100+ Years of Solving Problems - The DL S3E13

100+ Years of Solving Problems - The DL S3E13 is now available on Apple Podcasts, SoundCloud, IGTV, and YouTube.

In this episode of The DL, Diesel Laptops’ Founder and CEO, Tyler Robertson, is joined by Mike Betts, Chairman and CEO at Betts Company. Mike tells us the history of Betts Company and talks about labor shortage solutions, future diesel tech generations and education, community involvement, and the Sold! panel at HDAW.

As always thank you for watching and listening!

WATCH THE SOLD! PANEL AT HDAW:

YouTube - https://youtu.be/ahh4wtrj7hw
 

CONNECT WITH MIKE BETTS & BETTS COMPANY:

LinkedInhttps://www.linkedin.com/in/mike-betts-7b929714/

Websitehttps://www.betts1868.com

Transcript for 100+ Years of Solving Problems - The DL S3E13:

Tyler:

Welcome to the DL. I am your host, Tyler Robertson, the CEO and founder of Diesel Laptops. And if you've watched our show or listened to our show, you know I talk a lot about change, a lot about evolving your company, growing your business, how do you have to adapt in change? And I think if you've listened enough too, you know I'm passionate about our industry. So it's really great when I can find somebody that's gone through this road, not only one generation, but six generations in a business in our industry and someone that has probably more passion than even I have for our industry. And I'm just glad to have him on the show, we're going to talk about a lot of different things here. So I'm going to welcome Mike Betts with Betts Company. Welcome to the show, sir.

Mike Betts:

Well, thanks for having me, Tyler. Great to see you. We're really excited to be part of this venture that you're doing. It's really great how you're sharing these stories with our industry.

Tyler:

Well, I got to know you the last couple years, because you invited me on the sold panel, which takes place at HDAW and it's been great to listen and hear you. And I think I've gotten to learn a little bit about your company and everything, but what I didn't know, I'd always known Betts Company because I sold parts. I knew Betts mud flap hangers and brackets, that type of thing. But I didn't know all you did, and I didn't know the history. And this is a story that actually with your company starts back at the 1800s. Can you just give us a rundown of the history and what you guys do today?

Mike Betts:

Yeah, so our founder of our business came to the United States in 1863 from England. And he originally settled in St. Louis and opened a blacksmithing shop, manufacturing springs for horse carriages. And those would be leaf springs back in those days. And he saw during the Civil War that there was a movement west. And so he and his brother decided to move to San Francisco, he took his equipment down the Mississippi to the port of New Orleans, around South America up to San Francisco and Betts Company, Bett Spring company at that time became the pioneer spring maker in the United States west of the Mississippi river. Today we're celebrating 155 years of six generation, family business serving primarily the transportation industry in North America.

Tyler:

So I know people today talk about all these changes going on in the world, electrification, robots driving vehicles. We got the whole Ukraine-Russia thing going on right now and COVID. But I mean, your company's been around through world wars, through bad times, through good times, what was it like growing up in a family business like that? I grew up in a family business, so I know what my upbringing was like. It was like, hey, you're this is the family business they had you involved right from day one, and you hang out with the family. Is that how it went with you? Or how was it for you growing up?

Mike Betts:

Yeah. Very, very much so. And that was the same with my father. He worked for his grandmother who raised him. So he lost his dad before he was born. We have a lot of stories like this, where people had to do remarkable things, and that's where we get our strength, is all these amazing stories. My great grandmother who raised my dad lost her husband and two sons and commuted via the ferry boats from Berkeley, California, to downtown San Francisco through the Great Depression and World War II. She ran our business, which is basically a steel fabrication business, with furnaces and all sorts of... We weren't using natural gas back in those days. We're one of the Pacific gas and electrics first customers for natural gas in San Francisco in the 1950s. So anyway, she got us through those really difficult times.

She was referred to, in San Francisco, folklore as the iron lady, before Maggie Thatcher. But she was a lovely lady, and the workers just admired her. And honestly, we had very difficult time during the war, we had to shift all our production to the military. And to this day, we serve the defense industry, we serve heavy truck OEM production, we serve aftermarket production, a lot of different markets. We manufacture all types of springs, a large segment of suspension springs, you name it that we manufacture for all the different niche markets, the performance, raising, lowering, raising all sorts of different markets. And then as you said earlier, spray suppression products fenders, plastic steel, quarter fenders half full, mud flap hangers of all types and shapes, and then conspicuity solutions for safety and other safety related products. And then we have our eight locations where we have Betts truck parts and service throughout California and then Oregon and Arizona.

