilia.
Strengths and challenges
Monroe Motor Products is financially strong enough to do what it wants, but it is not large enough to rest on its laurels, Gordon says. Competition in the industry will always be an issue.
"I think that one of our strengths is that we’re large enough to take care of our customers but we’re small enough to know who we do business with. And that’s very important," he says. "Today there’s no margin for error in the environment that we work in, with the competitive nature, so we have to be very careful in how we place and how we spend our resources."
Though the company typically does well in a lackluster economy, 2012 has been something of an anomaly, Gordon says. The automotive aftermarket industry as a whole has not had a banner year.
"We’ve had a difficult last six months, and we’re not alone," Gordon says.
Mild winters with less salt wreaking havoc on vehicles, coupled with carpooling and less driving as a result of high gas prices and cars being made better and longer-lasting, have made an impact on the industry, Gordon notes.
While higher-quality vehicles could be considered a challenge in his industry, Gordon notes that parts have become costly.
"When they do break, they’re significantly more expensive," he says. "Although we continue to grow in sales, we sell fewer parts."
One of the larger obstacles Monroe Motor Products faces is big-box stores increasing their presence in the marketplace.
"We still consider ourselves a relatively small player, and we compete with companies far larger than ourselves," he explains. "Part of what our company faces is competition from the retail box stores that are now focusing on wholesale business. They have tremendous financial resources and they have tremendous buying power."
The aftermarket parts distribution business is an industry of 1 percent growth, Gordon says, and Monroe Motor Products operates in a no-growth market.
"So how do you grow? You continually work to gain market share," he says.
Gordon expects consolidation in the industry, especially among repair shops and retail stores.
"Fifteen years ago we used to sell to a lot of smaller, family-owned (stores)," he explains. "But they wanted to get out or they couldn’t compete. That’s where we acquired some stores over time. This industry, like every other one, will continually consolidate."
Another challenge the company faces is the high cost of doing business in New York, Gordon says.
"Doing business in the state of New York is troublesome," he says. "They really take the entrepreneurial spirit away, because the more successful your company is financially, the more they want to tax you."
Taxes and rising health care costs also can be difficult to deal with as a business owner, Gordon says.
"One of my biggest frustrations is we give our people raises but at the end of the day, with health care (increases), they end up with less in their paycheck," Gordon laments. "It’s a struggle. It’s a struggle to be competitive and to take care of your employees."
Despite the myriad challenges the company and industry face, Gordon says there is much to be satisfied with.
"We look at things more strategically for the longer haul," he says. "Because we’re privately held, I don’t have to worry about successes quarter to quarter to quarter."
One of the company’s strong points is its belief system, Gordon says.
"We make the decisions based on is it the right thing to do," he says. "It’s not always the most profitable, but we feel better about ourselves."
That attitude fosters trust and loyalty among customers and keeps the company’s bottom line strong.
"We are small enough that we can react fast," says Michael Lohrberg, who manages inventory, pricing and marketing. "We don’t need to go through a board of directors or the large corporate ladder in order to make decisions. If I need to address something, I can do it immediately. We’re able to respond to our customers’ needs fast."
Director of operations Jan Goldberg says the company stands apart from competitors because of its focus on customer service.
"Pleasing the customer, I believe, is a very primary fundamental," he says.
Gordon and his predecessors have instilled a customer-oriented philosophy in their employees, and he calls himself a "somewhat" hands-off manager.
"I believe that I empower my people to make the right decisions," he says. "I think I have a pretty loose management style. I try to see the big picture."
Goldberg says there are aspects of the business Gordon gets very involved in and others for which he is comfortable passing along responsibility.
"I think it’s a good mix," Goldberg says.
Lohrberg agrees, noting that Gordon primarily makes sure things run smoothly.
"He’s very involved at the vendor level, trying to make sure we’re getting the right deals so we can remain competitive," he says, adding that Gordon gives employees the tools to get the job done.
Gordon may appear tough on the outside, Lohrberg says, but he has compassion for people.
"Michael is more social with vendors, and Burt was more of the numbers guy," Lohrberg adds. "Michael is less the numbers guy as far as that attention to detail, but he’s more in communication with our vendors, our stores, our customers, trying to work with everyone for an outcome that’s beneficial to us."
Goldberg, who has been with the company 10 years, previously was a customer, and he worked with both Gordon and his father.
"When I first started, Burt was still the CEO. Fundamentally, the acorn didn’t fall far from the tree," he says. "I’ve known Burt and Michael for a long time, and it’s been a good partnership."
For many years the Gordons worked together, but not necessarily shoulder to shoulder, the younger Gordon says.
"I used to have some big fights with my father, and someone sat me down one time and said: ‘Look, you don’t seem to understand. Your father is not going to change, and you’re not going to change him. You need to learn how to adapt,’" Gordon recalls. "There are a lot of things I didn’t agree with my father on-a lot. But the good part was that my father always let me do what I wanted to do. He gave me the flexibility to go ahead and try it."
David DeJoy, managing partner and co-founder of DeJoy, Knauf & Blood LLP, has worked with the Gordons as their accountant for more than a decade.
"They have always teamed well," DeJoy says. "Burt is a very detail-oriented guy, really understands the distribution side of the business, very good businessperson. Michael is similar in many ways but also has looked at the business as a foundation to grow."
Gordon has leveraged what his father accomplished and built on that foundation, DeJoy adds.
"Michael is a guy that’s very dedicated to the business and his employees," DeJoy says. "He takes great pride in running the business well, investing in the business. Each generation of the Gordon family has grown the business, and Michael (has) taken on the business and done the exact same thing."
The job is his livelihood, Gordon says, and it is what keeps him coming back for more.
"I was born and raised in this," he says.
Gordon has learned a lot in nearly four decades with the family business, and he says that if asked to pass along a piece of advice to other entrepreneurs, it would be to adapt.
"To figure out your best business plan and execute it. Don’t be afraid to change if it needs to be changed," he says. "Adjust to the time."
Born and raised in Pittsford, Gordon and his wife of 36 years, Debbie, live in Brighton. They have two children, Stacy, 31, and Andrew, 27. While neither of the children is involved in the company, Gordon jokes that if he works as long as his father or grandfather did, he may be grooming a grandchild to take over someday.
The Gordon family has a home on Canandaigua Lake and enjoys the outdoors, Gordon says. When not working he often can be found bicycling, boating and skiing.
Gordon and his company support the United Way of Greater Rochester, the Jewish Federation of Greater Rochester, the Jewish Community Center and Veterans Outreach Center Inc.
He has much to like about his job, Gordon says, and it enables him to do more for the area.
"I like that I can help certain agencies. I feel good about giving back to the community," he explains. "It gives me the opportunity to do some things to help people."
Title: President and CEO, Monroe Motor Products Corp.
Education: B.S., business administration, 1973, C.W. Post College of Long Island University
Family: Wife Debbie; daughter Stacy, 31; son Andrew, 27
Hobbies: Family, charitable interests, bicycling, boating, skiing
Quote: "You need to know where you came from in order to understand better where to go."
11/16/12 (c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email email@example.com.