Ex-mechanic repairs ailing truck service firm

Two years ago, a heavy-duty mechanic was entrusted with the heavy-duty chore of fixing a gut-wrenching balance sheet at McCoy Bros.

From a shareholders’ perspective, the results have been stunning.

When Jim Rakievich, a trucking manufacturing and service industry veteran who started his career as a mechanic, was promoted from chief operating officer to chief executive officer of McCoy Bros. in October of 2002, the company’s shares were trading in the 40-cent range. About a year ago, the shares traded as low as 30 cents.

Stock in the 88-year-old Edmonton company that manufactures and services trucking equipment recently vaulted the $2 plateau for a phenomenal 400-per-cent increase, on the back of decreased expenses and a dramatic improvement in financial results.

Dan Riedlhuber, Business Edge

McCoy Brothers CEO Jim Rakievich leans against a flatbed trailer that was made by one of the company’s subsidiaries.

Yet Rakievich, the 45-year-old son of an Edmonton truck driver who joined McCoy eight years ago as service manager, certainly isn’t resting on his laurels.

McCoy recently beefed up operations with the acquisition of Peerless Ltd., a B.C. manufacturer of truck trailers for the forestry industry.

1. If someone had told you as a kid growing up in Edmonton that you’d one day be the CEO of McCoy Bros., what would you have said?

“I wouldn’t have believed it. In my early teens, I always liked fooling around with cars and working with my dad on equipment. I always thought I’d be a mechanic. I like taking things apart, but in those days I didn’t put them back together very well. For me, working with my hands was a lot of fun. My dad was a truck driver but I didn’t want to do that. I was more interested in fixin’ them. He would come home and I’d go out and tinker around with the truck.”

2. Who has been the greatest influence on your life?

“My parents instilled a lot of important values in me. In our household, you worked hard, you earned a living, you had good values and you were dependable. You either learn those things at a very early age or you don’t. And if you do, I guess they stick with you for the rest of your life.”

3. What was your first job?

“It was with Westcan Bulk Transport in Edmonton. I was a mechanic, but towards the end of my career with that company, I stuck my nose into managing the shipping of goods when I had an opportunity and that’s when I discovered that I really liked organizing things. The management side really appealed to me and, once I got a taste of it, it really got the management juices flowing in me that I didn’t know I had. I couldn’t go back to pullin’ wrenches.”

4. What did you learn during your 10 years with Kleysen Transport?

“I really got my apprenticeship in management, learning how to make business decisions and learning from them. I was very young and I guess very mouldable at that time. My learning curve was huge there. One important thing I learned was to stick to what you believe in and not just tell people what they want to hear.”

5. How’d you wind up with McCoy Bros. in 1996?

“My name came up in their head-hunting. I got curious and, as they say, curiosity kills the cat. They convinced me that there was an opportunity here that I should pursue. It was a very difficult decision because I had a good job with Kleysen Transport where I looked after all the equipment operations in Western Canada. I’ve always been driven by having a challenge and one of my goals was to be a part of an executive team. With Kleysen Transport based in Winnipeg, I would have had to relocate my family from Edmonton. McCoy Bros. gave me enough rope to get to where I wanted to go and I was confident I could prove myself.”

6. What was it like when you were finally appointed CEO in 2001?

“First of all, as a first-timer going in that position, you have some doubts whether you can do the job. Secondly, you wonder if it’s what you really want to do because it requires a lot of dedication and sacrifice in time and stress. I had 100-per-cent support of my family which was very important to me. I come from a very close family. Even though the company was in difficulty when I took over and I knew the challenge was going to be quite large, it’s your chance to step up to the plate with the bat. I decided to step up to the plate and take a swing.”

7. What was your initial priority as CEO?

“It was to get our financial house in order and evaluate the businesses that we had. Without a doubt, that was No. 1.”

8. What was the key to the dramatic turnaround of the company into profitability?

“I sold off the spring and axle business and another business in Los Angeles. I wanted to make the company a little smaller and focus the businesses that I was confident could be profitable long term. We cut expenses dramatically and got our management team focused on a smaller piece of the action.”

9. What were you thinking when McCoy stock was trading at 30 cents a year ago?

“I wasn’t worried about that. In the first month I was CEO, I read a magazine story about what CEOs do every day and how that reflects on stock price. It suggested that the most successful guys focus on being profitable and running the business very well while letting the market decide whether it wants to invest in your organization. So I decided not to worry about the stock price and focus with our management team in making the company profitable.”