Tyler:

Yeah. I mean, that's two totally different businesses, right? You got your manufacturing side over there, you're doing aftermarket and OEMs, I'm assuming. And then you got the whole repair side of it, so you see them afterwards as well. Is that two totally different business segments inside your business with different people, or how do you guys organize that and how do you split your time up? That's got to be the other challenge dealing with two different business units.

Mike Betts:

Right. Well, we have three business units. One would be the truck parts and service, and then the two manufacturing, which is Bett Spring manufacturing, and then Bett HD, HD standing for heavy duty for the spray suppression products, mud flap hangers and fenders, and all that. We have three manufacturing plants, two, actually right next door to each other in Fresno, and then one in Canfield, Ohio, that does the manufacturing. And then, again, our truck parts locations in the west.

Tyler:

So how long have you been having the reins over here at Betts? Obviously, you've been working there probably since you were a kid, but how long ago was it they said, "Hey Mike, you're the new CEO, this is your baby now, don't screw up our family history?"

Mike Betts:

Yeah. Well, it's interesting, for 155 years, it's always been a Betts at the helm, and it's always been a Betts ownership, and it has passed down from generation to generation. So today, I serve as chairman and CEO and my son, Bill Betts is our president. And he's been in that role now for years doing a fantastic job. And then I have two nephews and he has two cousins, that work intimately in the business as well. One runs two manufacturing plants, and the other is in charge of sales for the truck parts and service business. So we're still very, very much a family business. My brother-in-law and I, Don Devany, were together for 40 years. Don retired a few years ago, and then my dad and I worked together for 50 years. So my dad retired about 15 years ago. And then before my dad, it was his uncle, his grandmother, grandmother's husband, all Betts. And then, all the way to our founder back in 1868.

Tyler:

Man, you just don't hear stories like this anymore, because now the common story here is someone build something and they go sell it. And then that's the end of it and some big company owns it. So very impressive just to see that, and it sounds like you got the seventh generation already lined up there right behind you, which is awesome. So that's a great thing you have going on there. When I met you last year, I remember EOS, you had gotten involved with EOS and your company was doing that, have you found that even though your company's been around for so long, is it still the constant evolution and changing of your business and how you do things and the processes? Can you talk a little bit about some of your journey into that?

Mike Betts:

Sure. Tyler, I think everything starts out with core values. You have the right core values to run your business. And when you hire people, do those core values fit who they are, and when you have a good culture and those core values that people aspire to live to, not only at the company while they're here but at home and in the community. And those are the types of people that we look to hire. A lot of times it's like, well, what is the skillset, that's really important, but it's also who, who is the individual and what's the fit.

And so we spend a lot of time on that here and you mentioned EOS, entrepreneurial operating system. We're probably six years into that now, and EOS has been an absolute game changer, because it really makes the accountability with everybody on the team very visual. And it's a communication tool, and it makes communicating easier because there's process. And if you adopt it and practice it, it makes everybody's life easier, it makes everyone more aware, the communication is much, much better and you become a better company. So yeah, we just continue to evolve year over year, we're a continuous improvement organization. And we're not a top down company, most of the ideas come from our team members.

Tyler:

Well, talking about team members, I have to ask this question too. I'm a business owner, CEO, you're a business owner, CEO. I know what it's like trying to hire people right now, there's 11 million jobs open in the US, some roles are getting really hard to fill. How's it for you out in California? Are you guys able to find people? I mean, retaining them is one thing, but surely you lose people or add roles. How is it looking out there on the west coast?

Mike Betts:

Yeah. So, I mean, again, we've had to adapt. We moved from the San Francisco area across the bay to San Leandro, which is near Oakland, 1973. And then in 1988, we built our first plant 180 miles into the Central Valley right here in Fresno. And then, we got a taste of what the Central Valley was like, and it was very different. The commutes are very short, we manufacture indoors. So we had a huge pool of labor that loves to work with their hands. And they're mechanically inclined with agriculture because that's the big segment of our marketplace here in the valley, is we produce a about 60% of the nation's fruits and vegetables. And so, people love to come and work here and work with their hands, and then learn how to operate the machinery and move forward.

