Engine distributor Mack Boring balances its role as a conduit between manufacturer and dealer
A company that survives both the Great Depression and now the Great Recession is clearly doing something right. That was the theme at Mack Boring & Parts Co.’s 90th anniversary celebration in September at the distributor’s Union, N.J., headquarters.
“My grandparents got us on a path that led to this longevity. There’s a reason to lasting 90 years,” says Ned McGovern, 66, chairman and the third generation to run (with brother Steve) Mack Boring since their grandfather Ed “Mack” McGovern, who learned his trade as a machinist in the Navy during World War I, founded the company in 1922.
“We look at ourselves as stewards of the business. It’s never been for sale. We reinvest in the company and hopefully hand it off to the next generation in better shape than we received it,” Ned says.
The McGoverns’ durable business plan, as Ned expresses it, is this: Be passionate about your work, pay your bills, don’t accept “shoddy work,” love your customers, and outwork your competition. “Our most valuable asset is our reputation,” says Ned. And his brother Steve, 61, who is the company president, and Ned’s son, COO Patrick, 37 (the fourth generation), agree.
“Passion is what drives a business. We live the business, and we live it every day. My wife will tell you that. There is no easy way,” Steve says.
“When you’ve been around what I’ve seen growing up, it seems simple: Keep your word and be reliable,” Patrick says. “A track record means something, a focus on the long term and not the short term.”
As with nearly every industry worldwide, the Great Recession was a challenge to navigate. The company posted net revenue of $50 million in sales for 2006-07. In 2010, net revenue was in the $32 million to $34 million range. This year, the company expects to climb back above $42 million. “We’re working twice as hard for half the business,” Steve says. “It’s a different world we’re in.”
Growth in diversification
Mack Boring employs about 65 people at its New Jersey headquarters, along with branches in Middleborough, Mass., and Wilmington, N.C. Prerecession, the distributor employed more than 100, and it is working toward a rebound, advertising to hire six people with an eye toward expansion and diversification.
Mack Boring acquired a Yanmar Diesel distributorship in 1974, when the market didn’t know the Japanese manufacturer. Yanmar is now a leader in its market, and Mack Boring is its No. 1 North American distributor. Mack Boring since has acquired the rights to distributorships of Isuzu Diesel, Mitsubishi Marine and Industrial and, most recently, Swedish manufacturer Scania’s marine and industrial engines.
In 2010 the company diversified by opening Mack Powersports Corp., an Indian motorcycle dealership with a fully stocked showroom in its headquarters building. Mack Powersports is now the second-largest dealer for the revived semicustom manufacturer of the venerable American motorcycle brand. In front of the dealership sits a GEM electric car the new division also sells. “It’s all connected,” Patrick says. “Find me a sailboat manufacturer or dealer who isn’t interested in electric power.”
Mack Boring recently hired Brett Marshall, former chief marketing officer at Silverton Marine Corp., to leverage his marine contacts to sell Yanmar’s Cogeneration CP Series natural gas-powered generator.
The tours of the Union facility offered to longtime customers Sept. 7 (capped with a New York Harbor cruise on the Hornblower Hybrid, a 68-foot hybrid-powered ferry powered by Scania Diesel Electric supplied by Mack Boring) were meant to showcase the company’s growing diversity to customers locked into one phase of its offerings. The company’s mantra — “Reliable power. Everywhere” — stresses its diversity. A Yanmar, Isuzu, Mitsubishi, Scania and ZF dealer for the recreational market, Mack Boring also serves the commercial marine, generator and industrial (non-marine) markets. “The writing was on the wall long before the recession that we needed to diversify,” Patrick says. “We’re going to position ourselves to grow this business.”
The revenue goal is to top $70 million by maintaining the core values of the company, with an eye on diversifying. “We’re keeping an open mind and seeing what fits,” he says.
Training, engineering and service
Training and retraining, for employees and customers, has been a key to Mack Boring’s business plan from the early days. During the 1930s “Mack” Sr. started one of the first diesel mechanic training schools in the country. In 1969, his son started a private vocational school named Engine City Technical Institute, which taught diesel engine operation and maintenance.
Hands-on training for professionals (part of its dealer support program), would-be technicians and owners remains important to the company. About 21,000 people, including some from the Navy and Coast Guard, attend maintenance classes at the New Jersey facility and its branches each year, according to Larry Berlin, training services director. In-house training also remains a continual process.
The company, which its leaders say was built on customer service and engineering, recently opened an in-house engineering department and added a $100,000 dynamometer to measure the torque and power of every engine it rebuilds.
The company’s service department employs 30 people at the three facilities. “Service has always been a big part of our business,” says Mike Alfano, operations manager. “We service every single product we sell, and there are not many distributors who do that.”
About 250 engines a year are rebuilt — 75 percent of them marine — at the Union site in a 10,000-square-foot building.
The recreational side
Scott DuBrow heads Mack Boring’s division for Yanmar Recreational Products and its Marine Powertrain Group, which includes Aquadrive. He says sales this year are up 20 percent from 2011. In fact, business on the recreational side has improved every year since 2008. “It’s going in the right direction. It’s nowhere near where it was, but overall it’s a positive trend,” he says.
Echoing a trend seen throughout the industry, DuBrow says new and innovative is what’s driving the improving picture. “There are many new happenings. We have a great new engine from Yanmar, the 8LV, which delivers 320 to 370 hp. That product has really taken off for us,” he says. “The engine is in the new Hinckley Picnic Boat, exclusively, and the new Hinckley Talaria 34 is using our 6BY 260 Yanmars, as are other manufacturers.”
The Yanmar sterndrive ZT370 is another new product, coupled with a Yanmar joystick system being introduced at boat shows this year. “The new products that are coming out are definitely giving us a boost,” DuBrow says. “People seem to be most interested in innovation, which is a trend in the industry.”
Mack Boring has also partnered with ZF and Cabo and Sabre on pod technology.
The Recreational Division for Mack Boring covers 25 states as a Yanmar distributor — from Maine to South Carolina to the Great Lakes — through a network of 200 Yanmar dealers. Yanmar products are also sold directly to OEM boatbuilders.
Assessing the current landscape, DuBrow says things are looking up. Dealers, he says, are beginning to stock “spec” boats again. “Once the economy went south and they took a beating trying to sell what they were stuck with, they were gun-shy to order a stock boat,” he says, “We see that changing in some cases, and I think it’s a good sign for the future of the industry.”
The big picture
Steve McGovern explains that being a marine distributor — the middleman between manufacturers and dealers — is like being in the middle of a seesaw. “It’s a great position to be in because you see the activity on both sides, but you have to have the chemistry for this spot,” he says.
All of the principals praised their staff, which Patrick calls a “good, talented and deep” team. “We challenge each other. We believe in investing a lot of time and money in our people, and we take care of our people,” Steve says.
“And we can back up our promises with quality products and work and customer service. You say it, you back it up,” Steve says from his office, which he proudly points out was used by his grandfather, father and brother. Eventually it will be Patrick’s office.
“Lead by example,” he says. “Treat your people well. Be hands-on. Do whatever it takes. There are no egos here.”
This article originally appeared in the November 2012 issue.