10. So you weren’t spending a lot of time promoting the company?

“No. You can spend a lot of effort trying to prop up your price and making presentations and things like that. But I didn’t feel we were in any position to do that until we became profitable and proved to the world that we could put quarter after quarter (of profitability) up on the board.”

11. Now that you’ve got your financial house in order, what’s your strategy?

“It’s to grow the business in a way that will bring the best shareholder value. We’ve grown the company considerably with our recent acquisition (of Peerless Ltd., a manufacturer of truck trailers).”

12. How do you see the acquisition of Peerless working out?

“Peerless is a competitor of ours and I personally know that organization, having done business with them for many years. They’ve always been the major player in Western Canada in the forestry and log-hauling equipment area. We were always envious of that because the other manufacturers that have tried to compete with them on the forestry side were not successful. This acquisition gives us an automatic move into the forestry market that we’d wanted to get into. It also makes us the No. 1 manufacturer of heavy-duty trailers in Western Canada.”

13. How much of McCoy’s revenue is derived from the oil and gas industry?

“The oil and gas industry has an impact on all of our divisions. Currently, I would say that at least 70 per cent of our revenue is derived directly or indirectly from the oil and gas industry.

“We think it is going to be a very strong market to be working in over the next five years. We don’t see it slowing down any time in the short term or the mid term.”

14. What’s your long-term vision for McCoy Bros.?

“We want to make this the kind of company where investors look at us as a solid investment in five to 10 years from now. To do that, we’ll have to continue to be profitable and continue growing to attract investors.”

15. What do you enjoy most about your job?

“I really enjoy watching the people in our company grow. It’s gratifying to see people develop themselves as we give them more work and more challenges. I can relate to the people here pretty well. I’ve been on the shop floor, I’ve worked shift work, and I know what they’re doing. I guess I have a bit of a soft spot for those guys because I’ve been there.”

16. How do you reflect on your unorthodox career path, going from being a mechanic to being the CEO?

“I’ve always been lucky when it comes to work. I’ve been successful in every job I’ve had, and I’m very thankful to some of the people along the way who have helped my career.”

17. What’s your best advice for a budding CEO?

“No matter how bad it gets or how tough things look, keep it to yourself at the workplace. Maybe that doesn’t sound right but you can’t show fear. There’s an old story about the general wearing a red shirt so that, if he gets wounded, nobody knows he’s bleeding. There were some tough days and some days that I was really, really worried and concerned. But I made sure that when I went down and met with our people, I didn’t show it. I said, ‘We’re going to overcome this, we’re going to win this battle.’ I think that if the guy that is leading the charge is scared, I think everybody will be scared. It’s also extremely important that you pay attention and manage to balance your business life and personal life. It’s difficult to do that, but I think that if you really try, you can do it.”

18. How have you done in balancing your life?

“I think I’ve done pretty good. I’ve seen guys do way worse. They think they live at work. I try to be home for dinner every night. If I have to leave town, I try my best to do it when I won’t miss an important family function. You don’t always win that way but I think that if you try, you can make it work most of the time.”

19. What’s your favourite escape from work and stress?

“I play hockey year round. That really helps. Monday nights, I play hockey with a group of guys and I find that’s a great stress-relieving exercise. 20. What’s your most important goal beyond business?

“It’s to do whatever I can to see my children grow and do whatever it takes for them to achieve at life. To me, the most exciting thing is watching my children be successful. Work’s work and everybody has to work. Everybody has to eat. And I’m very dedicated to work and always have been. But your family’s got to be No. 1.”

(Gyle Konotopetz can be reached at gyle@businessedge.ca)

IN PROFILE: JIM RAKIEVICH

* Brass: Jim Rakievich, president/CEO; Kerry Brown, chief financial officer.

* Profile: McCoy is a manufacturer of steel gravel and grain truck boxes, pup trailers, custom-designed truck boxes, truck decks, specialty trailers, springs and axles. The company is also a distributor of truck parts and operates the Real McCoy trucking servicing centres and recently acquired Peerless Ltd., a manufacturer of truck trailers for the forestry industry.

* Divisions: Scona Trailer Manufacturing, Farr Canada.

* History: McCoy started 88 years ago as a blacksmithing shop and horseshoeing establishment in Edmonton.

* Recent Stock Price (TSX:MCB): $1.92 (year range $0.20-$2).

* Websites: www.mccoybros www.mccoyservice.com

* Head Office: 3904 78 Ave., Edmonton, T6B 2W4.

* Phone/Fax: 780-453-8451/ 453-8756.

THE COMPANY: MCCOY BROTHERS