So then in 2007, actually, we moved our spring plant to our headquarters here. So we don't have manufacturing operations in San Leandro anymore, it's here in Fresno and in Ohio. We do have a truck parts and service location in San Leandro still as part of our Betts truck parts footprint. But the labor situation was the reason we came here, because there's an abundance of labor people that are mechanically inclined. If you're working in ag, for whatever reason, you know how to fix things, you know how to fix your car, you're mechanically inclined, you fix things at home. Why? Because you have to. And so those are the kind of people that we gravitate to, people that love to make things and produce. And so that's been great, but with the pandemic, with labor law changes and stuff, California is a pretty difficult place to do business, and you have to adapt to so many different things.

And during the pandemic, of course, we were very fortunate that we were viewed essential business because of the work we do for national defense and the transportation industry. We never had to shut down, but we had a lot of COVID here in the Central Valley. And we had to manage through that, meet all the requirements of masking and boosting and vaccinations, and all of that. And I'm happy to say that last week we had zero COVID in our business. So it looks like we may have crested and we're back to business, but when you have people off, what do you do? Our on time delivery for 10 years running was better than 98.5%. And during the pandemic it dropped as low as 70%. So dramatic shift.

And, we went to a 24 hour, seven day a week operation with people on multiple shifts, and working tons of overtime so that we could do the best we possibly could to take care of our customers. And now, we got people back to work in California, we had the big stimulus monies that the fed did, but in California had additional stimulus money that they gave people and really incentivized people in many ways not to work, because they could earn a lot of money with all this. So as those monies have gone away, people are back to work as well. 

Tyler:

Yeah. I got some family in Northern Minnesota in between the state unemployment and the federal unemployment, they were getting something like $1,000 a week to sit at home and not work. So it was making it difficult to get people to come back to work when they were doing pretty well not having to work. So yeah, it's definitely interesting times. And I think you're bringing up supply chain here a little bit too, because, I think, it starts with the end user. Why can't I get, I see this every day on Facebook posts and LinkedIn, why can't I get X, Y, Z parts? What's the problem? Why are they out of them? And it goes back to, well, manufacturers like yourselves, you're trying to build things, but you're having COVID issues and I'm assuming you need raw goods and materials to come in as well.

I guess, you have their manufacturing side and you got your retail stores doing repair work.

What are you seeing out there for supply chain? Are you guys having problems sourcing the things you need to get things here or is it logistics and moving things around? Where's the big bottlenecks that you're currently seeing?

Mike Betts:

Well, I think, there's a lot of issues still regarding supply chain. We've seen a lot of consolidation on steel plants in north America, but at the same time, we've seen a lot of additional capacity come online. So we don't really know what that means yet, because when you see consolidation, you think price increases. And of course, the cost of steel has gone up anywhere from 30 to 40% over this three year period. And we're starting to see it come back down, but with all the consolidations and everything, I'm leaning towards the prices are probably going to remain high until more capacity comes online. And then with the supply chain issues with the ships from Asia being, it would take a typical order maximum 90 days from the time you placed the order to receive the product to six months to nine months in many cases.

And then the cost of a container went from as low as $15,000 three years ago, as high as $25,000. And we're starting to see those numbers come down. You heard last night, President Biden speak out to what happened with the shipping industry and the consolidation of the shipping industry and how they just jacked up the prices and took horrible advantage of the world with these ridiculous prices of, no justification to raise your price from 3,000 to $25,000 a container. So that's made a lot of us look at things differently. But Tyler, we still have a lot of products that we have to import, because this country sent so much manufacturing offshore. And if we're really going to be serious about bringing manufacturing back, we need to bring entire industries back. For example, castings, small, medium, and large castings, a lot of cast products are used on heavy truck.

And we don't have that many casting companies here, we don't have that capacity. And we talk about, well, we want to be the greenest and best air quality, la, la, la. But in reality, we set those industries overseas where they don't produce to the level of quality in regards to the environment that we do here. So, we got to figure out how we can bring these industries back and keep them competitive on a lot of the skill products we use, high tensile materials, high quality steel, and we don't have the type of billets here in America as the Japanese do, for example, to make this high quality steel that we need to get. So Japan makes a large segment of the billets that are shipped around Asia to the other companies that are producing the steel. And so those are reasons why, in many cases, you get certain types of steel from Asia steel. We're seeing more of those higher quality steels becoming available in the US, but not fast enough. So, I hope that answers your question.

Tyler:

Yeah. I mean, a lot of comments that I got there. I mean, number one, yeah, the whole shipping thing, I saw the state of the union address, I think that company came out a couple weeks ago and said they made something like 20 billion in profit or something like. It was a poppy number, I don't remember the exact number, but it was just unimaginable how much profit they generated. So yeah, I think it's like everything else and there's a problem, there's a lot of little things that all can join at one point in time to cause a problem like we have today. And we're seeing the same thing, we manufacture overseas cables and other little things. We tried to bring that back over here and we're struggling to find someone that can even do it or wants to do it.

