Toy story: At K'nex, seeing the pieces fit just so

K'nex CEO Michael Araten: "If you really care, the things that can happen are magical."
K'nex CEO Michael Araten: "If you really care, the things that can happen are magical." (ED HILLE / Staff Photographer)
Posted: September 10, 2013

The United States' trade deficit with China topped $30 billion last week. In Hatfield, Michael Araten, 43, chief executive of K'nex Brands L.P., the toy company, is making that trend go the other way.

President Obama visited K'nex in November to highlight the company's decision to bring back most of its manufacturing from China. In August, K'nex began exporting its toys to China.

Question: What struck you about your visit with the president?

Answer: He was personally incredibly charming. I think he's listed as 6-foot-1. He seemed taller.

Q: How tall are you?

A: I'm only 5-foot-8.

Q: Why did you move manufacturing to the U.S.?

A: We made a decision at the end of 2008, as the recession was hitting, that we wanted to keep as many of our own people as possible. So the decision . . . was that we were going to move as much of the production as quickly as we can back from China. Next, I had to figure out how to make money at it.

Q: What are the economics of it?

A: We knew it would give us faster speed to market. For my competitors, everything for the holidays, they ordered a month ago. It's coming and if it's a good seller, they won't have enough, and if it's a bad seller, they'll have too much, and that's just the way it is when you have a stretched supply chain. It's what we've internally been calling the China handicap.

Q: You work for a toy company. What was your favorite toy as

a kid?

A: Slot-car racing sets. I loved Mousetrap. I played Pac-Man endlessly on the [Atari] 2600. I made it to the regional finals of a tournament.  

Q: Atari was a forerunner of Nintendo. Now K'nex sells construction sets based on Nintendo.

A: My son came up with the idea to do Nintendo building sets when he was 7. It's been huge.

Q: Did you give him a share of the company?

A: He's asked that, a few times.

Q: How is K'nex responding to the growth of computer and video games?

A: Until we all evolve into floating heads, there will be a large role for physical toys in general and building toys in particular. All of us as children remember showing off something we made, whether with Popsicle sticks or K'nex.

Q: Nice psychology, but how does that translate into a business strategy?

A: Part of our strategy to keep kids interested is building worlds kids love from the worlds they already live in. Imagine the games coming out of the screen into the living room. You get to build in the real world what you are playing with on the screen.

Q: Do you have a management philosophy?

A: At the core of it, people only need two things - they need to be loved and respected. So, if you listen to your employees and then you share your reasoning for your decision, they are either going to love you or respect you or both. They can tell if you care or not. If you really care, the things that can happen are magical.

Quick hits

 

Q: Guilty pleasure?

A: Those cooking reality shows. I love Chopped. I love Top Chef. I love Hell's Kitchen.

Q: Do you cook?

A: No, but I love seeing how they do it. My wife and I watch it together and if we see something we like, we try to figure out where we can go out to dinner and get that.

Q: Summer drink?

A: Lately, I'm drinking tequila on ice, mainly when I'm watching Breaking Bad, because it feels appropriate.

Q: Food?

A: If I had pizza or a good steak every other day for the rest of my life, I think I'd be happy. And ice cream. My two favorites are coffee and strawberry. My wife doesn't know how I eat them together.

Contact Jane Von Bergen at jvonbergen@phillynews.com, @JaneVonBergen on Twitter, or at 215-854-2769. Read more about Michael Araten on my workplace blog at www.inquirer.com/jobbing.


Michael Araten

Title: President, CEO, since January 2009.

Diplomas: Cherry Hill West; Stanford University, political science; University of Pennsylvania, law.

Home: Gwynedd Valley.

Family: Wife, Ellen; children, Jessica, 15, and Daniel, 12.

Connection: K'nex inventor Joel Glickman is Araten's father-in-law.

Resume: Joined K'nex as general counsel, May 2005. Worked top lawyer jobs at Toll Brothers Inc., O'Neill Properties Group.


K'nex Brands

Products: Toys (K'nex), plastic components

(Rodon Group).

Location: Hatfield.

History: Founded

by Irving Glickman

in 1956 as a plastic company, Rodon Products. In 1988, Glickman's son, Joel, invented K'nex, an injection-molded, plastic building toy.

Revenues: Not available; products command

$150 million at retail.

Ownership: Privately held. Brothers Joel and

Bob still active in business.

Employees: 200.

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