So it's a difficult thing, and I think if audiences listen to this, these are two CEOs of a company talking here saying, man, we would love to do more here, but it's just not possible with the current climate and everything. And I think, interesting just in climate is you're in California, I think all of outsiders of California look at it and be like, "Man, that's a horrible place to do business." So much restrained, it's not business friendly, and all these things. But it sounds like I was talking to you earlier, different pockets of California are a little bit different. Was that a big part of the reason you guys moved to where you decided to move to?

Mike Betts:

Absolutely, the Central Valley is very conservative. Many, many family businesses, and people work hard the old school way I was raised, my dad was raised, and our workers just love to come to work every day and they love what they do. We have short commutes, we have good schools, a lot of people go to church in this community, and good family values. And then the career technical education is really, maybe, on the pinnacle of why we came. We started investing in the Central Valley when the rest of the nation was de-investing in career tech. You go back into the '90s and programs were closing all over the country, everybody was going to go to a college and get a four year degree. Well, that's not the reality of what took place and what's happening.

And what we did here is we began to invest heavily in career tech. So in the last 30 plus years, we have world class career technical education and just about every aspect of industry, and that's our pipeline for next generation talent. These kids are young people are going to these schools, some of which are four year high school programs, everything manufacturing heavy truck, you name it, they cover it. And then we also have it in the community colleges and then at the university level, of course, engineering and research and innovation. So it's a great place to do business, we're very connected to our community in multiple ways, we invest heavily in our career tech ed programs, and we have interns working here via all the programs pretty much on an annual year round basis.

Tyler:

So at the end of last season, I did an episode with Eric Rubio who obviously, you know and everything. And I didn't realize before I really started talking to Eric, I knew you knew Eric, I didn't know you actually were a part of helping get that thing going and I know Betts is involved with it as well. Can you explain a little bit, like when did you guys get involved and why'd you guys get involved with that program? Which is a great program that Eric's got going on, by the way, if listeners aren't aware, it's a great program for high schoolers to get them involved in the trades and skills.

Mike Betts:

Yeah. I don't want going to sound overly braggadocious about our heavy truck programs we have here. But if you go back six years ago, we had zero, and today we have five, three of which are at high schools and two of which are at the community colleges. And what we did was we brought the need to the schools. And when I say we, I mean industry. So, yes, our company led an initiative and we gathered other people, dealers, and independence, and trucking companies, and we met with the superintendents of schools, and especially around the CTE program said, "Hey, look, we have a huge need." We go to these programs at TMC, we go to heavy duty aftermarket week and we've been hearing for years about the technician shortage, and people weren't addressing it. Of course, we had universal technical institute, I don't think, biotech is in business anymore, but we have built five programs.

And the reason that we were able to do it is we collaborated and we built trusting relationships with the high school and the community colleges. And these are world class programs. Duncan Polytech, if you go online and look at Duncan Polytech Heavy Truck, you will be blown away by what we have. And of course, every program is only as good as the instructor and we have amazing instructors. And Eric Rubio is a guy that just goes above and beyond what a typical instructor would do to run a program. It's his life blood. He so enjoys what he is doing, and every kid is important to him in his program.

Tyler:

So I talk to many people that do exactly what you said, you go to the meetings, they complain about it, they talk about it, everyone's not happy about the current situation. Can't find diesel techs, can't find carpenters, can't find all these skill trades. And at the end of the day, they need to do what you did.

They need to get involved in the community, rally up other like-minded business owners and businesses and put forth, is that the strategy you'd recommend for listeners or watchers that are listening to this saying, "Man, I got that problem and we need a solution and I don't know what to do." What advice would you give them to get going?

Mike Betts:

Well, I would encourage them to find the sold video, a service opportunity learning day program that we put on in Grapevine, Texas at heavy duty aftermarket week in 2022, or I guess it was '21. It was 22.

Tyler:

Yeah.

Mike Betts:

And it was a great program, why? We said we were bringing the dream team from Fresno to Texas. And what we meant by that is we were bringing all the people that really helped make the program happen or programs. So we had folks from the high schools, we had instructors from the programs, and then we had deans from the programs at the community colleges, and then we had George Aarons from ASC, automotive service excellence. And George was huge in relationship to helping us with the curriculum. And if you don't have the right curriculum, then you're you got a problem.

So learning what Universal Institute was doing, and other people were doing around the country, George helped us with that a lot. And then Eric actually came from UTI over in Arizona. He had worked in the industry for the city of Glendale, he had worked for UTI and got a lot of experience and knowledge to be an instructor. And so we put all this together and then we got our industry partners to help Eric with his first advisory. I think today Eric's advisory is probably over 20 different companies that come on a regular basis, three or four times a year to Duncan to hold the advisory meetings.

And the advisory is the total most important thing, to get a program built, you got to have the industry support, you have to have industry champions, and then you have to put the right people together from the districts that you're working with. And so we were very fortunate, it was almost like the stars just aligned, and we were able to build these programs. And we've done the same thing with manufacturing programs. So this area is a great place. We don't have the pipeline problems that you hear around the country.

Tyler:

Well, Mike, I love what you're doing. Obviously, you're growing a business that has multiple businesses. You're actively involved in the community, you're trying to... I mean, just think of it this way, how many people's lives are better off because you get involved in helping build these things and do these things. So it's probably uncalculable, but that's what our industry needs more of. Like, what you guys have going on in Fresno needs to happen in other cities and other regions of the country, and I hope people get away with this, it's a totally doable thing. There's a blueprint out there, there's people that have done it, and I think more than anything else, everyone I've talked to that's been involved in this, what you do in Fresno wants to help. They're basically standing there saying, "Man, my hand is raised." I will help you, I will give you knowledge, I will get resources. We will do what we can to help you succeed. So I love what you guys are doing out there. Mike, if someone wants to get ahold of your company or get ahold of you, where should they go?

Mike Betts:

Well, my email is mike.betts@betts1868.com, and 1868 is the year we were founded. So people ask often, "What's that 1868?" That's the year we were founded. We like to remember that. And then of course we have a Facebook site and you can find us on LinkedIn, under Betts Company. Yeah, feel free to reach out, you may call or email me. We will help you around the country, if you want to come out and visit any of these programs, set up visits for you, actually maybe go with you, and introduce you and give a show and tell. But again, that so program that we did, we left there leaving everybody a top 10 list in order of the things you need to do to build a program. So, that would be something that you might want to watch and get that top 10 list before you make the trip out. But seeing is believing.

We have some really great programs that are working. Oh, by the way, one of the things, I think I'm most proud about, and again comes back to Eric and the example that he sets, is he does on his own dime with the advisory support, the time having a graduation night just for his heavy truck graduates.

And I've sat at the tables with the parents of these kids that are graduating, and these kids have already interned in the industry for two years during the school year, while they're going to the program. So the industry's gotten to know the kids, the kids have gotten to know the industry, and in most cases they've already been offered a job in the industry before graduation, at something around $20 or more just for starting. And again, Eric, as a ASC program with many of the students leaving the program, graduating with as many as three to five ASC industry recognized stackable certificates ,from engine to suspension, you name it, break, safety.

And so it's really great. And we're just getting started, Tyler. It's all about continuous improvement. And we're really focused on electric now because we have so much electric in California because it's been mandated. And so there's not a school district that you go to or a municipality that you go to that isn't buying electric vehicles. And the reason for that is the state government allots funding to the districts, to the communities, the cities, the schools that are moving in that direction. And if you're not, you get limited funds, not the level of funds that the districts and municipalities are going all in.

Tyler:

Well, Mike, I know you've been working at Betts for 43 years, but please don't tire anytime soon, the industry needs you, is hopefully what I want to get across here. It's been great having you on the show. Again, thank you for everything you do for the industry, I am sure your employees appreciate you, I know Eric Rubio talks highly of you in the whole Fresno area around there. So it's been great to pick your brain for a little bit. Any chance I get to talk to someone of your caliber is great. And thank you too for inviting people to come out there to come check things out. I think, what you guys have put together is remarkable thing, and like you said, like you just ended this continuous improvement and I have no doubt what it looks like today.

It'll look different tomorrow, and a lot of smart people out there working very, very hard to keep improving things. So with all that said to our audience, I want to just say again, thank you for watching. Thank you for listening. Like, comment, share, all those things definitely help us. Reach out to Mike if you want to learn more, and remember it's not just diagnostics, it's diagnostics done right. And hopefully, you're learning here too. Family businesses, you got to adapt, you have to change and you can have an impact on your industry. It all starts with somewhere. Talk to Mike, he's there to help.

Thank you everybody.

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